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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-13729
R&B FALCON CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 76-0544217
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
901 Threadneedle, Houston, Texas 77079
(Address of principal executive offices)(Zip Code)
(281) 496-5000
(Registrant's telephone number, including area code)
NONE
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days. Yes_X_ No____
NUMBER OF SHARES OUTSTANDING OF REGISTRANT'S COMMON STOCK
AT MAY 1, 1999: 193,376,351
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Forward-Looking Statements and Assumptions
This Quarterly Report on Form 10-Q may contain or incorporate by
reference certain forward-looking statements, including by way of
illustration and not of limitation, statements relating to liquidity,
revenues, expenses, margins and contract rates and terms. The Company
strongly encourages readers to note that some or all of the
assumptions, upon which such forward-looking statements are based, are
beyond the Company's ability to control or estimate precisely, and may
in some cases be subject to rapid and material changes. Such
assumptions include the contract status of the Company's offshore
units, general market conditions prevailing in the marine drilling
industry (including daily rates and utilization) and various other
trends affecting the marine drilling industry, including world oil and
gas prices, the exploration and development programs of the Company's
customers, the actions of the Company's competitors and economic
conditions generally.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Company or Group of Companies for Which Report is Filed:
R&B Falcon Corporation and Subsidiaries
The financial statements for the three months ended March 31,
1999 and 1998, include, in the opinion of the Company, all adjustments
(which only consist of normal recurring adjustments) necessary to
present fairly the financial position and results of operations for
such periods. The financial data for the three months ended March 31,
1999 included herein have been reviewed in accordance with standards
established by the American Institute of Certified Public Accountants
by Arthur Andersen LLP, the registrant's independent public
accountants, whose report is included herein. Results of operations
for the three months ended March 31, 1999 are not necessarily
indicative of results of operations which will be realized for the
year ending December 31, 1999. The financial statements should be
read in conjunction with the Company's Form 10-K for the year ended
December 31, 1998.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
MARCH 31, DECEMBER 31,
1999 1998
----------- ------------
ASSETS (unaudited)
------
CURRENT ASSETS:
Cash and cash equivalents $ 545.1 $ 177.4
Short-term investments 34.0 -
Accounts receivable:
Trade, net 176.1 197.0
Other 54.6 62.1
Drilling contracts in progress 27.8 29.5
Materials and supplies inventory 40.3 36.1
Other current assets 17.1 25.0
--------- ---------
Total current assets 895.0 527.1
--------- ---------
INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED
INVESTEES 170.5 28.2
--------- ---------
PROPERTY AND EQUIPMENT:
Drilling 3,593.9 3,369.2
Other 186.4 180.8
--------- ---------
Total property and equipment 3,780.3 3,550.0
Accumulated depreciation (551.4) (519.4)
--------- ---------
Net property and equipment 3,228.9 3,030.6
--------- ---------
GOODWILL, NET OF ACCUMULATED AMORTIZATION 70.2 70.6
--------- ---------
DEFERRED CHARGES AND OTHER ASSETS 74.2 45.8
--------- ---------
NET ASSETS OF BUSINESS HELD FOR SALE 3.4 7.0
--------- ---------
TOTAL ASSETS $ 4,442.2 $ 3,709.3
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Short-term obligations $ - $ 123.4
Long-term obligations due within one year 6.2 6.3
Accounts payable - trade 75.1 83.1
Accrued liabilities 174.6 139.0
--------- ---------
Total current liabilities 255.9 351.8
LONG-TERM OBLIGATIONS 2,714.3 1,866.2
OTHER NONCURRENT LIABILITIES 37.1 35.9
DEFERRED INCOME TAXES 137.3 142.4
--------- ---------
Total liabilities 3,144.6 2,396.3
--------- ---------
COMMITMENTS AND CONTINGENCIES
MINORITY INTEREST 44.6 62.8
--------- ---------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value 1.9 1.9
Capital in excess of par value 1,061.1 1,061.5
Retained earnings 200.7 199.1
Other (10.7) (12.3)
--------- ---------
Total stockholders' equity 1,253.0 1,250.2
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,442.2 $ 3,709.3
========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(in millions except per share amounts)
(unaudited)
THREE MONTHS ENDED
MARCH 31,
------------------
1999 1998
------- -------
OPERATING REVENUES:
Deepwater $ 90.2 $ 99.6
Shallow water 66.8 106.9
Inland water 31.0 72.7
Engineering services and land operations 55.8 .1
------- -------
Total operating revenues 243.8 279.3
------- -------
COSTS AND EXPENSES:
Deepwater 43.3 42.0
Shallow water 48.3 39.0
Inland water 27.9 39.1
Engineering services and land operations 38.3 .1
Development 1.0 7.8
Depreciation and amortization 36.5 21.4
General and administrative 15.8 14.1
Merger expenses - (1.0)
------- -------
Total costs and expenses 211.1 162.5
------- -------
OPERATING INCOME 32.7 116.8
------- -------
OTHER INCOME (EXPENSE):
Interest expense, net of capitalized interest (28.4) (13.4)
Interest income 4.6 1.7
Equity in earnings of unconsolidated investees .6 -
Other, net (.2) .1
------- -------
Total other income (expense) (23.4) (11.6)
------- -------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAX EXPENSE, MINORITY
INTEREST AND EXTRAORDINARY LOSS 9.3 105.2
------- -------
INCOME TAX EXPENSE (BENEFIT):
Current 7.8 6.8
Deferred (4.5) 34.6
------- -------
Total income tax expense (benefit) 3.3 41.4
------- -------
MINORITY INTEREST (2.7) (2.3)
------- -------
INCOME FROM CONTINUING OPERATIONS
BEFORE EXTRAORDINARY LOSS 3.3 61.5
INCOME FROM DISCONTINUED OPERATIONS - 8.3
EXTRAORDINARY LOSS, NET OF TAX BENEFIT (1.7) -
------- -------
NET INCOME $ 1.6 $ 69.8
======= =======
NET INCOME (LOSS) PER COMMON SHARE:
Basic:
Continuing operations $ .02 $ .37
Discontinued operations - .05
Extraordinary loss (.01) -
------- -------
Net income $ .01 $ .42
======= =======
Diluted:
Continuing operations $ .02 $ .37
Discontinued operations - .05
Extraordinary loss (.01) -
------- -------
Net income $ .01 $ .42
======= =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 192.5 164.9
======= =======
Diluted 193.5 166.4
======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
R&B FALCON CORPORATION
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)(unaudited)
THREE MONTHS ENDED
MARCH 31,
1999 1998
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1.6 $ 69.8
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 36.5 21.4
Deferred income taxes (5.1) 29.1
Gain on dispositions of property and equipment - (2.2)
Recognition of deferred expenses 2.6 2.8
Deferred compensation 1.2 .2
Minority interest in income of consolidated
subsidiaries 2.7 2.3
Dryhole and exploration expenses relating to
oil and gas properties - 7.4
Income from discontinued operations - (8.3)
Extraordinary loss from extinguishment of debt,
net of tax benefit 1.7 -
Changes in assets and liabilities:
Accounts receivable, net 28.4 (46.9)
Materials and supplies inventory (4.2) (2.9)
Drilling contracts in progress 1.7 -
Deferred charges and other assets (25.3) (5.9)
Accounts payable - trade (8.0) (.9)
Accrued liabilities (4.3) (26.7)
Accrued interest 34.5 (4.4)
Income taxes 5.4 -
Other, net 2.7 1.3
------- -------
Net cash provided by operating activities 72.1 36.1
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Dispositions of property and equipment 1.4 2.6
Purchases of property and equipment, exclusive
of noncash items (236.3) (201.9)
Purchase of short-term investments (34.0) (4.1)
Increase in investments in and advances to
unconsolidated investees (142.3) -
------- -------
Net cash used in investing activities (411.2) (203.4)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments on) proceeds from revolving
credit facilities (150.0) 118.0
Increase (decrease) in short-term obligations (123.4) 84.5
Proceeds from long-term obligations 1,000.0 -
Principal payments on long-term obligations (2.0) (3.5)
Distribution to minority shareholders of
consolidated subsidiaries (21.0) (4.0)
Other (.4) .6
------- -------
Net cash provided by financing activities 703.2 195.6
------- -------
CASH PROVIDED BY (USED IN) BUSINESS HELD FOR SALE 3.6 (15.2)
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS 367.7 13.1
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 177.4 55.5
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 545.1 $ 68.6
======= =======
Supplemental Cash Flow Disclosures:
Interest paid $ 7.6 $ 23.8
Income taxes paid $ 3.0 $ 5.0
Purchase of property and equipment in
exchange for debt or equity $ - $ 35.5
The accompanying notes are an integral part of the consolidated financial
statements.
R&B FALCON CORPORATION
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
A) SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS - At May 12, 1999, $40.5 million of
cash was held in escrow as a portion of the collateral for the
Secured Notes (see Note B). Such cash will be made available to the
Company as first priority ship mortgages on the collateralized
drilling units are completed.
REVENUE RECOGNITION - In the first quarter of 1999, a customer
terminated a drilling contract for one of the Company's third-
generation semisubmersibles and the Company received an early
termination fee of $7.2 million. The semisubmersible was immediately
contracted to another customer and as a result the Company
recognized the early termination fee as revenue in the first quarter
of 1999.
CAPITALIZED INTEREST - The Company capitalizes interest
applicable to the construction and significant upgrades of its
marine equipment as a cost of such assets. Interest capitalized for
the three months ended March 31, 1999 and 1998 was $14.6 million and
$6.3 million, respectively. Interest capitalized is shown net of
interest expense in the Consolidated Statement of Operations.
EXTRAORDINARY LOSS - In the first quarter of 1999, the Company
incurred an extraordinary loss of $1.7 million, after a tax benefit
of $.9 million, due to the early extinguishment of debt obligations.
Such loss consisted of the expense of related deferred debt issuance
costs (see Note B).
RECLASSIFICATION - Certain prior period amounts in the
consolidated financial statements have been reclassified for
comparative purposes. Such reclassifications had no effect on the
net income or the overall financial condition of the Company.
B) LONG-TERM OBLIGATIONS
(in millions)
-----------
Debt obligations at December 31, 1998 $ 1,872.5
Proceeds from debt offering (1) 1,000.0
Proceeds from credit facility (2) 200.0
Payment on retired credit facility (2) (350.0)
Payments on debt obligations other than
credit facility (2.0)
---------
Debt obligations at March 31, 1999 2,720.5
Less long-term obligations due within one year (6.2)
---------
Long-term obligations at March 31, 1999 $ 2,714.3
=========
(1) In March 1999, the Company issued $200.0 million of 12.25%
Senior Notes due 2006 (the "Senior Notes"). Also in March 1999,
RBF Finance Co., a limited purpose finance company and a
consolidated affiliate of the Company, issued $400.0 million of
11% Senior Secured Notes due 2006 and $400.0 million of 11.375%
Senior Secured Notes due 2009 (the "Secured Notes"). The Company
borrowed the proceeds from the Secured Notes from RBF Finance
Co. pursuant to ten separate loans, each of which is secured by
one of the Company's drilling rigs or the construction contract
to build a drilling rig. The Company also guaranteed the payment
of the Secured Notes by RBF Finance Co. Interest is payable
semiannually on March 15 and September 15 on both the Senior
Notes and Secured Notes. As a result, the Company received net
proceeds of approximately $971.5 million after deducting
estimated offering related expenses. The Company used the
proceeds to repay existing indebtedness of $350.0 million of
long-term obligations, $125.0 million of short-term obligations
(see Note C) and the Company's portion ($81.0 million) of an
interim facility for the construction of the Deepwater Frontier.
The remainder will be used for planned capital expenditures,
working capital and other general corporate purposes. As a
result of the repayment of existing indebtedness, the Company
incurred an extraordinary loss of $1.7 million, net of tax, in
the first quarter of 1999.
(2) In the first quarter of 1999, the Company received $200.0
million under its $350.0 million revolving credit facility
resulting in the facility being fully drawn and in March 1999,
the Company retired such facility from proceeds of the Senior
Notes and Secured Notes.
C) SHORT-TERM OBLIGATIONS
In the first quarter of 1999, the Company received $1.6 million
under its short-term credit facility for the construction of the
Deepwater Millennium resulting in the facility being fully drawn at
$125.0 million and in March 1999, the Company repaid such facility
from proceeds of the Senior Notes and Secured Notes.
D) SEGMENT INFORMATION
Segment information for the three months ended March 31, 1999
and 1998 is as follows (in millions):
Three Months Ended
March 31,
-------------------
1999 1998
-------- --------
Operating revenues:
Deepwater $ 90.2 $ 99.6
Shallow water 67.3 106.9
Inland water 31.0 72.7
Engineering services and land operations 55.8 .1
Intersegment (.5) -
-------- --------
Operating revenues 243.8 279.3
-------- --------
Operating income:
Deepwater 34.0 46.9
Shallow water 4.7 62.1
Inland water (3.8) 28.8
Engineering services and land operations 15.6 -
Development (1.1) (7.8)
-------- --------
Operating income 49.4 130.0
Unallocated depreciation and amortization (.9) (.1)
Unallocated general and administrative (15.8) (14.1)
Unallocated merger expenses - 1.0
-------- --------
Operating income $ 32.7 $ 116.8
======== ========
Total assets by segment were as follows (in millions):
March 31, December 31,
1999 1998
--------- ---------
Deepwater $ 2,404.1 $ 2,078.6
Shallow water 982.8 1,038.5
Inland water 222.7 251.2
Engineering services and land operations 168.2 156.9
Development 3.6 10.5
Corporate 660.8 173.6
--------- ---------
Total $ 4,442.2 $ 3,709.3
========= =========
For the three months ended March 31, 1999, revenues from one
customer (PDVSA Exploration and Production) of $43.4 million,
reported in the engineering services and land operations segment,
accounted for 17.8% of the Company's total operating revenues.
E) EARNINGS PER SHARE
The following table reconciles the numerators and denominators
of the basic and diluted per share computations for income from
continuing operations before extraordinary loss for the three months
ended March 31, 1999 and 1998 as follows (in millions except per
share amounts):
Three Months
Ended March 31,
-----------------
1999 1998
Numerator: ------- -------
Income from continuing operations
before extraordinary loss - basic and diluted $ 3.3 $ 61.5
======= =======
Denominator:
Weighted average common shares outstanding - basic 192.5 164.9
Outstanding stock options and restricted stock awards 1.0 1.5
------- -------
Weighted average common shares outstanding - diluted 193.5 166.4
======= =======
Earnings per share:
Income from continuing operations
before extraordinary loss:
Basic $ .02 $ .37
Diluted $ .02 $ .37
F) SUBSEQUENT EVENTS
On April 15, 1999, BP Amoco cancelled its contract with the
Company for the drillship Peregrine VII in accordance with the
contract's terms because the drillship had not been delivered on
time. The Company is currently marketing this rig for work.
On April 22, 1999, the Company issued 300,000 shares of 13.875%
Senior Cumulative Redeemable Preferred Stock (the "Preferred Stock")
and warrants to purchase 10,500,000 shares of the Company's common
stock at an exercise price of $9.50 per share (the "Warrants). The
Company received net proceeds from the issuance of the Preferred
Stock and Warrants of approximately $289.0 million. Each share of
Preferred Stock has a liquidation preference of $1,000 per share and
one Warrant to purchase 35 shares of the Company's common stock.
Both the Preferred Stock and the Warrants expire on May 1, 2009.
Dividends are to be paid quarterly commencing on August 1, 1999 and
at the Company's option may be paid in cash or, on or before May 1,
2004, in additional shares of Preferred Stock. The Company may
redeem any of the Preferred Stock beginning May 1, 2004. The initial
redemption price is 106.938% of the liquidation preference,
declining thereafter to 100% on or after May 1, 2007, in each case
plus accrued and unpaid dividends to the redemption date. In
addition, on or before May 1, 2002, the Company may redeem shares of
the Preferred Stock having an aggregate liquidation preference of up
to $105.0 million at a price equal to 113.875% of its liquidation
preference, plus accrued and unpaid dividends to the redemption
date, with proceeds from one or more public equity offerings. The
Warrants' initial fair value of $48.0 million will be recorded as a
discount to the Preferred Stock and amortized on a straight line
basis over ten years. Preferred Stock dividends and the amortization
of the Warrants' initial value will be deducted from net income to
arrive at net income applicable to common stockholders.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
R&B Falcon Corporation
We have reviewed the accompanying consolidated balance sheet of R&B
Falcon Corporation (a Delaware corporation) and Subsidiaries as of March
31, 1999, and the related consolidated statements of operations and cash
flows for the three months ended March 31, 1999 and 1998. These
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based upon our review, we are not aware of any material
modifications that should be made to the financial statements referred to
above for them to be in conformity with generally accepted accounting
principles.
/s/Arthur Andersen LLP
Houston, Texas
April 28, 1999
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
THREE MONTHS ENDED MARCH 31, 1999 COMPARED
TO THREE MONTHS ENDED MARCH 31, 1998
The Company's net income for the three months ended March 31, 1999
was $1.6 million ($.01 per diluted share) compared with net income of
$69.8 million ($.42 per diluted share) for the same period of 1998.
Included in the results for the three months ended March 31, 1999 was a
$1.7 million extraordinary loss due to the extinguishment of debt
obligations. Included in the results for the three months ended March
31, 1998 was income related to discontinued operations of $8.3 million.
Operating revenues are primarily a function of dayrates and
utilization. Operating revenues decreased for the three months ended
March 31, 1999 over the same period in 1998 in spite of a $79.7 million
revenue increase from the purchase of Cliffs Drilling in December 1998.
Such decrease is primarily due to lower utilization and dayrates in the
shallow water and inland water segments. In addition, the Company
recognized $7.2 million of revenue in the first quarter of 1999 for the
early termination of a drilling contract for one of its third-generation
semisubmersibles.
Operating expenses do not necessarily fluctuate in proportion to
changes in operating revenues due to the continuation of personnel on
board and equipment maintenance when the Company's units are stacked. It
is only during prolonged stacked periods that the Company is able to
significantly reduce labor costs and equipment maintenance expense.
Additionally, labor costs fluctuate due to the geographic diversification
of the Company's units and the mix of labor between expatriates and
nationals as stipulated in the contracts. In general, labor costs
increase primarily due to higher salary levels and inflation. Equipment
maintenance expenses fluctuate depending upon the type of activity the
unit is performing and the age and condition of the equipment. Scheduled
maintenance and overhauls of equipment are performed on the basis of
number of hours operated in accordance with the Company's preventive
maintenance program. Operating expenses for a unit are typically
deferred or capitalized as appropriate during periods of mobilization,
contract preparation, major upgrades or conversions unless corresponding
revenue is recognized, in which case such operating expenses are expensed
as incurred.
The increase in operating expenses for the three months ended March
31, 1999 as compared to the same period in 1998 is primarily due to the
purchase of Cliffs Drilling in December 1998 offset by lower operating
expenses in the shallow water and inland water segments due to lower
utilization.
Depreciation and amortization expense increased for the three months
ended March 31, 1999 as compared to the same period in 1998. Such
increase is primarily due to the purchase of Cliffs Drilling in December
1998 and due to the purchase and/or significant upgrades of offshore and
inland marine vessels during 1998.
General & administrative expense increased for the three months
ended March 31, 1999 as compared to the same period in 1998 primarily due
to the purchase of Cliffs Drilling in December 1998.
Interest expense increased for the three months ended March 31, 1999
as compared to the same period in 1998 primarily due to an increased
average debt balance outstanding and increased average interest rates,
partially offset by increased capitalized interest related to significant
upgrade and new build projects.
Income tax expense decreased for the three months ended March 31,
1999 as compared to the same period in 1998 due to the decrease in the
Company's pretax income.
Income from discontinued operations decreased for the three months
ended March 31, 1999 as compared to the same period in 1998 as the income
for 1998 was the reversal of accrued estimated losses from operations
until disposal resulting from the accounting requirements for
recontinuance.
Extraordinary loss, net of a tax benefit of $.9 million, for the
three months ended March 31, 1999 is due to the extinguishment of debt
obligations in connection with the issuance of new debt obligations (see
Note B of Notes to Consolidated Financial Statements).
Liquidity And Capital Resources
Cash Flows
Net cash provided by operating activities was $72.1 million for the
three months ended March 31, 1999 compared to $36.1 million for the same
period in 1998. Despite the decrease in net income, net cash provided by
operating activities increased primarily due to the changes in the
components of working capital.
Net cash used in investing activities was $411.2 million for the
three months ended March 31, 1999 compared to $203.4 million for the same
period in 1998. The increase is due to increasing levels of capital
expenditures, primarily related to the significant capital projects
involving the construction or upgrade of drilling units and the Company
invested and/or advanced approximately $139.8 million to the limited
liability company that operates the Deepwater Frontier.
Net cash provided by financing activities was $703.2 million for the
three months ended March 31, 1999 compared to $195.6 million for the same
period in 1998. The increase is due to proceeds received from the $1.0
billion debt offering, offset by the repayment of existing debt
obligations (see Liquidity below).
Capital Expenditure Commitments
The Company has numerous projects under way involving the
construction or upgrade of drilling units. The following is a list of
such projects:
Water
Depth Estimated Contract Expenditures
Capability Delivery Term Estimated Made thru
(feet) Date (years) Cost March 31, 1999
------ ---------------- ------- ---- -------------
(in millions)
Drillships:
DEEPWATER PATHFINDER (1) 10,000 Delivered 5 $ 280.0 $ 266.9
DEEPWATER FRONTIER (2) 10,000 Delivered 2.5 265.0 242.0
DEEPWATER MILLENNIUM 10,000 2nd quarter 1999 4 (3) 280.0 181.5
DEEPWATER IV (unnamed) 10,000 3rd quarter 2000 3 305.0 105.3
PEREGRINE IV 9,200 3rd quarter 1999 6 230.0 165.8
PEREGRINE VII (4) 8,200 4th quarter 1999 - 300.0 227.2
Semisubmersibles:
FALCON 100 (5) 2,450 2nd quarter 1999 4 120.0 108.2
RBS8M (formerly RBS6) 8,000 4th quarter 1999 5 330.0 154.1
RBS8D 8,000 4th quarter 2000 3 335.0 16.0
-------- --------
$2,445.0 $1,467.0
======== ========
(1) The Company owns a 50% interest in the limited liability company
that operates this drillship.
(2) The Company owns a 60% interest in the limited liability company
that operates this drillship. Under the drilling contract for this
drillship, the Company and Conoco have each committed to use this rig for
two and one half of the first five years after delivery. Conoco will use
the rig to drill a well after the rig's delivery, and the Company will
use it for the next 12 months. After this period, Conoco and the Company
will alternate the use of this rig. The Company is currently marketing
the rig for the periods during which it is obligated to use the rig.
(3) Statoil will use this drillship for the first three years after
delivery, then the Company will alternate use of the rig with Statoil
every six months for the next two years.
(4) On April 15, 1999, BP Amoco cancelled its contract with the Company
for this drillship in accordance with the contract's terms because the
drillship had not been delivered on time. The Company is currently
marketing this rig for work.
(5) In April 1999, Petrobras indicated to the Company that it may seek
to cancel the contract for the Falcon 100 based on its interpretation of
the cancellation provisions of the contract. The Company does not believe
that Petrobras has the right to cancel such contract.
Liquidity
The Company is currently constructing or significantly upgrading
seven wholly-owned deepwater drilling rigs. The Company estimates the
gross capital expenditures on these projects will be approximately $1.9
billion, of which approximately $.9 billion remains to be funded by the
Company. Since May 1998, there has been a downturn in demand for marine
drilling rigs resulting in a decline in rig utilization and dayrates.
The decline has been particularly dramatic in the domestic barge and jack-
up rig markets where the Company is one of the largest contractors. As a
result, the Company experienced a decline in operating revenues from the
first quarter of 1998 to the first quarter of 1999 (see Results of
Operations above). Depending on the level of future cash flows from
operations, the Company's cash on hand, and funds available under its
existing credit facilities may not be sufficient to satisfy the Company's
short-term and long-term working capital needs, planned investments,
capital expenditures, debt, lease and other payment obligations, without
selling certain assets or terminating construction contracts.
On March 26, 1999, the Company issued three series of senior notes
with an aggregate principal amount of $1.0 billion. The senior notes
consisted of $400.0 million of 11% senior secured notes due 2006, $400.0
million of 11.375% senior secured notes due 2009 and $200.0 million of
12.25% senior notes due 2006 (collectively, the "Senior Notes"). The
$800.0 million senior secured notes are collateralized by ten of the
Company's drilling rigs. As a result, the Company received net proceeds
of approximately $971.5 million after deducting estimated offering
related expenses. The Company used the proceeds to repay existing
indebtedness of approximately $556.0 million and the remainder will be
used to acquire, construct, repair and improve drilling rigs and for
general corporate purposes.
On April 22, 1999, the Company issued 300,000 shares of 13.875%
Senior Cumulative Redeemable Preferred Stock (the "Preferred Stock") and
warrants to purchase 10,500,000 shares of the Company's common stock at
an exercise price of $9.50 per share (the "Warrants). The Company
received net proceeds from the issuance of the Preferred Stock and
Warrants of approximately $289.0 million. Each share of Preferred Stock
has a liquidation preference of $1,000 per share and one Warrant to
purchase 35 shares of the Company's common stock. Both the Preferred
Stock and the Warrants expire on May 1, 2009. Dividends are to be paid
quarterly commencing on August 1, 1999 and at the Company's option may be
paid in cash or, on or before May 1, 2004, in additional shares of
Preferred Stock. The Company may redeem any of the Preferred Stock
beginning May 1, 2004. The initial redemption price is 106.938% of the
liquidation preference, declining thereafter to 100% on or after May 1,
2007, in each case plus accrued and unpaid dividends to the redemption
date. In addition, on or before May 1, 2002, the Company may redeem
shares of the Preferred Stock having an aggregate liquidation preference
of up to $105.0 million at a price equal to 113.875% of its liquidation
preference, plus accrued and unpaid dividends to the redemption date,
with proceeds from one or more public equity offerings. The Warrants'
initial fair value of $48.0 million will be recorded as a discount to the
Preferred Stock and amortized on a straight line basis over ten years.
Preferred Stock dividends and the amortization of the Warrants' initial
value will be deducted from net income to arrive at net income applicable
to common stockholders.
Proceeds from the Senior Notes and the Preferred Stock met a portion
of the Company's capital requirements. However, it will also be
necessary for the Company to obtain additional capital through debt
and/or equity financings to meet its currently projected obligations. The
Company is currently evaluating two project financings to meet a portion
of its additional capital requirements. The first is an approximately
$270.0 million financing in the form of a synthetic lease that would be
collateralized by the drillship Deepwater Frontier, drilling contract
revenues from such drillship and a letter of credit. Proceeds of such
financing, if obtained, would be used in part to repay advances made to a
limited liability company which will operate the Deepwater Frontier and
which is owned 60% by the Company and 40% by Conoco. The second financing
being contemplated is an approximately $250.0 million project financing
that would be collateralized by the semisubmersible RBS8M , as well as
the drilling contract revenues from such rig.
The Company currently believes it will be able to consummate the
proposed project financings. However, there can be no assurance that
these or any other additional financings can be obtained, or if obtained,
that they will be on terms favorable to the Company or for the amounts
needed. Further, the Company has limited ability under its indenture
covenants to incur additional recourse indebtedness and to secure that
debt. In the event that the Company is unable to obtain its requisite
financing, the Company may have to sell assets or terminate or suspend
one or more construction projects. Termination or suspension of a
project may subject the Company to claims for penalties or damages under
the construction contracts or drilling contracts for rigs that are being
constructed. In addition, asset sales made under duress in today's
drilling market may not yield attractive sales prices. Accordingly, the
inability of the Company to complete required financings would have a
material adverse effect on the Company's financial condition and its
ability to repay its outstanding indebtedness.
Three of the Company's outstanding credit facilities were repaid and
terminated in March 1999 from proceeds from the Senior Notes. To assist
the Company's liquidity position, the Company may seek to establish a new
revolving bank credit facility of up to $180.0 million, and may sell
certain assets. There can be no assurance, however, that such facility
will be obtained or sales completed.
The liquidity of the Company should also be considered in light of
the significant fluctuations in demand that may be experienced by
drilling contractors as changes in oil and gas producers' expectations
and budgets occur, primarily in response to declines in prices for oil
and gas. These fluctuations can rapidly impact the Company's liquidity
as supply and demand factors directly affect utilization and dayrates,
which are the primary determinants of cash flow from the Company's
operations. The decline in oil and gas prices since 1997 has negatively
impacted the Company's performance, particularly in the shallow water
U.S. Gulf market, by adversely affecting the Company's rig utilization
and dayrates. Utilization of the Company's domestic jack-up fleet has
declined from approximately 97% in the first quarter of 1998 to
approximately 49% in the first quarter of 1999, and dayrates have
declined from an average of $35,000 during the first quarter of 1998 to
an average of $21,000 during the first quarter of 1999. Dayrates for the
Company's domestic barge drilling rig fleet have not declined materially,
but utilization of the fleet declined from approximately 93% in the first
quarter of 1998 to approximately 27% in the first quarter of 1999. The
Company believes a continued depression in oil and gas prices would have
a material adverse effect on the Company's financial position and results
from operations.
In December 1998, Mobil U.K. Ltd. ("Mobil") terminated its contract
to use the Company's Jack Bates semisubmersible rig on the grounds that
two of the rig's anchor cables broke. The contract provided for Mobil's
use of the rig at a dayrate of approximately $115,000 for the primary
term through January 1999 and approximately $200,000 for the extension
term from February 1999 through December 2000. The Company does not
believe that Mobil had the right to terminate this contract. The Company
has recontracted the Jack Bates to Mobil for one well at a dayrate of
$156,000. This contract is without prejudice to either party's rights in
the dispute over the termination of the original contract. If the
Company is not successful in settling its dispute over the termination of
the original contract, the Company intends to commence legal proceedings
to enforce its rights under the contract.
In April 1999, BP Amoco cancelled its contract with the Company for
the drillship Peregrine VII in accordance with the contract's terms
because the drillship had not been delivered on time. The Company is
currently marketing this rig for work.
In April 1999, Petrobras indicated to the Company that it may seek
to cancel the contract for the Falcon 100 based on its interpretation of
the cancellation provisions of the contract. The Company does not believe
that Petrobras has the right to cancel such contract.
The Company's construction and upgrade projects are subject to the
risks of delay and cost overruns inherent in any large construction
project, including shortages of equipment, unforeseen engineering
problems, work stoppages, weather interference, unanticipated cost
increases and shortages of materials or skilled labor. Significant cost
overruns or delays would adversely affect the Company's liquidity,
financial condition and results of operations. Delays could also result
in penalties under, or the termination of, the long-term contracts under
which the Company plans to operate these rigs.
The Company has based its estimates regarding its financing needs on
the assumption that conditions in the marine contract drilling industry
will remain approximately the same as currently exist through 1999 and
will improve in 2000. If conditions during these periods are less
favorable than the Company has assumed, the Company may be required to
seek additional financing. Any additional financing, if obtained, would
be subject to the risks and contingencies described above.
Year 2000
The Company has focused its Year 2000 ("Y2K") compliance efforts in
three areas: information technology systems, embedded technology systems
and systems used by third parties with which the Company has a
substantial relationship. The Company has substantially completed its
investigation and evaluation of these systems and is currently in the
process of correcting the identified problems.
Information Technology Systems. The testing and validation phase
for information technology systems includes testing of each individual
information technology system that could be affected. Through the
information technology systems investigation, the Company determined that
the accounting software utilized by Cliffs Drilling required substantial
modification or replacement. The domestic accounting software was
replaced with Y2K compliant software during the fourth quarter of 1998 at
a total cost of approximately $2.0 million, the majority of which was
capitalized. Software replacements in Cliffs Drilling's foreign offices
will be completed during 1999 at a total cost of approximately $.3
million. The Company additionally determined that certain of its
remaining accounting software and systems were not Y2K compliant.
Company personnel have completed the majority of these modifications and
the remaining non-compliant software will be undergoing a previously
planned upgrade in the second quarter of 1999. Additionally, the Company
is undergoing a third party review of its information technology systems
in the second quarter of 1999.
Embedded Technology Systems. Embedded technology systems primarily
relate to the technology on board the Company's drilling units. The
testing and validation phase for the embedded technology systems includes
testing each high and medium priority system, which consists primarily of
all systems located on drilling units included in the Deepwater and
Shallow Water Divisions. For systems on board the Inland Water units,
confirmation of Y2K compliance has been received from the manufacturers
of these systems.
To facilitate the embedded technology systems investigation, the
Company hired an additional employee whose primary responsibility is the
evaluation of these technology systems. This evaluation should be
completed by the second quarter of 1999. The equipment evaluated thus
far, which includes all drilling units located in the United Kingdom,
Africa, Greece, Singapore and the Gulf of Mexico, has not demonstrated
any equipment failures or other Y2K compliance issues. Based on the
number and type of drilling units tested thus far, the Company estimates
that the total cost to replace or upgrade non-compliant embedded
technology systems will be less than $.5 million.
Third Party Systems. The Company is contacting third parties with
which it has substantial relationships to determine what actions may be
needed to mitigate its risks relating to the effects third party
technology failures may have on the Company. The Company sent out
requests for information to all of our electrical and electronic
contractors in August 1998 and has received information from 80% of them
regarding their Y2K efforts. Questionnaires were sent in the first
quarter of 1999 to all of the Company's suppliers and third party
vendors. Based on the responses received thus far, it is evident that
our contractors and suppliers are placing a priority on achieving Y2K
compliance. In the event the Company's major suppliers or customers do
not successfully and timely achieve Y2K compliance, the Company's
operations could be adversely affected.
Contingency Plans. The Company is continuing to monitor, on an
ongoing basis, the problems and uncertainties associated with its Y2K
issues and their potential consequences. The Company has accepted the
position that there will be some finite levels of risk that some systems
will not fully function after Y2K. A risk-based approach has identified
those items where absolute compliance is not guaranteed by the vendor or
supplier, and contingency plans are being developed to deal with any
safety related possibilities. These contingency plans will be completed
in the second quarter of 1999.
In addition to the safety related contingency plans directly related
to uncertainties with equipment, the Company maintains plans for all
critical safety equipment as part of its normal business. These critical
safety plans are currently being modified to fit the Y2K criteria. These
modifications primarily include: having personnel standing by at critical
equipment stations before the specified time changes, having no crane
lifts in operation and have all drilling units in a non-drilling mode.
Failure of this type of equipment, whether related to normal operational
risk or Y2K problems, must be managed with contingency planning. For
this reason, additional risk due to the Y2K issue does not measurably
affect the risk to personnel or equipment beyond the normal failure due
to other causes.
Other
On April 7, 1999, the Company announced that Mr. Steven Webster, the
Company's president and chief executive officer, has agreed to resign
from these officer positions effective May 31, 1999. Mr. Webster will
remain a director of the Company. Mr. Paul B. Loyd, Jr., the Company's
chairman of the board, will become chief executive officer.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to changes in interest rates with respect to
its debt obligations. The following table sets forth the average
interest rate for the scheduled maturity of the Company's debt
obligations as of March 31, 1999 (dollars in millions):
Estimated
Fair Value
at
There- March 31,
1999 2000 2001 2002 2003 after Total 1999
----- ----- ----- ----- ------ -------- -------- --------
Fixed Rate Debt:
Amount $ .1 $ .5 $ 5.2 $ - $550.1 $2,150.0 $2,705.9 $2,546.2
Average
interest rate 7.000% 8.000% 9.750% - 8.340% 9.392% 9.179%
Variable Rate Debt:
Amount $ 4.6 $ 6.1 $ 6.1 $ .5 $ - $ - $ 17.3 $ 17.3
Average
interest rate 7.000% 7.000% 7.000% 7.000% - - 7.000%
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in various legal actions arising in the
normal course of business. After taking into consideration the
evaluation of such actions by counsel for the Company, management is of
the opinion that outcome of all known and potential claims and litigation
will not have a material adverse effect on the Company's business or
consolidated financial position or results of operations.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.1 - Indenture dated as of March 26, 1999, between RBF Finance
Co., as Issuer, and United States Trust Company of New
York, as Trustee, with respect to $400,000,000 11% Senior
Secured Notes due 2006 and $400,000,000 11 3/8% Senior
Secured Notes due 2009.
4.2 - Indenture dated as of March 26, 1999, between R&B Falcon
Corporation, as Issuer, and U.S. Trust Company of Texas,
National Association, as Trustee, with respect to 12 1/4%
Senior Notes due 2006.
4.3 - Registration Rights Agreement dated March 26, 1999 among
RBF Finance Co., R&B Falcon Corporation and Donaldson,
Lufkin & Jenrette Securities Corporation.
4.4 - Registration Rights Agreement dated March 26, 1999 among
R&B Falcon Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation.
10.1 - Senior Secured Loan Agreement, Harvey Ward, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender.
10.2 - Senior Secured Loan Agreement, Peregrine II, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender.
10.3 - Senior Secured Loan Agreement, Peregrine I, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender.
10.4 - Senior Secured Loan Agreement, Deepwater IV, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender.
10.5 - Senior Secured Loan Agreement, Falrig 82, dated March 26,
1999 between R&B Falcon Corporation, as Borrower, and RBF
Finance Co., as Lender.
10.6 - Senior Secured Loan Agreement, Peregrine IV, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender.
10.7 - Senior Secured Loan Agreement, Peregrine VII, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender.
10.8 - Senior Secured Loan Agreement, Falcon 100, dated March
26, 1999 between R&B Falcon Corporation, as Borrower, and
RBF Finance Co., as Lender.
10.9 - Senior Secured Loan Agreement, W.D. Kent, dated March 26,
1999 between R&B Falcon Corporation, as Borrower, and RBF
Finance Co., as Lender.
10.10 - Senior Secured Loan Agreement, Deepwater Millennium,
dated March 26, 1999 between R&B Falcon Corporation, as
Borrower, and RBF Finance Co., as Lender.
15 - Letter regarding unaudited interim financial information.
27 - Financial Data Schedule. (Exhibit 27 is being submitted
as an exhibit only in the electronic format of this
Quarterly Report on Form 10-Q being submitted to the
Securities and Exchange Commission.)
(b) Reports on Form 8-K
R&B Falcon filed one Current Report on Form 8-K/A during the
three months ended March 31, 1999: (1) Report filed January 20, 1999
filing financial statements and pro forma financial information
relating to the acquisition of Cliffs Drilling Company.
R&B Falcon filed one Current Report on Form 8-K during the three
months ended March 31, 1999: (1) Report filed March 16, 1999 filing
financial data (including year-end 1998 results) relating to the
Company.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
R&B FALCON CORPORATION
Date: May 14, 1999 By /s/T. W. Nagle
-----------------------
T. W. Nagle
Executive Vice President
(Chief Accounting Officer)
EXHIBIT 4.1
=========================================================================
RBF FINANCE CO.
as Issuer
$800,000,000
11% Senior Secured Notes due 2006
11 3/8% Senior Secured Notes due 2009
INDENTURE
Dated as of March 26, 1999
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
=========================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND INCORPORATION
Section 1.1 Definitions.
Section 1.2 Other Definitions.
Section 1.3 Incorporation By Reference of Trust
Indenture Act.
Section 1.4 Rules of Construction.
ARTICLE II THE NOTES
Section 2.1 Form and Dating.
Section 2.2 Execution and Authentication.
Section 2.3 Registrar and Paying Agent.
Section 2.4 Paying Agent to Hold Money in Trust.
Section 2.5 Holder Lists.
Section 2.6 Transfer and Exchange
Section 2.7 Replacement of Secured Notes.
Section 2.8 Outstanding Secured Notes.
Section 2.9 Treasury Secured Notes.
Section 2.10 Temporary Secured Notes.
Section 2.11 Cancellation.
Section 2.12 Payment of Interest; Interest Rights Preserved.
Section 2.13 Computation of Interest.
Section 2.14 CUSIP Number.
ARTICLE III REDEMPTION AND PREPAYMENT
Section 3.1 Notices to Trustee.
Section 3.2 Selection of Secured Notes to be Redeemed.
Section 3.3 Notice of Redemption.
Section 3.4 Effect of Notice of Redemption.
Section 3.5 Deposit of Redemption Price.
Section 3.6 Secured Notes Redeemed in Part.
Section 3.7 Optional Redemptions.
Section 3.8 Redemption Upon Loss of a Mortgaged Rig.
Section 3.9 Redemption Upon Sale of a Mortgaged Rig.
Section 3.10 Excess Proceeds Offer.
ARTICLE IV COVENANTS
Section 4.1 Payment of Secured Notes.
Section 4.2 Maintenance of Office or Agency.
Section 4.3 Corporate Existence.
Section 4.4 Maintenance of Properties and Insurance.
Section 4.5 Compliance With Laws.
Section 4.6 Taxes and Other Claims.
Section 4.7 Stay, Extension and Usury Laws.
Section 4.8 Change of Control.
Section 4.9 Limitations on Indebtedness.
Section 4.10 Limitation on Liens.
Section 4.11 Limitation on Restricted Payments.
Section 4.12 Limitation on Sale/Leaseback Transactions.
Section 4.13 SEC Reports.
Section 4.14 Limitation on Restrictions on Distributions
from Restricted Subsidiaries.
Section 4.15 Limitation on Asset Sales.
Section 4.16 Limitation on Asset Swaps
Section 4.17 Limitation on Affiliate Transactions.
Section 4.18 Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries.
Section 4.19 Future Subsidiary Guarantor.
Section 4.20 Impairment of Liens.
Section 4.21 Limitation on Issuer Activities.
Section 4.22 Compliance Certificate; Notice of Default or
Event of Default.
Section 4.23 Prohibition on Issuer and Guarantor Becoming
an Investment Company.
Section 4.24 Additional Amounts.
ARTICLE V CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
Section 5.1 Limitations on Mergers and Consolidations
Section 5.2 Successor Corporation Substituted
ARTICLE VI DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
Section 6.2 Acceleration.
Section 6.3 Other Remedies.
Section 6.4 Waiver of Past Defaults.
Section 6.5 Control By Majority.
Section 6.6 Limitation on Suits.
Section 6.7 Rights of Holders of Secured Notes to Receive
Payment.
Section 6.8 Collection Suit by Trustee.
Section 6.9 Trustee May File Proofs of Claim.
Section 6.10 Priorities.
Section 6.11 Undertaking For Costs.
Section 6.12 Restoration of Rights and Remedies.
Section 6.13 Rights and Remedies Cumulative.
Section 6.14 Delay or Omission Not Waiver.
ARTICLE VII TRUSTEE
Section 7.1 Duties of Trustee.
Section 7.2 Rights of Trustee.
Section 7.3 Individual Rights of Trustee.
Section 7.4 Trustee's Disclaimer.
Section 7.5 Notice of Defaults.
Section 7.6 Reports by Trustee to Holders of the
Secured Notes.
Section 7.7 Compensation and Indemnity.
Section 7.8 Replacement of Trustee.
Section 7.9 Successor Trustee by Merger, Etc.
Section 7.10 Eligibility; Disqualification.
Section 7.11 Preferential Collection of Claims Against
the Issuer.
ARTICLE VIII SATISFACTION AND DISCHARGE
Section 8.1 Satisfaction and Discharge.
Section 8.2 Application of Trust Money.
Section 8.3 Repayment of the Issuer.
Section 8.4 Reinstatement.
ARTICLE IX DEFEASANCE AND COVENANT DEFEASANCE
Section 9.1 Option to Effect Defeasance or Covenant
Defeasance.
Section 9.2 Defeasance and Discharge.
Section 9.3 Covenant Defeasance.
Section 9.4 Conditions to Defeasance or Covenant Defeasance.
Section 9.5 Deposited Money and U.S. Government Obligations
To Be Held in Trust; Other Miscellaneous
Provisions.
Section 9.6 Repayment to the Issuer.
Section 9.7 Reinstatement.
ARTICLE X AMENDMENT, SUPPLEMENT AND WAIVER
Section 10.1 Without Consent of Holders of Secured Notes.
Section 10.2 With Consent of Holders of Secured Notes.
Section 10.3 Effect of Supplemental Indentures.
Section 10.4 Compliance with Trust Indenture Act.
Section 10.5 Revocation and Effect of Consents.
Section 10.6 Notation on or Exchange of Secured Notes.
Section 10.7 Trustee to Sign Supplemental Indentures.
Section 10.8 Payment for Consent.
ARTICLE XI COLLATERAL AND SECURITY
Section 11.1 Security Agreements.
Section 11.2 Recording and Opinions.
Section 11.3 Further Assurances and Security.
Section 11.4 Possession, Use and Release of Collateral.
Section 11.5 Certificates of the Issuer.
Section 11.6 Authorization of Actions to be Taken by the
Trustee Under the Security Agreements
Section 11.7 Authorization of Receipt of Funds by the
Trustee Under the Security Agreements
ARTICLE XII MISCELLANEOUS
Section 12.1 Trust Indenture Act Controls.
Section 12.2 Notices.
Section 12.3 Communication By Holders of Secured Notes With
Other Holders of Secured Notes.
Section 12.4 Certificate and Opinion as to Conditions
Precedent.
Section 12.5 Statements Required in a Certificate or Opinion.
Section 12.6 Acts of Holders.
Section 12.7 Rules by Trustee and Agents.
Section 12.8 No Personal Liability of Directors, Officers,
Employees and Stockholders.
Section 12.9 Governing Law.
Section 12.10 Agent for Service; Submission to Jurisdiction;
Waiver of Immunities.
Section 12.11 No Adverse Interpretation of Other Agreements.
Section 12.12 Successors.
Section 12.13 Severability.
Section 12.14 Counterpart Originals.
Section 12.15 Table of Contents, Headings, Etc.
ARTICLE XIII GUARANTEES
Section 13.1 Guarantor.
Section 13.2 Limitation on Liability.
Section 13.3 Execution and Delivery of Guarantees.
Section 13.4 No Waiver.
Section 13.5 Modification.
Section 13.6 Release of Subsidiary Guarantor.
Section 13.7 Future Guarantor; Execution of Supplemental
Indentures for Future Guarantor.
SCHEDULES
Schedule 1.1(a) Existing Investments
Schedule 4.13 Existing Indebtedness and Preferred Stock
of Subsidiaries
Schedule A Guarantor
EXHIBITS
Exhibit A Form of Secured Note
Exhibit B-1 Form of Certificate for Exchange or
Registration of Transfer from U.S. Global
Note to Regulation S Global Note
Exhibit B-2 Form of Certificate for Exchange or
Registration of Transfer from Regulation S
Global Note to U.S. Global Note
Exhibit B-3 Form of Certificate for Exchange or
Registration of Transfer of Certificated
Secured Notes
Exhibit B-4 Form of Certificate for Exchange or
Registration of Transfer from U.S. Global
Note or Regulation S Permanent Global Note to
Certificated Note
Exhibit C Form of Certificate From Acquiring
Institutional Accredited Investor
- ----------------------------------------------------------------------
INDENTURE, dated as of March 26, 1999, among RBF Finance Co., a
Delaware corporation (the "Issuer"), R&B Falcon Corporation, a
Delaware corporation (the "Guarantor" or "Company"), and United
States Trust Company of New York as trustee (the "Trustee").
RECITALS
The Issuer has duly authorized the creation and issuance of its
11% Senior Secured Notes due 2006 and its 11 3/8% Senior Secured
Notes due 2009 (each series together referred to as the "Initial
Secured Notes") of substantially the tenor and amount hereinafter set
forth; and to provide therefor and for, if and when issued as further
evidence of the Issuer's indebtedness and in substitution for the
Initial Secured Notes pursuant to this Indenture and the Registration
Rights Agreement (as defined herein), the Issuer's 11% Senior Secured
Notes due 2006 and its 11 3/8% Senior Secured Notes due 2009 (each
series together referred to as the "Exchange Secured Notes," and
together with the Initial Secured Notes, the "Secured Notes"), the
Issuer has duly authorized the execution and delivery of this
Indenture. Unless otherwise stated, "Secured Note" or "Secured
Notes" refers to a note or notes of both series.
All things necessary to make the Secured Notes, when executed by
the Issuer and authenticated and delivered by the Trustee hereunder
and duly issued by the Issuer, the valid obligations of the Issuer,
and to make this Indenture a valid instrument of the Issuer and the
Guarantor, in accordance with their respective terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Initial Secured
Notes by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Secured
Notes, as follows:
ARTICLE I
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
"Acquired Indebtedness'' means, with respect to any specified
Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such
specified Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging
with or into, or becoming a Subsidiary of such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; (ii) the
Capital Stock of a Person that becomes a Restricted Subsidiary as a
result of the acquisition of such Capital Stock by the Company or
another Restricted Subsidiary or (iii) Capital Stock constituting a
minority interest in any Person that at such time is a Restricted
Subsidiary; provided, however, that any such Restricted Subsidiary
described in clause (ii) or (iii) above is primarily engaged in a
Related Business. Proceeds of insurance arising from damage for an
asset shall be deemed to have been invested in Additional Assets to
the extent of the cost of such repairs made to such asset.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date
means the amount by which the fair value of the assets and property
of such Subsidiary Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving
effect to all other fixed and contingent liabilities incurred or
assumed on such date), but excluding liabilities under its Subsidiary
Guarantee, of such Subsidiary Guarantor at such date.
"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 Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
Voting Stock, by contract or otherwise; and the terms ``controlling''
and ``controlled'' have meanings correlative to the foregoing;
provided, however, that ``Affiliate'' shall also mean any beneficial
owner of Capital Stock representing 5% or more of the total voting
power of the Voting Stock (on a fully diluted basis) of such a Person
or of rights or warrants to purchase such Capital Stock (whether or
not currently exercisable).
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of beneficial interests in a Global Note, the rules and
procedures of the Depository and the Trustee that apply to such
transfer and exchange.
"Asset Sale" means any direct or indirect sale, capital lease,
transfer or other disposition (or series of related sales, capital
leases, transfers or dispositions) by the Company or any Restricted
Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the
purposes of this definition as a ``disposition'') in one transaction
or a series of related transactions, of (i) any shares of Capital
Stock of a Restricted Subsidiary (other than directors' qualifying
shares or shares required by applicable law to be held by a Person
other than the Company or a Restricted Subsidiary), (ii) any
drillship or drilling rig or all or substantially all the assets of
any division or line of business of the Company or any Restricted
Subsidiary or (iii) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company
or such Restricted Subsidiary (other than, in the case of (i), (ii)
and (iii) above, (u) a disposition by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Wholly
Owned Restricted Subsidiary, (v) for purposes of the covenant
described under Section 4.15 hereof only, a disposition that
constitutes a Restricted Payment permitted by the covenant described
under Section 4.11 hereof, (w) Asset Swaps permitted under Section
4.16 hereof, (x) dispositions of Incidental Assets, (y) dispositions
of Temporary Cash Investments and (z) a disposition of assets with a
fair market value of less than $100,000).
"Asset Swap" means a substantially concurrent purchase and sale,
or exchange, of assets constituting Additional Assets described in
clause (i) of the definition thereof between the Company or any
Restricted Subsidiary and another Person or group of Persons;
provided, however, that the cash and other assets to be received by
the Company or such Restricted Subsidiary which do not constitute
Additional Assets do not constitute more than 25% of the total
consideration to be received by the Company or such Restricted
Subsidiary in such Asset Swap.
"Attributable Indebtedness," when used with respect to any
Sale/Leaseback Transaction, means, as at the time of determination,
the present value (discounted at the rate set forth or implicit in
the terms of the lease included in such transaction) of the total
obligations of the lessee for rental payments (other than amounts
required to be paid on account of property taxes, maintenance,
repairs, insurance, assessments, utilities, operating and labor costs
and other items which do not constitute payments for property rights)
during the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which such lease
has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained
by dividing (i) the sum of the products of numbers of years from the
date of determination to the dates of each successive scheduled
principal payment of such Indebtedness or redemption or similar
payment with respect to such Preferred Stock multiplied by the amount
of such payment by (ii) the sum of all such payments.
"Board of Directors" means the Board of Directors of a Person or
any committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means a copy of a resolution certified by a
Secretary or Assistant Secretary of a Person to have been duly
adopted by the Board of Directors thereof 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 not a Legal Holiday.
"Capitalized Lease Obligation" of any Person means any
obligation of such Person to pay rent or other amounts under a lease
of property, real or person, that is required to be capitalized for
financial reporting purposes in accordance with generally accepted
accounting principles and the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, rights to purchase, warrants or options (whether
or not currently exercisable), participations or other equivalents of
or interests in (however designated) the equity (which includes, but
is not limited to, common stock, preferred stock and partnership and
joint venture interests) of such Person (excluding any debt
securities that are convertible into, or exchangeable for, such
equity).
"Cedel" means Cedel Bank, societe anonyme (or any successor
securities clearing agency).
"Certificated Secured Notes" means Secured Notes that are
substantially in the form of the Secured Note attached hereto as
Exhibit A that do not include the information or text called for by
footnotes 1, 2 and 3 thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" shall include, in each case as pledged and assigned
to the Collateral Agent, the Trustee or the Issuer, as applicable,
pursuant to the Security Agreements, (1) all of the Issuer Loans and
Issuer Loan Agreements (2) all cash held by the Collateral Agent and
the Trustee pursuant to the Indenture or the Security Agreements and
the Issuer Escrow Account and all Issuer Escrowed Property held
pursuant to the Issuer Escrow Agreement (including any cash
collateral deposited therein by the Issuer); and (3) the Company's
right, title and interest in and to (i) each of its respective
Mortgaged Rigs, pursuant to a Mortgage issued by the Company in favor
of the Issuer, which Mortgage contains covenants pursuant to which
the Company, among other things, will be prohibited from selling,
mortgaging or transferring any of its interest in such Mortgaged Rig
(other than as permitted under the Indenture), and which Mortgage
will be collaterally assigned to the Trustee, (ii) the Company's
interest in construction contracts and equipment purchased by the
Company for Mortgaged Rigs pursuant to a Company Security Agreement
and (iii) the Company Escrow Account and the Company Escrowed
Property; and (4) all proceeds of any of the foregoing including from
all the Company's policies and contracts of insurance taken out from
time to time in respect each of its Mortgaged Rigs.
"Common Stock" means Capital Stock other than Preferred Stock.
"Company Order" means a written order or request signed in the
name of an Officer and delivered to the Trustee.
"Company" means the Person named as such in the preamble of this
Indenture unless and until a successor replaces it pursuant to the
applicable provisions hereof and thereafter means such successor.
"Company Escrow Account" means the escrow account established
under the Company Escrow Agreement.
"Company Escrow Agreement" means the Issuer Loan Escrow
Agreement of even date herewith among the Company, the Issuer, the
Trustee and United States Trust Company of New York as escrow agent
providing for deposit into escrow of $100,000,000 pending completion,
flagging and mortgaging of the Mortgaged Rig Deepwater Millennium.
"Company Escrowed Property" means the funds and Investments
contained in the Company Escrow Account.
"Company Security Agreement" means a each Security and Pledge
Agreement entered into between the Company and the Issuer as security
for an Issuer Loan.
"Consolidated EBITDA Coverage Ratio" as of any date of
determination means the ratio of (a) the aggregate amount of EBITDA
for the period of the most recent four consecutive fiscal quarters
ending at least 45 days prior to the date of such determination to
(b) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to
calculate the Consolidated EBITDA Coverage Ratio is an issuance of
Indebtedness, or both, EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been issued on
the first day of such period and the discharge of any other
Indebtedness repaid, repurchased, defeased or otherwise discharged
with the proceeds of such new Indebtedness as if such discharge had
occurred on the first day of such period;
(2) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any asset disposition, the
EBITDA for such period shall be reduced by an amount equal to the
EBITDA (if positive) directly attributable to the assets which are
the subject of such asset disposition for such period, or increased
by an amount equal to the EBITDA (if negative), directly attributable
thereto for such period, and Consolidated Interest Expense for such
period shall be reduced by an amount equal to the Consolidated
Interest Expense directly attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, defeased or
otherwise discharged with respect to the Company and its continuing
Subsidiaries in connection with such asset dispositions for such
period (or, if the Capital Stock of any Restricted Subsidiary is
sold, the Consolidated Interest Expense for such period directly
attributable to the Indebtedness of such Restricted Subsidiary to the
extent the Company and its continuing Subsidiaries are no longer
liable for such Indebtedness after such sale);
(3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person which becomes
a Restricted Subsidiary) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business (which shall
include the acquisition or construction of a vessel or drilling rig,
provided the Company has paid 75% or more of the cost thereof and
such vessel or drilling rig is reasonably expected to be delivered
within 90 days), EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving pro forma effect thereto
(including the issuance of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period; and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or
into the Company or any Restricted Subsidiary since the beginning of
such period) shall have made any asset disposition or any Investment
that would have required an adjustment pursuant to clause (2) or (3)
above if made by the Company or a Restricted Subsidiary during such
period, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such
asset disposition or Investment occurred on the first day of such
period.
For purposes of this definition, whenever pro forma effect is to
be given to an acquisition of assets, the amount of income or
earnings relating thereto, and the amount of Consolidated Interest
Expense associated with any Indebtedness issued in connection
therewith, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting officer of the
Company. If any Indebtedness bears a floating rate of interest and is
being given pro forma effect, the interest of such Indebtedness shall
be calculated as if the rate in effect on the date of determination
had been the applicable rate for the entire period (taking into
account any Interest Rate Protection Agreement applicable to such
Indebtedness if such Interest Rate Protection Agreement has a
remaining term in excess of 12 months).
For purposes of this definition, in the case of the acquisition
since the beginning of such period of a drilling rig or drillship (or
of a Restricted Subsidiary owning same) by the Company or by a
Restricted Subsidiary since the beginning of such period of a
drilling rig or drillship to the Company or a Restricted Subsidiary
pursuant to a binding construction contract, which drilling rig or
drillship has been subject for at least one full fiscal quarter to a
binding drilling contract constituting a Qualifying Contract, then,
for purposes of making the pro forma calculations provided for in the
first sentence of the preceding paragraph, the financial or
accounting officer of the Company shall give pro forma effect to the
earnings (losses) of such drilling rig or drillship as if such
drilling rig or drillship were acquired on the first day of such
period, by basing such earnings (losses) on the annualized (x)
historical revenues actually earned from such Qualifying Contract and
(y) actual expenses related thereto, in each case for each quarter
during such period in which the Qualifying Contract is in effect.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such interest
expense:
(1) interest expense attributable to Capitalized Lease Obligations;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest payments;
(5) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(6) net costs under Interest Rate Protection Agreements (including
amortization of fees);
(7) dividends in respect of any Redeemable Stock held by Persons
other than the Company or a Restricted Subsidiary;
(8) interest expense attributable to deferred payment obligations;
and
(9) interest expense on Indebtedness of another Person to the extent
that such Indebtedness is guaranteed by the Company or a Restricted
Subsidiary.
"Consolidated Net Income" means, for any period, the net income
of the Company and its consolidated subsidiaries; provided, however,
that there shall not be included in such Consolidated Net Income:
(a) any net income of any Person if such Person is not a
Restricted Subsidiary, except that (1) the Company's equity in the
net income of any such Person for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Person during such period to the
Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations
contained in clause (c) below) and (2) the Company's equity in a
net loss of any such Person for such period shall be included in
determining such Consolidated Net Income;
(b) any net income of any Person acquired by the Company or a
Restricted Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition;
(c) any net income of any Restricted Subsidiary to the extent
such Restricted Subsidiary is subject to restrictions, directly or
indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that (1) the net income of
Cliffs Drilling Company shall be included notwithstanding the
foregoing, (2) the net income of a Restricted Subsidiary shall be
included to the extent such net income could be paid to the
Company or a Restricted Subsidiary by loans, advances,
intercompany transfers, principal repayments or otherwise; (3) the
Company's equity in the net income of any such Restricted
Subsidiary for such period shall be included in such Consolidated
Net Income up to the aggregate amount of cash actually distributed
by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution to
another Restricted Subsidiary, to the limitation contained in this
clause) and (4) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(d) any gain (but not loss) realized upon the sale or other
disposition of any property, plant or equipment of the Company or
its consolidated subsidiaries (including pursuant to any sale-and-
leaseback arrangement) which is not sold or otherwise disposed of
in the ordinary course of business and any gain (but not loss)
realized upon the sale or other disposition of any Capital Stock
of any Person;
(e) extraordinary, unusual or nonrecurring charges;
(f) charges relating to the extinguishment of debt obligations
of R&B Falcon Holdings Inc.; and
(g) the cumulative effect of a change in accounting principles.
"Consolidated Net Worth" of a Person means the consolidated
stockholders' equity of such Person and its Subsidiaries, as
determined in accordance with GAAP.
"Corporate Trust Office of the Trustee" shall be at the address
of the Trustee specified in Section 12.2 hereof or such other address
as to which the Trustee may give notice to the Company.
"Credit Facilities" means, with respect to the Company or any
Restricted Subsidiary, one or more debt facilities or commercial
paper facilities, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables
financing (including through the sale of receivables to such lenders
or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or
refinanced in whole or in part from time to time.
"Default" means any act, event or condition which is, or after
notice or passage of time or both would be, an Event of Default.
"Depositary" means, with respect to the Secured Notes issuable
or issued in whole or in part in global form, the Person specified in
Section 2.3 hereof as the Depositary with respect to the Secured
Notes, until a successor shall have been appointed and become such
Depositary pursuant to the applicable provision of this Indenture,
and thereafter, "Depositary" shall mean or include such successor.
"Devco" means Reading & Bates Development Co., a Delaware
corporation and a Restricted Subsidiary of the Company.
"EBITDA" for any period means the Consolidated Net Income for
such period, plus the following (but without duplication) to the
extent deducted in calculating such Consolidated Net Income for such
period: (a) income tax expense, (b) Consolidated Interest Expense,
(c) depreciation expense and (d) amortization expense.
"Euroclear" means the Euroclear System (or any successor
securities clearing agency).
"Event of Loss" is defined to mean any of the following events:
(a) the actual or constructive total loss of a Mortgaged Rig or the
agreed or compromised total loss of a Mortgaged Rig, (b) the
destruction of a Mortgaged Rig, (c) damage to a Mortgaged Rig to an
extent, determined in good faith by the Company within 90 days after
the occurrence of such damage (and evidenced by an officers'
certificate to such effect delivered to the Trustee, within such 90-
day period), as shall make repair thereof uneconomical or shall
render such Mortgaged Rig permanently unfit for normal use (other
than obsolescence) or (d) the condemnation, confiscation,
requisition, seizure, forfeiture or other taking of title to or use
of a Mortgaged Rig that shall not be revoked within six months. An
Event of Loss shall be deemed to have occurred: (i) in the event of
the destruction or other actual total loss of a Mortgaged Rig, on the
date of such loss; (ii) in the event of a constructive, agreed or
compromised total loss of a Mortgaged Rig, on the date of the
determination of such total loss pursuant to the relevant insurance
policy; (iii) in the case of any event referred to in clause (c)
above, upon the delivery of the officers' certificate to the Trustee;
or (iv) in the case of any event referred to in clause (d) above, on
the date six months after the occurrence of such event.
"Event of Loss Proceeds" is defined to mean all compensation,
damages and other payments (including insurance proceeds) received by
the Issuer, the Company, any Restricted Subsidiary, the Collateral
Agent or the Trustee, jointly or severally, from any Person,
including any governmental authority, with respect to or in
connection with an Event of Loss.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Global Note" means one or more Global Notes that do
not and are not required to bear the Private Placement Legend.
"Exchange Offer" means the offer that may be made by the Issuer
and the Company pursuant to the Registration Rights Agreement to
exchange Exchange Secured Notes for Initial Secured Notes.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Exchange Secured Notes" has the meaning set forth in the
Recitals to this Indenture and more particularly means any series of
the Secured Notes authenticated and delivered under this Indenture
pursuant to the Exchange Offer.
"Exchangeable Stock" means any Capital Stock which is
exchangeable or convertible into another security (other than Capital
Stock of the Company which is neither Exchangeable Stock nor
Redeemable Stock).
"GAAP" means generally accepted accounting principles in the
United States set forth in the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect from time to time.
"Global Note" means, individually and collectively, the
Regulation S Temporary Global Note, the Regulation S Permanent Note,
the U.S. Global Notes and the Exchange Global Notes.
"guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness of
any Person and any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or
other obligation of such Person (whether arising by virtue of
partnership arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise) or (ii) entered into for
the purpose of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided,
however, that the term "guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business. The
term "guarantee" used as a verb has a corresponding meaning. The
term ``guarantor'' shall mean any Person guaranteeing any obligation.
"Guarantee" means the guarantee of the Secured Notes pursuant to
the provisions described in Article XIII hereof.
"Hedging Obligations" of any Person means the net obligation
(not the notional amount) of such Person pursuant to any interest
rate swap agreement, foreign currency exchange agreement, interest
rate collar agreement, option or futures contract or other similar
agreement or arrangement relating to interest rates or foreign
exchange rates.
"Holder" or "Noteholder" means the Person in whose name a
Secured Note is registered on the Registrar's books.
"Incidental Asset" is defined to mean any equipment, outfit,
furniture, furnishings, appliances, spare or replacement parts or
stores owned by the Company or a Restricted Subsidiary that have
become obsolete or unfit for use or no longer useful, necessary or
profitable in the conduct of the business of the Company or such
Restricted Subsidiary, as the case may be. In no event shall the term
"Incidental Asset" include a drilling rig or a drillship or a
Mortgaged Rig.
"Incur" means issue, assume, guarantee, incur or otherwise
become liable for, provided, however, that any Indebtedness or
Capital Stock of a Person existing at the time such Person becomes a
Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Subsidiary at the
time it becomes a Subsidiary. The term "Incurrence" when used as a
noun shall have a correlative meaning.
"Indebtedness" of any Person at any date means, without
duplication:
(1) all indebtedness of such Person for borrowed money (whether
or not the recourse of the lender is to the whole of the assets of
such Person or only to a portion thereof);
(2) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(3) all obligations of such Person in respect of letters of
credit or other similar instruments (or reimbursement obligations
with respect thereto), other than standby letters of credit and
performance bonds issued by such Person in the ordinary course of
business, to the extent not drawn or, to the extent drawn, if such
drawing is reimbursed not later than the third Business Day
following demand for reimbursement;
(4) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services, except trade
payables and accrued expenses incurred in the ordinary course of
business;
(5) all Capitalized Lease Obligations of such Person;
(6) all Indebtedness of others secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by
such Person, to the extent of the fair market value of all the
assets of such Person subject to such Lien;
(7) all Indebtedness of others guaranteed by such Person to the
extent of such guarantee;
(8) Redeemable Stock; and
(9) all Hedging Obligations of such Person.
For purposes of clause (8) of the preceding sentence, Redeemable
Stock shall be valued at the maximum fixed redemption, repayment or
repurchase price, which shall be calculated in accordance with the
terms of such Redeemable Stock as if such Redeemable Stock were
repurchased on any date on which Indebtedness shall be required to be
determined pursuant to this Indenture; provided, however, that if
such Redeemable Stock is not then permitted to be redeemed, repaid or
repurchased, the redemption, repayment or repurchase price shall be
the book value of such Redeemable Stock. The amount of Indebtedness
of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the
maximum liability of any guarantees at such date; provided that for
purposes of calculating the amount of any non-interest bearing or
other discount security, such Indebtedness shall be deemed to be the
principal amount thereof that would be shown on the balance sheet of
the issuer thereof dated such date prepared in accordance with GAAP
but that such security shall be deemed to have been Incurred only on
the date of the original issuance thereof. The amount of Indebtedness
of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise
to the obligation, of any contingent obligations at such date.
"Indenture" means this Indenture, as amended or supplemented
from time to time by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, including
for all purposes of this Indenture and any supplemental indenture the
provisions of the Trust Indenture Act that are deemed to be a part of
and govern this Indenture and any supplemental indenture.
"Indirect Participant" means a Person who holds an interest
through a Participant.
"Initial Purchaser" means Donaldson, Lufkin & Jenrette
Securities Corporation.
"Initial Secured Notes" has the meaning set forth in the
Recitals to this Indenture and more particularly means any of the
Secured Notes authenticated and delivered under this Indenture other
than Exchange Secured Notes.
"Institutional Accredited Investor" means an entity which is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest Rate Protection Agreement" means any interest rate
swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect the Company or any
Restricted Subsidiary against fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of
business that are recorded as accounts receivable on the balance
sheet of the lender) or other extensions of credit (including by way
of guarantee or similar arrangement) or capital contribution to (by
means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others),
or any purchase or acquisition of Capital Stock, Indebtedness or
other similar instruments issued by such Person. For purposes of the
definition of "Unrestricted Subsidiary," the definition of
"Restricted Payment" and the covenant described under the "Limitation
on Restricted Payments" covenant (i) "Investment" shall include the
portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of any
Subsidiary of the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary, provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent
"Investment" in such Subsidiary at the time of such redesignation
equal to (x) the amount of such Investment immediately prior to such
redesignation less (y) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time of such redesignation; and
(ii) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Company's
Board of Directors.
"Investment Grade Rating" means BBB- or above, in the case of
S&P (or its equivalent under any successor rating categories of S&P),
Baa3 or above, in the case of Moody's (or its equivalent under any
successor rating categories of Moody's), and the equivalent in
respect of the ratings categories of any Rating Agencies substituted
for S&P or Moody's.
"Issue Date" means the date on which the Secured Notes are
originally issued.
"Issuer" means the Person named as such in the preamble of this
Indenture unless and until a successor replaces it pursuant to the
applicable provisions hereof and thereafter means such successor.
"Issuer Escrow Account" means the escrow account established
pursuant to the Issuer Escrow Agreement.
"Issuer Escrow Agreement" means the Senior Secured Note Escrow
Agreement of even date herewith among the Issuer, the Trustee and
United States Trust Company of New York as escrow agent.
"Issuer Escrowed Property" means the funds and Investments
contained in the Issuer Escrow Account.
"Issuer Loan" means a loan made under an Issuer Loan Agreement.
"Issuer Loan Agreement" means a loan agreement between the
Issuer and the Company pursuant to which the Issuer will make a loan
for the purpose of:
(a) Financing all or a portion of the cost of acquiring,
constructing, altering, improving or repairing the Mortgaged Rig or
improvements used or to be used in connection with such Mortgaged
Rig; or
(b) Financing all or any part of the purchase price of the
Mortgaged Rig or improvements used or to be used in connection with
such Mortgaged Rig, which Issuer Loan is incurred prior to or within
one year after the later of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof.
"Issuer Security Agreement" means the Senior Secured Note
Security and Pledge Agreement of even date among the Issuer, the
Trustee and United States Trust Company of New York as collateral
agent.
"Legal Holiday" means a Saturday, a Sunday or a day on which
federal offices or banking institutions in The City of New York, in
the city of the corporate trust office of the Trustee, or at a place
of payment are authorized by law, regulation or executive order to
remain closed. If a payment date is a Legal Holiday, payment may be
made on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
"Lien" means any mortgage, pledge, hypothecation, charge,
assignment, deposit arrangement, encumbrance, security interest, lien
(statutory or other), or preference, priority or other security or
similar agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any agreement to give or
grant a Lien or any lease, condition sale or other title retention
agreement having substantially the same economic effect as any of the
foregoing). For the purposes of this Indenture, the Company or any of
its Subsidiaries shall be deemed to own subject to a Lien any asset
which the Company has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capitalized
Lease Obligation or other title retention agreement relating to such
asset.
"Loss Excess Proceeds" is defined to mean the total of (i)
amounts treated as Loss Excess Proceeds under Section 3.8 and (ii)
the amount by which the Net Event of Loss Proceeds received by the
Company or any of its Restricted Subsidiaries from one or more Events
of Loss with respect to drilling rigs or drillships other than
Mortgaged Rigs occurring on or after the Issue Date in the most
receipt period of 12 consecutive months exceeds $10,000,000, less (in
the case of clause (ii)) the amount of such excess Net Event of Loss
Proceeds (A) used to repay Senior Indebtedness of the Company or
secured Senior Indebtedness of a Subsidiary Guarantor then owning a
Mortgaged Rig, in each case, with a permanent reduction of
availability in the case of revolving credit borrowings and owing to
a Person other than the Company or any of its Subsidiaries, or (B)
invested in Additional Assets (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and
evidenced by a Board Resolution).
"Maturity" means the date on which the principal of a Secured
Note becomes due and payable as provided therein or in this
Indenture, whether at the Stated Maturity or the Change of Control
Payment Date or the purchase date established pursuant to the terms
of this Indenture for an Excess Proceeds Offer or by declaration of
acceleration, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc., or if Moody's
Investors Services, Inc. shall cease rating the specified debt
securities and such ratings business with respect thereto shall have
been transferred to a successor Person, such successor Person.
"Mortgage" means a vessel mortgage, First Naval Mortgage or Deed
of Covenant substantially in the form and to the effect set forth as
an exhibit to an Issuer Loan Agreement.
"Mortgaged Rigs" means the drilling rigs, drillships or other
vessels owned by the Company and mortgaged to secure an Issuer Loan,
including the Mortgage Rigs listed on Schedule 1.1.
"Net Available Cash" from an Asset Sale means cash payments or
Temporary Cash Equivalents received therefrom (including any cash
payments received by way of deferred payment of principal pursuant to
a note or installment receivable or otherwise and proceeds from the
sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring
Person of Indebtedness or other obligations relating to such
properties or assets or received in any other noncash form), in each
case net of (i) all legal, title and recording tax expenses,
commissions and other fees and expenses incurred, and all federal,
state, provincial, foreign and local taxes required to be accrued as
a liability under GAAP, as a consequence of such Asset Sale, (ii) all
payments made on any Indebtedness which is secured by any assets
subject to such Asset Sale, in accordance with the terms of any Lien
upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law, be repaid out of
the proceeds from such Asset Sale, (iii) all distributions and other
payments required to be made to minority interest holders in
Subsidiaries or joint ventures as a result of such Asset Sale and
(iv) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated
with the property or other assets disposed in such Asset Sale and
retained by the Company or any Restricted Subsidiary after such Asset
Sale.
"Net Cash Proceeds" means, with respect to any issuance or sale
of Capital Stock, the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance or sale
and net of taxes paid or payable as a result thereof.
"Net Event of Loss Proceeds" means, with respect to any Event of
Loss, the Event of Loss Proceeds from such Event of Loss net of
related fees and expenses, distributions and other payments required
to be made to minority interest holders in Subsidiaries or joint
ventures as a result of such Event of Loss, and payments made to
repay Indebtedness or any other obligation outstanding at the time of
such Event of Loss; provided, however, that such Indebtedness or
other obligation is either (A) secured by a Lien on the property or
assets that suffered the Event of Loss or (B) required to be paid as
a result of such Event of Loss.
"New Senior Note Indenture" means the Indenture, dated the date
hereof, among the Company and U.S. Trust Company of Texas, National
Association, as trustee thereunder, relating to the New Senior Notes,
as amended and supplemented from time to time.
"New Senior Notes" means the 121/4% Senior Notes due 2006 of the
Company to be issued pursuant to the New Senior Note Indenture.
"Non-Convertible Capital Stock" means, with respect to any
Person, any non-convertible Capital Stock of such Person and any
Capital Stock of such Person convertible solely into non-convertible
common stock of such Person; provided, however, that Non-Convertible
Capital Stock shall not include any Redeemable Stock or Exchangeable
Stock.
"Non-Recourse Indebtedness" means Indebtedness or that portion
of Indebtedness of an Unrestricted Subsidiary as to which neither the
Company or any Restricted Subsidiary:
(1) provides credit support including any undertaking,
agreement or instrument which would constitute Indebtedness; or
(2) is directly or indirectly liable for such Indebtedness.
"Obligations" means, with respect to any Indebtedness, any
obligation thereunder, including, without limitation, principal,
premium and interest (including post petition interest thereon and,
with respect to the Secured Notes, Special Interest and Additional
Amounts), penalties, fees, costs, expenses, indemnifications,
reimbursements, damages and other liabilities.
"Obligors" means the Issuer, the Company and the Subsidiary
Guarantors, if any, collectively; "Obligor" means the Issuer, the
Company or any Subsidiary Guarantor.
"Offering Memorandum" means the Offering Memorandum, dated
March 19, 1999 relating to the Issuer's offering and placement of the
Initial Secured Notes.
"Offering" means the Offering of the Initial Secured Notes by
the Issuer.
"Officer" means, with respect to any Person, the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Chief Accounting Officer,
the Treasurer, any Assistant Treasurer, the Controller, the
Secretary, an Assistant Secretary or any Vice President of such
Person.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the President,
the Chief Executive Officer or a Vice President, and by the Chief
Financial Officer, the Chief Accounting Officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the
Issuer, the Company or a Subsidiary and delivered to the Trustee,
which shall comply with this Indenture.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee that meets the requirements of
Sections 12.4 and 12.5 hereof. The counsel may be an employee of or
counsel to the Issuer, the Company, any Subsidiary or the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the Company,
whether outstanding on the date on which the Secured Notes are
originally issued or thereafter created, incurred or assumed, unless,
in the case of any particular Indebtedness the instrument creating or
evidencing the same or pursuant to which the same is outstanding
expressly provides that such Indebtedness shall be subordinated in
right of payment to the Guarantee or the Issuer Loans, as applicable.
"Participant" means, with respect to DTC, Euroclear or Cedel, a
Person who has an account with DTC, Euroclear or Cedel, respectively
(and, with respect to DTC, shall include Euroclear and Cedel).
"Permitted Investments" means:
(a) certificates of deposit, bankers acceptances, time
deposits, Eurocurrency deposits and similar types of Investments
routinely offered by commercial banks with final maturities of one
year or less issued by commercial banks having capital and surplus in
excess of $100,000,000;
(b) commercial paper issued by any corporation, if such
commercial paper has credit ratings of at least ``A-1'' by S&P and at
least `P-1'' by Moody's;
(c) U.S. Government Obligations with a maturity of four years
or less;
(d) repurchase obligations of instruments of the type described
in clause (c);
(e) shares of money market mutual or similar funds having
assets in excess of $100,000,000;
(f) payroll advances in the ordinary course of business;
(g) other advances and loans to officers and employees of the
Company or any Restricted Subsidiary, so long as the aggregate
principal amount of such advances and loans does not exceed
$1,000,000 at any one time outstanding;
(h) Investments in any Person in the form of a capital
contribution of the Company's Common Stock;
(i) Investments made by the Company in its Restricted
Subsidiaries (or any Person that will be a Restricted Subsidiary as a
result of such Investment) or by a Restricted Subsidiary in the
Company or in one or more Restricted Subsidiaries (or any Person that
will be a Restricted Subsidiary as a result of such Investment);
(j) Investments in stock, obligations or securities received in
settlement of debts owing to the Company or any Restricted Subsidiary
as a result of bankruptcy or insolvency proceedings or upon the
foreclosure, perfection or enforcement of any Lien in favor of the
Company or any Restricted Subsidiary, in each case as to debt owing
to the Company or any Restricted Subsidiary that arose in the
ordinary course of business of the Company or any such Restricted
Subsidiary;
(k) Investments made in exchange for Indebtedness permitted by
clauses (b)(4) and (b)(5) of Section 4.9;
(l) Investments in the capital stock of Navis ASA, a Norwegian
corporation, in exchange for cash and non-cash assets (the fair
market value of which shall be determined in good faith by the Board
of Directors of the Company), in an aggregate amount not to exceed
$50,000,000 at any time outstanding;
(m) Investments consisting of the redesignation of the
Subsidiary owning or operating the drillship Deepwater Frontier or
the semisubmersible RBS8M as an Unrestricted Subsidiary, or the
contribution, transfer or other disposition of the drillship
Deepwater Frontier or the semisubmersible RBS8M and related equipment
and assets (including any drilling contract) by the Company or any
Restricted Subsidiary to a Person other than a Restricted Subsidiary,
in connection with the refinancing of the Indebtedness Incurred to
finance the construction of such rigs;
(n) Investments in a Person other than a Restricted Subsidiary
for the purpose of financing the construction or upgrade prior to
delivery of the drillship Deepwater Frontier or the semisubmersible
RBS8M pursuant to the terms of applicable construction and equipment
installation agreements;
(o) Investments in a Person other than a Restricted Subsidiary
for the purpose of financing the construction or upgrade of new
drilling rigs, drillships or similar vessels and related equipment,
in an aggregate amount not to exceed at any time outstanding
(i) $100,000,000 less (ii) the aggregate amount of all payments
actually made pursuant to paragraph (n) of this definition that
represent payments for amounts in excess of the Company's estimated
costs for the vessels referred to therein, as in effect on the Issue
Date; provided, however, that at the time of such Investment, the
Company or such Person has entered into a Qualifying Contract with
respect thereto;
(p) Investments represented by that portion of the proceeds
from Asset Sales that is not required to be cash or Temporary Cash
Equivalents by the covenant described in Section 4.15 hereof; and
(q) Investments in Devco in an aggregate amount not to exceed
$10,000,000 at any time outstanding.
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends, or as
to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such Person, over shares of Capital
Stock of any other class of such Person.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Qualifying Contract" with respect to a drilling rig, drillship
or similar vessel means a contract for the use thereof (i) between
the Company or a Restricted Subsidiary or, for the purposes of clause
(o) of the definition of "Permitted Investments," a Person other than
a Restricted Subsidiary and a counterparty that, as certified in an
officers' certificate delivered to the Trustee in connection
therewith, is either generally recognized in the offshore drilling
industry as a major oil company or has an investment grade rating on
its long-term debt from Moody's or S&P, (ii) having a minimum term of
two years and (iii) containing a minimum dayrate for such drilling,
rig, drillship or similar vessel.
"Rating Agencies" means (a) S&P and Moody's or (b) if S&P or
Moody's or both of them are not making ratings of the Secured Notes
publicly available, a nationally recognized U.S. rating agency or
agencies, as the cases may be, selected by the Company, which will be
substituted for S&P or Moody's or both, as the case may be.
"Record Date" means, for the interest payment on any Interest
Payment Date, the date specified in Section 2.12 hereof.
"Redeemable Stock" means, with respect to any series of Secured
Notes, any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or
upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part,
on or prior to the date on which the Secured Notes of such series
mature. Notwithstanding the preceding sentence, any Capital Stock
that would constitute Redeemable Stock solely because the holders
thereof have the right to require the Company to repurchase such
Capital Stock upon the occurrence of a change of control or an asset
sale shall not constitute Redeemable Stock if the terms of such
Capital Stock provide that the Company may not repurchase or redeem
any such Capital Stock pursuant to such provisions unless such
repurchase or redemption complies with the covenants described in
Sections 3.10, 4.8, 4.11 and 4.15.
"Redemption Date" means, when used with respect to any Secured
Note or part thereof to be redeemed hereunder, the date fixed for
redemption of such Secured Notes pursuant to the terms of the Secured
Notes and this Indenture.
"Redemption Price" means, when used with respect to any Secured
Note or part thereof to be redeemed hereunder, the price fixed for
redemption of such Secured Note pursuant to the terms of the Secured
Notes and this Indenture, plus accrued and unpaid interest, if any,
and Special Interest, if any, thereon, to the Redemption Date.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or
to issue other Indebtedness in exchange or replacement for, such
indebtedness. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the
Issuer, Company and the Initial Purchaser, as such agreement may be
amended, modified or supplemented from time to time.
"Regulation S" means Regulation S under the Securities Act
(including any successor regulation thereto), as it may be amended
from time to time.
"Regulation S Global Note" means a Regulation S Temporary Global
Note or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global
senior note that contains the paragraph referred to in footnote 1,
the phrase referred to in footnote 4 and the additional schedule
referred to in footnote 5 to the form of the Secured Note attached
hereto as Exhibit A, and that is deposited with the Secured Note
Custodian and registered in the name of the Depositary or its
nominee, representing the Initial Secured Notes sold in reliance on
Regulation S.
"Regulation S Temporary Global Note" means a single temporary
global senior note that contains the paragraphs referred to in
footnote 1, the phrase referred to in Footnote 4 and the additional
schedule referred to in footnote 4 to the form of the Senior Secured
Note attached hereto as Exhibit A, in the form of the Secured Note
attached hereto as Exhibit A that is deposited with the Secured Note
Custodian and registered in the name of the Depositary or its
nominee, representing the Initial Secured Notes sold in reliance on
Regulation S.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted
Subsidiaries on the Issue Date.
"Responsible Officer," when used with respect to the Trustee,
means any officer of the Trustee with direct responsibility of the
administration of this Indenture 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.
"Restricted Subsidiary" means any Subsidiaries other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act (including
any successor regulation thereto), as it may be amended from time to
time.
"S&P" is defined to mean Standard & Poors Ratings Group, a
division of McGraw-Hill Companies, Inc. and its successors.
"Sale Excess Proceeds" is defined to mean (i) all amounts
treated as Sale Excess Proceeds under Section 3.10 and (ii) all
amounts treated as Sale Excess Proceeds under Section 4.15(b) hereof.
"Sale/Leaseback Transaction" means any arrangement with any
Person providing for the leasing by the Company or any of its
Restricted Subsidiaries, for a period of more than three years, of
any real or tangible personal property, which property has been or is
to be sold or transferred by the Company or such Restricted
Subsidiary to such Person in contemplation of such leasing.
"SEC" or "Commission" means the Securities and Exchange
Commission.
"Secured Note Custodian" means the Trustee, as custodian for the
Depositary with respect to the Secured Notes in global form, or any
successor entity thereto.
"Secured Notes" has the meaning set forth in the Recitals of
this Indenture and more particularly means any of the Secured Notes
authenticated and delivered under this Indenture.
"Securities Act" means the U.S. Securities Act of 1933, as
amended.
"Security Agreements" means the Issuer Escrow Agreement, the
Issuer Security Agreement, the Mortgages, the Company Escrow
Agreement and the Company Security Agreement and any other document
that secures the Secured Notes or an Issuer Loan.
"Senior Indebtedness" of any Person means (i) Indebtedness of
such Person, whether outstanding on the Issue Date or thereafter
Incurred, and (ii) accrued and unpaid interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company to the extent post-filing
interest is allowed in such proceeding) in respect of (A)
indebtedness for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for the payment
of which such Person is responsible or liable unless, in the case of
(i) and (ii), in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is provided that such
obligations are subordinate in right of payment to the Secured Notes,
the Guarantee, the Issuer Loans or the Subsidiary Guarantees, as
applicable; provided, however, that Senior Indebtedness shall not
include (1) any obligation of such Person to any Subsidiary of such
Person, (2) any liability for federal, state, local, foreign or other
taxes owed or owing by such Person, (3) any accounts payable or other
liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities), (4) any Indebtedness of such Person (and any accrued
and unpaid interest in respect thereof) which is subordinate or
junior in any respect to any other Indebtedness or other obligation
of such Person or (5) that portion of any Indebtedness which at the
time of Incurrence is Incurred in violation of this Indenture.
"Significant Subsidiary" means any Subsidiary Guarantor and any
other Restricted Subsidiary that would be a ``Significant
Subsidiary'' of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC. For purposes of Section
6.1(g) and Section 6.1(h) hereof only, the term "Significant
Subsidiary" shall also include any group of Restricted Subsidiaries
that, taken as a whole as of the latest audited consolidated
financial statements for the Company and its Subsidiaries, would
constitute a Significant Subsidiary.
"Special Interest" means all "special interest" owing pursuant
to the Registration Rights Agreement.
"Special Record Date" means a date fixed by the Trustee pursuant
to Section 2.12 hereof for the payment of Defaulted Interest.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final
payment of principal of such security is due and payable, including
pursuant to any mandatory redemption provision (but excluding any
provision providing for the repurchase of such security at the option
of the holder thereof upon the happening of any contingency unless
such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Issuer,
the Company or a Subsidiary Guarantor, as the case may be (whether
outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Secured Notes, the
Guarantee, the Issuer Loans or the Subsidiary Guarantee, as
applicable, whether pursuant to a written agreement to that effect or
by operation of law.
"Subsidiary" means, with respect to any Person:
(1) any corporation of which more than 50% of the total
voting power of all classes of the capital stock entitled
(without regard to the occurrence of any contingency) to vote in
the election of directors is owned by such Person directly or
through one or more other Subsidiaries of such Person, and
(2) any entity other than a corporation of which at least
a majority of the capital stock or other equity interest
(however designated) entitled (without regard to the occurrence
of any contingency) or vote in the election of the governing
body, partners, managers or others that will control the
management of such entity is owned by such Person directly or
through one or more other Subsidiaries of such Person.
"Subsidiary Guarantor" means each Subsidiary of the Company,
whether now owned or hereafter formed, which owns a Mortgaged Rig or
which shall execute and deliver a Subsidiary Guarantee.
"Subsidiary Guarantee" means a guarantee of the Issuer's
obligations with respect to the Secured Notes issued by a Subsidiary
of the Company.
"Tangible Property" means all land, buildings, machinery and
equipment and leasehold interests and improvements which would be
reflected on a balance sheet of the Company prepared in accordance
with GAAP, excluding (a) all rights, contracts and other intangible
assets of any nature whatsoever and (b) all inventories and other
current assets.
"Temporary Cash Investments" means Investments described in
clauses (a), (b), (c) and (d) of the definition of ``Permitted
Investments.''
"Transfer Restricted Notes" means Secured Notes that bear or are
required to bear the Private Placement Legend.
"Trust Indenture Act" or "TIA" means the U.S. Trust Indenture
Act of 1939 (15 U.S.C. 77aaa-77bbbb) as in effect on the date on
which this Indenture is qualified under the Trust Indenture Act
except as required by Section 9.3 hereof, provided that if the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture
Act" or "TIA" means, if so required by such amendment, the Trust
Indenture Act of 1939, as so amended.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means:
(a) any Subsidiary of the Company that at the time of
determination will be designated an Unrestricted subsidiary by the
Board of Directors of the Company as provided below and
(b) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any
Subsidiary of the Company as an Unrestricted Subsidiary so long as:
(1) it has no Indebtedness other than Non-Recourse Indebtedness;
provided, however, that notwithstanding any other provision of
this Indenture, a Subsidiary shall not fail to constitute an
Unrestricted Subsidiary by reason of (a) the guarantee by the
Company or a Restricted Subsidiary in connection with synthetic
lease obligations Incurred to finance the construction or upgrade
of drilling rigs, drillships or similar vessels; and (b)
obligations of the Company or a Restricted Subsidiary relating to
Indebtedness of an Unrestricted Subsidiary if such Indebtedness
constituted a Permitted Investment or a Restricted Payment
permitted by Section 4.11 hereof at the time of its Incurrence or
at the time of designation of such Subsidiary as an Unrestricted
Subsidiary; and
(2) after giving effect thereto, such designation was permitted
by Section 4.11.
Any such designation by the Board of Directors of the Company
shall be evidenced to the Trustee by filing a resolution of the Board
of Directors with the Trustee giving effect to such designation. The
Board of Directors of the Company may designate any Unrestricted
Subsidiary as a Restricted Subsidiary if, immediately after giving
effect to such designation, (A) no Default or Event of Default shall
have occurred and be continuing and (B) the Company could incur $1.00
of additional Indebtedness under Section 4.9(a) hereof.
"U.S. Global Note" means a permanent Global Note that contains
the paragraphs referred to in footnote 1 or footnote 3, in the phrase
referred to in footnote 4 and the additional schedule referred to in
footnote 5 to the form of the Secured Note attached hereto as Exhibit
A, and that is deposited with the Secured Note Custodian and
registered in the name of the Depositary or its nominee, representing
Secured Notes sold in reliance on Rule 144A or in reliance on another
exemption from the registration requirements of the Securities Act.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations)
of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and
credit of the United States of America is pledged and which are not
callable at the issuer's option.
"U.S. Person" means (i) any individual resident in the United
States, (ii) any partnership or corporation organized or incorporated
under the laws of the United States, (iii) any estate of which an
executor or administrator is a U.S. Person (other than an estate
governed by foreign law and of which at least one executor or
administrator is a non-U.S. Person who has sole or shared investment
discretion with respects to its assets), (iv) any trust of which any
trustee is a U.S. Person (other than a trust of which at least one
trustee is an non-U.S. Person who has sole or shared investment
discretion with respect to its assets and no beneficiary of the trust
(and no settler, if the trust is revocable) is a U.S. Person), (v)
any agency or branch of a foreign entity located in the United
States, (vi) any non-discretionary or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit
or account of a U.S. person, (vii) any discretionary or similar
account (other than an estate or trust) held by a dealer or other
fiduciary organized, incorporated or (if an individual) resident in
the United States (other than such an account held for the benefit or
account of a non-U.S. Person), (viii) any partnership or corporation
organized or incorporated under the laws of a foreign jurisdiction
and formed by a U.S. Person principally for the purpose of investing
in securities not registered under the Securities Act (unless it is
organized or incorporated and owned, by "accredited investors" within
the meaning of Rule 501(a) under the Securities Act who are not
natural persons, estates or trusts); provided, however, that the term
"U.S. Person" shall not include (A) a branch or agency of a U.S.
Person that is located and operating outside the United States for
valid business purposes as a locally regulated branch or agency
engaged in the banking or insurance business, (B) any employee
benefit plan established and administered in accordance with the law,
customary practices and documentation of a foreign country and (C)
the international organizations set forth in Section 902(k)(vi) of
Regulation S and any other similar international organizations, and
their agencies, affiliates and pension plans.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or
trustees thereof.
"Wholly Owned Restricted Subsidiary" means a Restricted
Subsidiary all the Capital Stock of which (other than directors'
qualifying shares) is owned by the Company or one or more Wholly
Owned Restricted Subsidiaries.
Section 1.2 Other Definitions.
Defined
Term in Section
"Act" 12.6(a)
"Additional Amounts" ______
"Affiliate Transaction 4.17(a)
"Change of Control" 4.8(a)
"Change of Control Offer" 4.8(a)
"Change of Control Purchase Price" 4.8(a)
"Change of Control Offer Period" 4.8(a)
"Change of Control Payment Date" 4.8(b)
"Comparable Treasury Price" 3.9
"Comparable Treasury Rate" 3.9
"Covenant Defeasance" 9.3
"DTC" 2.3
"Defaulted Interest" 2.12
"Defeasance" 9.2
"Event of Default" 6.1
"Excess Proceeds" ______
"Excess Proceeds Offer" 3.10(a)
"Excess Proceeds Offer Amount" 3.10(b)
"Excess Proceeds Offer Period" 3.10(b)
"Excess Proceeds Purchase Date 3.10(b)
"40-day restricted period" 2.1(b)
"Guaranteed Indebtedness" 4.19, 13.7
"Independent Investment Banker" 3.9
"Interest Payment Date" 2.12
"Loss Proceeds Receipt Date" 3.8
"Loss Date" 3.8
"Loss Redemption Amount" 3.8
"Lost Mortgaged Rig" 3.8
"Make-Whole Premium" 3.7(c)
"Mortgaged Rig Asset" 4.15(a)
"Paying Agent" 2.3
"Primary Treasury Dealer" 3.9
"Private Placement Legend" 2.6(e)(i)
"Process Agent" 12.10
"Reference Treasury Dealer" 3.9
"Reference Treasury Dealer Quotations" 3.9
"Registrar" 2.3
"Restricted Payment" 4.11(a)
"Sale Date" 3.9
"Sale Proceeds Receipt Date" 3.9
"Sale Redemption Amount" 3.9
"Securities Register" 2.3
"7-Year Secured Notes" 2.1(b)
"Sold Mortgaged Rig" 3.9
"Successor" 5.1(a)
"Suspended Covenants" Art. IV
"10-Year Secured Notes" 2.1(b)
"Treasury Rate" 3.9
Section 1.3 Incorporation By Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made
a part of this Indenture.
The following Trust Indenture Act terms used in this Indenture
have the following meanings:
"indenture securities" means the Secured Notes;
"indenture security holder" means a Holder of a Secured Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Secured Notes means the Issuer or any other
obligor on the Secured Notes.
All other terms used in this Indenture that are defined by the
Trust Indenture Act, defined by the Trust Indenture Act reference to
another statute or defined by Commission rule under the Trust
Indenture Act have the meanings so assigned to them therein.
Section 1.4 Rules of Construction.
Unless the context otherwise requires:
(1) 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;
(2) a term has the meaning assigned to it;
(3) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the plural
include the singular;
(6) provisions apply to successive events and transactions;
(7) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor
sections or rules adopted by the Commission from time to time;
(8) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof
that would be shown on a balance sheet of the issuer dated such date
prepared in accordance with generally accepted accounting principles;
(9) when used with respect to the Secured Notes, the term "principal
amount" shall mean the principal amount thereof at Maturity;
(10) unless otherwise expressly provided herein, the principal amount
of any preferred stock shall be greater of (i) the maximum
liquidation value of such preferred stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to
such preferred stock; and
(11) all references to amounts of money or $ mean U.S. Dollars.
ARTICLE II
THE SECURED NOTES
Section 2.1 Form and Dating.
(a) General. The Secured Notes, together with the Trustee's
certificate of authentication and the Company's notation of the
Guarantee, shall be substantially in the form set forth in Exhibit A
hereto. The Secured Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each
Secured Note shall be dated the date of its authentication. The
Secured Notes shall be issued only in fully registered form, without
coupons, in denominations of $1,000 and integral multiples thereof.
The Initial Secured Notes and the Exchange Secured Notes will be the
same except that the Private Placement Legend and paragraph 18 will
be omitted from the Exchange Secured Notes.
The terms and provisions contained in the Secured Notes shall
constitute, and are hereby expressly made, a part of this Indenture
and the Issuer, the Guarantor and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
(b) Authorized Principal Amount; Issuable in Series; Terms. The
aggregate principal amount of Secured Notes which may be
authenticated and delivered under this Indenture is $800,000,000
issuable in two series. All Secured Notes 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 of the Secured Notes of such series.
(i) There is created a series of Secured Notes with the following
terms:
The title of the series of Secured Notes will be 11% Senior
Secured Notes due 2006 (the "7-Year Secured Notes"). Such series
will be limited to (A) Initial 7-Year Secured Notes in an
aggregate principal amount not to exceed $400,000,000 (B) Exchange
Secured Notes for issue only in the Exchange Offer pursuant to the
Exchange Offer Registration Statement for a like principal amount
of Initial 7-Year Secured Notes exchanged in such Exchange Offer,
in each case upon the receipt of a Company Order directing the
Trustee to authenticate such 7-Year Secured Notes and certifying
that all conditions precedent to the issuance of the relevant
7-Year Secured Notes contained herein have been complied with.
The aggregate principal amount of 7-Year Secured Notes outstanding
at any time may not exceed $400,000,000, except as provided in
Section 2.7 hereof. Such 10-Year Secured Notes will mature on
March 15, 2006.
(ii) There is also created a series of Secured Notes under this
Indenture with the following terms:
The title of the series of Secured Notes will be 11 3/8% Secured
Notes due 2009 (the "10-Year Secured Notes"). Such series will be
limited to (A) Initial 10-year Secured Notes in an aggregate
principal amount not to exceed $400,000,000; (B) Exchange Secured
Notes for issue only in the Exchange Offer pursuant to the
Exchange Offer Registration Statement for a like principal amount
of Initial 10-Year Secured Notes exchanged in such Exchange Offer,
in each case upon the receipt of a Company Order directing the
Trustee to authenticate such 10-Year Secured Notes and certifying
that all conditions precedent to the issuance of the relevant 10-
Year Secured Notes contained herein have been complied with. The
aggregate principal amount of 10-Year Secured Notes outstanding at
any time may not exceed $400,000,000, except as provided in
Section 2.7 hereof. Such 10-Year Secured Notes will mature on
March 15, 2009.
(c) Initial Secured Notes. Initial Secured Notes, with the
notations of the Guarantee endorsed thereon, shall be issued in the
form of one or more permanent Global Notes in definitive fully
registered form without interest coupons. Secured Notes offered and
sold to QIBs in reliance on Rule 144A, shall be issued initially in
the form of the U.S. Global Notes, which shall be deposited on behalf
of the purchasers of the Secured Notes represented thereby with the
Secured Note Custodian, and registered in the name of the Depositary
or a nominee of the Depositary, duly executed by the Issuer and
authenticated by the Trustee as hereinafter provided. The aggregate
principal amount of the U.S. Global Notes may from time to time be
increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee as hereinafter provided.
Initial Secured Notes offered and sold in reliance on Regulation S
shall be issued initially in the form of the Regulation S Temporary
Global Note, which shall be deposited on behalf of the purchasers of
the Secured Notes represented thereby with the Secured Note
Custodian, and registered in the name of the Depositary or the
nominee of the Depositary for the accounts of designated agents
holding on behalf of Euroclear or Cedel, duly executed by the Issuer
and authenticated by the Trustee as hereinafter provided. The "40-day
restricted period" (as defined in Regulation S) shall be terminated
upon the receipt by the Trustee of a written certificate from the
Depositary, together with copies of certificates from Euroclear and
Cedel certifying that they have received certification of non-United
States beneficial ownership of 100% of the aggregate principal amount
of the Regulation S Temporary Global Note (except to the extent of
any beneficial owners thereof who acquired an interest therein
pursuant to another exemption from registration under the Securities
Act and who will take delivery of a beneficial ownership interest in
a 144A Global Note, all as contemplated by Section 2.6(a)(ii)
hereof). Following the termination of the 40-day restricted period,
beneficial interests in the Regulation S Temporary Global Note shall
be exchanged for beneficial interests in Regulation S Permanent
Global Note pursuant to the Applicable Procedures. Simultaneously
with the authentication of Regulation S Permanent Global Note, the
Trustee shall cancel the Regulation S Temporary Global Note. The
aggregate principal amount of the Regulation S Temporary Global Note
and the Regulation S Permanent Global Note may from time to time be
increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee, as the case may be, in
connection with transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Secured
Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Secured Notes
from time to time endorsed on Schedule A thereto and that the
aggregate amount of outstanding Secured Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect
exchanges, redemptions and transfers of interests. Any endorsement of
Schedule A of a Global Note to reflect the amount of any increase or
decrease in the amount of outstanding Secured Notes represented
thereby shall be made by the Trustee or the Secured Note Custodian,
at the direction of the Trustee, in accordance with instructions
given by the Holder thereof as required by Section 2.6 hereof.
The provisions of the "Operating Procedures of the Euroclear
Clearance System" and "Terms and Conditions Governing Use of
Euroclear" and the "Management Regulations" and "Instructions to
Participants" of Cedel shall be applicable to interests in the
Regulation S Temporary Global Note and the Regulation S Permanent
Global Note that are held by Participants through Euroclear or Cedel.
The Trustee shall have no obligation to notify Holders of any such
procedures or to monitor or enforce compliance with the same.
Except as set forth in Section 2.6 hereof, the Global Notes may
be transferred, in whole and not in part, only to another nominee of
the Depositary or to a successor of the Depositary or its nominee.
(d) Book-Entry Provisions. This Section 2.1(d) shall apply only to
Global Notes deposited with or on behalf of the Depositary.
The Issuer shall execute and the Trustee shall, in accordance
with this Section 2.1(d), authenticate and deliver the Global Secured
Notes that (i) shall be registered in the name of the Depositary or
the nominee of the Depositary and (ii) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary's
instructions or held by the Secured Note Custodian.
Participants shall have no rights either under this Indenture
with respect to any Global Note held on their behalf by the
Depositary or by the Secured Note Custodian as custodian for the
Depositary or under such Global Note, and the Depositary may be
treated by the Issuer, the Trustee and any agent of the Issuer or the
Trustee as the absolute owner of such Global Note for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Issuer, the Trustee or any agent of the Issuer or the
Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between
the Depositary and its Participants, the operation of customary
practices of such Depositary governing the exercise of the rights of
an owner of a beneficial interest in any Global Note.
(e) Certificated Secured Notes. Secured Notes issued in certificated
form shall be substantially in the form of Exhibit A attached hereto
(but without including the text referred to in footnotes 1 and 4
thereto) and shall be printed, typewritten, lithographed or engraved
or produced by any combination of these methods or may be produced by
any other method permitted by the rules of any securities exchange on
which the Secured Notes may be listed, as evidenced by the execution
of such Secured Notes.
(f) Provisions Applicable to Forms of Secured Notes. The Secured
Notes may also have such additional provisions, omissions, variations
or substitutions as are not inconsistent with the provisions of 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 this Indenture, any applicable law or with
any rules made pursuant thereto or with the rules of any securities
exchange or governmental agency or as may be determined consistently
herewith by the Officers of the Issuer executing such Secured Notes,
as conclusively evidenced by their execution of such Secured Notes.
All Secured Notes will be otherwise substantially identical except as
provided herein.
Subject to the provisions of this Article II, a Holder of a
Global Note may grant proxies and otherwise authorize any Person to
take any action that a Holder is entitled to take under this
Indenture or the Secured Notes.
Section 2.2 Execution and Authentication.
Two Officers shall sign the Secured Notes for the Issuer by
manual or facsimile signature.
If an Officer whose signature is on a Secured Note no longer
holds that office at the time a Secured Note is authenticated, the
Secured Note shall nevertheless be valid.
A Secured Note shall not be valid until authenticated by the
manual signature of the Trustee. The signature shall be conclusive
evidence that the Secured Note has been authenticated under this
Indenture. The form of Trustee's certificate of authentication to be
borne by the Secured Notes shall be substantially as set forth in
Exhibit A hereto.
The Trustee shall authenticate (i) Initial 7-Year Secured Notes
for original issue in an aggregate principal amount not to exceed
$400,000,000 and Initial 10-Year Secured Notes in an aggregate
principal amount not to exceed $400,000,000 and (ii) Exchange 7-Year
Secured Notes or Exchange 10-Year Secured Notes for issue only in the
Exchange Offer pursuant to the Exchange Offer Registration Statement
for a like principal amount of Initial 7-Year Secured Notes or
Initial 10-Year Secured Notes exchanged in such Exchange Offer, in
each case upon the receipt of a Company Order directing the Trustee
to authenticate such Secured Notes and certifying that all conditions
precedent to the issuance of the relevant Secured Notes contained
herein have been complied with.
The aggregate principal amount of 7-Year Secured Notes and 10-
Year Secured Notes outstanding at any time may not exceed
$400,000,000 or $400,000,000, as the case may be, except as provided
in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Issuer to authenticate Secured Notes. Unless limited by the terms
of such appointment, an authenticating agent may authenticate Secured
Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent
to deal with the Issuer or an Affiliate of the Issuer.
Section 2.3 Registrar and Paying Agent.
The Issuer shall maintain (i) an office or agency where Secured
Notes may be presented for registration of transfer or for exchange
("Registrar"), (ii) an office or agency where Secured Notes may be
presented for payment ("Paying Agent"), and (iii) and an office or
agency where notices or demands to or upon the Issuer and the
Guarantor in respect of the Secured Notes and this Indenture may be
served. The Registrar shall keep a register of the Secured Notes and
of their transfer and exchange (the "Securities Register"). The
Issuer may appoint one or more co-registrars and one or more
additional paying agents except as otherwise provided in this
Indenture. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Issuer
may change any Paying Agent or Registrar without notice to any
Holder. The Issuer shall notify the Trustee in writing of the name
and address of any Agent not a party to this Indenture. If the Issuer
fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Issuer or any of its
Subsidiaries may act as Paying Agent or Registrar.
The Issuer initially appoints The Depository Trust Issuer
("DTC") to act as Depositary with respect to the Global Secured
Notes.
The Issuer initially appoints the Trustee (at the Corporate
Trust Office of the Trustee) to act as the Registrar and Paying Agent
and to act as Secured Note Custodian with respect to the Global
Notes.
Section 2.4 Paying Agent to Hold Money in Trust.
The Issuer shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Trustee all money held by the
Paying Agent for the payment of principal of, premium, if any, on,
interest on, and Special Interest and Additional Amounts, if any, on,
the Secured Notes, and shall notify the Trustee of any default by the
Issuer in making any such payment. While any such default continues,
the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. The Issuer at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent (if other than the Issuer or a Subsidiary)
shall have no further liability for the money. If the Issuer, the
Company or a Subsidiary acts as Paying Agent, it shall segregate and
hold in a separate trust fund for the benefit of the Holders all
money held by it as Paying Agent. Upon any bankruptcy or
reorganization proceedings relating to the Issuer, the Trustee shall
serve as Paying Agent for the Secured Notes.
Section 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Issuer shall
furnish to the Trustee at least seven Business Days before each
Interest Payment Date and at such other times as the Trustee may
request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the
Holders of Secured Notes, and the Issuer shall otherwise comply with
TIA Section 312(a).
Section 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Global Secured Notes. The transfer and
exchange of beneficial interests in Global Secured Notes shall be
effected through the Depositary, in accordance with this Indenture
and the Applicable Procedures, which shall include restrictions on
transfer comparable to those set forth herein to the extent required
by the Securities Act. Beneficial interests in a Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Global Note in accordance with the
transfer restrictions set forth in subsection (e) of this Section 2.6
and in the legend in subsection (f) of this Section 2.6. Transfers of
beneficial interests in the Global Notes to Persons required to take
delivery thereof in the form of an interest in another Global Note
shall be permitted as follows:
(i) U.S. Global Note to Regulation S Global Note. Prior to the
expiration of the 40-day restricted period, an owner of a beneficial
interest in a U.S. Global Note deposited with the Depositary (or the
Secured Note Custodian) will not be permitted to transfer its
interest to a Person who wishes to take delivery thereof in the form
of an interest in the Regulation S Global Note of the same series.
If, at any time after the expiration of the 40-day restricted period,
an owner of a beneficial interest in a U.S. Global Note deposited
with the Depositary (or the Secured Note Custodian) wishes to
transfer its beneficial interest in such U.S. Global Note to a Person
who is required or permitted to take delivery thereof in the form of
an interest in a Regulation S Global Note of the same series, such
owner shall, subject to the Applicable Procedures, exchange or cause
the exchange of such interest for an equivalent beneficial interest
in a Regulation S Global Note of the same series as provided in this
Section 2.6(a)(i). Upon receipt by the Trustee of (1) instructions
given in accordance with the Applicable Procedures from a Participant
directing the Trustee to credit or cause to be credited a beneficial
interest in the Regulation S Global Note of the same series in an
amount equal to the beneficial interest in the U.S. Global Note to be
exchanged, (2) a written order given in accordance with the
Applicable Procedures containing information regarding the
Participant account of the Depositary and the Euroclear or Cedel
account to be credited with such increase, and (3) a certificate in
the form of Exhibit B-1 hereto given by the owner of such beneficial
interest stating that the transfer of such interest has been made in
compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with Rule 903 or Rule 904 of
Regulation S, then the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the aggregate principal
amount at Maturity of the applicable U.S. Global Note and to increase
or cause to be increased the aggregate principal amount at Maturity
of the applicable Regulation S Global Note by the principal amount at
Maturity of the beneficial interest in the U.S. Global Note to be
exchanged or transferred, to credit or cause to be credited to the
account of the Person specified in such instructions, a beneficial
interest in the Regulation S Global Note equal to the reduction in
the aggregate principal amount at Maturity of the U.S. Global Note,
and to debit, or cause to be debited, from the account of the Person
making such exchange or transfer the beneficial interest in the U.S.
Global Note that is being exchanged or transferred.
(ii) Regulation S Global Note to U.S. Global Note. Prior to the
expiration of the 40-day restricted period, an owner of a beneficial
interest in a Regulation S Global Note deposited with the Depositary
(or the Secured Note Custodian) will not be permitted to transfer its
interest to a Person who wishes to take delivery thereof in the form
of an interest in a U.S. Global Note of the same series. If, at any
time, after the expiration of the 40-day restricted period, an owner
of a beneficial interest in a Regulation S Global Note deposited with
the Depositary or with the Secured Note Custodian wishes to transfer
its beneficial interest in such Regulation S Global Note to a Person
who is required or permitted to take delivery thereof in the form of
an interest in a U.S. Global Note of the same series, such owner
shall, subject to the Applicable Procedures, exchange or cause the
exchange of such interest for an equivalent beneficial interest in a
U.S. Global Note of the same series as provided in this Section
2.6(a)(ii). Upon receipt by the Trustee of (1) instructions from
Euroclear or Cedel, if applicable, and the Depositary, directing the
Trustee, as Registrar, to credit or cause to be credited a beneficial
interest in the U.S. Global Note of the same series equal to the
beneficial interest in the Regulation S Global Note to be exchanged,
such instructions to contain information regarding the Participant
account with the Depositary to be credited with such increase, (2) a
written order given in accordance with the Applicable Procedures
containing information regarding the Participant account of the
Depositary and (3) a certificate in the form of Exhibit B-2 attached
hereto given by the owner of such beneficial interest stating (A) if
the transfer is pursuant to Rule 144A, that the Person transferring
such interest in a Regulation S Global Note reasonably believes that
the Person acquiring such interest in a U.S. Global Note is a QIB and
is obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable blue sky or securities
laws of any state of the United States, (B) that the transfer
complies with the requirements of Rule 144 under the Securities Act,
(C) if the transfer is to an Institutional Accredited Investor that
such transfer is in compliance with the Securities Act and that a
certificate in the form of Exhibit C attached hereto is attached
thereto, together with, if the Issuer should so request or if the
transfer is in respect of an aggregate principal amount of Secured
Notes less than $250,000, an Opinion of Counsel in form reasonably
acceptable to the Issuer that such transfer is in compliance with the
Securities Act or (D) if the transfer is pursuant to any other
exemption from the registration requirements of the Securities Act,
that the transfer of such interest has been made in compliance with
the transfer restrictions applicable to the Global Notes and pursuant
to and in accordance with the requirements of the exemption claimed,
such statement to be supported by an Opinion of Counsel from the
transferee or the transferor in form reasonably acceptable to the
Issuer and to the Registrar and, in each case, in accordance with any
applicable securities laws of any state of the United States or any
other applicable jurisdiction, then the Trustee, as Registrar, shall
instruct the Depositary to reduce or cause to be reduced the
aggregate principal amount at Maturity of such Regulation S Global
Note and to increase or cause to be increased the aggregate principal
amount at Maturity of the applicable U.S. Global Note by the
principal amount at Maturity of the beneficial interest in the
Regulation S Global Note to be exchanged or transferred, and the
Trustee, as Registrar, shall instruct the Depositary, concurrently
with such redemption, to credit or cause to be credited to the
account of the Person specified in such instructions a beneficial
interest in the applicable U.S. Global Note equal to the reduction in
the aggregate principal amount at Maturity of such Regulation S
Global Note and to debit or cause to be debited from the account of
the Person making such transfer the beneficial interest in the
Regulation S Global Note that is being exchanged or transferred.
(iii) U.S. Global Notes to Institutional Accredited Investor. If,
at any time, an owner of a beneficial interest in a U.S. Global Note
deposited with the Depositary (or the Secured Note Custodian) wishes
to transfer its beneficial interest in such U.S. Global Note to a
Person who is an Institutional Accredited Investor, such owner shall,
subject to the Applicable Procedures and the other provisions of this
Section 2.6, exchange or cause the exchange of such interest for an
equivalent beneficial interest in a U.S. Global Note of the same
series as provided in this Section 2.6(a)(iii). Upon receipt by the
Trustee of (1) instructions given in accordance with the Applicable
Procedures from a Participant directing the Trustee to credit or
cause to be credited a beneficial interest in the U.S. Global Note of
the same series in an amount equal to the beneficial interest in the
U.S. Global Note to be exchanged, (2) a written order given in
accordance with the Applicable Procedures containing information
regarding the Participant account of the Depositary to be credited
with such increase, and (3) a certificate in the form of Exhibit C
hereto given by the proposed transferee, and, if the Issuer should so
request, an Opinion of Counsel provided by the transferor or the
transferee (a copy of which the Transferor attaches to such
certificate), in form reasonably acceptable to the Issuer and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act, then the Trustee, as Registrar, shall instruct the
Depositary to credit or cause to be credited to the account of the
Person specified in such instructions, a beneficial interest in the
U.S. Global Note equal to the aggregate principal amount being
transferred, and to debit, or cause to be debited, from the account
of the Person making such exchange or transfer the beneficial
interest in the U.S. Global Note that is being exchanged or
transferred.
(b) Transfer and Exchange of Certificated Secured Notes. When
Certificated Secured Notes are presented by a Holder to the Registrar
with a request to register the transfer of the Certificated Secured
Notes or to exchange such Certificated Secured Notes of the same
series for an equal principal amount of Certificated Secured Notes of
other authorized denominations of the same series, the Registrar
shall register the transfer or make the exchange as requested only if
the Certificated Secured Notes are presented or surrendered for
registration of transfer or exchange, are endorsed and contain a
signature guarantee or are accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by such
Holder or by his attorney and contains a signature guarantee, duly
authorized in writing and the Registrar received the following
documentation (all of which may be submitted by facsimile):
in the case of Certificated Secured Notes that are Transfer
Restricted Secured Notes, such request shall be accompanied by the
following additional information and documents, as applicable:
(1) if such Transfer Restricted Note is being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, or such Transfer Restricted Note is being
transferred to the Issuer, a certification to that effect from such
Holder (in substantially the form of Exhibit B-3 hereto); or
(2) if such Transfer Restricted Note is being transferred to a QIB
in accordance with Rule 144A under the Securities Act or pursuant to
an exemption from registration in accordance with Rule 144 under the
Securities Act or in an offshore transaction pursuant to and in
compliance with Rule 904 under the Securities Act or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from such Holder (in substantially the
form of Exhibit B-3 hereto); or
(3) if such Transfer Restricted Note is being transferred in
reliance on any other exemption from the registration requirements of
the Securities Act, a certification to that effect from such Holder
(in substantially the form of Exhibit B-3 hereto) and an Opinion of
Counsel from such Holder or the transferee in form reasonably
acceptable to the Issuer and to the Registrar to the effect that such
transfer is in compliance with the Securities Act.
(c) Transfer of a Beneficial Interests in Global Notes for
Certificated Secured Notes.
(i) The Global Notes that are Transfer Restricted Notes or the
Exchange Global Notes, as the case may be, shall be exchanged by the
Issuer for one or more Certificated Secured Notes of the same series
representing Initial Secured Notes or Exchange Secured Notes, as the
case may be, if (x) the Depositary (i) has notified the Issuer that
it is unwilling or unable to continue as, or ceases to be, a
"Clearing Agency" registered under Section 17A of the Exchange Act
and (ii) a successor to the Depositary registered as a "Clearing
Agency" under Section 17A of the Exchange Act is not able to be
appointed by the Issuer within 90 calendar days or (y) the Depositary
is at any time unwilling or unable to continue as Depositary and a
successor to the Depositary is not able to be appointed by the Issuer
within 90 calendar days or (iii) the Issuer, at its option, delivers
a notice in the form of an Officers' Certificate that it elects to
cause the issuance of Certificated Secured Notes of the same series.
If an Event of Default occurs and is continuing, the Issuer shall, at
the request of the Holder thereof, exchange all or part of a Global
Note that is a Transfer Restricted Note or an Exchange Global Note,
as the case may be, for one or more Certificated Secured Notes of the
same series representing Initial Secured Notes or Exchange Secured
Notes, as the case may be; provided that the principal amount of each
of such Certificated Secured Notes, and such Global Note, after such
exchange, shall be $1,000 or an integral multiple thereof. Whenever
a Global Note is exchanged as a whole for one or more Certificated
Secured Notes, it shall be surrendered by the Holder thereof to the
Trustee for cancellation. Whenever a Global Note is exchanged in
part for one or more Certificated Secured Notes, it shall be
surrendered by the Holder thereof to the Trustee and the Trustee
shall make the appropriate notations to Schedule A thereof pursuant
to Section 2.1 hereof. All Certificated Secured Notes or Exchange
Secured Notes, as the case may be, issued in exchange for a Global
Note or any portion thereof shall be registered in such names, and
delivered, as the Depositary shall instruct the Trustee. Any
Certificated Secured Notes issued pursuant to this Section 2.6(c)(i)
shall include the Private Placement Legend, except as otherwise
provided for by this Section 2.6. Interests in a Global Note may not
be exchanged for Certificated Secured Notes other than as provided in
this Section 2.6. If a beneficial interest in a Transfer Restricted
Note is being transferred, the following additional documents and
information must be submitted (including by facsimile):
(1) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a
certification to that effect from such Person (in substantially the
form of Exhibit B-4 hereto);
(2) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 under the
Securities Act or in an offshore transaction pursuant to and in
compliance with Rule 904 under the Securities Act or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from the transferor (in substantially
the form of Exhibit B-4 hereto);
(3) if such beneficial interest is being transferred in reliance on
any other exemption from the registration requirements of the
Securities Act, a certification to that effect from the transferor
(in substantially the form of Exhibit B-4 hereto) and an Opinion of
Counsel from the transferee or the transferor in form reasonably
acceptable to the Issuer and to the Registrar to the effect that such
transfer is in compliance with the Securities Act, in which case the
Trustee or the Secured Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depositary and the Secured Note
Custodian, cause the aggregate principal amount of U.S. Global Notes
or Regulation S Permanent Global Notes, as applicable, to be reduced
accordingly and, following such reduction, the Issuer shall execute
and, the Trustee shall authenticate and deliver to the transferee a
Certificated Secured Note of the same series in the appropriate
principal amount.
(ii) Certificated Secured Notes issued in exchange for a beneficial
interest in a U.S. Global Note or Regulation S Permanent Global Note,
as applicable, pursuant to this Section 2.6(c) shall be registered in
such names and in such authorized denominations as the Depositary,
pursuant to instructions from its Participants or Indirect
Participants or otherwise, shall instruct the Trustee. The Trustee
shall deliver such Certificated Secured Notes to the Persons in whose
names such Secured Notes are so registered. Following any such
issuance of Certificated Secured Notes, the Trustee, as Registrar,
shall instruct the Depositary to reduce or cause to be reduced the
aggregate principal amount at maturity of the applicable Global Note
to reflect the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsections (e) and (f) of this Section 2.6),
a Global Note may not be transferred as a whole except 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. Any Holder of a beneficial
interest in a Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Note may
be effected only through a book entry system maintained by the Holder
of such Global Note (or its agent), and that ownership of a
beneficial interest in the Secured Notes represented hereby shall be
required to be reflected in book entry form. Interests of beneficial
owners in a Global Note may be transferred in accordance with the
rules and procedures of the Depositary (or its successors).
(e) Continuous Restrictions on Transfer and Exchange of Secured
Notes. Notwithstanding any other provision of this Indenture, the
Secured Notes may not at any time, including after consummation of
the Exchange Offer, be transferred to, or held by Persons other than
QIBs, Institutional Accredited Investors or a Person involved in the
organization or operation of the Company or an affiliate (as defined
in Rule 465 under the Securities Act) of the Company. Any Holder or
beneficial owner of a Secured Note shall, by acceptance of such
Secured Note, agree that such Holder or owner will deliver to each
Person to whom a Secured Note or an interest therein is transferred a
notice provided for in the legend specified in subsection (f) of this
Section 2.6. No Secured Note may be transferred by the Trustee or
the Registrar in violation of the foregoing.
(f) Legends.
(i) Except as permitted by the following paragraphs (iii), (iv) and
(v), each Secured Note certificate evidencing Global Notes and
Certificated Secured Notes (and all Secured Notes issued in exchange
therefor or substitution thereof) shall bear a legend (the "Private
Placement Legend") in substantially the following form:
THIS SECURED NOTE (OR ITS PREDECESSOR) HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS. ACCORDINGLY, THIS SECURED NOTE MAY NOT BE OFFERED,
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE
HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) (A "QIB"), OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER REGULATION D UNDER THE SECURITIES ACT (AN
"IAI"));
(2) AGREES THAT IT WILL NOT RESELL, OR OTHERWISE
TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (C) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES THE TRUSTEE WITH A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED
FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN
OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (D)
TO A PERSON INVOLVED IN THE ORGANIZATION OR OPERATION OF
THE COMPANY OR AN AFFILIATE (AS DEFINED IN RULE 405 UNDER
THE SECURITIES ACT) OF THE COMPANY AND, AND IN EACH CASE,
IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAW OF ANY
STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING.
(ii) After the registration of the Exchange Secured Notes under the
Securities Act, the Secured Exchange Notes when issued, will bear a
legend to the following effect unless otherwise agreed by Finco and
the holder thereof.
THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")
OR (C) IT IS A PERSON INVOLVED IN THE ORGANIZATION OR OPEREATION OF
THE COMPANY OR AN AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY.
(2) AGREES THAT IT WILL NOT RESELL, OR OTHERWISE TRANSFER THIS NOTE
EXCEPT TO (A) A QIB, (B) AN IAI, OR (C) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE COMPANY OR AN AFFILIATE (AS DEFINED
IN RULE 405 UNDER THE SECURITIES ACT) OF THE COMPANY, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR
AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
(4) THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING. THE INDENTURE ALSO CONTAINS A PROVISION REQUIRING FINCO
AND THE COMPANY TO EXERCISE REASONABLE CARE TO ENSURE THAT THE
SECURED NOTES ARE RESOLD OR OTHERWISE TRANSFERRED ONLY TO PURCHASERS
MEETING THE REQUIREMENTS SPECIFIED IN CLAUSE (2) ABOVE.
(iii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Global Note)
pursuant to Rule 144 under the Securities Act or pursuant to a
effective registration statement under the Securities Act:
(1) in the case of any Transfer Restricted Note that is a
Certificated Secured Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a Certificated
Secured Note of the same series that does not bear the legend set
forth in (i) above and rescind any restriction on the transfer of
such Transfer Restricted Note upon receipt of a certification from
the transferring Holder substantially in the form of Exhibit B-4
hereto; and
(2) in the case of any Transfer Restricted Note represented by a
Global Note, such Transfer Restricted Note shall not be required to
bear the legend set forth in (i) above, but shall continue to be
subject to the provisions of Section 2.6(a) and (b) hereof; provided,
however, that with respect to any request for an exchange of a
Transfer Restricted Note that is represented by a Global Note for a
Certificated Secured Note of the same series that does not bear the
legend set forth in (i) above, which request is made in reliance upon
Rule 144, the Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to Rule 144 (such
certification to be substantially in the form of Exhibit B-4 hereto).
(iv) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Global Note)
in reliance on any exemption from the registration requirements of
the Securities Act (other than exemptions pursuant to Rule 144A or
Rule 144 under the Securities Act) in which the Holder or the
transferee provides an Opinion of Counsel to the Issuer and the
Registrar in form and substance reasonably acceptable to the Issuer
and the Registrar (which Opinion of Counsel shall also state that the
transfer restrictions contained in the legend are no longer
applicable):
(1) in the case of any Transfer Restricted Note that is a
Certificated Secured Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a Certificated
Secured Note that does not bear the legend set forth in (i) above and
rescind any restriction on the transfer of such Transfer Restricted
Note; and
(2) in the case of any Transfer Restricted Note represented by a
Global Note, such Transfer Restricted Note shall not be required to
bear the legend set forth in (i) above, but shall continue to be
subject to the provisions of Section 2.6(a) and (b) hereof.
(v) By its acceptance of any Initial Secured Note represented by a
certificate bearing the Private Placement Legend, each Holder of, and
beneficial owner of an interest in, such Initial Secured Note
acknowledges the restrictions on transfer of such Initial Secured
Note set forth in the Private Placement Legend and the legend
specified in paragraph (ii) above and under the heading "Notice to
Investors in the Secured Notes" in the Offering Memorandum and agrees
that it will transfer such Initial Secured Note only in accordance
with the Private Placement Legend and the restrictions set forth
under the heading "Notice to Investors" in the Offering Memorandum.
(vi) Notwithstanding the foregoing, upon the occurrence of the
Exchange Offer in accordance with the Registration Rights Agreement,
the Issuer shall issue and, upon receipt of an authentication order
in accordance with Section 2.2 hereof, the Trustee shall authenticate
(i) one or more Global Notes in aggregate principal amount equal to
the principal amount of the restricted beneficial interests validly
tendered and not properly withdrawn by Persons that certify in the
letter of transmittal delivered in the Exchange Offer that they are
not (x) broker-dealers, (y) Persons participating in the distribution
of the Exchange Secured Notes or (z) Persons who are affiliates (as
defined in Rule 144 under the Securities Act) of the Issuer and
accepted for exchange in the Exchange Offer and (ii) Certificated
Secured Notes that do not bear the Private Placement Legend but
continue to bear the legend specified in clause (ii) of this Section
2.6(f) in an aggregate principal amount equal to the principal amount
of the Certificated Secured Notes that are Transfer Restricted Notes
accepted for exchange in the Exchange Offer. Concurrently with the
issuance of such Secured Notes, the Trustee shall cause the aggregate
principal amount of the applicable Global Notes of a series to be
reduced accordingly and the Issuer shall execute and the Trustee
shall authenticate and deliver to the Persons designated by the
Holders of Certificated Secured Notes so accepted Certificated
Secured Notes of such series in the appropriate principal amount.
(g) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes of a series have been
exchanged for Certificated Secured Notes, redeemed, repurchased or
cancelled, all Global Notes of such series shall be returned to or
retained and cancelled by the Trustee in accordance with Section 2.11
hereof. At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for Certificated Secured
Notes, redeemed, repurchased or cancelled, the principal amount of
Secured Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by
the Trustee or the Secured Note Custodian, at the direction of the
Trustee, to reflect such reduction.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Issuer
shall execute and the Trustee shall authenticate Global Notes and
Certificated Secured Notes of each series at the Registrar's request.
(ii) No service charge shall be made to a Holder for any registration
of transfer or exchange, but the Issuer may require payment of a sum
sufficient to cover any stamp or transfer tax or similar governmental
charge payable in connection therewith (other than any such stamp or
transfer taxes or similar governmental charge payable upon exchange
or transfer pursuant to Sections 2.10, 3.6, 3.10, 4.8, and 10.6
hereto).
(iii) All Global Notes and Certificated Secured Notes issued upon
any registration of transfer or exchange of Global Notes or
Certificated Secured Notes shall be the valid obligations of the
Issuer, evidencing the same debt, and entitled to the same benefits
under this Indenture, as the Global Notes or Certificated Secured
Notes surrendered upon such registration of transfer or exchange.
(iv) The Registrar shall not be required: (A) to issue, to register
the transfer of or to exchange Secured Notes during a period
beginning at the opening of fifteen (15) Business Days before the day
of any selection of Secured Notes for redemption under Article III
hereof and ending at the close of business on the day of selection,
(B) to register the transfer of or to exchange any Secured Note so
selected for redemption in whole or in part, except the unredeemed
portion of any Secured Note being redeemed in part, or (C) to
register the transfer of or to exchange a Secured Note between a
Record Date and the next succeeding Interest Payment Date.
(v) Prior to due presentment for the registration of a transfer of
any Secured Note, the Trustee, any Agent and the Issuer may deem and
treat the Person in whose name any Secured Note is registered as the
absolute owner of such Secured Note for the purpose of receiving
payment of principal of and interest on such Secured Notes and for
all other purposes, and neither the Trustee, any Agent nor the Issuer
shall be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Certificated
Secured Notes in accordance with the provisions of Section 2.2
hereof.
Notwithstanding anything herein to the contrary, as to any
certifications or certificates delivered to the Trustee or Registrar
pursuant to this Section 2.6, the Trustee's or the Registrar's duties
shall be limited to confirming that any such certifications and
certificates delivered to it are in the form of Exhibits B-1 through
B-4 and C attached hereto. The Trustee or Registrar shall not be
responsible for confirming the truth or accuracy of representations
made in any such certifications or certificates.
Section 2.7 Replacement of Secured Notes.
If any mutilated Secured Note is surrendered to the Trustee or
the Issuer and the Trustee receive evidence to their satisfaction of
the destruction, loss or theft of any Secured Note, the Issuer shall
issue, and the Trustee, upon the receipt of a Company Order, shall
authenticate, a replacement Secured Note of the same series if the
Trustee's requirements are met. If required by the Trustee or the
Issuer, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Issuer to protect
the Issuer, each Guarantor, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a
Secured Note is replaced. The Issuer may charge for its expenses in
replacing a Secured Note.
Every replacement Secured Note is an additional obligation of
the Issuer and shall be entitled to all of the benefits of this
Indenture equally and proportionately with all other Secured Notes of
the same series duly issued hereunder. The provisions of this
Section 2.7 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement of
mutilated, destroyed, lost or stolen Secured Notes.
Section 2.8 Outstanding Secured Notes.
The Secured Notes of a series outstanding at any time are all
the Secured Notes of such series authenticated by the Trustee except
for those cancelled by it, those delivered to it for cancellation,
those reductions in the interest in a Global Note of such series
effected by the Trustee in accordance with the provisions hereof, and
those described in this Section as not outstanding. Except as set
forth in Section 2.9 hereof, a Secured Note does not cease to be
outstanding because the Issuer or an Affiliate of the Issuer holds
the Secured Note.
If a Secured Note is replaced pursuant to Section 2.7 hereof, it
ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Secured Note is held by a bona
fide purchaser.
If the principal amount of any Secured Note is considered paid
under Section 4.1 hereof, it ceases to be outstanding and interest
(including Special Interest and Additional Amounts, if any) on it
ceases to accrue.
If the Paying Agent (other than the Issuer, the Company, a
Subsidiary, Guarantor, a Subsidiary or an Affiliate of any thereof)
holds, on a Redemption Date or Maturity, money sufficient to pay
Secured Notes payable on that date, then on and after that date such
Secured Notes shall be deemed to be no longer outstanding and shall
cease to accrue interest (including Special Interest and Additional
Amounts, if any).
Section 2.9 Treasury Secured Notes.
In determining whether the Holders of the required principal
amount of Secured Notes have concurred in any direction, waiver or
consent, Secured Notes owned by the Issuer, the Company, a
Subsidiary, any Subsidiary Guarantor, or by any Person directly or
indirectly controlling or controlled by or under direct or indirect
common control with the Issuer, the Company or any Subsidiary
Guarantor, shall be considered as though not outstanding, except that
for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only
Secured Notes that a Responsible Officer knows are so owned shall be
so disregarded.
Section 2.10 Temporary Secured Notes.
Until definitive Secured Notes are ready for delivery, the
Issuer may prepare and the Trustee shall authenticate temporary
Secured Notes upon a Issuer Order. Temporary Secured Notes shall be
substantially in the form of definitive Secured Notes but may have
variations that the Issuer considers appropriate for temporary
Secured Notes and as shall be reasonably acceptable to the Trustee.
Without unreasonable delay, the Issuer shall prepare and the Trustee
shall authenticate definitive Secured Notes in exchange for temporary
Secured Notes.
Holders of temporary Secured Notes shall be entitled to all of
the benefits of this Indenture.
Section 2.11 Cancellation.
The Issuer at any time may deliver Secured Notes to the Trustee
for cancellation. The Registrar and Paying Agent shall forward to the
Trustee any Secured Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall
cancel all Secured Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall upon the
written request of the Issuer, return such cancelled Secured Notes to
the Issuer. The Issuer may not issue new Secured Notes to replace
Secured Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12 Payment of Interest; Interest Rights Preserved.
Interest (including Additional Amounts, if any, and Special
Interest, if any) on any Secured Note which is payable, and is
punctually paid or duly provided for, on any March 15 or September 15
(an "Interest Payment Date"), commencing on September 15, 1999, shall
be paid to the Person in whose name such Secured Note is registered
at the close of business on the Record Date for such interest
payment, which shall be the March 1 or September 1 (whether or not a
Business Day) immediately preceding such Interest Payment Date.
Any interest on any Secured Note 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 Record Date, and,
except as hereinafter provided, such Defaulted Interest and any
interest payable on such Defaulted Interest may be paid by the
Issuer, at its election, as provided in clause (a) or (b) below:
(a) The Issuer may elect to make payment of any Defaulted Interest,
and any interest payable on such Defaulted Interest, to the Persons
in whose names the Secured Notes 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 Issuer
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on the Secured Notes and the date of the
proposed payment, and at the same time the Issuer shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed
to be paid in respect of such Defaulted Interest (including
Additional Amounts, if any, and Special Interest, if any) 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 provided in this clause (a). Thereupon the
Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 calendar days and
not less than 10 calendar days prior to the date of the proposed
payment and not less than 10 calendar days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Issuer of such Special Record Date and, in the
name and at the expense of the Issuer, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor to be sent, first class mail, postage prepaid, to each
Holder at such Holder's address as it appears in the Securities
Register, not less than 10 calendar 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
the Secured Notes are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (b).
(b) The Issuer may make payment of any Defaulted Interest (including
Additional Amounts, if any, and Special Interest, if any), and any
interest payable on such Defaulted Interest, on the Secured Notes in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Secured Notes may be listed, and
upon such notice as may be required by such exchange, if, after
notice given by the Issuer to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section 2.12, each
Secured Note delivered under this Indenture upon registration of
transfer of, or in exchange for, or in lieu of, or in substitution
for, any other Secured Note, shall carry the rights to interest
(Additional Amounts, if any, and Special Interest, if any) accrued
and unpaid, and to accrue, which were carried by such other Secured
Note.
Section 2.13 Computation of Interest.
Interest on the Secured Notes shall be computed on the basis of
a 360-day year comprised of twelve 30-day months.
Section 2.14 CUSIP Number.
The Issuer in issuing the Secured Notes may use a "CUSIP"
number, and if it does so, the Trustee shall use the CUSIP number in
notices of redemption or exchange as a convenience to Holders;
provided that any such notice may state that no representation is
made as to the correctness or accuracy of the CUSIP number printed in
the notice or on the Secured Notes and that reliance may be placed
only on the other identification numbers printed on the Secured
Notes. The Issuer shall promptly notify the Trustee of any change in
the CUSIP number.
ARTICLE III
REDEMPTION AND PREPAYMENT
Section 3.1 Notices to Trustee.
If the Issuer elects to redeem Secured Notes of a series
pursuant to the optional redemption provisions of Section 3.7 hereof
and of the Secured Notes of such series, it shall furnish to the
Trustee, at least 45 days (unless a shorter period is acceptable to
the Trustee) but not more than 60 days before a Redemption Date, an
Officers' Certificate setting forth (i) the clause of this Indenture
pursuant to which the redemption shall occur, (ii) the Redemption
Date, (iii) the principal amount of Secured Notes to be redeemed and
(iv) the Redemption Price.
Section 3.2 Selection of Secured Notes to be Redeemed.
In the case of any partial redemption provided for in Section
3.7 hereof, selection of the Secured Notes for redemption will be
made by the Trustee on a pro rata basis, by lot or by such other
method as the Trustee in its sole discretion shall deem to be fair
and appropriate, although no Secured Note of $1,000 in then
outstanding principal amount or less shall be redeemed in part. If
any Secured Note is to be redeemed in part only, the notice of
redemption relating to such Secured Note shall state the portion of
the principal amount thereof to be redeemed. A new Secured Note in
principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the
original Secured Note. Partial Redemptions provided for in Section
3.8 and Section 3.9 hereof will be applied to all Secured Notes on a
pro rata basis, although no Secured Note of $1000 in then outstanding
principal amount shall be redeemed in part.
The Trustee shall promptly notify the Issuer in writing of the
Secured Notes selected for redemption and, in the case of any Secured
Note selected for partial redemption, the portion of the principal
amount thereof to be redeemed. Secured Notes and portions of Secured
Notes selected shall be in amounts of $1,000 or integral multiples of
$1,000, except that if all of the Secured Notes of a Holder are to be
redeemed, the entire outstanding amount of Secured Notes held by such
Holder, even if not an integral multiple of $1,000, shall be
redeemed. Except as provided in the preceding sentence, provisions of
this Indenture that apply to Secured Notes called for redemption also
apply to portions of Secured Notes called for redemption.
Section 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Issuer shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Secured Notes are
to be redeemed at its registered address as it appears in the
Securities Register.
The notice shall identify the Secured Notes to be redeemed
including CUSIP number and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the method of calculating such
Redemption Price pursuant to this Indenture;
(c) if any Secured Note is being redeemed in part, the portion of
the principal amount of such Secured Note to be redeemed and that,
after the Redemption Date upon surrender of such Secured Note, a new
Secured Note or Secured Notes of the same series in principal amount
equal to the unredeemed portion shall be issued upon cancellation of
the original Secured Note;
(d) the name and address of the Paying Agent;
(e) that Secured Notes called for redemption (other than a Global
Note) must be surrendered to the Paying Agent to collect the
Redemption Price;
(f) that, unless the Issuer defaults in making such Redemption
Payment, interest (Additional Amounts, if any, and Special Interest,
if any) on Secured Notes (or portions thereof) called for redemption
cease to accrue on and after the Redemption Date;
(g) the paragraph of the Secured Notes and/or Section of this
Indenture pursuant to which the Secured Notes called for redemption
are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Secured Notes.
At the Issuer's request, the Trustee shall give the notice of
redemption in the Issuer's name and at its expense; provided,
however, that the Issuer shall have delivered to the Trustee, at
least 45 days prior to the Redemption Date (unless a shorter time is
acceptable to the Trustee), an Officers' Certificate requesting that
the Trustee give such notice and setting forth the information to be
stated in such notice as provided in the preceding paragraph.
Section 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.3 hereof, Secured Notes called for redemption become irrevocably
due and payable on the Redemption Date at the Redemption Price
including interest and Special Interest, if any, accrued and unpaid
on the Redemption Date. Upon surrender to the Paying Agent, such
Secured Notes shall be paid at the Redemption Price stated in such
notice. Failure to give notice or any defect in the notice to any
Holder shall not affect the validity of the notice to any other
Holder. A notice of redemption may not be conditional.
Section 3.5 Deposit of Redemption Price.
On or prior to the Redemption Date, the Issuer shall deposit
with the Trustee or with the Paying Agent immediately available funds
sufficient to pay the Redemption Price of and accrued and unpaid
interest, if any, on (and Special Interest, if any, and Additional
Amounts, if any on) all Secured Notes to be redeemed on that date.
The Trustee or the Paying Agent shall promptly return to the Issuer
any money deposited with the Trustee or the Paying Agent by the
Issuer in excess of the amounts necessary to pay the Redemption Price
of, and accrued interest (including Special Interest, if any) on, all
Secured Notes to be redeemed.
If the Issuer complies with the provisions of the preceding
paragraph, on and after the Redemption Date, interest (and Special
Interest, if any, and Additional Amounts, if any) shall cease to
accrue on the Secured Notes or the portions of Secured Notes called
for redemption. If a Secured Note is redeemed on or after a Record
Date but on or prior to the related Interest Payment Date, then any
accrued and unpaid interest (and Special Interest, if any) shall be
paid to the Person in whose name such Secured Note was registered at
the close of business on such Record Date. If any Secured Note called
for redemption shall not be so paid upon surrender for redemption
because of the failure of the Issuer to comply with the preceding
paragraph, interest (and Special Interest, if any, and Additional
Amounts, if any) shall be paid on the unpaid principal, from the
Redemption Date until such principal is paid, and to the extent
lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Secured Notes and in Section 4.1
hereof.
Section 3.6 Secured Notes Redeemed in Part.
Upon surrender of a Secured Note that is redeemed in part, the
Issuer shall issue and, upon the Issuer's written request, the
Trustee shall authenticate for the Holder at the expense of the
Issuer a new Secured Note of the same series equal in principal
amount to the unredeemed portion of the Secured Note surrendered. The
records of the Registrar and the Depositary shall reflect any partial
redemption of any Global Note.
Section 3.7 Optional Redemptions.
(a) 10-Year Secured Notes. On or after March 15, 2004, the 10-Year
Secured Notes will be redeemable, at the Issuer's option, in whole or
in part, at any time or from time to time, upon not less than 30 nor
more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following Redemption Prices
(expressed in percentages of principal amount), plus accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) to the Redemption Date (subject to the right of
Holders of record on the relevant Record Date to receive interest due
on the relevant Interest Payment Date), if redeemed during the 12-
month period commencing on March 15 of the years set forth below:
Redemption
Period Price
2004 105.6875%
2005 103.7917%
2006 101.8958%
2007 and thereafter 100.0000%
Any prepayments by the Company on the Issuer Loans required to
be made to provide funds for the Issuer to make this redemption shall
be made on the 10-Year Tranche (as defined in the applicable Issuer
Loan Agreement) of each Issuer Loan on a pro rata basis.
(b) 7-Year Secured Notes. The 7-Year Secured Notes will be
redeemable, at the Issuer's option, at any time in whole or from time
to time in part upon not less than 30 and not more than 60 days'
prior notice mailed by first class mail to each Holder's registered
address appearing in the Securities Register on any date prior to
Maturity at a price equal to 100% of the principal amount thereof
plus accrued and unpaid interest (including Special Interest, if any,
and Additional Amounts, if any) to the Redemption Date (subject to
the right of Holders of record on the relevant Record Date to receive
interest due on an Interest Payment Date that is on or prior to the
Redemption Date) plus the Make-Whole Premium applicable to the 7-Year
Secured Notes. In no event will the Redemption Price ever be less
than 100% of the principal amount of the 7-Year Secured Notes plus
accrued and unpaid interest (including Special Interest, if any, and
Additional Amounts, if any) to the Redemption Date.
The amount of the Make-Whole Premium with respect to any 7-Year
Secured Notes (or portion thereof) to be redeemed will be equal to
the excess, if any, of:
(i) the sum of the present values, calculated as of the redemption
date, of:
(1) each interest payment that, but for such redemption, would have
been payable on the 7-Year Secured Notes (or portion thereof) of such
series being redeemed on each Interest Payment Date occurring after
the Redemption Date (excluding any accrued and unpaid interest for
the period prior to the Redemption Date); and
(2) the principal amount that, but for such redemption, would have
been payable at the final maturity of the 7-Year Secured Notes (or
portion thereof) of such series being redeemed, over
(ii) the principal amount of the 7-Year Secured Notes (or portion
thereof) of such series being redeemed.
The present values of interest and principal payments referred
to in clause (i) above will be determined in accordance with
generally accepted principles of financial analysis. Such present
values will be calculated by discounting the amount of each payment
of interest or principal from the date that each such payment would
have been payable, but for the redemption, to the redemption date at
a discount rate equal to the Treasury Yield (as defined below) plus
50 basis points.
The Make-Whole Premium will be calculated by the Independent
Investment Banker. For purposes of determining the Make-Whole
Premium, ``Treasury Yield'' means a rate of interest per annum equal
to the weekly average yield to maturity of United States Treasury
Notes that have a constant maturity that corresponds to the remaining
term to maturity of the 7-Year Secured Notes, calculated to the
nearest 1/12th of a year (the ``Remaining Term''). The Treasury Yield
will be determined as of the third business day immediately preceding
the applicable redemption date.
The weekly average yields of United States Treasury Notes will
be determined by reference to the most recent statistical release
published by the Federal Reserve Bank of New York and designated
``H.15(519) Selected Interest Rates'' or any successor release (the
"H.15 Statistical Release"). If the H.15 Statistical Release sets
forth a weekly average yield for United States Treasury Notes having
a constant maturity that is the same as the Remaining Term, then the
Treasury Yield will be equal to such weekly average yield. In all
other cases, the Treasury Yield will be calculated by interpolation,
on a straight-line basis, between the weekly average yields on the
United States Treasury Notes that have a constant maturity closest to
and greater than the Remaining Term and the United States Treasury
Notes that have a constant maturity closest to and less than the
Remaining Term (in each case as set forth in H.15 Statistical
Release). Any weekly average yields so calculated by interpolation
will be rounded to the nearest 1/100th of 1%, with any figure of
1/200 of 1% or above being rounded upward. If weekly average yields
for United States Treasury Notes are not available in comparable the
H.15 Statistical Release or otherwise, then the Treasury Yield will
be calculated by interpolation of comparable rates selected by the
Independent Investment Banker.
Any prepayments by the Company on the Issuer Loans required to
be made to provide funds for the Issuer to make the redemption shall
be made on the 7-Year Tranche (as defined in the applicable Issuer
Loan Agreement) of each Issuer Loan on a pro rata basis.
(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Section 3.1 through 3.6 hereof.
Section 3.8 Redemption Upon Loss of a Mortgaged Rig.
If an Event of Loss occurs at any time with respect to a
Mortgaged Rig (the Mortgaged Rig suffering such Event of Loss being
the "Lost Mortgaged Rig"), the Company shall apply the Event of Loss
Proceeds in respect thereof in an amount (the "Loss Redemption
Amount") equal to the principal amount of the applicable Issuer Loan
secured by the Lost Mortgaged Rig outstanding on the date (the "Loss
Date") on which such Event of Loss was deemed to have occurred,
together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon to the
prepayment of such Issuer Loan; if a Default shall have occurred and
be continuing at the time of receipt of the Event of Loss Proceeds
with respect to such Event of Loss, the Company will also be required
to prepay all Issuer Loans on a pro rata basis in an aggregate amount
equal to the excess of the Net Event of Loss Proceeds over the Loss
Redemption Amount, if any, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon. Such payments on the Issuer Loan or Loans shall be
made directly to the Trustee for deposit into the Issuer Escrow
Account. Such funds shall constitute part of the Collateral pending
application in accordance with the next paragraph.
Upon the earlier to occur of (A) 30 days after the receipt of
such Event of Loss Proceeds by the Company (the "Loss Proceeds
Receipt Date") and (B) 180 days after the Loss Date, the Issuer shall
redeem Secured Notes of both series, in whole or in part on a pro
rata basis, at a Redemption Price equal to 100% of their principal
amount, plus accrued and unpaid interest (including Additional
Amounts and Special Interest, if any) to the Redemption Date, in an
aggregate principal amount equal to the Loss Redemption Amount or the
Net Event of Loss Proceeds, as the case may be. The Issuer and the
Company shall treat as Loss Excess Proceeds the amount equal to (i)
the excess of the Net Event of Loss Proceeds from such Event of Loss
over the funds applied pursuant to the preceding sentence, less (ii)
the amount of such excess Net Event of Loss Proceeds (A) used to
repay Senior Indebtedness of the Company or secured Senior
Indebtedness of a Subsidiary Guarantor then owning a Mortgaged Rig,
in each case, with a permanent reduction of availability in the case
of revolving credit borrowings and owing to a Person other than the
Company or any of its Subsidiaries, or (B) invested in Additional
Assets (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a Board
Resolution).
Section 3.9 Redemption Upon Sale of a Mortgaged Rig.
If a Mortgaged Rig or the Capital Stock of Subsidiary Guarantor
then owning a Mortgaged Rig is sold in compliance with the terms of
this Indenture (the Mortgaged Rig so sold or owned by the Subsidiary
Guarantor whose Capital Stock is so sold being the "Sold Mortgaged
Rig"), the Company shall apply funds in an amount (the "Sale
Redemption Amount") equal to the principal amount of the Issuer Loan
secured by such Sold Mortgaged Rig on the date of such sale (the
"Sale Date"), together with all accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
thereon, plus any additional amounts required by the Issuer to redeem
the Secured Notes to the extent required by the next paragraph, to
the repayment of such Issuer Loan. If a Default shall have occurred
and be continuing at the time of receipt of the cash consideration
with respect to such Sold Mortgaged Rig, the Company will also be
required to prepay other Issuer Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Issuer Loan or Loans shall be allocated
between the 7-Year Tranche and the 10-Year Tranche of each such
Issuer Loan on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account. Such funds shall
constitute part of the Collateral pending application in accordance
with the next paragraph.
Upon the earlier to occur of (A) 30 days after the receipt of
such Net Available Cash (the "Sale Proceeds Receipt Date") and (B) 60
days after the Sale Date, the Issuer shall redeem Secured Notes of
both series, in whole or in part on a pro rata basis, in an aggregate
principal amount equal to the Sale Redemption Amount or the Net
Available Cash, as the case may be, at a Redemption Price equal to:
(x) In respect to the 10-year Secured Notes (i)
if such redemption is before March 15, 2004, the sum of the
remaining scheduled payments of interest, through March 15,
2004 (including Additional Amounts and Special Interest, if
any) and the Redemption Price as of March 15, 2004 as set
forth in Section 3.7(a) as discounted to their present
values to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 50 basis points, plus
accrued and unpaid interest on the Secured Notes to the
date of redemption or (ii) if such redemption is on or
after March 15, 2004, the redemption price then applicable
as described in Section 3.7(a), or
(y) In respect of the 7-Year Secured Notes, the sum of the
remaining scheduled payments of principal and interest (including
Additional Amounts and Special Interest, if any) thereon, as
discounted to their present values to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate plus 50 basis points,
(z) in each case plus accrued and unpaid interest (including
Special Interest, if any, and Additional Amounts, if any) on the
Secured Notes to the Redemption Date.
The excess of the Net Available Cash from the sale of a
Mortgaged Rig over the funds applied as payment of Issuer Loans shall
be treated in the manner provided in the last sentence of Section
4.15(b).
For purposes of this Section 3.9, the following definitions
apply:
"Treasury Rate" is defined to mean, with respect to any
redemption date, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury
Price for such redemption date.
"Comparable Treasury Issue" is defined to mean the United States
Treasury security selected by an Independent Investment Banker as
having a maturity comparable to the weighted average maturity of the
remaining term of the Secured Notes outstanding that would be
utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt
securities of comparable maturity to such weighted average maturity
of such Secured Notes. "Independent Investment Banker" means the
Reference Treasury Dealer appointed by the Trustee after consultation
with the Issuer and the Company.
"Comparable Treasury Price" is defined to mean, with respect to
any Redemption Date, the average of the Reference Treasury Dealer
Quotations for such Redemption Date. The "Reference Treasury Dealer
Quotations" means, with respect to the Reference Treasury Dealer and
any Redemption Date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in
writing to the Trustee by the Reference Treasury Dealer at 5:00 p.m.
(New York City time) on the third business day preceding such
Redemption Date.
"Reference Treasury Dealer" is defined to mean each of
Donaldson, Lufkin & Jenrette Securities Corporation and its
successors; provided, however, that if Donaldson, Lufkin & Jenrette
Securities Corporation shall cease to be a primary U.S. Government
securities dealer in New York City (a "Primary Treasury Dealer"), the
Issuer shall substitute therefor another Primary Treasury Dealer.
Section 3.10 Excess Proceeds Offer.
(a) If, as of the first day of any calendar month, the aggregate
amount of Sale Excess Proceeds and Loss Excess Proceeds exceeds 10%
of consolidated total assets of the Company, and if the aggregate
amount of Sale Excess Proceeds and Loss Excess Proceeds in excess of
10% of consolidated total assets that has not theretofore been
subject to an Excess Proceeds Offer (the ``Excess Proceeds Offer
Amount''), totals at least $10,000,000, the Issuer must, not later
than the fifteenth Business Day of such month, make an offer (an
``Excess Proceeds Offer'') to purchase from the Holders pursuant to
and subject to the conditions contained in this Indenture, Secured
Notes at a purchase price equal to 100% of their principal amount,
plus any accrued interest (including Additional Amounts and Special
Interest, if any) to the date of purchase. The New Senior Note
Indenture requires that the Company must, not later than the
fifteenth Business Day of such month, also make an offer to purchase
new Senior Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including "Special Interest" (as
defined in the New Senior Note Indenture), if any) to the date of
purchase. The total amount of the Secured Notes that are required to
be purchased by the Issuer and of New Senior Notes that are required
to be purchased by the Company shall equal the Excess Proceeds Offer
Amount (an ``Excess Proceeds Payment''). The Company will prepay the
appropriate tranches of the Issuer Loans on a pro rata basis, or make
loans constituting Subordinated Obligations to the Issuer, to permit
the Issuer to purchase any Secured Notes validly tendered pursuant to
an Excess Proceeds Offer. Any amounts remaining after all Secured
Notes and all New Senior Notes validly tendered are purchased shall
no longer constitute Sale Excess Proceeds or Loss Excess Proceeds.
(b) The Excess Proceeds Offer will remain open for a period of at
least 30 days following its commencement but no longer than 60 days,
except to the extent that a longer period is required by applicable
law (the "Excess Proceeds Offer Period"). On the Business Day
following the termination of the Excess Proceeds Offer Period (the
"Excess Proceeds Purchase Date"), the Issuer will purchase the
principal amount of Secured Notes required to be purchased pursuant
to this Section 3.10 (i.e., the portion of the Excess Proceeds Offer
Amount allocable to the Secured Notes) or, if less than the portion
of Excess Proceeds Offer Amount allocable to the Secured Notes has
been so validly tendered and not properly withdrawn, all Secured
Notes validly tendered and not properly withdrawn in response to the
Excess Proceeds Offer. Payment for any Secured Notes so purchased
will be made in the same manner as interest payments are made on the
Secured Notes. If the Excess Proceeds Purchase Date is on or after a
Record Date and on or before the related Interest Payment Date, any
accrued and unpaid interest and Special Interest, if any, and
Additional Amounts, if any, shall be paid to the Person in whose name
a Secured Note is registered at the close of business on such Record
Date, and no additional interest (or Special Interest (to the extent
involving interest that is due and payable on such Interest Payment
Date), if any) shall be payable to Holders who tender Secured Notes
pursuant to the Excess Proceeds Offer.
(c) Upon the commencement of an Excess Proceeds Offer, the Issuer
shall send, by first class mail, a notice to the Trustee and each of
the Holders. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Secured Notes pursuant to
the Excess Proceeds Offer. The Excess Proceeds Offer shall be made
to all Holders. The notice, which shall govern the terms of the
Excess Proceeds Offer, shall state:
(i) that the Excess Proceeds Offer is being made pursuant to this
Section 3.10 and the Excess Proceeds Offer Period during which the
Excess Proceeds Offer shall remain open;
(ii) the Excess Proceeds Offer Amount, the Excess Proceeds Offer
Purchase Price and the Excess Proceeds Purchase Date;
(iii) that any Secured Notes which are not validly tendered or
are not otherwise accepted for payment shall continue to accrue
interest and Additional Amounts and Special Interest, if applicable;
(iv) that, unless the Company defaults in making such payment, any
Secured Note accepted for payment pursuant to the Excess Proceeds
Offer shall cease to accrue interest and Additional Amounts and
Special Interest, if applicable, after the Excess Proceeds Purchase
Date;
(v) that any Holder electing to have a Secured Note purchased
pursuant to any Excess Proceeds Offer shall be required to surrender
the Secured Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Secured Note completed, or transfer
by book-entry transfer, to the Issuer, a depositary, if appointed by
the Issuer, or a Paying Agent at the address specified in the notice
at least (1) one Business Day before the Excess Proceeds Purchase
Date;
(vi) that Holders shall be entitled to withdraw their election if
the Issuer, the depositary or the Paying Agent, as the case may be,
receives, no later than the expiration of the Excess Proceeds Offer
Period, a telegram, facsimile transmission or letter setting forth
the name of the Holder, the principal amount of the Secured Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Secured Note purchased;
(vii) that, if the aggregate principal amount of Secured Notes
surrendered by Holders exceeds the portion of the Excess Proceeds
Offer Amount allocable to the Secured Notes, the Trustee shall select
the Secured Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Trustee so that only
Secured Notes in denominations of $1,000, or integral multiples
thereof, shall be purchased); and
(viii) that Holders whose Secured Notes were purchased only in
part shall be issued new Secured Notes equal in principal amount to
the unpurchased portion of the Secured Notes surrendered (or
transferred by book-entry transfer).
(d) On or before the Excess Proceeds Purchase Date, the Issuer
shall, to the extent lawful, (1) accept for payment, on a pro rata
basis to the extent necessary, the Secured Notes or portions thereof
in an aggregate amount equal to the portion of the Excess Proceeds
Offer Amount allocable to Secured Notes so validly tendered and not
properly withdrawn pursuant to the Excess Proceeds Offer, or if less
than such portion of the Excess Proceeds Offer Amount allocable to
Secured Notes has been so validly tendered and not properly
withdrawn, all Secured Notes validly tendered and not properly
withdrawn, (2) deposit by 12:00 noon New York City time, on such date
with the Paying Agent an amount equal to such portion of the Excess
Proceeds Offer Amount, plus accrued and unpaid interest, and Special
Interest, if any, and Additional Amounts, if any, in respect of all
Secured Notes, or portions thereof, so accepted and (3) shall deliver
to the Trustee an Officers' Certificate stating that such Secured
Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.10. The Issuer, the
Depositary or the Paying Agent, as the case may be, shall promptly
(but in any case not later than five days after the Excess Proceeds
Purchase Date) mail or deliver to each tendering Holder an amount
equal to the Excess Proceeds Purchase Price of the Secured Notes
validly tendered and not properly withdrawn by such Holder and
accepted by the Issuer for purchase. Upon surrender and cancellation
of a Certificated Secured Note that is purchased in part, the Company
shall promptly issue and the Trustee shall authenticate and deliver
to the surrendering Holder of such Certificated Secured Note a new
Certificated Secured Note equal in principal amount to the
unpurchased portion of such surrendered Certificated Secured Note;
provided that each such new Certificated Secured Note shall be in a
principal amount at Maturity of $1,000 or an integral multiple
thereof. Upon surrender of a Global Note that is purchased in part
pursuant to an Excess Proceeds Offer, the Paying Agent shall forward
such Global Note to the Trustee who shall make a notation on
Schedule A thereof to reduce the principal amount of such Global Note
to an amount equal to the unpurchased portion of such Global Note, as
provided in Section 2.6 hereof. Any Secured Note not so accepted
shall be promptly mailed or delivered by the Issuer to the Holder
thereof. The Issuer shall publicly announce the results of the
Excess Proceeds Offer on the Excess Proceeds Purchase Date. For
purposes of this Section 3.10, the Trustee shall act as the Paying
Agent.
(e) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the purchase of
Secured Notes pursuant to an Excess Proceeds Offer. To the extent
that the provisions of any securities laws or regulations conflict
with provisions in this Indenture governing Excess Proceeds Offers,
the Issuer shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations
under the covenant described hereunder by virtue thereof.
ARTICLE IV
COVENANTS
In the event that at any time (a) the ratings assigned to the
Secured Notes by both of the Rating Agencies are Investment Grade
Ratings and (b) no Default has occurred and is continuing under this
Indenture, the Company and its Restricted Subsidiaries will no longer
be subject to the provisions of this Indenture described below under
Section 4.9 and Section 4.11 (together, the "Suspended Covenants").
In the event that the Company is not subject to the Suspended
Covenants for any period of time as a result of the preceding
sentence and, subsequently, one or both Rating Agencies withdraws its
ratings or downgrades the ratings assigned to the Secured Notes below
the required Investment Grade Ratings, then the Company and its
Restricted Subsidiaries will again be subject to the Suspended
Covenants and compliance with the Suspended Covenants with respect to
Restricted Payments made after the time of such withdrawal or
downgrade will be calculated in accordance with the terms of Section
4.11 as if such covenant had been in effect during the entire period
of time from the date of this Indenture.
Section 4.1 Payment of Secured Notes.
The Issuer shall pay or cause to be paid the principal of,
premium, if any, and interest (and Special Interest, if any, and
Additional Amounts, if any) on, the Secured Notes on the dates and in
the manner provided in the Secured Notes and in this Indenture.
Principal, premium, if any, and interest (and Special Interest, if
any, and Additional Amounts, if any) shall be considered paid on the
date due if the Trustee or the Paying Agent, if other than the
Issuer, the Company or a Subsidiary thereof, holds as of 11:00 noon,
New York time, on the due date money deposited by the Issuer in
immediately available funds and designated for and sufficient to pay
all principal, premium, if any, and interest (and Special Interest,
if any) then due. The Issuer shall pay all Special Interest, if any,
in the same manner on the dates and in the amounts set forth in the
Registration Rights Agreement. The Issuer will promptly notify the
Trustee of a Registration Default (as defined in the Registration
Rights Agreement) under the Registration Rights Agreement and any
cure thereof.
The Issuer shall pay interest (including post-petition interest
in any proceeding under any applicable Federal, state or foreign
bankruptcy law) on Defaulted Interest and Special Interest, if any,
(without regard to any applicable grace period) at the same rate to
the extent lawful.
Section 4.2 Maintenance of Office or Agency.
Each of the Issuer and the Company shall maintain in the Borough
of Manhattan, The City of New York, an office or agency (which may be
an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Secured Notes may be surrendered for registration
of transfer or for exchange and where notices and demands to or upon
the Issuer and/or the Company in respect of the Secured Notes and
this Indenture may be served. The Issuer and the Company shall give
prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Issuer
and/or the Company shall fail to maintain any such required 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 Corporate Trust Office of the Trustee.
The Issuer may also from time to time designate one or more
other offices or agencies where the Secured Notes may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Issuer or
the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York for such purposes. The
Issuer shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any
such other office or agency.
The Issuer hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Issuer in accordance with
Section 2.3 hereof.
Section 4.3 Corporate Existence.
Subject to the provisions of Article 5 hereof, each of the
Issuer and the Company shall do or cause to be done all things
necessary to preserve and keep in full force and effect (i) its
respective corporate existence, and the corporate, partnership or
other existence of each of the Restricted Subsidiaries, in accordance
with the respective organizational documents (as the same may be
amended from time to time) of each of the Issuer, the Company or any
such Subsidiary of the Company and (ii) the rights (charter and
statutory), licenses and franchises of each of the Issuer, the
Company and the Subsidiaries of the Company; provided, however, that
the Issuer and the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other
existence of any of the Restricted Subsidiaries, if the Board of
Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the
Company and the Restricted Subsidiaries taken as a whole and that the
loss thereof is not adverse in any material respect to the Holders of
the Secured Notes.
Section 4.4 Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties and assets owned
by or leased by it or any of the Restricted Subsidiaries useful and
necessary to the conduct of its business or the business of any of
its Restricted Subsidiaries to be maintained and kept in good
condition, repair and working order (reasonable wear and tear
excepted) and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its
judgment may be necessary, so that the business carried on in
connection therewith may be properly conducted at all times;
provided, however, that nothing in this Section 4.4 shall prevent the
Company or any of the Restricted Subsidiaries from discontinuing the
use, operation or maintenance of any of such properties and assets,
or disposing of any of them, if such discontinuance or disposal is,
in the judgment of the Board of Directors of the Company or the
Restricted Subsidiary so concerned, or of an officer (or other agent
employed by the Company or of the Subsidiary so concerned) of the
Company or a Restricted Subsidiary having managerial responsibility
for any such properties or assets, desirable in the conduct of the
business of the Company or such Restricted Subsidiary of the Company,
and if such discontinuance or disposal is not adverse in any material
respect to the Holders.
(b) To the extent available at commercially reasonable rates, the
Company shall maintain, and shall cause the Restricted Subsidiaries,
to the extent such Restricted Subsidiaries maintain operations, to
maintain, insurance with responsible carriers against such risks and
in such amounts, and with such deductibles, retentions, self-insured
amounts and co-insurance provisions, as are customarily carried by
similar businesses of similar size.
Section 4.5 Compliance With Laws.
The Issuer and the Company shall comply, and shall cause each of
the Subsidiaries of the Company to comply, with all applicable
statutes, rules, regulations, orders and restrictions in respect of
the conduct of their respective businesses and the ownership of their
respective properties, except for such noncompliances as would not in
the aggregate have a material adverse effect on the financial
condition or results of operations of the Issuer or the Company and
the Restricted Subsidiaries taken as a whole.
Section 4.6 Taxes and Other Claims.
The Issuer and the Company shall pay, and shall cause each of
the Restricted Subsidiaries to pay, prior to delinquency, (a) all
material taxes, assessments, and governmental charges levied or
imposed upon the Issuer, the Company or any of the Restricted
Subsidiaries or upon the income, profits or property or assets of the
Issuer, the Company or any of the Restricted Subsidiaries and (b) all
lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a Lien upon the property or assets of the Issuer,
the Company or any of the Restricted Subsidiaries, except such as are
contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect
to the Holders of the Secured Notes and for which adequate reserves
in accordance with GAAP or other appropriate provisions have been
made.
Section 4.7 Stay, Extension and Usury Laws.
The Issuer, the Company and each of Subsidiary Guarantors
covenant (to the extent that they may lawfully do so) that they shall
not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the
Issuer, the Company and each of Subsidiary Guarantors (to the extent
that they may lawfully do so) hereby expressly waive all benefit or
advantage of any such law, and covenant that they shall not, by
resort to any such law, hinder, delay or impede the execution of any
power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.8 Change of Control.
(a) Upon the occurrence of any of the following events (each a
"Change of Control"), the Issuer shall make an offer to repurchase
all outstanding Secured Notes in whole or in part (the "Change of
Control Offer") at a purchase price (the "Change of Control Purchase
Price") in cash equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon, if any, and
Additional Amounts and Special Interest, if any, to the date of
purchase (subject to the right of Holders of record on the relevant
Record Date to receive interest (including Special Interest, if any,
and Additional Amounts, if any) due on the relevant Interest Payment
Date).
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), is or becomes the beneficial owner (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that for
purposes of this clause (i) such person shall be deemed to have
"beneficial ownership" of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of more than
50% of [the total voting power of the Voting Stock of] the Company;
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of
the Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the
shareholders of the Company was approved by a vote of 66-2/3% of the
directors of the Company then still in office who were either
directors at 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 then in
office; and
(iii) the merger or consolidation of the Company with or into
another Person or the merger of another Person with or into the
Company, or the sale of all or substantially all the assets of the
Company or the Company and its Restricted Subsidiaries taken as a
whole to another Person and, in the case of any such merger or
consolidation, the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100% of the
aggregate voting power of the Voting Stock of the Company are changed
into or exchanged for cash, securities or property, unless pursuant
to such transaction such securities are changed into or exchanged
for, in addition to any other consideration, securities of the
surviving corporation that represent immediately after such
transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation.
Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred if (a) the ratings assigned to the Secured
Notes by Moody's and S&P prior to the announcement are not downgraded
or placed on a negative credit watch by either such rating agency as
a result thereof and (b) no Default has occurred and is continuing.
(b) The Change of Control Offer will remain open for a period of at
least 30 days following its commencement but no longer than 60 days,
except to the extent that a longer period is required by applicable
law (the "Change of Control Offer Period"). On the first Business
Day after the termination of the Change of Control Offer Period (the
"Change of Control Payment Date"), the Issuer will purchase all
Secured Notes validly tendered and not properly withdrawn pursuant to
the Change of Control Offer. Payment for any Secured Notes so
purchased will be made in the same manner as interest payments are
made on the Secured Notes. If the Change of Control Payment Date is
on or after a Record Date and on or before the related Interest
Payment Date, any accrued and unpaid interest and Special Interest
and Additional Amounts (to the extent involving interest that is due
and payable on such Interest Payment Date), if any, shall be paid to
the Person in whose name a Secured Note is registered at the close of
business on such Record Date, and no additional interest (or
Additional Amounts or Special Interest, if any) (to the extent
involving interest that is due and payable on such Interest Payment
Date)) shall be payable to Holders who validly tender Secured Notes
pursuant to the Change of Control Offer.
(c) Within 30 days following any Change of Control, the Issuer or
the Trustee (at the expense of the Issuer) shall mail by first class
mail, a notice to each Holder, with a copy of such notice to the
Trustee. The notice, which shall govern the terms of the Change of
Control Offer, shall state, among other things:
(i) that a Change of Control has occurred and a Change of Control
Offer is being made as provided for herein that each Holder has the
right to require the Issuer to purchase such Holder's Secured Notes
at the Change of Control Purchase Price, and that, although Holders
are not required to tender their Secured Notes, all Secured Notes
that are validly tendered shall be accepted for payment;
(ii) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such
Change of Control);
(iii) the Change of Control Purchase Price and the Change of
Control Payment Date, which will be no earlier than 30 days and no
later than 60 days after the date such notice is mailed;
(iv) that any Secured Note accepted for payment pursuant to the
Change of Control Offer (and duly paid for on the Change of Control
Payment Date) shall cease to accrue interest and Special Interest and
Additional Amounts, if applicable, after the Change of Control
Payment Date;
(v) that any Secured Notes (or portions thereof) not validly
tendered shall continue to accrue interest and Special Interest and
Additional Amounts, if applicable;
(vi) that any Holder electing to have a Secured Note purchased
pursuant to any Change of Control Offer shall be required to
surrender the Secured Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Secured Note completed, or
transfer by book-entry transfer, to the Issuer, a depositary, if
appointed by the Issuer, or a Paying Agent at the address specified
in the notice at least one (1) Business Day before the Change of
Control Purchase Date;
(vii) that Holders shall be entitled to withdraw their election
if the Issuer, the depositary or the Paying Agent, as the case may
be, receives, not later than the expiration of the Change of Control
Offer Period, a telegram, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Secured
Note the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Secured Note
purchased; and
(viii) the instructions and any other information necessary to
enable Holders to tender their Secured Notes (or portions thereof)
and have such Secured Notes (or portions thereof) purchased pursuant
to the Change of Control Offer.
(d) The Company will also be required to prepay appropriate tranches
of the Issuer Loans on a pro rata basis at a redemption price equal
to 101% of the principal amount thereof being repaid, plus accrued
and unpaid interest (including Special Interest, if any, and
Additional Amounts, if any) thereon, in order to provide funds
sufficient to permit the Issuer to purchase any Secured Notes validly
tendered pursuant to the foregoing Change of Control Offer.
(e) On or before the Change of Control Payment Date, the Issuer
shall, to the extent lawful, (1) accept for payment all Secured Notes
or portions thereof validly tendered and not properly withdrawn
pursuant to the Change of Control Offer, (2) deposit by 11:00 a.m.,
New York City time, on such date with the Paying Agent an amount
equal to the Change of Control Purchase Price in respect of all
Secured Notes or portions thereof so validly tendered and not
properly withdrawn and (3) deliver or cause to be delivered to the
Trustee the Secured Notes so accepted together with an Officers'
Certificate stating the aggregate principal amount of Secured Notes
or portions thereof being purchased by the Issuer. The Paying Agent
shall promptly (but in any case not later than five days after the
Change of Control Payment Date) mail to each Holder of Secured Notes
so validly tendered and not properly withdrawn the Change of Control
Purchase Price for such Secured Notes.
(f) Upon surrender and cancellation of a Certificated Secured
Note that is purchased in part pursuant to the Change of Control Offer,
the Issuer shall promptly issue and the Trustee shall authenticate
and mail (or cause to be transferred by book entry) to the
surrendering Holder of such Certificated Secured Note, a new
Certificated Secured Note equal in principal amount to the
unpurchased portion of such surrendered Certificated Secured Note;
provided that each such new Certificated Secured Note shall be in a
principal amount of $1,000 or an integral multiple thereof. Upon
surrender of a Global Note that is purchased in part pursuant to a
Change of Control Offer, the Paying Agent shall forward such Global
Note to the Trustee who shall make a notation on Schedule A thereof
to reduce the principal amount of such Global Note to an amount equal
to the unpurchased portion of such Global Note, as provided in
Section 2.6 hereof. The Issuer shall publicly announce the results
of the Change of Control Offer on the Change of Control Payment Date.
For purposes of this Section 4.8, the Trustee shall act as the Paying
Agent.
(g) The Issuer shall comply with the requirements of Rules 13e-4
and 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Secured Notes as
a result of a Change of Control.
Section 4.9 Limitations on Indebtedness.
(a) The Company will not, and will not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness;
provided, however, that the Company may Incur Indebtedness if the
Consolidated EBITDA Coverage Ratio at the date of such Incurrence and
after giving effect thereto exceeds 2.25 to 1.0.
(b) Notwithstanding paragraph (a), the following Indebtedness may be
Incurred:
(1) Indebtedness of the Company pursuant to one or more Credit
Facilities (and the guarantee of such Indebtedness by Restricted
Subsidiaries); provided, however, that the aggregate amount of such
Indebtedness outstanding at such time shall not exceed $350,000,000,
less any amounts derived from Asset Sales and applied to the required
permanent reduction of Senior Indebtedness (and a permanent reduction
of the related commitment to lend or amount available to be
reborrowed in the case of a revolving credit facility) under such
Credit Facilities as contemplated by Section 4.15;
(2) Indebtedness of the Company or a Restricted Subsidiary owed to
and held by a Restricted Subsidiary or Indebtedness of a Restricted
Subsidiary owed to and held by the Company; provided, however, that
any subsequent issuance or transfer of any Capital Stock that results
in such Restricted Subsidiary to whom Indebtedness is owed ceasing to
be a Restricted Subsidiary or any transfer of such Indebtedness
(other than to the Company or another Restricted Subsidiary) shall be
deemed, in each case, to constitute the Incurrence of such
Indebtedness;
(3) The Guarantee, the Subsidiary Guarantees, if any, the Issuer
Loans and Indebtedness incurred in exchange for, or the proceeds of
which are used to Refinance any Indebtedness permitted by this clause
(iii); provided, however, that (i) the principal amount of the
Indebtedness so Incurred shall not exceed the principal amount of the
Indebtedness so Refinanced (plus the amount of reasonable fees and
expenses incurred in connection therewith, including any premium or
defeasance costs) and (ii) the Indebtedness so Incurred (A) shall not
mature prior to the Stated Maturity of the Indebtedness so Refinanced
and (B) shall have an Average Life equal to or greater than the
remaining Average Life of the Indebtedness so Refinanced;
(4) Indebtedness of the Company or any Restricted Subsidiary (other
than Indebtedness described in clause (1), (2) or (3) above)
(x) outstanding on the Issue Date (including without limitation, the
New Senior Notes and any subsidiary guarantee issued under the New
Senior Note Indenture, the Company's 6 1/2% Senior Notes due 2003, the
Company's 6 3/4% Senior Notes due 2005, the Company's 6.95% Senior Notes
due 2008, the Company's 7 3/8% Senior Notes due 2018, the Company's
9 1/8% Senior Notes due 2003, the Company's 9 1/2% Senior Notes due 2008,
and the 10 1/4% Senior Notes due 2003 of Cliffs Drilling Company) or
Incurred pursuant to agreements as in effect on the Issue Date and
(y) Indebtedness Incurred in exchange for, or the proceeds of which
are used to Refinance, any Indebtedness permitted by this clause (iv)
or permitted by clause (a) above; provided, however, that (i) the
principal amount of the Indebtedness so Incurred shall not exceed the
principal amount of the Indebtedness Refinanced (plus the amount of
reasonable fees and expenses incurred in connection therewith,
including any premium or defeasance costs); and (ii) the Indebtedness
so Incurred (A) shall not mature prior to the Stated Maturity of the
Indebtedness so Refinanced and (B) shall have an Average Life equal
to or greater than the remaining Average Life of the Indebtedness so
Refinanced;
(5) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees in connection with any synthetic lease
obligations of Persons Incurred to finance the construction or
upgrade of the drillship Deepwater Frontier and the drillship
Deepwater Pathfinder pursuant to agreements governing such
obligations;
(6) Acquired Indebtedness of any Restricted Subsidiary in an
aggregate amount not to exceed $300,000,000, provided that the
Company on a pro forma basis could Incur $1.00 of additional
Indebtedness pursuant to paragraph (a) of this covenant;
(7) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities or obligations in respect of
purchase price adjustments in connection with the acquisition or
disposition of assets, including, without limitation, shares of
Capital Stock;
(8) The Incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Indebtedness; provided, however, that if any such
Indebtedness ceases to be Non-Recourse Indebtedness of any
Unrestricted Subsidiary, subject to the definition of "Unrestricted
Subsidiary," such event shall be deemed to constitute an incurrence
of Indebtedness by a Restricted Subsidiary of the Company that was
not permitted by this clause (8);
(9) Obligations of the Company or a Restricted Subsidiary under
performance or surety bonds relating to building contracts for the
construction of drilling rigs, drillships or similar vessels or
contracts for the installation of related equipment;
(10) Hedging Obligations; and
(11) Indebtedness of the Company or any Restricted Subsidiary in an
aggregate principal amount which, together with all other
Indebtedness of the Company then outstanding (other than Indebtedness
permitted by clauses (1) through (10) of this paragraph (b) or
paragraph (a)) does not exceed $50,000,000.
(c) Notwithstanding paragraphs (a) and (b), the Company shall not
issue any Indebtedness if the proceeds thereof are used, directly or
indirectly, to repay, prepay, redeem, defease, retire, refund or
refinance any Subordinated Obligations unless such Indebtedness shall
be subordinated to the Guarantee and Issuer Loans to at least the
same extent as such Subordinated Obligations.
(d) For purposes of determining compliance with the foregoing
covenant, (i) in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness described
above, the Issuer, in its sole discretion, will classify such item of
Indebtedness and only be required to include the amount and type of
such Indebtedness in one of the above clauses and (ii) an item of
Indebtedness may be divided and classified in more than one of the
types of Indebtedness described above.
Section 4.10 Limitation on Liens.
The Company will not, and will not permit any Restricted
Subsidiary of the Company to, issue, assume or guarantee any
Indebtedness for borrowed money secured by any Lien on any property
or asset now owned or hereafter acquired by the Company or such
Restricted Subsidiary without making effective provision whereby any
and all Secured Notes then or thereafter outstanding and/or the
Guarantee will be secured by a Lien equally and ratably with any and
all other obligations thereby secured for so long as any such
obligations shall be so secured.
The foregoing restriction does not, however, apply to:
(1) Liens securing the Secured Notes, the Guarantee and the Issuer
Loans;
(2) Liens existing on the date on which the Secured Notes are
originally issued or provided for under the terms of agreements
existing on such date;
(3) Liens on property securing (a) all or any portion of the cost of
acquiring, constructing, altering, improving or repairing any
property or assets, real or personal, or improvements used or to be
used in connection with such property or (b) Indebtedness incurred by
the Company or any Restricted Subsidiary of the Company prior to or
within one year after the later of the acquisition, the completion of
construction, alteration, improvement or repair or the commencement
of commercial operation thereof, which Indebtedness is incurred for
the purpose of financing all or any part of the purchase price
thereof or construction or improvements thereon;
(4) Liens securing Indebtedness owed by a Restricted Subsidiary of
the Company or to any other Restricted Subsidiary of the Company;
(5) Liens on property existing at the time of acquisition of such
property by the Company or any of its Restricted Subsidiary or Liens
on the property of any Person existing at the time such Person
becomes a Restricted Subsidiary of the Company and, in any case, not
incurred as a result of (or in connection with or in anticipation of)
the acquisition of such property or such Person becoming a Restricted
Subsidiary of the Company, provided that such Liens do not extend to
or cover any property or assets of the Company or any of its
Restricted Subsidiaries other than the property encumbered at the
time such property is acquired by the Company or any of its
Restricted Subsidiaries or such Person becomes a Restricted
Subsidiaries of the Company and, in any case, do not secure
Indebtedness with a principal amount in excess of the principal
amount outstanding at such time;
(6) Liens on any property securing (a) Indebtedness incurred in
connection with the construction, installation or financing of
pollution control or abatement facilities or other forms of
industrial revenue bond financing or (b) Indebtedness issued or
guaranteed by the United States or any State thereof or any
department, agency or instrumentality of either;
(7) any Lien extending, renewing or replacing (or successive
extensions, renewals or replacements of) any Lien of any type
permitted under clause (1), (2), (3), (5) or (6) above, provided that
such Lien extends to or covers only the property that is subject to
the Lien being extended, renewed or replaced and that the principal
amount of the Indebtedness secured thereby shall not exceed the
principal amount of Indebtedness so secured at the time of such
extension, renewal or replacement; or
(8) Liens (exclusive of any Lien of any type otherwise permitted
under clauses (1) through (7) above) securing Indebtedness for
borrowed money of the Company or any Restricted Subsidiary of the
Company in an aggregate principal amount which, together with the
aggregate amount of Attributable Indebtedness deemed to be
outstanding in respect of all Sale/Leaseback Transactions entered
into pursuant to clause (a) of Section 4.12 (exclusive of any such
Sale/Leaseback Transactions otherwise permitted under clauses (1)
through (7) above), does not at the time such Indebtedness is
incurred exceed 15% of the Consolidated Net Worth of the Company (as
shown in the most recent audited consolidated balance sheet of the
Company and its Restricted Subsidiaries).
Section 4.11 Limitation on Restricted Payments.
(a) The Company will not, and will not permit any Restricted
Subsidiary, directly or indirectly, to:
(i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection
with any merger or consolidation involving the Company) or to the
direct or indirect holders of its Capital Stock, except:
(A) dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase its
Non-Convertible Capital Stock;
(B) dividends or distributions payable to the Company or a
Restricted Subsidiary; and
(C) pro rata dividends or distributions on the Capital Stock of a
Restricted Subsidiary held by minority stockholders (including,
without limitation, minority stockholders of Arcade Drilling AS, a
Norwegian corporation);
(ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or of any direct or indirect parent of
the Company, or any Restricted Subsidiary (except Capital Stock held
by the Company or a Restricted Subsidiary);
(iii) purchase, repurchase, redeem, defease or otherwise acquire
or retire for value, prior to scheduled maturity, scheduled repayment
or scheduled sinking fund payment, any Subordinated Obligation (other
than the purchase, repurchase or other acquisition of Subordinated
Obligations purchased in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due
within one year of the date of acquisition); or
(iv) make any Investment other than a Permitted Investment (any such
dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Investment being herein referred to
as a "Restricted Payment"),
if at the time the Company or such Restricted Subsidiary makes
such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom); or
(2) the Company would not be permitted to Incur an additional $1.00
of Indebtedness pursuant to Section 4.9(a) after giving pro forma
effect to such Restricted Payment; or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter during which the Secured Notes were originally issued to the
end of the most recent fiscal quarter ending at least 45 days prior
to the date of such Restricted Payment (or, in case such Consolidated
Net Income shall be a deficit, minus 100% of such deficit);
(B) 100% of the aggregate net proceeds (including the fair market
value of non-cash proceeds, which shall be determined in good faith
by the Board of Directors of the Company) received by the Company
from the issue or sale of its Capital Stock (other than Redeemable
Stock or Exchangeable Stock) subsequent to the Issue Date (other than
an issuance or sale to a Restricted Subsidiary or an employee stock
ownership plan or similar trust);
(C) the amount by which Indebtedness of the Company is reduced on
the Company's balance sheet upon the conversion or exchange (other
than by a Restricted Subsidiary) subsequent to the Incurrence of any
Indebtedness of the Company convertible or exchangeable for Capital
Stock (other than Redeemable Stock or Exchangeable Stock) of the
Company (less the amount of any cash, or other property, distributed
by the Company upon such conversion or exchange);
(D) to the extent not otherwise included in Consolidated Net Income,
the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted
Subsidiary after the Issue Date from any Unrestricted Subsidiary or
from the redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary (valued in each case as provided in the definition of
Investment), not to exceed in the case of any Restricted Subsidiary
the total amount of Investments (other than Permitted Investments) in
such Restricted Subsidiary made by the Company and its Restricted
Subsidiaries in such Unrestricted Subsidiary after the Issue Date;
and
(E) $20 million.
(b) The provisions of Section (a) shall not prohibit:
(i) Any purchase or redemption of Capital Stock or Subordinated
Obligations of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock of
the Company (other than Redeemable Stock or Exchangeable Stock and
other Capital Stock issued or sold to a Restricted Subsidiary or an
employee stock ownership plan); provided, however, that (i) such
purchase or redemption shall be excluded in the calculation of the
amount of Restricted Payments and (ii) the Net Cash Proceeds from
such sale shall be excluded from clauses (3)(B) and (3)(C) of Section
(a);
(ii) Any purchase or redemption of Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Indebtedness of the Company which
is permitted to be issued pursuant to the provision of Section 4.09
hereof above; provided, however, that such purchase or redemption
shall be excluded in the calculation of the amount of Restricted
Payments;
(iii) Dividends paid within 60 days after the date of declaration
if at such date of declaration such dividend would have complied with
this provision; provided, however, that at the time of payment of
such dividend, no other Default shall have occurred and be continuing
(or would result therefrom); provided further, however, that such
dividend shall be included in the calculation of the amount of
Restricted Payments (unless already included in determining the
amount of Restricted Payments previously made upon the declaration of
such dividend); and
(iv) If the Company issues Preferred Stock which is Non-Convertible
Capital Stock and receives at least $100,000,000 million of net
proceeds therefrom, dividends on such Preferred Stock in an aggregate
amount not to exceed $30,000,000 million, provided that such
dividends constitute Restricted Payments for purposes of calculating
the amount of Restricted Payments made pursuant to Section
4.11(a)(iii) above.
Section 4.12 Limitation on Sale/Leaseback Transactions.
The Company will not, and will not permit any Restricted
Subsidiary to, enter into any Sale/Leaseback Transaction with any
Person (other than the Company or a Restricted Subsidiary) unless:
(a) the Company or such Restricted Subsidiary would be entitled to
incur Indebtedness, in a principal amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction, secured
by a Lien on the property subject to such Sale/Leaseback Transaction
pursuant to Section 4.10 above without equally and ratably securing
the Secured Notes and/or the Guarantee pursuant to such Section;
(b) after the Issue Date and within a period commencing six months
prior to the consummation of such Sale/Leaseback Transaction and
ending six months after the consummation thereof, the Company or such
Restricted Subsidiary shall have expended for property used or to be
used in the ordinary course of business of the Company and its
Restricted Subsidiaries an amount equal to all or a portion of the
net proceeds of such Sale/Leaseback Transaction and the Company shall
have elected to designate such amount as a credit against such
Sale/Leaseback Transaction (with any such amount not being so
designated to be applied as set forth in clause (c) below); or
(c) the Company during the 12-month period after the effective
date of such Sale/Leaseback Transaction, shall have applied to the
voluntary defeasance or retirement of Issuer Loans and Secured Notes
or any Pari Passu Indebtedness an amount equal to the greater of the
net proceeds of the sale or transfer of the property leased in such
Sale/Leaseback Transaction and the fair value, as determined by the
Board of Directors of the Company, of such property at the time of
entering into such Sale/Leaseback Transaction (in either case
adjusted to reflect the remaining term of the lease and any amount
expended by the Company as set forth in clause (b) above), less an
amount equal to the principal amount of Issuer Loans and Secured
Notes and Pari Passu Indebtedness voluntarily defeased or retired by
the Issuer and the Company within such 12-month period and not
designated as a credit against any other Sale/Leaseback Transaction
entered into by the Company or any Restricted Subsidiary during such
period.
Section 4.13 SEC Reports.
Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the SEC and provide the
Trustee and Noteholders with such annual reports and such
information, documents and other reports specified in Sections 13 and
15(d) of the Exchange Act.
In addition, whether or not required by the rules and
regulations of the Commission, the Company will file a copy of all
such information and reports with the Commission for public
availability (unless the Commission will not accept such filing). In
addition, the Issuer and the Company shall furnish to the Noteholders
and to prospective investors, upon the requests of such Noteholders,
any information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act so long as the Secured Notes are not freely
transferable under the Securities Act.
Section 4.14 Limitation on Restrictions on Distributions from
Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary to (a) pay dividends or make any other
distributions, in cash or otherwise, on its Capital Stock to the
Company or any Restricted Subsidiary or pay any Indebtedness owed to
the Company or any Restricted Subsidiary, (b) make any loans or
advances to the Company or any Restricted Subsidiary or (c) transfer
any of its property or assets to the Company or any Restricted
Subsidiary, except:
(i) any encumbrance or restriction pursuant to an agreement in
effect or entered into on the Issue Date;
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Acquired
Indebtedness or Preferred Stock Incurred by such Restricted
Subsidiary on or prior to the date on which such Restricted
Subsidiary became a Restricted Subsidiary or was acquired by the
Company (other than Indebtedness or Preferred Stock Incurred as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company or
other Incurred in anticipation of such acquisition) and outstanding
on such date;
(iii) any encumbrance or restriction relating to any assets
acquired after the Issue Date, so long as such encumbrance or
restriction relates only to the assets so acquired and is not or was
not created in anticipation of such acquisition;
(iv) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness or Preferred Stock Incurred
pursuant to an agreement referred to in clause (i), (ii) or (iii) of
this covenant or this clause (iv) or contained in any amendment to an
agreement referred to in clause (i), (ii) or (iii) of this covenant
or this clause (iv); provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in
any such refinancing agreement or amendment are in the aggregate no
less favorable to the Holders of Secured Notes than the encumbrances
and restrictions with respect to such Restricted Subsidiary contained
in such predecessor agreements;
(v) any such encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests or
in license agreements to the extent such provisions restrict the
assignment of such agreement and any rights granted or property
leased thereunder;
(vi) in the case of clause (iii) above, restrictions contained in
security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such restrictions restrict the
transfer of the property subject to such security agreements or
mortgages; and
(vii) any temporary encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered into
for the sale or disposition of all or substantially all the Capital
Stock or assets of such Restricted Subsidiary pending the closing of
such sale or disposition.
Nothing contained in this covenant shall prevent the Company or
any Restricted Subsidiary from entering into any agreement permitting
the incurrence of Liens otherwise permitted by Section 4.10 hereof.
Section 4.15 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any Subsidiary
Guarantor to, sell, assign, convey, transfer or otherwise dispose of
a Mortgaged Rig or any other portion of the Collateral (other than an
Incidental Asset or Temporary Cash Investments in the Issuer Escrow
Account or the Company Escrow Account and other than a transfer of a
Mortgaged Rig to a Wholly-Owned Restricted Subsidiary that becomes a
Subsidiary Guarantor); provided, however, that the Company or a
Subsidiary Guarantor may sell a Mortgaged Rig or the Company may sell
all the Capital Stock of a Subsidiary Guarantor owning a Mortgaged
Rig (any such asset proposed to be sold is referred to herein as a
"Mortgaged Rig Asset") if such sale of a Mortgaged Rig Asset shall be
made in compliance with each of the following conditions:
(i) no Default shall have occurred and be continuing;
(ii) the sale shall be effected in a commercially reasonable manner
as determined by the Board of Directors and evidenced by a Board
Resolution;
(iii) at least 75% of the consideration received shall be in the
form of cash or Temporary Cash Equivalents, provided that Net
Available Cash shall not be less than an amount equal to the Sale
Redemption Amount for the Issuer Loan secured by a Lien on such
Mortgaged Rig Asset;
(iv) funds in an amount equal to the Sale Redemption Amount (or if
required by the provisions of Section 3.9, the Net Available Cash of
such sale) shall be applied as repayments on the appropriate Issuer
Loan or Loans and paid in full directly to the Trustee for deposit in
the Escrow Account and shall be received by the Trustee free of any
Lien (other than the Lien of this Indenture and the Security
Agreements); and
(v) the Company shall have complied with the other provisions of
this Indenture applicable to such sale.
(b) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, engage in any Asset Sales (other than
Asset Sales permitted by Section 4.15(a) unless (i) the Company or
the applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the
fair market value of the assets sold or otherwise disposed of (as
determined in good faith by the Company's Board of Directors), and
(ii) at least 75% of the consideration received by the Company or the
Restricted Subsidiary, as the case may be, from such Asset Sale at
the time of such disposition shall be in the form of cash or
Temporary Cash Equivalents (or the assumption of indebtedness and
liabilities of the Company or such Restricted Subsidiary and the
release of the Company or such Restricted Subsidiary from all
liability thereon) or notes or marketable securities that are
converted into cash or Temporary Cash Equivalents within 180 days
after the date of such Asset Sale; provided that any Asset Sale of
shares of Capital Stock of Devco or of assets owned by Devco not
constituting a Mortgaged Rig shall not have to comply with the
provisions of this clause (ii). If the Company or a Restricted
Subsidiary engages in an Asset Sale in compliance with the previous
sentence, then the Company shall or shall cause a Restricted
Subsidiary to apply an amount equal to such excess Net Available Cash
within 360 days of the Asset Sale either (i) to repay Senior
Indebtedness of the Company or of a Restricted Subsidiary (other than
in each case Indebtedness owed to an Affiliate of the Company), (ii)
to invest in Additional Assets or (iii) treat (no later than the end
of such 360-day period) such excess Net Available Cash (to the extent
not applied pursuant to clauses (i) or (ii) above) as Sale Excess
Proceeds.
Section 4.16 Limitation on Asset Swaps.
The Company will not, and will not permit any Restricted
Subsidiary to, engage in any Asset Swaps, unless:
(i) at the time of entering into the agreement with respect thereto
and immediately after giving effect to the proposed Asset Swap, no
Default shall have occurred and be continuing;
(ii) the aggregate fair market values of the Additional Assets and
other consideration to be received by the Company or the applicable
Restricted Subsidiary is, at the time the Asset Swap is agreed to,
substantially equal to the aggregate fair market of the property
being disposed of by the Company or the applicable Restricted
Subsidiary (to be determined in good faith by the Board of Directors
of the Company and to be evidenced by a resolution of such Board set
forth in an Officer's Certificate delivered to the Trustee); and
(iii) the cash payments, if any, received by the Company or such
Restricted Subsidiary in connection with such Asset Swap are treated
as Net Available Cash received from an Asset Sale.
Section 4.17 Limitation on Affiliate Transactions.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into or permit to exist any transaction
(including the purchase, sale, lease or exchange of any property,
employee compensation arrangements or the rendering of any service)
with any Affiliate of the Company (an "Affiliate Transaction") unless
the terms thereof (1) are no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained at the time
of such transaction in arm's-length dealings with a Person who is not
such an Affiliate, (2) if such Affiliate Transaction involves an
amount in excess of $500,000, (i) are set forth in writing and (ii)
have been approved by a majority of the members of the Board of
Directors of the Company having no personal stake in such Affiliate
Transaction and (3) if such Affiliate Transaction involves an amount
in excess of $10,000,000, have been determined by an investment
banking firm of national reputation or, in the case of the sale or
transfer of assets subject to valuation, an appropriate independent
qualified appraiser of national reputation, given the size and nature
of the transaction, to be fair, from a financial standpoint, to the
Company and its Restricted Subsidiaries.
(b) The provisions of the foregoing paragraph (a) shall not prohibit
(i) any Restricted Payment permitted to be paid pursuant to the
covenant described under Section 4.11 hereof, (ii) any issuance of
securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements
of the Company, stock options, stock ownership and other employee
benefit plans approved by the Board of Directors of the Company,
(iii) the grant of stock options or similar rights to employees,
officers and directors of the Company pursuant to plans approved by
its Board of Directors, (iv) loans or advances to employees in the
ordinary course of business in accordance with the past practices of
the Company or its Subsidiaries, but in any event not to exceed
$1,000,000 in aggregate principal amount outstanding at any one time,
(v) the payment of reasonable fees to directors of the Company and
its Restricted Subsidiaries who are not employees of the Company or
its Restricted Subsidiaries and (vi) any Affiliate Transaction among
any of the Issuer, the Company, the Restricted Subsidiaries, Arcade
Drilling AS, any entity owning or operating any of the Deepwater
Pathfinder, the Deepwater Frontier or the Seillean (but only for
transactions relating to such vessels) and Navis ASA.
Section 4.18 Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries.
The Company shall not sell or otherwise dispose of any Capital
Stock of a Restricted Subsidiary, and shall not permit any such
Restricted Subsidiary, directly or indirectly, to issue or sell or
otherwise dispose of any of its Capital Stock except (i) to the
Company or a Wholly Owned Restricted Subsidiary, (ii) if, immediately
after giving effect to such issuance, sale or other disposition,
neither the Company nor any of its Subsidiaries own any Capital Stock
of such Restricted Subsidiary, (iii) other than with respect to
shares of Capital Stock of a Subsidiary Guarantor owning a Mortgaged
Rig, to Persons who are entering into joint ventures or other similar
business relationships with the Company or any Subsidiary other than
a Subsidiary Guarantor; provided, however, that transactions pursuant
to this clause (iii) are approved in the manner set forth in
paragraph (a) under Section 4.17, (iv) directors' qualifying shares,
(v) other than with respect to shares of Capital Stock of a
Subsidiary Guarantor which owns a Mortgaged Rig, if, immediately
after giving effect to such issuance, sale or other disposition, such
Restricted Subsidiary would no longer constitute a Restricted
Subsidiary and any Investment in such Person remaining after giving
effect thereto would have been permitted to be made under the
covenant described under Section 4.11 if made on the date of such
issuance, sale or other disposition or (vi) pursuant to the loan
arrangement with Nisho-Iwai. The Company shall apply the proceeds
from any applicable sale of Capital Stock of a Subsidiary Guarantor
which owns a Mortgaged Rig, in accordance with the provisions
described above under Section 3.9.
Section 4.19 Future Subsidiary Guarantors.
The Company may not permit any Restricted Subsidiary, directly
or indirectly, to guarantee any Indebtedness of the Company or any
other Obligor ("Guaranteed Indebtedness") or to acquire a Mortgaged
Rig unless (i) such Restricted Subsidiary simultaneously executes and
delivers a supplemental indenture to this Indenture providing for a
Subsidiary Guarantee of payment of the Secured Notes by such
Restricted Subsidiary and (ii) such Restricted Subsidiary waives and
will not in any manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation
or any other rights against the Issuer, the Company or any other
Restricted Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee. If the Guaranteed
Indebtedness is pari passu with the Guarantee, then the guarantee of
such Guaranteed Indebtedness shall be pari passu with or subordinated
to the Subsidiary Guarantee; and if the Guaranteed Indebtedness is
subordinated to the Guarantee, then the guarantee of such Guaranteed
Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that all Guaranteed Indebtedness is subordinated
to the Guarantee. Notwithstanding the foregoing, any Subsidiary
Guarantee by a Restricted Subsidiary which does not own a Mortgaged
Rig that was incurred pursuant to the terms of this Section 4.19 (but
not otherwise) shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon the
release or discharge of the guarantee which resulted in the creation
of such Restricted Subsidiary's Subsidiary Guarantee, except a
discharge or release by, or as a result of, payment under such
guarantee.
Section 4.20 Impairment of Liens.
The Issuer and the Company shall not, and the Issuer and the
Company shall not permit any Restricted Subsidiary to, take or
knowingly or negligently omit to take, any action which action or
omission might or would have the result of materially impairing the
Liens granted by the Issuer with respect to the Collateral for the
benefit of the Trustee and the Holders of the Secured Notes and the
Liens granted by the Company with respect to Collateral for the
benefit of the Issuer, and except as permitted by this Indenture and
the Security Agreements, the Issuer and the Company shall not, and
shall not permit any Restricted Subsidiary to, grant to any Person
other than the Trustee, for the benefit of the Trustee and the
Holders of the Secured Notes, any interest whatsoever in any of the
Collateral.
Section 4.21 Limitation on Issuer Activities.
The Issuer will not engage in any business activity or undertake
any activity, except any activity (i) relating to the offering, sale
or issuance of the Secured Notes or the lending of the proceeds of
such sale of Secured Notes to the Company pursuant to the Issuer
Loans, or (ii) undertaken with the purpose of, and directly related
to, exercising its rights under, and fulfilling the obligations of
the Company, the Issuer or the Restricted Subsidiaries under, the
Secured Notes, this Indenture, the Issuer Loans and Security
Agreements. The Indenture provides that the Issuer will be a limited
purpose entity with corporate organizational documents containing
certain limitations (including the foregoing restrictions on the
Issuer's business activities, the requirement of an independent
director on its Board of Directors, and a restriction on its ability
to commence a voluntary case or proceeding under any applicable
bankruptcy or insolvency laws without the prior unanimous affirmative
vote of all of its directors). The Issuer shall not (i) incur any
Indebtedness other than the Secured Notes or Subordinated Obligations
owing to the Company or (ii) enter into any derivative product
transactions.
Section 4.22 Compliance Certificate; Notice of Default or Event of
Default.
(a) The Issuer, the Company and each Subsidiary Guarantor shall
deliver to the Trustee, within 90 days after the end of each fiscal
year, an Officers' Certificate (which shall be signed by Officers
satisfying the requirements of Section 314 of the Trust Indenture
Act) stating that a review of the activities of the Issuer, the
Company and the Restricted Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with
a view to determining whether the Issuer and the Company have kept,
observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Issuer has
kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance
or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or she
may have knowledge and what action the Issuer is taking or proposes
to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of, interest, if any, or
Special Interest, if any, or Additional Amounts, if any, on the
Secured Notes is prohibited or if such event has occurred, a
description of the event and what action the Issuer is taking or
proposes to take with respect thereto.
(b) The year-end financial statements delivered pursuant to Section
4.13 hereof shall be accompanied by a written statement of the
independent public accountants of the Company (who shall be a firm of
established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has
come to their attention that would lead them to believe that the
Issuer has violated any provisions of Article 4 or Article 5 hereof
(except that, such written statement need not address the Issuer's
compliance with the provisions of Sections 4.2, 4.5, 4.7, 4.8, 4.17
or 4.23 hereof) or, if any such violation has occurred, specifying
the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any
Person for any failure to obtain knowledge of any such violation.
(c) The Issuer and the Company shall, so long as any of the Secured
Notes are outstanding, deliver to the Trustee, forthwith upon, but in
any event within five Business Days after, any Officer's becoming
aware of any Default or Event of Default, an Officers' Certificate
specifying such Default or Event of Default and what action the
Issuer and/or the Company is taking or proposes to take with respect
thereto.
(d) For purposes of this Section 4.22, compliance shall be
determined without required by any period of grace or requirement of
notice under this Indenture.
Section 4.23 Prohibition on Issuer and Guarantor Becoming an
Investment Company.
Neither the Issuer nor the Company shall become an "Investment
Company" as defined in the Investment Company Act of 1940, as
amended.
Section 4.24 Additional Amounts.
(a) Except to the extent required by any applicable law, regulation
or governmental policy, any and all payments of, or in respect of,
any Secured Note shall be made free and clear of and without
deduction for or on account of any and all present or future taxes,
levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas or
any other jurisdiction with which the Company or any Subsidiary
Guarantor has some connection (including any jurisdiction (other than
the United States of America) from or through which payments under
the Issuer Loans, the Secured Notes, the Guarantee or the Subsidiary
Guarantees (if any) are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," or "Other Taxes," respectively). If the
Issuer, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, or
Other Taxes from or in respect of any sum payable under an Issuer
Loan Agreement, the Secured Notes, the Guarantee or a Subsidiary
Guarantee, the sum payable by the Issuer, the Company or such
Subsidiary Guarantor, as the case may be, thereunder shall be
increased by the amount ("Additional Amounts") necessary so that
after making all required withholdings and deductions, the Holder or
beneficial owner of a Secured Note shall receive an amount equal to
the sum that it would have received had not such withholdings and
deductions been made; provided that any such sum shall not be paid in
respect of any Panamanian Taxes, Bahamian Taxes or Other Taxes to a
Holder (an "Excluded Holder") (i) resulting from the beneficial
owner of such Secured Note carrying on business or being deemed to
carry on business in or through a permanent establishment or fixed
base in the relevant taxing jurisdiction or having any other
connection with the relevant taxing jurisdiction or any political
subdivision thereof or any taxing authority therein other than the
mere holding or owning of such Secured Note, being a beneficiary of
the Guarantee or any applicable Subsidiary Guarantee, the receipt of
any income or payments in respect of such Secured Note, any Issuer
Loan, the Guarantee or any applicable Subsidiary Guarantee or the
enforcement of such Secured Note, such Issuer Loan, the Guarantee or
any applicable Subsidiary Guarantee, or (ii) that would not have been
imposed but for the presentation (where presentation is required) of
such Secured Note for payment more than 180 days after the date such
payment became due and payable or was duly provided for, whichever
occurs later. The Issuer, the Company or the Subsidiary Guarantors,
as applicable, will also (i) make such withholding or deduction and
(ii) remit the full amount deducted or withheld to the relevant
authority in accordance with applicable law, and, in any such case,
the Issuer will furnish to each Holder on whose behalf an amount was
so remitted, within 30 calendar days after the date the payment of
any Panamanian Taxes, Bahamian Taxes or Other Taxes is due pursuant
to applicable law, certified copies of tax receipts evidencing such
payment by the Issuer, the Company or the Subsidiary Guarantors, as
applicable. The Issuer will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes or Other Taxes so
levied or imposed and paid by such holder as a result of payments
made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, or Other Taxes so levied or imposed
with respect to any reimbursement under the foregoing clause (i) so
that the net amount received by such Holder (net of payments made
under or with respect to such Secured Notes, such Issuer Loans, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes or Other Taxes on
such reimbursement had not been imposed.
(b) At least 30 calendar days prior to each date on which any
payment under or with respect to the Secured Notes is due and
payable, if the Issuer, the Company or the Subsidiary Guarantors, as
applicable, will be obligated to pay Additional Amounts with respect
to such payment, the Issuer, the Company or the Subsidiary
Guarantors, as applicable, will deliver to the Trustee an officer's
certificate stating the fact that such Additional Amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
(c) If any Holder or beneficial owner of any Secured Note receives
a refund of the Panamanian Taxes, Bahamian Taxes or Other Taxes after
the Issuer, the Company or any Subsidiary Guarantor, as applicable,
has paid any Additional Amounts, such Holder or beneficial owner
shall reimburse the Issuer, the Company or any Subsidiary Guarantor,
as applicable, for any amount of such refund.
(d) The Issuer, the Company or the Subsidiary Guarantors will pay
any stamp, issue, registration, documentary or other similar taxes
and duties, including interest and penalties, in respect of the
creation, issue and offering of the Secured Notes payable in the
United States, Panama, The Bahamas or any political subdivision
thereof or taxing authority of or in the foregoing. The Issuer, the
Company and the Subsidiary Guarantors, as applicable, will also pay
and indemnify the Trustee and the Holders of the Secured Notes from
and against all court fees and taxes or other taxes and duties,
including interest and penalties, paid by any of them in any
jurisdiction in connection with any action permitted to be taken by
the Holders or the Trustee to create Liens on the Collateral or to
enforce the Obligations of the Company or the Subsidiary Guarantors
under the Secured Notes, this Indenture, the Guarantee, the
Subsidiary Guarantees, the Issuer Loans or the Security Agreements.
(e) Whenever there is mentioned, in any context, the payment of
principal, premium or interest in respect of any Secured Note or the
net proceeds received on the sale or exchange of any Secured Note,
such mention shall be deemed to include the payment of Additional
Amounts or Special Interest provided for in this Indenture to the
extent that, in such context, Additional Amounts are, were or would
be payable in respect thereof pursuant to this Indenture.
ARTICLE V
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
Section 5.1 Limitations on Mergers and Consolidations.
(a) Neither the Company nor any Subsidiary Guarantor (other
than any Subsidiary Guarantor that shall have been released from its
Subsidiary Guarantee pursuant to the provisions of this Indenture)
will consolidate with or merge into any Person, continue in another
jurisdiction, or sell, lease, convey, transfer or otherwise dispose
of all or substantially all of its assets to any Person, unless:
(i) the Person formed by or surviving such consolidation or merger
(if other than the Company or such Subsidiary Guarantor, as the case
may be), or to which such sale, lease, conveyance, transfer or other
disposition shall be made (collectively, the "Successor"), is a
corporation organized and existing under the laws of the United
States or any State thereof or the District of Columbia (or,
alternatively, in the case of a Subsidiary Guarantor organized under
the laws of a jurisdiction outside the United States, a corporation
organized and existing under the laws of such foreign jurisdiction),
and the Successor assumes by supplemental indenture in a form
satisfactory to the Trustee all of the applicable Obligations of the
Issuer or such Subsidiary Guarantor, as the case may be, under this
Indenture, the Guarantee, the Subsidiary Guarantees and the Issuer
Secured Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; and
(iii) in the case of the Company, immediately after giving effect
to such transactions, the resulting, surviving or transferee Person
would be able to incur at least $1.00 of Indebtedness pursuant to
Section 4.9 (a) hereof.
The provision of clause (iii) shall not apply to any merger or
consolidation into or with, or any such transfer of all or
substantially all of the property and assets of the Issuer or a
Restricted Subsidiary into the Company.
(b) The Issuer shall not consolidate or merge with or into any
other Person, continue in another jurisdiction, or convey, transfer or
lease any assets to any other Person (other than as permitted under
"Collateral"). The Issuer shall not become a Subsidiary of the
Company so long as any of the Company's 6 1/2% Senior Notes due 2003,
the Company's 6 3/4% Senior Notes due 2005, the Company's 6.95% Senior
Notes due 2008, the Company's 7 3/8% Senior Notes due 2018, the
Company's 9 1/8% Senior Notes due 2003, the Company's 9 1/2% Senior
Notes due 2008 or the New Senior Notes remain outstanding.
(c) In connection with any consolidation, merger, continuance,
transfer of assets or other transactions contemplated by this Section
5.1, the Issuer shall deliver, or cause to be delivered to the
Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, continuance, sale,
assignment, conveyance or transfer and the supplemental indenture in
respect thereto comply with the provisions of this Indenture and that
all conditions precedent in this Indenture relating to such
transactions have been complied with.
(d) Upon any transaction or series of transactions that are of the
type described in, and are effected in accordance with, this Section
5.1, the Successor shall succeed to, and be substituted for, and may
exercise every right and power of, the Company or Subsidiary
Guarantor, as applicable, under this Indenture and the Secured Notes
with the same effect as if such Successor had been named as the
Company or Subsidiary Guarantor, as applicable, in this Indenture;
and when a Successor duly assumes all of the Obligations and
covenants of the Company or a Subsidiary Guarantor pursuant to this
Indenture and the Secured Notes, except in the case of a lease, the
predecessor Person shall be relieved of all such Obligations.
Section 5.2 Successor Corporation Substituted.
Upon any consolidation or merger by the Company with or into any
other corporation, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the
assets of the Company, in accordance with Section 5.1 hereof, the
successor corporation formed by such consolidation into or with which
the Company is merged or to which such sale, assignment, transfer,
lease, conveyance or other disposition is made shall succeed to, and
be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition,
the provisions of this Indenture referring to "the Company" shall
refer instead to the Successor and not to the Company), and may
exercise every right and power of the Company under this Indenture
with the same effect as if such Successor had been named as the
Company herein; provided, however, that the predecessor of the
Company shall not be relieved from the obligation to pay the
principal, premium, if any, and interest and Special Interest, if
any, and Additional Amounts, if any, on the Secured Notes except in
the case of a sale of all of the Company's assets that meets the
requirements of Section 5.1 hereof.
If the Successor shall have succeeded to and been substituted
for the Company, such Successor may cause to be signed, and may issue
either in its own name or in the name of the Company prior to such
succession any or all of the notation of Guarantee on the Secured
Notes issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee.
In case of any such consolidation, merger, continuance, sale,
transfer, conveyance or other disposal, such changes in phraseology
and form (but not in substance) may be made in the Secured Notes
thereafter to be issued or the Guarantee to be endorsed thereon as
may be appropriate.
For all purposes of this Indenture and the Secured Notes,
Subsidiaries of any Successor will, upon such transaction or series
of transactions, become Restricted Subsidiaries or Unrestricted
Subsidiaries as provided pursuant to this Indenture and all
Indebtedness, and all Liens on the property or assets, of the
Successor and its Restricted Subsidiaries immediately prior to such
transaction or series of transactions shall be deemed to have been
incurred upon such transaction or series of transactions.
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.
Each of the following is an "Event of Default" hereunder:
(a) default in the payment of interest (including Special Interest
and Additional Amounts, if any) on the Secured Notes or an Issuer
Loan when due, continued for 30 days;
(b) (i) default in the payment of principal of, or premium, if any,
on, any Secured Note or Issuer Loan when due at its Stated Maturity,
upon redemption, required repurchase, declaration of acceleration or
otherwise; or
(ii) the failure to redeem or purchase Secured Notes or the Issuer
Loans when required pursuant to this Indenture or the Issuer Loan
Agreements;
(c) the failure by the Company to comply with its obligations under
Sections 3.8, 3.9, 3.10, 4.8, 4.15 or 5.1;
(d) the failure by the Issuer, the Company and the Subsidiary
Guarantors to comply with its other agreements contained in this
Indenture or in the Security Agreements, or the occurrence of an
event of default under a Mortgage, and such failure or event of
default continues for 60 days after notice;
(e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness by the Company or any of its Restricted Subsidiaries (or
the payment of which is guaranteed by the Company or any of its
Restricted Subsidiaries) whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, which default
(i) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default
unless being contested in good faith by appropriate proceedings (a
``Payment Default'') or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has
been a Payment Default or the maturity of which has been so
accelerated, aggregates $20,000,000 or more; provided, however, that
a default under this clause (e) will not constitute an Event of
Default until the Trustee provides a written notice to the Issuer, or
the Holders of 25% in aggregate principal amount of the outstanding
Secured Notes provide a written notice to the Issuer and the Trustee,
of the default and the Issuer does not cure such default within the
time specified after receipt of such notice;
(f) failure by the Company or any of its Restricted Subsidiaries
to pay final judgments aggregating in excess of $20,000,000, which
judgments are not paid, discharged or stayed for a period of 30 days;
(g) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Issuer, the
Company or any Significant Subsidiary in an involuntary case or
proceeding under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state, or foreign
bankruptcy, insolvency, or other similar law or (ii) a decree or
order adjudging the Issuer, the Company or any Significant Subsidiary
a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or
in respect of the Issuer, the Company or any Significant Subsidiary
under U.S. bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal, state or foreign bankruptcy, insolvency, or
similar law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Issuer, the Company or any Significant Subsidiary or of any
substantial part of the property or assets of the Issuer, the Company
or any Significant Subsidiary, or ordering the winding up or
liquidation of the affairs of the Issuer, the Company or any
Significant Subsidiary, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 60 consecutive days;
(h) (i) the commencement by the Issuer, the Company or any
Significant Subsidiary of a voluntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent; or (ii) the consent by the Issuer, the Company
or any Significant Subsidiary to the entry of a decree or order for
relief in respect of the Issuer, the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency or other similar
law or to the commencement of any bankruptcy or insolvency case or
proceeding against the Issuer, the Company or any Significant
Subsidiary; or (iii) the filing by the Issuer, the Company or any
Significant Subsidiary of a petition or answer or consent seeking
reorganization or relief under U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law; or (iv) the
consent by the Issuer, the Company or any Significant Subsidiary to
the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Issuer, the Company or any
Significant Subsidiary or of any substantial part of the Property or
assets of the Issuer, the Company or any Significant Subsidiary, or
the making by the Issuer, the Company or any Significant Subsidiary
of an assignment for the benefit of creditors; or (v) the admission
by the Issuer, the Company or any Significant Subsidiary in writing
of its inability to pay its debts generally as they become due; or
(vi) the taking of corporate action by the Issuer, the Company or any
Significant Subsidiary in furtherance of any such action; or
(i) the Guarantee or any Subsidiary Guarantee ceases to be in full
force and effect (other than in accordance with the terms of this
Indenture and such Subsidiary Guarantee) or the Company or a
Subsidiary Guarantor denies or disaffirms its obligations under the
Guarantee or its Subsidiary Guarantee, as applicable; or
(j) the Liens under the Security Agreements shall, at any time,
cease to be in full force and effect for any reason (other than by
operation of the provisions of this Indenture and the Security
Agreements) other than the satisfaction in full of all obligations
under this Indenture and discharge of this Indenture, or any Lien
created thereunder shall be declared invalid or unenforceable or the
Issuer, the Company or any Subsidiary Guarantor shall assert, in any
pleading in any court of competent jurisdiction, that any such Lien
is invalid or unenforceable.
Section 6.2 Acceleration.
If any Event of Default (other than an Event of Default
specified in clause (g) or (h) of Section 6.1) occurs and is
continuing, then and in every such case the Trustee or the Holders of
not less than 25% of the outstanding aggregate principal amount at
Stated Maturity of the Secured Notes, may declare the principal
amount at Stated Maturity of, premium, if any, and any accrued and
unpaid interest (and Special Interest, if any) on all such Secured
Notes then outstanding to be immediately due and payable by a notice
in writing to the Issuer (and to the Trustee if given by Holders of
such Secured Notes), and upon any such declaration all amounts
payable in respect of the Secured Notes will become and be
immediately due and payable. If any Event of Default specified in
clause (g) or (h) of Section 6.1 occurs, the principal amount at
Stated Maturity of, premium, if any, and any accrued and unpaid
interest (including Special Interest, if any) on, the Secured Notes
then outstanding shall become immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder of
such Secured Notes. In the event of a declaration of acceleration
because an Event of Default set forth in clause (e) of Section 6.1
has occurred and is continuing, such declaration of acceleration
shall be automatically rescinded and annulled if the event of default
triggering such Event of Default pursuant to clause (e) of
Section 6.1 shall be remedied or cured or waived by the holders of
the relevant Indebtedness within 30 days after such event of default;
provided that no judgment or decree for the payment of the money due
on the Secured Notes has been obtained by the Trustee as provided in
this Indenture.
After any such acceleration, but before a judgment or decree
based on acceleration, Holders of a majority in principal amount at
Stated Maturity of the outstanding Secured Notes by notice to the
Issuer and the Trustee may rescind an acceleration and its
consequences if:
(a) the Issuer or any Guarantor has paid or deposited with the
Trustee a sum sufficient to pay
(i) all money paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursement and advances of the
Trustee, its agents and counsel, and any other amounts due to the
Trustee under Section 7.7;
(ii) all overdue installments of interest and Special Interest, if
any, on, and any other amounts due in respect of, all Secured Notes;
(iii) the principal of (and premium, if any, on) any Secured
Notes that have become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates prescribed
therefor in the Secured Notes and this Indenture; and
(iv) to the extent that payment of such interest is lawful, interest
upon Defaulted Interest at the rate or rates prescribed therefor in
the Secured Notes and this Indenture;
(b) all Events of Default, other than the nonpayment of principal of
Secured Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 6.4;
(c) the annulment of such acceleration would not conflict with any
judgment or decree of a court of competent jurisdiction; and
(d) the Issuer has delivered an Officers' Certificate to the Trustee
to the effect of clauses (b) and (c) of this sentence.
No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
Section 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of,
premium, on, if any, any interest on, Special Interest, if any, on,
Additional Amounts, if any, with regard to, and any other amounts
owing and unpaid on, the Secured Notes or to enforce the performance
of any provision of the Secured Notes, the Security Agreements or
this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Secured Notes or does not produce any of them in
the proceeding. A delay or omission by the Trustee or any Holder of a
Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver
of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.4 Waiver of Past Defaults.
Subject to Section 6.7 hereof, Holders of not less than a
majority in aggregate principal amount of the then outstanding
Secured Notes by notice to the Trustee may on behalf of the Holders
of all of the Secured Notes waive an existing Default or Event of
Default and its consequences hereunder, except (i) an existing
Default or Event of Default in the payment of the principal of,
premium, if any, on, or interest and Special Interest, if any, on,
the Secured Notes (including in connection with an offer to purchase)
or (ii) an existing Default or Event of Default in respect of a
provision that under Section 10.2 cannot be amended without the
consent of each Holder affected thereby. 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 and the Security Agreements; but no such waiver shall
extend to any subsequent or other Default or impair any right
consequent thereon.
Section 6.5 Control By Majority.
The Holders of a majority in aggregate principal amount of the
Secured Notes then outstanding may direct the time, method and place
of conducting any proceeding for exercising any remedy available to
the Trustee or exercising any trust or power conferred on it.
However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or the Security Agreements or,
subject to Section 7.1 hereof, that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Secured Notes or
that may involve the Trustee in personal liability; provided that the
Trustee may take any other action deemed by the Trustee that is not
inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
Section 6.6 Limitation on Suits.
No Holder of any Secured Note shall have the right to institute
any proceeding, judicial or otherwise, with respect to this
Indenture, the Guarantee, the Secured Notes or the Security
Agreements, or for the appointment of a receiver or a trustee, or for
any other remedy, unless:
(a) the Holder of a Secured Note has given to the Trustee written
notice of a continuing Event of Default;
(b) a Holder or Holders of at least 25% in principal amount of the
then outstanding Secured Notes make a written request to the Trustee
to pursue the remedy;
(c) such Holder of a Secured Note or Holders of Secured Notes offer
and, if requested, provide to the Trustee indemnity satisfactory to
the Trustee against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the Secured Notes then outstanding do not give the Trustee
a direction inconsistent with the request;
in any event, it being understood and intended that no one or
more Holders of Secured Notes shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this
Indenture or the Security Agreements to affect, disturb or prejudice
the rights of any Holders of Secured Notes, or to obtain or to seek
to obtain priority or preference over any other of such Holders or to
enforce any right under this Indenture or the Security Agreements,
except in the manner herein provided and for the equal and ratable
benefit of all Holders of Secured Notes.
A Holder of a Secured Note may not use this Indenture or any
Security Agreement to prejudice the rights of another Holder of a
Secured Note or to obtain a preference or priority over another
Holder of a Secured Note.
Section 6.7 Rights of Holders of Secured Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right
of any Holder to receive payment of principal of, premium, if any,
on, Additional Amounts, if any, on, and interest and Special
Interest, if any, on, the Secured Notes held by such Holder, on or
after the respective due dates expressed in the Secured Note or this
Indenture (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the
consent of such Holder; except that no Holder shall have the right to
institute any such suit, if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would under
applicable law result in the surrender, impairment, waiver, or loss
of the Liens of the Security Agreements upon any property or assets
subject to the Liens.
Section 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a) or (b) occurs
and is continuing, the Trustee is authorized to recover judgment in
its own name and as trustee of an express trust against the Issuer
for the whole amount of principal of, premium, if any, on, interest
and Special Interest, if any, and Additional Amounts, if any,
remaining unpaid on, the Secured Notes and interest on overdue
principal and, to the extent lawful, interest and 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 any other
amounts due to the Trustee under Section 7.7.
Section 6.9 Trustee May File Proofs of Claim.
The Trustee shall be entitled and empowered, without regard to
whether the Trustee or any Holder shall have made any demand or
performed any other act pursuant to the provisions of this Article
and without regard to whether the principal of the Secured Notes
shall then be due and payable as therein expressed or by declaration
or otherwise, by intervention in any proceedings relative to the
Issuer, the Company or any Obligor upon the Secured Notes, or to the
creditors or property or assets of the Issuer, the Company, any
Subsidiary Guarantor or any other Obligor or otherwise, to take any
and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be entitled and
empowered in such instances:
(a) to file and prove a claim or claims for the whole amount of
principal (and premium, if any), interest, Additional Amounts, if
any, Special Interest, if any, and any other amounts owing and unpaid
in respect of the Secured Notes, and to file such other papers or
documents as may be necessary or advisable in order to have the
claims of the Trustee (including all amounts owing to the Trustee and
each predecessor Trustee pursuant to Section 7.7 hereof) and of the
Holders allowed in any judicial proceedings relative to the Issuer,
the Company or other Obligor upon the Secured Notes, or to the
creditors or property of the Issuer, the Company, any Subsidiary
Guarantor or any such other Obligor;
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the Holders of the Secured Notes in any election of a
trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person
performing similar functions in comparable proceedings; and
(c) to collect and receive any moneys or other property or assets
payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Holders and of the
Trustee on their behalf; and any trustee, receiver, or liquidator,
custodian or other similar official is hereby authorized by each of
the Holders to make payments to the Trustee, and, in the event that
the Trustee shall consent to the making of payments directly to the
Holders, to pay to the Trustee such amounts as shall be sufficient to
cover all amounts owing to the Trustee and each predecessor Trustee
pursuant to Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Secured Notes or the rights
of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding except, as
aforesaid, to vote for the election of a trustee in bankruptcy or
similar person.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party), the Trustee shall
be held to represent all the Holders of the Secured Notes, and it
shall not be necessary to make any Holders of the Secured Notes
parties to any such proceedings.
Section 6.10 Priorities.
If the Trustee collects any money or property pursuant to this
Article (including funds received from collateral agents and escrow
agents pursuant to the Security Agreements), it shall pay out the
money or property in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation,
expense and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
Second: to Holders of Secured Notes for amounts due and unpaid
on the Secured Notes for principal, premium, if any, interest, and
Special Interest, if any, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Secured
Notes for principal (premium, if any), interest, and Special
Interest, if any, and Additional Amounts, if any, respectively; and
Third: to the Issuer or to the Company or Subsidiary Guarantors
or to such other party as a court of competent jurisdiction shall
direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Secured Notes pursuant to this Section 6.10. At
least 15 days before such record date, the Issuer shall mail to each
Holder and the Trustee a notice that states the record date, the
payment date and amount to be paid. The Trustee may mail such notice
in the name and at the expense of the Issuer.
Section 6.11 Undertaking For Costs.
In any suit for the enforcement of any right or remedy under
this Indenture and the Security Agreements or in any suit against the
Trustee for any action taken or omitted by it as a Trustee, a court
in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in
its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder of a Secured Note pursuant to Section 6.7
hereof, or a suit by Holders of more than 10% in aggregate principal
amount of the then outstanding Secured Notes.
Section 6.12 Restoration of Rights and Remedies.
If the Trustee or any Holder of Secured Notes has instituted any
proceeding to enforce any right or remedy under this Indenture and
such proceeding has been discontinued or abandoned for any reason, or
has been determined adversely to the Trustee or to such Holder, then
and in every such case the Issuer, the Company, the Trustee and the
Holders 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 Holders shall continue as though no such proceeding has been
instituted.
Section 6.13 Rights and Remedies Cumulative.
Except as otherwise provided in Section 2.7 hereof, no right or
remedy conferred herein, or in the Security Agreements, upon or
reserved to the Trustee or to the Holders 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 6.14 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Secured Note 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 VI, by the Security
Agreements, or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient,
by the Trustee or by the Holders, as the case may be.
ARTICLE VII
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise 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 Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture
and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
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. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture or the Security Agreements shall
require the Trustee to expend or risk its own funds or incur any
liability. The Trustee shall be under no obligation to exercise any
of its rights and powers under this Indenture or the Security
Agreements at the request of any Holders, unless such Holder shall
have offered to the Trustee security and indemnity satisfactory to it
against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the
Issuer and the Company. Money held in trust by the Trustee need not
be segregated from other funds except to the extent required by law.
(g) 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 and to the
provisions of the Trust Indenture Act.
Section 7.2 Rights of Trustee.
(a) Subject to the provisions of Section 7.1(a) hereof, the Trustee
may rely upon any document believed by it to be genuine and to have
been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on such Officers' Certificate or Opinion of
Counsel. The Trustee may consult with counsel and the oral or written
advice of such counsel or any Opinion of Counsel with respect to
legal matters relating to this Indenture, the Security Agreements and
the Secured Notes shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any attorney
or agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture; provided,
however, that the Trustee's conduct does not constitute willful
misconduct or negligence.
(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 Holders unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.
(f) Except with respect to Section 4.1 hereof, the Trustee shall
have no duty to inquire as to the performance of the Issuer's
covenants in Article 4 hereof. In addition, the Trustee shall not be
deemed to have knowledge of any Default or Event of Default except
(i) any Event of Default occurring pursuant to Sections 6.1(a)
(except that the Trustee shall not be deemed to have knowledge of a
default in the payment of Special Interest or Additional Amounts) or
6.1(b), or (ii) any Default or Event of Default of which a
Responsible Officer of the Trustee shall have received written
notification; provided that the Trustee shall comply with the
"automatic stay" provisions contained in U.S. bankruptcy laws, if
applicable. As used herein, the term "actual knowledge" means the
actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
(g) Prior to the occurrence of an Event of Default hereunder and
after the curing and waiving of all Events of Default, 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, note, other evidence of indebtedness or other paper or
document unless requested in writing to do so by the Holders of not
less than a majority in aggregate principal amount of the Secured
Notes then outstanding; provided that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee
by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of
every such examination shall be paid by the Issuer or, if advanced by
the Trustee, shall be repaid by the Issuer upon demand. The Trustee
shall not be bound to ascertain or inquire as to the performance or
observance of any covenants, conditions, or agreements on the part of
the Issuer, except as otherwise set forth herein, but the Trustee
may, in its discretion, 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 Issuer
personally or by agent or attorney.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.
Section 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Secured Notes and may otherwise deal with the
Issuer, the Company or any Affiliate of the Issuer or the Company
with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest (as
defined in the Trust Indenture Act) it must eliminate such conflict
within 90 days, apply to the Commission for permission to continue as
Trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
Section 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the
Security Agreements, the Guarantee, any Subsidiary Guarantee or the
Secured Notes, it shall not be accountable for the Company's use of
the proceeds from the Issuer Loans or any money paid to the Issuer or
the Company or upon the Company's direction under any provision of
this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other than the
Trustee, and it shall not be responsible for any statement or recital
herein or any statement in the Secured Notes or any other document in
connection with the sale of the Secured Notes, any Security Agreement
or pursuant to this Indenture or the Security Agreements, other than
its certificate of authentication.
Section 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to Holders of
Secured Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest on
any Secured Note (including payments pursuant to the mandatory
repurchase provisions of such Secured Notes, if any), the Trustee may
withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in
the interests of the Holders of the Secured Notes.
Section 7.6 Reports by Trustee to Holders of the Secured Notes.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Secured
Notes remain outstanding, the Trustee shall mail to the Holders of
the Secured Notes a brief report dated as of such reporting date that
complies with TIA Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b). The Trustee shall also
transmit by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
of Secured Notes shall be mailed to the Issuer and filed with the
Commission and each stock exchange on which the Secured Notes are
listed in accordance with TIA Section 313(d). The Issuer shall
promptly notify the Trustee whenever the Secured Notes become listed
on any stock exchange and of any delisting thereof.
Section 7.7 Compensation and Indemnity.
The Issuer and the Company shall pay to the Trustee promptly
from time to time such compensation for its acceptance of this
Indenture and services hereunder as agreed to by the parties from
time to time. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuer
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it,
including the costs of collection, in addition to the compensation
for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and
counsel.
The Issuer and the Company shall indemnify the Trustee against
any and all losses, liabilities or expenses (including reasonable
attorneys' fees) incurred by it arising out of or in connection with
the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against
the Issuer (including this Section 7.7) and defending itself against
any claim (whether asserted by the Issuer or any Holder or any other
Person) or liability in connection with the exercise or performance
of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence
or bad faith. The Trustee shall notify the Issuer and the Company
promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Issuer or the Company shall not relieve the
Issuer and the Company of their respective obligations hereunder. The
Issuer shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Issuer shall
pay the reasonable fees and expenses of such counsel. The Issuer need
not pay for any settlement made without its consent, which consent
shall not be unreasonably withheld.
The obligations of the Issuer under this Section 7.7 shall
survive the resignation or removal of the Trustee and the
satisfaction and discharge of this Indenture.
To secure the Issuer's payment obligations in this Section, the
Trustee shall have a Lien prior to the Secured Notes on all money or
property held or collected by the Trustee, except that held in trust
to pay principal and interest on particular Secured Notes. Such Lien
shall be a Lien permitted by this Indenture and shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Sections 6.1(g) or 6.1(h) hereof
occurs, the expenses and the compensation for the services (including
the fees and expenses of its agents and counsel) are intended to
constitute expenses of administration under any applicable bankruptcy
laws.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor
Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Issuer. The Holders
of Secured Notes of a majority in principal amount of the then
outstanding Secured Notes may remove the Trustee by so notifying the
Trustee and the Issuer in writing. If at any time:
(a) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request thereof by the Issuer or by
any Holder who has been a bona fide Holder of a Secured Note for at
least six months, unless the Trustee's duty to resign is stayed in
accordance with the provisions of TIA Section 310(b); or
(b) the Trustee shall cease to be eligible under Section 7.10 hereof
and shall fail to resign after written request therefor by the Issuer
or by any Holder; or
(c) the Trustee shall become incapable of acting or a decree or
order for relief by a court having jurisdiction in the premises shall
have been entered in respect of the Trustee in an involuntary case
under the U.S. bankruptcy laws, as now or hereinafter constituted, or
a decree or order by a court having jurisdiction in the premises
shall have been entered for the appointment of a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trustee or of its property and assets or affairs, or
any public officer shall take charge or control of the Trustee or of
its property and assets or affairs for the purpose of rehabilitation,
conservation, winding-up or liquidation; or
(d) the Trustee shall commence a voluntary case under the U.S.
bankruptcy laws, as now or hereafter constituted, or shall consent to
the appointment of or taking possession by a receiver, custodian,
liquidator, assignee, trustee, sequestrator (or other similar
official) of the Trustee or of its property and assets or affairs, or
shall make an assignment for the benefit of creditors, or shall admit
in writing its inability to pay its debts generally as they become
due, or shall take corporate action in furtherance of any such
action; or
(e) the Trustee becomes incapable of acting,
then, in any such case, (i) the Issuer by a Board Resolution may
remove the Trustee with respect to the Secured Notes, or (ii) subject
to Section 6.11 hereof, any Holder who has been a bona fide Holder of
a Secured Note for at least six months may, on behalf of such Holder
and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee for the Secured Notes.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Issuer shall promptly
appoint a successor Trustee. Within one year after the successor
Trustee takes office, the Holders of a majority in principal amount
of the then outstanding Secured Notes may appoint a successor Trustee
to replace the successor Trustee appointed by the Issuer.
If a successor Trustee does not take office within 60 days after
the retiring Trustee notifies the Issuer of its resignation or is
removed, the retiring Trustee, the Issuer, or the Holders of Secured
Notes of at least 10% in principal amount of the then outstanding
Secured Notes may petition any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Secured
Note who has been a Holder of a Secured Note for at least six months,
fails to comply with Section 7.10, such Holder of a Secured Note may
petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Holders of the
Secured Notes. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, provided
that all sums owing to the Trustee hereunder have been paid and
subject to the Lien provided for in Section 7.7 hereof.
Notwithstanding replacement of the Trustee pursuant to this Section
7.8, the Issuer's obligations under Section 7.7 hereof shall continue
for the benefit of the retiring Trustee.
Section 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business
to, another corporation, the successor entity without any further act
shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the
trusts created by this Indenture any of the Secured Notes shall have
been authenticated but not delivered, any such successor to the
Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Secured Notes so authenticated;
and in case at that time any of the Secured Notes shall not have been
authenticated, any successor to the Trustee may authenticate such
Secured Notes either in the name of any predecessor hereunder or in
the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the
Secured Notes or in this Indenture provided that the certificate of
the Trustee shall have.
Section 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under
such laws to exercise corporate trustee power, that is subject to
supervision or examination by federal or state authorities and that
has a combined capital and surplus of at least $75,000,000 as set
forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall
comply with TIA Section 310(b); provided, however, that there shall
be excluded from the operation of TIA Section 310(b)(1) any indenture
or indentures under which other securities or certificates of
interest or participation in other securities of the Issuer are
outstanding if the requirements for such exclusion set forth in TIA
Section 310(b)(1) are met.
Section 7.11 Preferential Collection of Claims Against the Issuer.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to
the extent indicated therein.
ARTICLE VIII
SATISFACTION AND DISCHARGE
Section 8.1 Satisfaction and Discharge.
This Indenture shall upon the request of the Issuer cease to be
of further effect (except as to surviving rights of registration of
transfer, substitution or exchange of Secured Notes herein expressly
provided for, the Issuer's and the Company's obligations under
Sections 7.7 and 8.4 hereof, the Issuer's rights of optional
redemption under Article III hereof, and the Issuer's, the Trustee's
and the Paying Agent's obligations under Section 8.3 hereof) and the
Trustee, at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this
Indenture when:
(a) either
(i) all outstanding Secured Notes have been delivered to the Trustee
for cancellation; or
(ii) all such Secured Notes not theretofore delivered to the Trustee
for cancellation have become due and payable, will become due and
payable within one year or are to be called for redemption within one
year under irrevocable arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name and at
the expense of the Issuer, and the Issuer has irrevocably deposited
or caused to be deposited with the Trustee funds in an amount
sufficient to pay and discharge the entire debt on the Secured Notes
not theretofore delivered to the Trustee for cancellation, for
principal of (premium, if any, on) and interest (including Additional
Amounts and Special Interest, if any) to the date of deposit or
Maturity or date of redemption;
(b) the Issuer has paid or caused to be paid all sums then due and
payable by the Issuer under this Indenture; and
(c) the Issuer has delivered an Officers' Certificate and an Opinion
of Counsel relating to compliance with the conditions set forth in
this Indenture.
Notwithstanding the satisfaction and discharge of this
Indenture, the Issuer's obligations in Sections 2.3, 2.4, 2.6, 2.7,
2.11, 2.13, 4.23, 7.7, 7.8, 8.2, 8.3 and 8.4, and the Trustee's and
Paying Agent's obligations in Section 8.3 shall survive until the
Secured Notes are no longer outstanding. Thereafter, only the
Issuer's obligations in Sections 7.7, 8.3 and 8.4 and the Trustee's
and Paying Agent's obligations in Section 8.3 shall survive.
In order to have money available on a payment date to pay
principal (and premium, if any, on) or interest (and Additional
Amounts, if any, and Special Interest, if any) on the Secured Notes,
the U.S. Government Obligations shall be payable as to principal (and
premium, if any) or interest (and Additional Amounts, if any, and
Special Interest, if any) at least one Business Day before such
payment date in such amounts as will provide the necessary money.
U.S. Government Obligations shall not be callable at the Issuer's
option.
Section 8.2 Application of Trust Money.
All money deposited with the Trustee pursuant to Section 8.1
shall be held in trust and, at the written direction of the Issuer,
be invested prior to maturity in non-callable U.S. Government
Obligations, and applied by the Trustee in accordance with the
provisions of the Secured Notes and this Indenture, to the payment,
either directly or through any Paying Agent as the Trustee may
determine, to the Persons entitled thereto, of the principal (and
premium, if any) and interest (and Additional Amounts, if any, and
Special Interest, if any) for the payment of which money has been
deposited with the Trustee; but such money need not be segregated
from other funds except to the extent required by law.
Section 8.3 Repayment of the Issuer.
The Trustee and the Paying Agent shall promptly pay to the
Issuer upon written request any excess money or securities held by
them at any time.
The Trustee and the Paying Agent shall pay to the Issuer upon
written request any money held by them for the payment of principal
or interest that remains unclaimed for two years after the date upon
which such payment shall have become due; provided that the Issuer
shall have either caused notice of such payment to be mailed to each
Holder of the Secured Notes entitled thereto no less than 30 days
prior to such repayment or within such period shall have published
such notice in a financial newspaper of widespread circulation
published in The City of New York, including, without limitation, The
Wall Street Journal (national edition). After payment to the Issuer,
Holders entitled to the money must look to the Issuer for payment as
general creditors unless an applicable abandoned property law
designates another Person, and all liability of the Trustee and such
Paying Agent with respect to such money shall cease.
Section 8.4 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 8.1 by reason
of any legal proceeding or by reason of any order or judgment of any
court of governmental authority enjoining, restraining or otherwise
prohibiting such application, the Issuer's, the Company's and
Subsidiary Guarantor's obligations under this Indenture, the Secured
Notes, the Security Agreements and the Subsidiary Guarantees shall be
revived and reinstated as though no deposit has occurred pursuant to
Section 8.1 until such time as the Trustee or Paying Agent is
permitted to apply all such money or U.S. Government Obligations in
accordance with Section 8.2; provided, however, that if the Issuer,
the Company or a Subsidiary Guarantor has made any payment of
interest (including Special Interest and Additional Amounts, if any)
on or principal of any Secured Notes because of the reinstatement of
their Obligations, the Issuer, the Company or such Subsidiary
Guarantor shall be subrogated to the rights of the Holders of such
Secured Notes to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE IX
DEFEASANCE AND COVENANT DEFEASANCE
Section 9.1 Option to Effect Defeasance or Covenant Defeasance.
The Issuer may, at the option of its Board of Directors
evidenced by a Board Resolution, at any time, elect to have either
Section 9.2 or 9.3 hereof be applied to all outstanding Secured Notes
upon compliance with the conditions set forth below in this Article 9.
Section 9.2 Defeasance and Discharge.
Upon the Issuer's exercise under Section 9.1 hereof of the
option applicable to this Section 9.2, the Issuer, the Company and
the Subsidiary Guarantors, if any, shall, subject to the satisfaction
of the conditions set forth in Section 9.4 hereof, be deemed to have
been discharged from their respective Obligations with respect to all
outstanding Secured Notes, this Indenture and the Guarantee and the
Subsidiary Guarantees, if any, on the date the conditions set forth
below are satisfied (hereinafter, "Defeasance"). For this purpose,
Defeasance means that the Issuer shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding
Secured Notes and the Issuer, the Company and the Subsidiary
Guarantors shall be deemed to have satisfied all of their obligations
under such Secured Notes, this Indenture, the Security Agreements and
the Subsidiary Guarantees (and the Trustee, at the expense of the
Issuer, shall execute proper instruments acknowledging the same),
subject to the following which shall survive until otherwise
terminated or discharged hereunder:
(a) the rights of Holders of such Secured Notes to receive, solely
from the trust fund described in Section 9.4 hereof and as more fully
set forth in Section 9.4, payments in respect of the principal and of
and any premium and interest (including Special Interest, if any, and
Additional Amounts, if any) on such Secured Notes when payments are
due, (but not a Redemption upon an Event of Loss or upon a Sale of a
Mortgaged Rig, the Change of Control Purchase Price or the Excess
Proceeds Offer Amount);
(b) the Issuer's obligations with respect to such Secured Notes
under Sections 2.6, 2.7, 2.10, and 4.2 hereof;
(c) the rights, powers, trusts, duties and immunities of the Trustee
under this Indenture;
(d) Article III hereof other than Sections 3.8, 3.9 and 3.10
thereof; and
(e) this Article IX.
Subject to compliance with this Article 9, the Issuer may
exercise its option under this Section 9.2 notwithstanding the prior
exercise of its option under Section 9.3 hereof.
Section 9.3 Covenant Defeasance.
Upon the Issuer's exercise under Section 9.1 hereof of the
option applicable to this Section 9.3, (i) the Issuer and the
Guarantor shall, subject to the satisfaction of the conditions set
forth in Section 9.4 hereof, be released from its obligations under
the covenants contained in Sections 3.8, 3.9, 4.4, 4.6, 4.8, 4.9,
4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20
and Section 5.1(a)(iii) hereof and any covenant added to this
Indenture subsequent to the Issue Date pursuant to Section 10.1
hereof with respect to the outstanding Secured Notes and (ii) the
occurrence of any event specified in Section 6.1(c) or 6.1(d) hereof,
with respect to any of Sections 4.4, 4.6, 4.8, 4.9, 4.10, 4.11, 4.12,
4.12, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20] and Section
5.1(a)(iii) hereof, and any covenant added to this Indenture
subsequent to the Issue Date pursuant to Section 10.1 hereof, shall
be deemed not to be or result in an Event of Default, in each case
with respect to such Secured Notes as provided in this Section 9.3 on
and after the date on which the conditions set forth in Section 9.4
hereof are satisfied, and the Secured Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be
deemed "outstanding" for all other purposes hereunder (it being
understood that such Secured Notes shall not be deemed outstanding
for accounting purposes). For this purpose, "Covenant Defeasance"
means that, with respect to the outstanding Secured Notes, the
Issuer, the Company and the Subsidiary Guarantors may omit to comply
with and shall have no liability in respect of any term, condition or
limitation set forth in any such covenant (to the extent so specified
in the case of Section 6.1(c) or 6.1(d) hereof), whether directly or
indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under
Section 6.1 hereof, but, except as specified above, the remainder of
this Indenture, the Security Agreements, the Subsidiary Guarantees
and the Secured Notes shall be unaffected thereby.
Section 9.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 9.2 or 9.3 hereof to the outstanding Secured Notes:
In order to exercise either Defeasance or Covenant Defeasance:
(a) the Issuer shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for,
and dedicated solely to the benefits of the Holders of such Secured
Notes, (i) money in an amount, or (ii) U.S. Government Obligations
which through the scheduled payment of principal and interest in
respect thereof in accordance with their terms will provide, not
later than one Business Day before the due date of any payment, money
in an amount, or (iii) a combination thereof, in each case
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 and discharge the principal
of (premium, if any, on) and any installment of interest on and
Special Interest, if any, on the Secured Notes at the Maturity
thereof or Redemption Date therefor in accordance with the terms of
this Indenture and the Secured Notes;
(b) in the case of an election under Section 9.2 hereof, the Issuer
shall have delivered to the Trustee an Opinion of Counsel confirming
that (A) the Issuer has received from, or there has been published
by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable U.S.
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of
the outstanding Secured Notes will not recognize income, gain or loss
for U.S. federal income tax purposes as a result of such Defeasance
and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case
if such Defeasance had not occurred;
(c) in the case of an election under Section 9.3 hereof, the Issuer
shall have delivered to the Trustee an Opinion of Counsel confirming
that the Holders of the outstanding Secured Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result
of such Covenant Defeasance and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not
occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the incurrence of Indebtedness all or a
portion of the proceeds of which will be used to defease the Secured
Notes pursuant to this Article 9 concurrently with such incurrence)
or insofar as Section 6.1(g) or 6.1(h) hereof is concerned, shall
have occurred at any time on or prior to the 91st day after the date
of such deposit and be continuing on such 91st day (it being
understood that this condition shall not be deemed satisfied until
after such 91st day);
(e) such Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the
Issuer, the Company or any of the Company's Subsidiaries is a party
or by which the Issuer, the Company or any of the Company's
Subsidiaries is bound;
(f) such Defeasance or Covenant Defeasance shall not cause the
Trustee to have a conflicting interest within the meaning of the
Trust Indenture Act (assuming for the purpose of this clause (f) that
all Secured Notes are in default within the meaning of such Act);
(g) such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment Issuer
within the meaning of the Investment Issuer Act of 1940, as amended,
unless such trust shall be registered under such Act or exempt from
registration thereunder;
(h) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that on the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(i) the Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Issuer with
the intent of preferring the Holders over any other creditors of the
Issuer or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Issuer; and
(j) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Defeasance or
the Covenant Defeasance have been complied with.
Section 9.5 Deposited Money and U.S. Government Obligations To Be
Held in Trust; Other Miscellaneous Provisions.
Subject to Section 9.6 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee, collectively for purposes of
this Section 9.5, the "Trustee") pursuant to Section 9.4 hereof in
respect of the outstanding Secured Notes shall be held in trust and
applied by the Trustee, in accordance with the provisions of such
Secured Notes and this Indenture, to the payment, either directly or
through any such Paying Agent as the Trustee may determine, to the
Holders of such Secured Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest
(including Special Interest, if any), but such money need not be
segregated from other funds except to the extent required by law.
The Issuer shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or U.S.
Government Obligations deposited pursuant to Section 9.4 hereof or
the principal and interest received in respect thereof.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuer from time to time upon the
request of the Issuer any money or U.S. Government Obligations held
by it as provided in Section 9.4 hereof which, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee
(which may be the opinion delivered under Section 9.4(a) hereof), are
in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Defeasance or Covenant Defeasance.
Section 9.6 Repayment to the Issuer.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Issuer, in trust for the payment of the principal
of, premium, if any, Additional Amounts, if any, Special Interest, if
any, or interest on any Secured Note and remaining unclaimed for two
years after such principal, and premium, if any Special Interest, if
any, or interest has become due and payable shall be paid to the
Issuer on its request or (if then held by the Issuer) shall be
discharged from such trust; and the Holder of such Secured Note shall
thereafter, as a creditor, look only to the Issuer for payment
thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuer as
trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Issuer cause to be published
once, in The New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer.
Section 9.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or U.S. Government Obligations in accordance with
Section 9.2 or 9.3 hereof, as the case may be, by reason of any order
or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the
Issuer's Obligations under this Indenture and the Secured Notes shall
be revived and reinstated as though no deposit had occurred pursuant
to Section 9.2 or 9.3 hereof until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section
9.2 or 9.3 hereof, as the case may be; provided, however, that, if
the Issuer makes any payment of principal of, premium, if any,
interest, Special Interest, if any, on any Secured Note following the
reinstatement of its Obligations, the Issuer shall be subrogated to
the rights of the Holders of such Secured Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE X
AMENDMENT, SUPPLEMENT AND WAIVER
Section 10.1 Without Consent of Holders of Secured Notes.
Notwithstanding Section 10.2 of this Indenture, the Issuer, the
Company, the Subsidiary Guarantors, if any, and the Trustee may amend
or supplement this Indenture or the Secured Notes without the consent
of any Holder of a Secured Note:
(a) to evidence the succession of another Person to the Issuer and
the Company and the assumption by such successor of the covenants and
Obligations of the Issuer under this Indenture and contained in the
Secured Notes or the Security Agreements and of the Company contained
in this Indenture and the Guarantee, or in the Security Agreements;
(b) to add to the covenants of the Issuer or the Company, for the
benefit of Holders, or to surrender any right or power conferred upon
the Issuer or the Company by this Indenture or the Security
Agreements;
(c) to add any additional Events of Default;
(d) to provide for uncertificated Secured Notes in addition to or in
place of Certificated Secured Notes (provided that the uncertificated
Secured Notes are issued in registered form for purposes of Section
163(f) of the Code, or in a manner such that the uncertificated
Secured Notes are described in Section 163(f)(2)(B) of the Code);
(e) to evidence and provide for the acceptance of appointment under
this Indenture by the successor Trustee;
(f) to add additional security for the Secured Notes to secure or
add additional security for the Guarantee and/or the Subsidiary
Guarantees;
(g) to cure any ambiguity, to correct or supplement any provision in
this Indenture or the Security Agreements, which may be inconsistent
with any other provision herein or therein or to add any other
provisions with respect to matters or questions arising under this
Indenture or the Security Agreements, provided that such actions will
not adversely affect the interests of Holders in any material
respect;
(h) to add or release any Subsidiary Guarantor pursuant to the terms
of this Indenture; or
(i) to comply with the requirements of the SEC to effect or maintain
the qualification of this Indenture under the Trust Indenture Act.
Upon the request of the Issuer accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described
in Section 10.7 hereof, the Trustee shall join with the Issuer in the
execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein
contained, but the Trustee shall not be obligated to enter into such
amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
Section 10.2 With Consent of Holders of Secured Notes.
Except as provided below in this Section 10.2, the Issuer, the
Company, the Subsidiary Guarantors, if any, and the Trustee may amend
or supplement this Indenture and the Secured Notes may be amended or
supplemented with the consent of the Holders of at least a majority
in aggregate principal amount at Stated Maturity of the Secured Notes
then outstanding (including consents obtained in connection with a
tender offer or exchange offer for the Secured Notes), and, subject
to Sections 6.4 and 6.7 hereof, any existing Default or Event of
Default (other than a Default or Event of Default in the payment of
the principal of, premium, if any, or, interest on, or Special
Interest, if any, and Additional Amounts, if any, on, the Secured
Notes, except a payment default resulting from an acceleration that
has been rescinded) or compliance with any provision of this
Indenture, the Security Agreements or the Secured Notes may be waived
with the consent of the Holders of a majority in aggregate principal
amount at Stated Maturity of the then outstanding Secured Notes
(including consents obtained in connection with a tender offer or
exchange offer for the Secured Notes).
Upon the request of the Issuer accompanied by a Board Resolution
authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Secured
Notes as aforesaid, and upon receipt by the Trustee of the documents
described in Section 10.7 hereof, the Trustee shall join with the
Issuer, the Company and the Subsidiary Guarantors, if any, in the
execution of such amended or supplemental Indenture unless such
amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case
the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Secured Notes under this Section 10.2 to approve the particular form
of any proposed amendment or waiver, but it shall be sufficient if
such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Issuer shall mail to the Holders of Secured
Notes affected thereby a notice briefly describing the amendment,
supplement or waiver. Any failure of the Issuer to mail such notice,
or any defect therein, shall not, however, in any way impair or
affect the validity of any such amended or supplemental Indenture or
waiver. Subject to Sections 6.4 and 6.7 hereof, the Holders of a
majority in aggregate principal amount of the Secured Notes then
outstanding may waive compliance in a particular instance by the
Issuer with any provision of this Indenture or the Secured Notes.
However, without the consent of each Holder affected, an amendment or
waiver may not (with respect to any Secured Notes held by a non-
consenting Holder):
(a) reduce the amount of Secured Notes whose Holders must consent to
an amendment;
(b) reduce the rate of or extend the time for payment of interest on
any Secured Note or any Issuer Loan;
(c) reduce the principal of or extend the Stated Maturity of any
Secured Note or any Issuer Loan;
(d) modify the obligations of Issuer to make mandatory redemptions
or otherwise reduce the premium payable upon the redemption of any
Secured Note or change the time at which any Secured Note may be or
is required to be redeemed as described under Article III;
(e) modify the obligations of the Company to make mandatory
repayments or change the time at which an Issuer Loan may be or is
required to be repaid under Article III;
(f) make any Secured Note payable in money other than that stated in
the Secured Note;
(g) impair the right of any Holder of the Secured Notes to receive
payment of principal of and interest on such Holder's Secured Notes
on or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such Holder's
Secured Notes;
(h) make any change in the amendment provisions which require each
Holder's consent or in the waiver provisions;
(i) make any change in the Guarantee or any Security Agreement or
Issuer Loan Agreement that would adversely affect the Noteholders or
terminate the Lien of this Indenture or any Security Agreement on any
property at any time subject thereto or deprive the Holders of the
security afforded by the Lien of this Indenture or the Security
Agreements or the Issuer of the Liens securing the Issuer Loans;
(j) modify the Obligations of the Issuer to make offers to purchase
Secured Notes upon a Change of Control;
(k) subordinate in right of payment the Secured Notes, the Guarantee
or the Subsidiary Guarantees to any other Indebtedness;
(l) amend, supplement or otherwise modify the provisions of this
Indenture relating to the Guarantee; or
(m) make any change in Sections 6.4 or 6.7 or modify any of the
provisions of this Section 10.2 (except to increase any percentage
set forth therein or herein).
Upon the request of the Issuer accompanied by a Board Resolution
of each the Issuer and the Company authorizing the execution of any
such amended or supplemental Indenture, and upon the filing with the
Trustee of evidence satisfactory to the Trustee of the consent of the
Holders of Secured Notes as aforesaid, and upon receipt by the Trustee
of the documents described in Section 7.2 hereof, the Trustee shall
join with the Issuer and the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Secured Notes under this Section 10.2 to approve the particular form
of any proposed amendment or waiver, but it shall be sufficient if
such consent approves the substance thereof.
Section 10.3 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article X, 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 Secured Notes theretofore or
thereafter authenticated and delivered hereunder shall be bound
thereby. After a supplemental indenture becomes effective, the Issuer
shall mail to Holders a notice briefly describing such amendment. The
failure to give such notice to all Holders, or any defect therein,
shall not impair or affect the validity of an amendment under this
Section.
Section 10.4 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Secured
Notes shall be set forth in an amended or supplemental Indenture that
complies with the Trust Indenture Act as then in effect.
Section 10.5 Revocation and Effect of Consents.
(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Secured Note is a continuing consent
by the Holder of a Secured Note and every subsequent Holder of a
Secured Note or portion of a Secured Note that evidences the same
debt as the consenting Holder's Secured Note, even if notation of the
consent is not made on any Secured Note. However, any such Holder of
a Secured Note or subsequent Holder of a Secured Note may revoke the
consent as to its Secured Note if the Trustee receives written notice
of revocation before the date the waiver, supplement or amendment
becomes effective. An amendment, supplement or waiver becomes
effective in accordance with its terms and thereafter binds every
Holder.
(b) The Issuer may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to give their
consent or take any other action described above or required or
permitted to be taken pursuant to this Indenture. If a record date is
fixed, then notwithstanding the immediately preceding subsection,
those Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be entitled to
give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or
effective for more than 120 days after such record date.
Section 10.6 Notation on or Exchange of Secured Notes.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Secured Note thereafter
authenticated. The Issuer in exchange for all Secured Notes may issue
and the Trustee shall authenticate new Secured Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Secured
Note shall not affect the validity and effect of such amendment,
supplement or waiver.
Section 10.7 Trustee to Sign Supplemental Indentures.
The Trustee shall sign any supplemental Indenture authorized
pursuant to this Article 10 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. Neither the Issuer nor the Company, or any Subsidiary
Guarantor may sign a supplemental Indenture until the Board of
Directors of such Person approves it. In executing any supplemental
indenture, the Trustee shall be entitled to receive indemnity
reasonably satisfactory to it and to receive and (subject to Section
7.1) shall be fully protected in relying upon, in addition to the
documents required by Section 12.4, an Officers' Certificate and an
Opinion of Counsel stating that:
(a) such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution,
delivery and performance of such supplemental indenture have been
satisfied;
(b) the Issuer, the Company and the Subsidiary Guarantors, if any,
have all necessary corporate power and authority to execute and
deliver the supplemental indenture and that the execution, delivery
and performance of such supplemental indenture has been duly
authorized by all necessary corporate action of the Issuer, the
Company and the Subsidiary Guarantors, if any;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or
constitute a default under any of the terms, conditions or provisions
of (i) this Indenture, (ii) the charter documents and by-laws of the
Issuer, the Company or any Subsidiary Guarantor, or (iii) any
material agreement or instrument to which the Issuer, the Company or
any Subsidiary Guarantor is subject and of which such counsel is
aware;
(d) to the knowledge of legal counsel writing such Opinion of
Counsel, the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of any of the
terms, conditions or provisions of (i) any law or regulation
applicable to the Issuer, the Company or any Subsidiary Guarantor, or
(ii) any material order, writ, injunction or decree of any court or
governmental instrumentality applicable to the Issuer, the Company or
any Subsidiary Guarantor;
(e) such supplemental indenture has been duly and validly executed
and delivered by the Issuer, the Company and the Subsidiary
Guarantors, if any, and this Indenture together with such
supplemental indenture constitutes a legal, valid and binding
obligations of the Issuer, the Company and the Subsidiary Guarantors,
if any, enforceable against the Issuer, the Company and the
Subsidiary Guarantors, if any, as applicable, in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles (whether
considered in a proceeding at law or in equity); and
(f) this Indenture together with such amendment or supplement
complies with the Trust Indenture Act.
Section 10.8 Payment for Consent.
Neither the Issuer, the Company nor any Affiliate of the Issuer
or the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to
any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture, the
Secured Notes or the Security Agreements unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to
amend in the time frame set forth in solicitation documents relating
to such consent, waiver or agreement.
ARTICLE XI
COLLATERAL AND SECURITY
Section 11.1 Security Agreements.
The due and punctual payment of the principal of, premium, if
any, interest (including Additional Amounts, if any, and Special
Interest, if any) on, and any other amounts due in respect of, the
Secured Notes when and as the same shall be due and payable, whether
on an Interest Payment Date, at Stated Maturity, by acceleration,
call for redemption, upon a Change of Control Offer, Excess Proceeds
Offer, purchase or otherwise, and interest on the overdue principal
of and interest (including Additional Amounts, if any, and Special
Interest, if any) (to the extent permitted by law), on the Secured
Notes and performance of all other obligations of the Issuer and the
Company to the Holders of the Secured Notes or the Trustee under this
Indenture, the Secured Notes, the Subsidiary Guarantees, and the
Security Agreements, according to the terms hereunder or thereunder,
shall be secured as provided in the Security Agreements, (i) by a
pledge to the Collateral Agent in favor of the Trustee for its
benefit and the Holders of Secured Notes, all of the Issuer Loans and
the Issuer's interest in the Issuer Loan Agreements, together with a
collateral assignment of all Liens securing such Issuer Loans,
including a pledge in favor of the Issuer of the Company's interest
in the Company Escrow Account and the Company Escrowed Property; (ii)
by a pledge to the Escrow Agent in favor of the Trustee for its
benefit and the Holder of Secured Notes, its interest in the Issuer
Escrow Account and the Escrowed Property and any other cash of the
Issuer that is required by the terms of this Indenture to be
deposited with the Trustee or the Escrow Agent; and the Company will
grant a Lien on each of its Mortgaged Rigs and/or the construction
contracts and on equipment purchased by the Company for, and its
interest in, any incomplete Mortgage Rig and all proceeds thereof,
including all its policies and contracts of insurance taken out from
time to time in respect of its Mortgaged Rig, pursuant to a Mortgage
or other appropriate Security Agreement issued by the Company in
favor of the Issuer, which Issuer Loan Agreements, Mortgages and
Security Agreements contain covenants pursuant to which such the
Company, among other things, will be prohibited from selling, further
mortgaging or transferring any of its interest in such Mortgaged Rig
(other than as permitted under this Indenture), and upon completion
of an uncompleted Mortgage Rig, the Company will grant a Lien
pursuant to a Mortgage on the Mortgaged Rig.
Each Holder, by its acceptance of a Secured Note, consents and
agrees to the terms of the Security Agreements (including, without
limitation, the provisions providing for foreclosure and release of
Collateral) as the same may be in effect or may be amended from time
to time in accordance with the terms thereof and hereof and
authorizes and directs the Trustee to enter into each of the Security
Agreements and to perform its respective obligations and exercise its
respective rights thereunder in accordance therewith. The Issuer and
the Company will do or cause to be done all such acts and things as
may be necessary or proper, or as may be required by the provisions
of the Security Agreements to which it is a party, to assure and
confirm to the collateral agent and the Trustee the Liens in the
Collateral contemplated hereby and by the Security Agreements to
which it is a party, as from time to time constituted, so as to
render the same available to the fullest extent permitted by law for
the security and benefit of this Indenture and of the Secured Notes
and each Issuer Loan secured thereby, as applicable, according to the
intent and purposes herein and therein expressed. The Issuer shall
to the fullest extent permitted by law take, upon request of the
Trustee, any and all actions reasonably required to cause the
Security Agreements to which it is a party to create and maintain, as
security for the Obligations of the Issuer under this Indenture and
the Secured Notes, and the Security Agreements to which it is a
party, to be valid and enforceable, perfected (except as expressly
provided herein and therein), Liens in and on all the Collateral in
favor of the Trustee, escrow agent or a collateral agent for the
benefit of the Trustee and for the equal and ratable benefit of the
Holders of the Secured Notes. The Company shall to the fullest
extent permitted by law, take upon request of the Issuer and/or the
Trustee, any and all actions reasonably required to cause the
Security Agreements to which it is a party for the Obligations of the
Company under each Issuer Loan and the Security Agreement related
thereto, to be valid and enforceable, perfected, except as expressly
provided herein or therein, Liens in favor of the Issuer , escrow
agent or a collateral agent for the benefit of the Issuer.
Section 11.2 Recording and Opinions.
(a) Each of the Issuer and the Company represents that it has
caused or will promptly cause to be executed and delivered, filed and
recorded and covenants that it will promptly cause to be executed and
delivered and filed and recorded, all instruments and documents, and
represents that it has done and will do or will cause to be done all
such acts and other things, at the Issuer's or the Company's expense,
as applicable, as are necessary to subject the applicable Collateral
to valid Liens and to perfect those Liens, all to the fullest extent
permitted by law. Each of the Issuer and the Company shall, as
promptly as practicable, cause to be executed and delivered, filed
and recorded all instruments and do all acts and other things as may
be required by law to perfect, maintain and protect the Liens under
the applicable Security Agreements to which it is party (except as
otherwise expressly provided herein and therein), all to the fullest
extent permitted by law.
(b) The Issuer and the Company shall furnish to the Trustee promptly
after the execution and delivery of this Indenture an Opinion of
Counsel either (i) stating that in the opinion of such counsel all
action has been taken with respect to the recording, registering and
filing of this Indenture, financing statements or other instruments
or otherwise necessary to make effective the Liens intended to be
created by the Security Agreements and reciting the details of such
action, or (ii) stating that, in the opinion of such counsel, no such
action is necessary to make such Lien effective. Such opinion of
counsel shall cover the necessity for recordings, registrations and
filings required in all relevant jurisdictions.
(c) The Issuer and the Company shall furnish to the Trustee
within 3 months after each anniversary of the Issue Date, an Opinion
of Counsel, dated as of such date, stating either that (i) in the
opinion of such counsel, all action has been taken with respect to
the recording, registering, filing, re-recording, re-registering and
refiling of all supplemental indentures, financing statements,
continuation statements or other instruments of further assurance or
otherwise as is necessary to maintain the effectiveness of the Liens
intended to be created by the Security Agreements and reciting the
details of such action or (ii) in the opinion of such counsel, no
such action is necessary to maintain the effectiveness of such Liens.
Such opinion of counsel shall cover the necessity of recordings,
registrations, filing, re-recordings, re-registrations and refilings
in all relevant jurisdictions.
(d) The Issuer and the Company shall otherwise comply with the
provisions of Section 314(b) and, as applicable Sections 314(c), (d)
and (e) of the Trust Indenture Act.
Section 11.3 Further Assurances and Security.
The Issuer and the Company will execute, acknowledge and deliver
to the Trustee, at the Issuer's and/or such Guarantor's expense, at
any time and from time to time such further assignments, transfers,
assurances or other instruments as may be reasonably required to
effectuate the terms of this Indenture and the Security Agreements,
and will at any time and from time to time do or cause to be done all
such acts and things as may be necessary or proper, or as may be
reasonably required by the Trustee, to assure and confirm to the
Trustee the Liens in the Collateral contemplated hereby and by the
Security Agreements, all to the fullest extent permitted by law. The
Trustee shall have no duty to determine whether any filing or
recording is necessary hereunder or under any Collateral Document.
Section 11.4 Possession, Use and Release of Collateral.
(a) All of the proceeds of the Secured Notes shall be deposited in
the Issuer Escrow Account and shall be subject to a first priority
Lien. All funds deposited in the Issuer Escrow Account representing
proceeds of the Secured Notes constitute Collateral and will, at the
direction of the Issuer except during the continuance of a Default or
an Event of Default and at the direction of the Trustee during the
continuance of a Default or an Event of Default, be invested in
Temporary Cash Equivalents (such cash and Temporary Cash Equivalents,
together with interest, dividends and distributions thereof, the
"Issuer Escrowed Property"), in the manner provided for in the Issuer
Escrow Agreement. No funds shall be released from the Issuer Escrow
Account except as provided herein and in the Issuer Escrow Account
Agreement. The Issuer Escrow Account and the Issuer Escrowed
Property shall be pledged to, and be under the sole dominion and
control of the Trustee acting for its benefit and the benefit of the
Holders of Secured Notes.
Pursuant to the Issuer Escrow Agreement and this Indenture, the
Issuer is required to, and the Issuer shall enter up to ten separate
loan agreements with the Company (each an "Issuer Loan Agreement").
Each Issuer Loan Agreement will be secured by Liens pursuant to a
mortgage (each a "Mortgage") on a separate drilling rig or drillship
(each a "Mortgaged Rig") or, if such Mortgaged Rig is under
construction but not yet flagged on the Issue Date, Liens on the
construction contract and equipment purchased by the Company for such
Mortgaged Rig. The purpose of each loan made under an Issuer Loan
Agreement (an "Issuer Loan") will be only as follows:
(i) Financing all or a portion of the cost of acquiring,
constructing, altering, improving or repairing the Mortgaged Rig or
improvements used or to be used in connection with such Mortgaged
Rig; or
(ii) Financing all or any part of the purchase price of the
Mortgaged Rig or improvements used or to be used in connection with
such Mortgaged Rig, which Issuer Loan is incurred prior to or within
one year after the later of the completion of construction, alteration,
improvement or repair or the commencement of commercial operations
thereof.
(b) To the extent that the Mortgaged Rig is under construction and
not yet flagged, the Company will secure the Issuer Loans with Liens
on the construction contract and the equipment purchased by the
Company for such Mortgaged Rig; provided that Liens on equipment
purchased by the Company for a Mortgaged Rig that has not yet been
mortgaged do not have to be perfected until required by the Trustee,
but only after the later to occur of one year after the Issue Date or
the completion date for such Mortgaged Rig as scheduled on the Issue
Date.
Each Issuer Loan will be made in two tranches. One tranche of
each Issuer Loan (the ``7-year Tranche'') will bear interest at the
rate equal to the interest rate for the 7-year Secured Notes plus 2
basis points per annum and the other tranche (the ``10-year
Tranche'') will bear interest at the rate equal to the interest rate
for the 10-year Secured Notes plus 2 basis points per annum. Each
Issuer Loan Agreement may also provide for a commitment fee on the
undrawn portion of the Issuer Loan. The Company will be required to
repay the Issuer Loans in whole or in part if the Issuer redeems or
is required to redeem or purchase Secured Notes. In connection with
any release of Issuer Escrowed Property to fund an Issuer Loan, such
release will be conditioned on the substantially concurrent recording
of a Mortgage or other security document against the Mortgaged Rig or
the construction contracts and equipment purchased by the Company for
the uncompleted Mortgaged Rig, as applicable, and the satisfaction of
certain other conditions set forth in this Indenture and Issuer
Escrow Agreement, including delivery of appropriate legal opinions
and certificates required by the Trust Indenture Act. The Issuer will
not be entitled to withdraw the Issuer Escrowed Property (other than
certain minimal amounts for the Issuer) for any purposes other than
the making of Issuer Loans or the repayment of principal (whether at
maturity, upon redemption, by declaration of acceleration or
otherwise), premium, if any, and interest on the Secured Notes. One
hundred million dollars ($100,000,000) of the proceeds of the Issuer
Loan for the Mortgaged Rig Deepwater Millennium will be deposited by
the Company in the Company Escrow Account established by the Company
pursuant to the Company Escrow Agreement. The Company will not be
able to withdraw such funds (the ``Company Escrowed Property'') until
the Deepwater Millennium Mortgaged Rig is completed and a Mortgage
has been placed thereon and become perfected.
(c) As security for an Issuer Loan, the Company will grant a Lien
on a Mortgaged Rig, or the construction contract and equipment purchased
by the Company (with respect to the Deepwater Millennium and
Deepwater IV) and in the case of the Deepwater Millennium the Company
Escrow Account and the Company Escrowed Property, and all proceeds of
the foregoing, including all its policies and contracts of insurance
taken out from time to time in respect of its Mortgaged Rig, pursuant
to a Mortgage or other appropriate Security Agreement issued by the
Company in favor of the Issuer. These Mortgages and Security
Agreements will contain covenants pursuant to which the Company,
among other things, will be prohibited from selling, further
mortgaging or transferring any of its interest in such Mortgaged Rig
(other than as permitted under the Indenture). Upon completion and
flagging of the Deepwater Millennium22 and the Deepwater IV, the
Company will be required to grant a Lien pursuant to a Mortgage on
the respective Mortgaged Rig. Contemporaneous with the granting of
the Mortgage on the Deepwater IV, the Issuer Loan secured by the
Deepwater IV will be increased in exchange for a reduction in the
outstanding amounts of the Issuer Loans secured by certain other
Mortgaged Rigs pursuant to the terms of the applicable Issuer Loan
Agreement therefor.
Section 11.5 Certificates of the Issuer.
The Issuer and the Company will furnish to the Trustee prior to
each proposed release of Collateral pursuant to the Security
Agreements all documents required by Section 314(d) of the Trust
Indenture Act. The Trustee may, to the extent permitted by Sections
7.1 and 7.2 hereof, accept as conclusive evidence of compliance with
the foregoing provisions the appropriate statements contained in such
instruments. Any certificate or opinion required by Section 314(d)
of the Trust Indenture Act may be made by an Officer of the Issuer or
the Company, as the case may be, except in cases where Section 314(d)
of the Trust Indenture Act requires that such certificate or opinion
be made by an independent engineer, appraiser or other expert within
the meaning of Section 314(d) of the Trust Indenture Act.
Section 11.6 Authorization of Actions to be Taken by the Trustee
Under the Security Agreements.
The Trustee may, in its sole discretion and without the consent
of the Holders, on behalf of the Holders, take all actions it deems
necessary or appropriate in order to (a) enforce any of the terms of
the Security Agreements and (b) collect and receive any and all
amounts payable in respect of the obligations of the Issuer and the
Company hereunder. The Trustee shall have the power to institute and
to maintain such suits and proceedings as it may deem expedient to
prevent any impairment of the collateral by any acts that may be
unlawful or in violation of the Security Agreements, or this
Indenture, and such suits and proceedings as the Trustee may deem
expedient to preserve or protect its interests and the interests of
the Holders in the Collateral (including power to institute and
maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other government enactment, rule
or order that may be unconstitutional or otherwise invalid if the
enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the
interests of the Holders or of the Trustee).
Section 11.7 Authorization of Receipt of Funds by the Trustee
Under the Security Agreements.
The Trustee is authorized to receive any funds for the benefit
of the Holders distributed under the Security Agreements, and to make
further distributions of such funds to the Holders according to the
provisions of this Indenture and the Security Agreements.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by, or with another provision
included in this Indenture by operation of Sections 310 to 318,
inclusive, of the Trust Indenture Act, such imposed duties or
incorporated provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture
Act that can be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or excluded, as
the case may be.
Section 12.2 Notices.
Any notice or communication by the Issuer, the Company, any
Subsidiary Guarantor or the Trustee to the others is duly given if in
writing and delivered in person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or
overnight air courier guaranteeing next day delivery, to the others'
address:
If to the Issuer, or the Company or any Subsidiary
Guarantor:
c/o R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079-2982
Attention: Leighton Moss
Telephone No.: (281) 496-5000
Telecopier No.: (281) 496-0285
If to the Trustee:
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Division
Telephone No.: (212) 852-1676
Telecopier No.: (212) 852-1626
The Issuer, the Company, any Subsidiary Guarantor or the
Trustee, by notice to the others may designate additional or
different addresses for subsequent notices or communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; when receipt
acknowledged, if telecopied; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address
shown on the Securities Register kept by the Registrar and shall be
given if so sent within the time prescribed. Any notice or
communication shall also be so mailed to any Person described in TIA
Section 313(c), to the extent required by the Trust Indenture Act.
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not
the addressee receives it; a notice or communication, however, shall
not be effective unless, in the case of the Issuer, the Company or
the Trustee, actually received.
If the Issuer mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give notice
by mail to Holders, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.
Section 12.3 Communication By Holders of Secured Notes With Other
Holders of Secured Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or
the Secured Notes. The Issuer, the Company, the Trustee, the
Registrar and anyone else shall have the protection of TIA
Section 312(c).
Section 12.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Issuer to the Trustee to
take any action under this Indenture, the Issuer, upon request, shall
furnish to the Trustee, to the extent required by this Indenture or
the Trust Indenture Act:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.5 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been
satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.5 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
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 such Persons
as to 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 Issuer, the
Company or any Subsidiary Guarantor 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, and may state that it is so
based, insofar as it relates to factual matters, upon a certificate
or opinion of, or representations by, an Officer or Officers of the
Issuer, the Company or such Subsidiary Guarantor stating that the
information with respect to such factual matters is in the possession
of the Issuer, the Company or such Subsidiary Guarantor, unless such
counsel knows, or in the exercise of reasonable care should know,
that the certificate of 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 12.5 Statements Required in a Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply
with the provisions of TIA Section 314(e) and shall include:
(a) a statement that the Persons making such certificate or opinion
have read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Persons, they have made
such examination or investigation as is necessary to enable them to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Persons, such condition or covenant has been satisfied.
Section 12.6 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or
taken by a specified percentage of Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor
signed by such specified percentage of Holders in person or by agents
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are received by the Trustee and, where it is hereby
expressly required, by the Issuer and the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the "Act" of the Holders 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 Sections
7.1 and 7.2) conclusive in favor of the Trustee, the Issuer and the
Company, if made in the manner provided in this Section. Any
electronic or other transmission pursuant to the Applicable
Procedures will be considered an instrument executed by the Holder of
the Global Notes held by the Depository for purposes of this
Section 12.6.
(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 of
such execution or by a certificate of a 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
a signer acting in a capacity other than his individual capacity,
such certificate or affidavit shall also constitute sufficient proof
of 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, including the execution of such instrument or writing
without more.
(c) The ownership, principal amount and serial numbers of Secured
Notes held by any Person, and the date of holding the same, shall be
proved by the Securities Register.
(d) If the Issuer shall solicit from the Holders of Secured Notes
any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Issuer may, at its option, by or pursuant to
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 Act, but the Issuer shall
have no obligation to do so. Such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall
be a date not earlier than the date 30 days prior to the first
solicitation is completed. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent, waiver or
other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall
be deemed to be Holders for the purposes of determining whether
Holders of the requisite proportion of outstanding Secured Notes have
authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and
for that purpose the outstanding Secured Notes shall be computed as
of such record date; provided that no such authorization, agreement
or consent by the Holders on such record date shall be deemed
effective unless it shall become pursuant to the provisions of this
Indenture not later than eleven months after the record date.
(e) Except to the extent otherwise expressly provided in this
Indenture, any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Secured Note shall
bind every future Holder of the same Secured Note and the Holder of
every Secured Note issued upon the registration of transfer thereof
or in exchange therefor or in lieu thereof in respect of anything
done, omitted or suffered to be done by the Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon
such Secured Note.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action with regard to any particular Secured Note
may do so with regard to all or any part of the principal amount of
such Secured Note or by one or more duly appointed agents each of
which may do so pursuant to such appointment with regard to all or
any different part of such principal amount.
Section 12.7 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions; provided
that no such rule shall conflict with the terms of this Indenture or
the Trust Indenture Act.
Section 12.8 No Personal Liability of Directors, Officers,
Employees and Stockholders.
No director, officer, employee, incorporator or stockholder of
the Issuer, the Company or any Subsidiary Guarantor, as such, shall
have any liability for any obligations of the Issuer or the Company
under the Secured Notes, this Indenture, the Guarantee, the
Subsidiary Guarantees or for any claim based on, in respect of, or by
reason of, such Obligations or their creation. Each Holder by
accepting a Secured Note waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the
Secured Notes.
Section 12.9 Governing Law.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE SECURED NOTES, WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
Section 12.10 Agent for Service; Submission to Jurisdiction; Waiver
of Immunities.
By the execution and delivery of this Indenture or any amendment
or supplement hereto, each of the Issuer and the Company
(i) acknowledges that it has, by separate written instrument,
designated and appointed CT Corporation System (the "Process Agent")
currently located at 1633 Broadway, New York, New York 10019, as its
authorized agent upon which process may be served in any suit, action
or proceeding with respect to, arising out of, or relating to, this
Indenture, the Guarantees, or the Secured Notes or brought under U.S.
federal or state securities laws, may be instituted in any U.S.
federal or state court located in The City of New York, New York, and
acknowledges that the Process Agent has accepted such designation,
(ii) irrevocably submits to the jurisdiction of any such court in any
such suit, action or proceeding and irrevocably waives, to the
fullest extent that it may effectively and lawfully do so, any
obligation to the laying of venue of any such suit, action or
proceeding and the defense of an inconvenient forum to the
maintenance of any such suit action or proceeding in such court, and
(iii) agrees that service of process upon the Process Agent shall be
deemed in every respect effective service of process upon the Issuer
and the Company in any such suit, action or proceeding. The Issuer
and the Company further agree to take any and all action, including
the execution and filing of any and all such documents and
instruments as may be necessary to continue such designation and
appointment of the Process Agent in full force and effect so long as
this Indenture shall be in full force and effect; provided that the
Issuer and the Company may and shall (to the extent the Process Agent
ceases to be able to be served on the basis contemplated herein), by
written notice to the Trustee, designate such additional or
alternative agents for service of process under this Section 12.10
that (i) maintains an office located in the Borough of Manhattan, The
City of New York in the State of New York, (ii) are either (a)
counsel for the Issuer or (b) a corporate service Issuer which acts
as agent for service of process for other persons in the ordinary
course of its business and for other persons in the ordinary course
of its business and (iii) agrees to act as agent for service of
process in accordance with this Section 12.10. Such notice shall
identify the name of such agent for process and the address of such
agent for process in the Borough of Manhattan, The City of New York,
State of New York. Upon the request of any Holder of a Secured Note,
the Trustee shall deliver such information to such Holder.
Notwithstanding the foregoing, there shall, at all times, be at least
one agent for service of process for the Issuer and the Company
appointed and acting in accordance with this Section 12.10.
To the extent that the Issuer or the Company has or hereafter
may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise)
with respect to itself or its property, each of the Issuer and the
Company hereby irrevocably waives such immunity in respect of its
Obligations under this Indenture, the Guarantee and the Secured
Notes, to the extent permitted by law.
Section 12.11 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture,
loan or debt agreement of the Issuer, the Company or the Issuer's
Subsidiaries or of any other Person. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
Section 12.12 Successors.
All agreements of the Issuer and the Company in this Indenture,
the Secured Notes and the Guarantor shall bind its successors. All
agreements of the Trustee in this Indenture shall bind its
successors.
Section 12.13 Severability.
In case any provision in this Indenture or in the Secured Notes
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 12.14 Counterpart Originals.
The parties may sign any number of copies of this Indenture and
by the parties thereto in separate counterparts. Each of which when
signed shall be deemed to be an original, but all of them together
represent the same agreement.
Section 12.15 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of the
Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part of
this Indenture and shall in no way modify or restrict any of the
terms or provisions hereof.
ARTICLE XIII
GUARANTEES
Section 13.1 Guarantor.
(a) For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company, together with any
Restricted Subsidiary which in accordance with Section 4.19 or
Section 13.7 hereof any Subsidiary Guarantor is required in the
future to guarantee the Obligations of the Issuer under the Secured
Notes and this Indenture, and the Company under the Guarantee and
this Indenture, upon execution of a supplemental indenture, hereby
jointly and severally and irrevocably and unconditionally guarantees
to the Trustee and to each Holder irrespective of the validity or
enforceability of this Indenture or the Secured Notes or the
Obligations of the Issuer and the Guarantor under this Indenture,
that: (i) the principal of, premium, if any, any interest, and
Special Interest, if any, on the Secured Notes (including, without
limitation, any interest that accrues after the filing of a
proceeding of the type described in Sections 6.1(g) and (h)) and any
fees, expenses and other amounts owing under this Indenture will be
duly and punctually paid in full when due, whether at Maturity, by
acceleration, mandatory redemption, call for redemption, upon a
Change of Control Offer, Excess Proceeds Offer, purchase or
otherwise, and interest on the overdue principal and (to the extent
permitted by law) interest, if any, on the Secured Notes and any
other amounts due in respect of the Secured Notes, and all other
Obligations of the Issuer and the Company under the Guarantee,
including the Issuer's obligations to the Holders of the Secured
Notes under this Indenture, the Secured Notes and the Subsidiary
Guarantees, whether now or hereafter existing, will be promptly paid
in full or performed, all strictly in accordance with the terms
hereof and of the Secured Notes; and (ii) in case of any extension of
time of payment or renewal of any Secured Notes or any of such other
Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal,
whether at Maturity, by acceleration, mandatory redemption, call for
redemption, upon Change of Control Offer, Excess Proceeds Offer,
purchase or otherwise. If payment is not made when due of any amount
so guaranteed for whatever reason, the Company and each Subsidiary
Guarantor (collectively referred to as the "Guarantors" and
individually as a "Guarantor") shall be jointly and severally
obligated to pay the same individually whether or not such failure to
pay has become an Event of Default which could cause acceleration
pursuant to Section 6.2. The Company and each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection. An
Event of Default under this Indenture or the Secured Notes shall
constitute an Event of Default under the Guarantee and each
Subsidiary Guarantee, and shall entitle the Holders to accelerate the
Obligations of each Guarantor hereunder in the same manner and to the
same extent as the Obligations of the Issuer. The Guarantee and each
Subsidiary Guarantee is intended to be superior to or pari passu in
right of payment with all Indebtedness of the respective Guarantor
and each Guarantor's Obligations are independent of any Obligation of
the Issuer or any other Guarantor.
(b) Each Guarantor waives presentation to, demand of, payment
from and protest to the Issuer of any of the Obligations under this
Indenture or the Secured Notes and also waives notice of protest for
nonpayment. Each Guarantor waives notice of any default under the
Secured Notes or the Obligations. The Obligations of each Guarantor
hereunder shall not be affected by (i) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or
remedy against the Issuer or any other Person under this Indenture,
the Secured Notes or any other agreement or otherwise; (ii) any
extension or renewal of any thereof; (iii) any rescission, waiver,
amendment or modification of any of the terms or provisions of this
Indenture, the Secured Notes or any other agreement; (iv) the release
of any security held by any Holder, the Trustee or the Issuer for the
Obligations or any of them; (v) the failure of any Holder, the
Trustee, the Issuer, any collateral agent or any escrow agent to
exercise any right or remedy against any other guarantor of the
Obligations; or (f) any change in the ownership of any such
Guarantor.
(c) The Obligations of each Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration
or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of
the invalidity, illegality or unenforceability of the Obligations of
the Issuer or otherwise. Without limiting the generality of the
foregoing, the Obligations of each Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any
remedy under this Indenture, the Secured Notes or any other
agreement, by any waiver or modification of any thereof, by any
default, failure or delay, willful or otherwise, in the performance
of the Obligations of the Issuer, or by any other act or thing or
omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of such Guarantor or would
otherwise operate as a discharge of such Guarantor as a matter of law
or equity.
(d) Each Guarantor further agrees that the Guarantee or Subsidiary
Guarantee, as the case may be, to which it is an Obligor shall
continue to be effective or be reinstated, as the case may be, if at
any time payment, or any part thereof, of principal of, premium, if
any, on or interest (or Special Interest, if any, and Additional
Amounts, if any) on any Obligation of the Issuer is rescinded or must
otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Issuer or otherwise.
(e) In furtherance of the foregoing and not in limitation of any
other right which any Holder or the Trustee has at law or in equity
against any Guarantor by virtue hereof, upon the failure of the
Issuer to pay the principal of, premium, if any, on or interest (or
Special Interest, if any, and Additional Amounts, if any) on any
Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform
or comply with any other Obligation, each Guarantor hereby promises
to and will, upon receipt of written demand by the Trustee, forthwith
pay, or cause to be paid, in cash, to the Holders or the Trustee an
amount equal to the sum of (i) the unpaid amount of such Obligations,
(ii) accrued and unpaid interest on such Obligations (but only to the
extent not prohibited by law) and (iii) all other monetary
Obligations of the Issuer to the Holders and the Trustee.
(f) Until such time as the Secured Notes and the other Obligations
of the Issuer guaranteed hereby have been satisfied in full, each
Guarantor hereby irrevocably waives any claim or other rights that it
may now or hereafter acquire against the Issuer or any other
Guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's Obligations under the Guarantee or
its Subsidiary Guarantee, as applicable, including, without
limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any
claim or remedy of the Holders or the Trustee against the Issuer or
any other Guarantor or any security, whether or not such claim,
remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from
the Issuer or any other Guarantor, directly or indirectly, in cash or
other Property or by set-off or in any other manner, payment or
security on account of such claim, remedy or right, provided that to
the extent that the Company makes a payment on the Guarantee, it will
be deemed to have made a payment on the Issuer Loans then
outstanding, and will otherwise be subrogated to the Issuer's rights
on the Issuer Loans, to the extent that such Issuer Loans remain
unpaid. If any amount shall be paid to such Guarantor in violation
of the preceding sentence at any time prior to the later of the
payments in full of the Secured Notes and all other amounts payable
under this Indenture, the Guarantee and each Subsidiary Guarantee
upon the Maturity of the Secured Notes, such amount shall be held in
trust for the benefit of the Holders and the Trustee and shall
forthwith be paid to the Trustee to be credited and applied to the
Secured Notes and all other amounts payable under the Guarantee and
each Subsidiary Guarantee, whether matured or unmatured, in
accordance with the terms of this Indenture, or to be held as
security for any Obligations or other amounts payable under any
Guarantee thereafter arising.
(g) Each Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by
this Indenture and that the waiver set forth in this Section 13.1 is
knowingly made in contemplation of such benefits. Each Guarantor
further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) subject to this Article XIII,
the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article VI for the purposes of the Guarantee and each
Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the
Obligations guaranteed hereby, and (y) in the event of any
acceleration of such Obligations guaranteed hereby as provided in
Article VI, such Obligations (whether or not due and payable) shall
further then become due and payable by the Guarantor for the purposes
of each Guarantee.
(h) A Subsidiary Guarantor that makes a distribution or payment
under a Subsidiary Guarantee shall be entitled to contribution from
each other Subsidiary Guarantor in a pro rata amount based on the
Adjusted Net Assets of each such other Subsidiary Guarantor for all
payments, damages and expenses incurred by that Guarantor in
discharging the Issuer's obligations with respect to the Secured
Notes and this Indenture or any other Subsidiary Guarantor with
respect to its Subsidiary Guarantee, so long as the exercise of such
right does not impair the rights of the Holders of the Secured Notes
under the Subsidiary Guarantees.
(i) Each Guarantor also agrees to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
Section 13.2 Limitation on Liability.
The Obligations of each Guarantor will be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other
Guarantor in respect of the Obligations of such other Guarantor under
the Guarantee or its Subsidiary Guarantee, as applicable, or pursuant
to its contribution obligations under this Indenture, result in the
Obligations of such Guarantor under the Guarantee or its Subsidiary
Guarantee, as applicable, not constituting a fraudulent conveyance or
fraudulent transfer under federal or state law or otherwise not being
void, voidable or unenforceable under any bankruptcy, reorganization,
receivership, insolvency, liquidation or other similar legislation or
legal principles under any applicable foreign law. Each Guarantor
that makes a payment or distribution under the Guarantee or its
Subsidiary Guarantee, as applicable, shall be entitled to a
contribution from each other Guarantor in a pro rata amount based on
the Adjusted Net Assets of each Guarantor.
Section 13.3 Execution and Delivery of Guarantees.
To further evidence the Guarantee set forth in Section 13.1
hereof, the Company hereby agrees that notation of the Guarantee
shall be endorsed on each Secured Note authenticated and delivered by
the Trustee and executed by either manual or facsimile signature of
an authorized officer of such Guarantor. The Company hereby agrees
that the Company's Guarantee set forth in Section 13.1 hereof shall
remain in full force and effect notwithstanding any failure to
endorse on each Secured Note a notation of the Guarantee. If an
Officer of the Company whose signature is on this Indenture or a
Secured Note no longer holds that office at the time the Trustee
authenticates such Secured Note or at any time thereafter, the
Company's Guarantee of such Secured Note shall be valid nevertheless.
The delivery of any Secured Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of
the Guarantee set forth in this Indenture on behalf of the Company.
Section 13.4 No Waiver.
Neither a failure nor a delay on the part of either the Trustee
or the Holders in exercising any right, power or privilege under this
Article XIII shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of
any right, power or privilege. The rights, remedies and benefits of
the Trustee and the Holders herein expressly specified are cumulative
and not exclusive of any other rights, remedies or benefits which
either may have under this Article XIII at law, in equity, by statute
or otherwise.
Section 13.5 Modification.
No modification, amendment or waiver of any provision of this
Article XIII, nor the consent to any departure by any Guarantor
therefrom, shall in any event be effective unless the same shall be
in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose
for which given. No notice to or demand on any Guarantor in any case
shall entitle such Guarantor to any other or further notice or demand
in the same, similar or other circumstances.
Section 13.6 Release of Subsidiary Guarantor.
(a) Upon the sale or other disposition (by merger or otherwise) of a
Subsidiary Guarantor (or all or substantially all of its Property and
assets) to a Person other than the Issuer, the Company or a
Restricted Subsidiary and pursuant to a transaction that is otherwise
in compliance with this Indenture (including as described in clause
Section 5.1 hereof and as described in Section 4.15 hereof), such
Guarantor (unless it otherwise remains a Restricted Subsidiary or
owns a Mortgaged Rig) shall be deemed released from its Subsidiary
Guarantee and the related Obligations set forth in this Indenture;
provided that any such termination shall occur only to the extent
that all Obligations of such Subsidiary Guarantor under all of its
guarantees of and under all of its pledges of assets or other
security interests which secure, other Indebtedness of the Company or
any other Restricted Subsidiary shall also terminate or be released
upon such sale or other disposition. Each Subsidiary Guarantor that
is designated as an Unrestricted Subsidiary in accordance with this
Indenture shall be released from its Subsidiary Guarantee and the
related Obligations set forth in this Indenture so long as it remains
an Unrestricted Subsidiary.
(b) Any Subsidiary Guarantee by a Restricted Subsidiary shall be
automatically and unconditionally released and discharged, as
evidenced by a supplemental indenture executed by the Issuer, the
Company, and the Subsidiary Guarantors, if any, and the Trustee, upon
the release or discharge of the guarantee which resulted in the
creation of such Restricted Subsidiary's Subsidiary Guarantee and all
other guarantees of the Obligations of any Obligor on the Secured
Notes, except a discharge or release by, or as a result of, payment
under such guarantee.
Section 13.7 Future Guarantor; Execution of Supplemental Indentures
for Future Guarantor.
(a) The Company may not permit any Restricted Subsidiary of the
Company, directly or indirectly, to guarantee any Indebtedness of the
Company or any other Obligor ("Guaranteed Indebtedness") or to
acquire a Mortgaged Rig unless (i) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this
Indenture providing for a Subsidiary Guarantee of payment of the
Secured Notes by such Restricted Subsidiary and (ii) such Subsidiary
Guarantor waives and will not in any manner whatsoever claim or take
the benefit or advantage of, any rights of reimbursement, indemnity
or subrogation or any other rights against the Issuer or any other
Subsidiary Guarantor as a result of any payment by such Subsidiary
Guarantor under its Subsidiary Guarantee. If the Guaranteed
Indebtedness is pari passu with the Guarantee, then the guarantee of
such Guaranteed Indebtedness shall be pari passu with or subordinated
to the Subsidiary Guarantee; and if the Guaranteed Indebtedness is
subordinated to the Guarantee, then the guarantee of such Guaranteed
Indebtedness shall be subordinated to the Subsidiary Guarantee at
least to the extent that all Guaranteed Indebtedness is subordinated
to the Secured Notes.
(b) Any Restricted Subsidiary Guarantor that guarantees any
Indebtedness of the Issuer or another Obligor is required pursuant to
Section 13.7(a) or 4.19 hereof to become a Subsidiary Guarantor and
the Issuer shall cause each such Restricted Subsidiary to promptly
execute and deliver to the Trustee a supplemental indenture pursuant
to which such Restricted Subsidiary shall become a Subsidiary
Guarantor under this Article XIII and shall guarantee the Obligations
of the Issuer under the Secured Notes and this Indenture.
Concurrently with the execution and delivery of such supplemental
indenture, the Issuer shall deliver to the Trustee an Opinion of
Counsel to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such Subsidiary and that,
subject to the application of bankruptcy, insolvency, moratorium,
reorganization, fraudulent conveyance or transfer and other similar
laws relating to creditors' rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the
Subsidiary Guarantee of such Subsidiary Guarantor is a legal, valid
and binding obligation of such Subsidiary Guarantor, enforceable
against such Subsidiary Guarantor in accordance with its terms, and
as to any such other matters as the Trustee may reasonably request.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
RBF FINANCE CO.
By:
Name:
Title:
UNITED STATES TRUST COMPANY OF NEW
YORK, as Trustee
By:
Name:
Title
Each of the following entities as Guarantor:
R&B FALCON CORPORATION
By:
Name:
Title:
- -------------------------------------------------------------------------
(Face of Note) Exhibit A
[THIS GLOBAL NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE
INDENTURE REFERRED TO ON THE REVERSE THEREOF.
UNLESS THIS SECURED NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW
YORK, NEW YORK, TO RBF FINANCE CO. (THE "ISSUER") OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURED NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTION 2.6 OF THE INDENTURE REFERRED TO ON
THE REVERSE HEREOF.
THIS GLOBAL NOTE IS EXCHANGEABLE FOR A SECURED NOTE IN DEFINITIVE,
FULLY REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES
THE ISSUER THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY
FOR THIS GLOBAL NOTE OR IF AT ANY TIME DTC CEASES TO BE A "CLEARING
AGENCY" REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED, AND A SUCCESSOR DEPOSITORY IS NOT APPOINTED BY THE ISSUER
WITHIN 90 DAYS OF SUCH NOTICE, (B) THE ISSUER EXECUTES AND DELIVERS
TO THE TRUSTEE A NOTICE THAT THIS GLOBAL NOTE SHALL BE SO
TRANSFERABLE, REGISTRABLE, AND EXCHANGEABLE, AND SUCH TRANSFER SHALL
BE SO REGISTRABLE, OR (C) AN EVENT OF DEFAULT (AS HEREINAFTER
DEFINED) HAS OCCURRED AND IS CONTINUING WITH RESPECT TO THE SECURED
NOTES.]1
[THIS SECURED NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS. ACCORDINGLY, THIS SECURED NOTE MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT
AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A
BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(A)(1), (2), (3) OR (7) UNDER REGULATION D UNDER THE
SECURITIES ACT (AN "IAI")),
(2) AGREES THAT IT WILL NOT RESELL, OR OTHERWISE TRANSFER THIS NOTE
EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) TO AN IAI THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF
THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND,
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF
NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE
ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
OR (D) TO A PERSON INVOLVED IN THE ORGANIZATION OR OPERATION OF THE
COMPANY OR AN AFFILIATE (AS DEFINED IN RULE 405 UNDER THE SECURITIES
ACT) OF THE COMPANY AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAW OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR
AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.]2
[THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1),
(2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN "IAI")
OR (C) IT IS A PERSON INVOLVED IN THE ORGANIZATION OR OPERATION OF
THE COMPANY OR AN AFFILIATE (AS DEFINED IN RULE 405 UNDER THE
SECURITIES ACT) OF THE COMPANY.
(2) AGREES THAT IT WILL NOT RESELL, OR OTHERWISE TRANSFER THIS NOTE
EXCEPT TO (A) A QIB, (B) AN IAI, OR (C) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE COMPANY OR AN AFFILIATE (AS DEFINED
IN RULE 405 UNDER THE SECURITIES ACT) OF THE COMPANY, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR
AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO
REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING.
THE INDENTURE ALSO CONTAINS A PROVISION REQUIRING FINCO AND THE
COMPANY TO EXERCISE REASONABLE CARE TO ENSURE THAT THE SECURED NOTES
ARE RESOLD OR OTHERWISE TRANSFERRED ONLY TO PURCHASERS MEETING THE
REQUIREMENTS SPECIFIED IN CLAUSE (2) ABOVE.]3
_________________________________
1 These paragraphs should be included if the Secured Notes are issued
in global form.
2 These paragraphs (the Private Placement Legend) should be replaced
upon the exchange of Initial Secured Notes for Exchange Secured
Notes in the Exchange Offer or upon the registration of Initial
Secured Notes pursuant to the Registration Rights Agreement by the
paragraphs referred to in Footnote 3.
_____% Secured Notes due _____
RBF FINANCE CO.
No.
CUSIP No.
$_____________________
RBF FINANCE CO. promises to pay to _______________________
or registered assigns, the principal sum of ___________________
United States Dollars, [or such greater or lesser amount as may from
time to time be endorsed on Schedule A hereto]4 on [_________], ____.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is hereby made to the further provisions of this
Secured Note set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set
forth at this place.
Unless the certificate of authorization hereon has been
duly executed by the Trustee referred to on the reverse hereof by
manual signature, this Secured Note shall not be entitled to any
benefit of this Indenture or be valid or obligatory for any purpose.
_____________________________
4 This is included on Global Notes only.
IN WITNESS WHEREOF, the Issuer has caused this instrument
to be duly executed as of the date written below.
RBF FINANCE CO.
By:
Name:
Title:
By:
Dated: Name:
Title:
Certificate of Authentication:
This is one of the Secured Notes
referred to in the within-mentioned
Indenture:
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By:
Authorized Signatory
(Reverse of Note)
_____% Secured Note due ________
Capitalized terms used herein shall have the meanings
assigned to them in this Indenture referred to below unless otherwise
indicated.
1. Interest. RBF Finance Co., a Delaware corporation
(such corporation, and its successors and assigns under this
Indenture hereinafter referred to, being called the "Issuer"),
promises to pay interest on the principal amount of this Secured Note
at _____% per annum until Maturity and shall pay Additional Amounts
(as defined), if any, and Special Interest, if any, payable pursuant
to Section 5 of the Registration Rights Agreement referred to below.
The Issuer will pay interest, if any, and Additional Amounts, if any,
and Special Interest, if any, semi-annually in arrears on March 15
and September 15 of each year (each, an "Interest Payment Date"), or
if any such day is not a Business Day, on the next succeeding
Business Day. Interest on the Secured Notes will accrue from the most
recent date to which interest has been paid or, if no interest has
been paid, from the Issue Date; provided that if there is no existing
Default in the payment of interest, and if this Secured Note is
authenticated between a Record Date referred to on the face hereof
and the next succeeding Interest Payment Date, interest shall accrue
from such next September 15, 1999. The Issuer shall pay interest
(including post-petition interest in any proceeding under any
applicable Federal, State or foreign bankruptcy law) on overdue
installments of interest ("Defaulted Interest"), Additional Amounts,
if any, and Special Interest, if any, (without regard to any
applicable grace periods) from time to time on demand at the same
rate to the extent lawful. Interest will be computed on the basis of
a 360-day year of twelve 30-day months.
2. Method of Payment. The Issuer will pay interest on
the Secured Notes (except Defaulted Interest), Additional Amounts, if
any, and Special Interest, if any, to the Persons who are registered
Holders of Secured Notes at the close of business on March 1 or
September 1 immediately preceding the Interest Payment Date (each, a
"Record Date"), even if such Secured Notes are canceled after such
Record Date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to Defaulted
Interest. The Secured Notes will be payable as to principal, premium,
interest, Additional Amounts and Special Interest at the office or
agency of the Issuer maintained for such purpose within the City and
State of New York, or, at the option of the Issuer, payment of
interest and Additional Amounts and Special Interest may be made by
check mailed to the Holders at their addresses set forth in the
register of Holders, provided that payment by wire transfer of
immediately available funds will be required with respect to
principal of and interest, premium, if any, and Additional Amounts,
if any, and Special Interest, if any, on, all Global Notes and all
other Secured Notes the Holders of which shall have provided wire
transfer instructions to the Issuer and the Paying Agent prior to the
applicable Record Date for such payment. Such payment shall be in
such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts.
3. Additional Amounts. Except to the extent required by
any applicable law, regulation or governmental policy, any and all
payments of, or in respect of, any Secured Note shall be made free
and clear of and without deduction for or on account of any and all
present or future taxes, levies, imposts, deduction, charges or
withholdings and all liabilities with respect thereto imposed by
Panama, The Bahamas or any other jurisdiction with which the Company
or any Subsidiary Guarantor has some connection (including any
jurisdiction (other than the United States of America) from or
through which payments under the Issuer Loans, the Secured Notes, the
Guarantee or the Subsidiary Guarantees (if any) are made) or any
political subdivision of or any taxing authority in any such
jurisdiction ("Panamanian Taxes," "Bahamian Taxes," or "Other Taxes,"
respectively). If the Issuer, the Company or any Subsidiary
Guarantor shall be required by law to withhold or deduct any
Panamanian Taxes, Bahamian Taxes, or Other Taxes from or in respect
of any sum payable under an Issuer Loan Agreement, the Secured Notes,
the Guarantee or a Subsidiary Guarantee, the sum payable by the
Issuer, the Company or such Subsidiary Guarantor, as the case may be,
thereunder shall be increased by the amount ("Additional Amounts")
necessary so that after making all required withholdings and
deductions, the Holder or beneficial owner of a Secured Note shall
receive an amount equal to the sum that it would have received had
not such withholdings and deductions been made; provided that any
such sum shall not be paid in respect of any Panamanian Taxes,
Bahamian Taxes or Other Taxes to a Holder (an "Excluded Holder")
(i) resulting from the beneficial owner of such Secured Note carrying
on business or being deemed to carry on business in or through a
permanent establishment or fixed base in the relevant taxing
jurisdiction or having any other connection with the relevant taxing
jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in
respect of such Secured Note, such Issuer Loan, the Guarantee or any
applicable Subsidiary Guarantee or the enforcement of such Secured
Note, such Issuer Loans, the Guarantee or any applicable Subsidiary
Guarantee, or (ii) that would not have been imposed but for the
presentation (where presentation is required) of such Secured Note
for payment more than 180 days after the date such payment became due
and payable or was duly provided for, whichever occurs later. The
Issuer, the Company or the Subsidiary Guarantors, as applicable, will
also (i) make such withholding or deduction and (ii) remit the full
amount deducted or withheld to the relevant authority in accordance
with applicable law, and, in any such case, the Issuer will furnish
to each Holder on whose behalf an amount was so remitted, within 30
calendar days after the date the payment of any Panamanian Taxes,
Bahamian Taxes or Other Taxes is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by the
Issuer, the Company or the Subsidiary Guarantors, as applicable. The
Issuer will, upon written request of each Holder (other than an
Excluded Holder), reimburse each such holder for the amount of
(i) any Panamanian Taxes, Bahamian Taxes or Other Taxes so levied or
imposed and paid by such holder as a result of payments under or with
respect to any Secured Notes, and (ii) any Panamanian Taxes, Bahamian
Taxes, or Other Taxes so levied or imposed with respect to any
reimbursement under the foregoing clause (i) so that the net amount
received by such Holder (net of payments made under or with respect
to such Secured Notes, such Issuer Loans, the Guarantee or the
applicable Subsidiary Guarantees) after such reimbursement will not
be less than the net amount the Holder would have received if
Panamanian Taxes, Bahamian Taxes or Other Taxes on such reimbursement
had not been imposed.
At least 30 calendar days prior to each date on which any
payment under or with respect to the Secured Notes is due and
payable, if the Issuer, the Company or the Subsidiary Guarantors, as
applicable, will be obligated to pay Additional Amounts with respect
to such payment, the Issuer, the Company or the Subsidiary
Guarantors, as applicable, will deliver to the Trustee an officer's
certificate stating the fact that such Additional Amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
If any Holder or beneficial owner of any Secured Note
receives a refund of the Panamanian Taxes, Bahamian Taxes or Other
Taxes after the Issuer, the Company or any Subsidiary Guarantor, as
applicable, has paid any Additional Amounts, such Holder or
beneficial owner shall reimburse the Issuer, the Company or any
Subsidiary Guarantor, as applicable, for any amount of such refund.
In addition, the Issuer, the Company or the Subsidiary
Guarantors will pay any stamp, issue, registration, documentary or
other similar taxes and duties, including interest and penalties, in
respect of the creation, issue and offering of the Secured Notes
payable in the United States, Panama, The Bahamas or any political
subdivision thereof or taxing authority of or in the foregoing. The
Issuer, the Company and the Subsidiary Guarantors, as applicable,
will also pay and indemnify the Trustee and the Holders of the
Secured Notes from and against all court fees and taxes or other
taxes and duties, including interest and penalties, paid by any of
them in any jurisdiction in connection with any action permitted to
be taken by the Holders or the Trustee to create Liens on the
Collateral or to enforce the Obligations of the Company or the
Subsidiary Guarantors under the Secured Notes, the Indenture, the
Guarantee, the Subsidiary Guarantees, the Issuer Loans or the
Security Agreements.
Whenever there is mentioned, in any context, the payment of
principal, premium or interest in respect of any Secured Note or the
net proceeds received on the sale or exchange of any Secured Note,
such mention shall be deemed to include the payment of Additional
Amounts of Special Interest provided for in the Indenture to the
extent that, in such context, Additional Amounts are, were or would
be payable in respect thereof pursuant to the Indenture.
4. Paying Agent and Registrar. Initially, the Trustee
under this Indenture will act as Paying Agent and Registrar. The
Issuer may change any Paying Agent or Registrar without notice to any
Holder. In certain situations, the Issuer or any of its Subsidiaries
may act in any such capacity.
5. Indenture. The Issuer issued the Secured Notes under
an Indenture dated as of March 26, 1999 ("Indenture") between the
Issuer, R&B Falcon Corporation (the "Company") acting as guarantor
and United States Trust Issuer of New York, as trustee (the
"Trustee," which term includes any successor trustee under this
Indenture). The terms of the Secured Notes include those stated in
this Indenture and those made part of this Indenture by reference to
the U.S. Trust Indenture Act of 1939, as amended (15 U.S. Code
77aaa-77bbbb) as in effect on the date of this Indenture. The
Secured Notes are subject to all such terms, and Holders are referred
to this Indenture and such Act for a statement of such terms. The
Secured Notes are secured obligations of the Issuer issuable in two
series, one consisting of 11% Senior Secured Notes dated 2006 (the
"7-Year Secured Notes") limited to $400,000,000 aggregate principal
amount (subject to Section 2.7 of the Indenture), and the other
consisting of 11 3/8% Senior Secured Notes due 2009 (the "10-Year
Secured Notes") limited to $400,000,000 in aggregate principal amount
(subject to Section 2.7 of the Indenture). This Secured Note is one
of the Secured Notes referred to in this Indenture.
6. Optional Redemptions.
(a) The 10-year Secured Notes. Under the terms of the
Indenture, on or after March 15, 2004, the 10-Year Secured Notes will
be redeemable, at the Lender's option, in whole or in part, at any
time or from time to time, upon not less than 30 nor more than 60
days' prior notice mailed by first-class mail to the Holders of the
10-Year Secured Notes, at the following Redemption Prices (expressed
in percentages of principal amount), plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date, if redeemed during the 12-month
period commencing on March 15 of the years set forth below.
Period Redemption Price
2004 105.6875%
2005 103.7917%
2006 101.8958%
2007 and thereafter 100.0000
The Company shall prepay the Issuer Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Issuer Loans required to be made to provide funds for the Issuer
to make this redemption shall be made on the 10-Year Tranche of each
Issuer Loan on a pro rata basis.
(b) 7-Year Secured Notes. Under the terms of the
Indenture, the 7-Year Secured Notes will be redeemable, at the
Lender's option at any time in whole or from time to time in part
upon not less than 30 and not more than 60 days' prior notice mailed
by first class mail to the Holders of the 7-Year Secured Notes, on
any date prior to Maturity at a price equal to 100% of the principal
amount thereof plus accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) to the Redemption
Date plus the Make-Whole Premium applicable to the 7-Year Secured
Notes determined in the manner provided for in Section 3.7 of the
Indenture. The Company shall prepay the Issuer Loans in whole or in
part to provide funds for such redemption. Any prepayments by the
Company on the Issuer Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the 7-Year
Tranche of the Issuer Loans on a pro rata basis.
(c) Notices of redemption will be mailed by first class
mail at least 30 days but not more than 60 days before the Redemption
Date to each Holder whose Secured Notes are to be redeemed at its
registered address. Secured Notes in denominations larger than $1,000
may be redeemed in part but only in integral multiples of $1,000,
unless all of the Secured Notes of the applicable series held by a
Holder are to be redeemed. Unless the Issuer defaults in making such
redemption payment, on and after the Redemption Date interest
(including Special Interest, if any and Additional Amounts, if any)
ceases to accrue on Secured Notes or portions thereof called for
redemption.
7. Redemption upon Loss of a Rig. If an Event of Loss
occurs at any time with respect to a Mortgaged Rig (the Mortgaged Rig
suffering such Event of Loss being the "Lost Mortgaged Rig"), the
Company shall apply funds in an amount (the "Loss Redemption Amount")
equal to the principal amount of the applicable Issuer Loan secured
by the Lost Mortgaged Rig outstanding on the date (the "Loss Date")
on which such Event of Loss was deemed to have occurred, together
with all accrued and unpaid interest (including Special Interest, if
any, and Additional Amounts, if any) thereon, to the prepayment of
such Issuer Loan; if a Default shall have occurred and be continuing
at the time of receipt of the Event of Loss Proceeds with respect to
such Event of Loss, the Company will also be required to prepay other
Issuer Loans on a pro rata basis in an aggregate amount equal to the
excess of the Net Event of Loss over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon. Such
payments on the Issuer Loan or Loans shall be made directly to the
Trustee for deposit into the Issuer Escrow Account. Such funds shall
constitute part of the Collateral pending application in accordance
with the next paragraph.
Upon the earlier to occur of (A) 30 days after the receipt
of such Event of Loss Proceeds by the Company (the "Loss Proceeds
Receipt Date") and (B) 180 days after the Loss Date, the Issuer
shall redeem Secured Notes, of both series, in whole or in part on a
pro rata basis, at a Redemption Price equal to 100% of their
principal amount, plus accrued and unpaid interest (including
Additional Amounts and Special Interest, if any) to the Redemption
Date, in an aggregate principal amount equal to the Loss Redemption
Amount or the Net Event of Loss Proceeds, as the case may be. The
Issuer and the Company shall treat as Loss Excess Proceed the amount
equal to (i) the excess of the Net Event of Loss Proceeds from such
Event of Loss over the funds applied pursuant to the preceding
sentence, less (ii) the amount of such excess Net Event of Loss
Proceeds (A) used to repay Senior Indebtedness of the Company or
secured Senior Indebtedness of a Subsidiary Guarantor then owning a
Mortgaged Rig, in each case, with a permanent reduction of
availability in the case of revolving credit borrowings and owing to
a Person other than the Company or any of its Subsidiaries, or (B)
invested in Additional Assets (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and
evidenced by a Board Resolution).
8. Redemption Upon Sale of a Mortgaged Rig. If a
Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor then
owning a Mortgaged Rig is sold in compliance with the terms of the
Indenture (the Mortgaged Rig so sold or owned by the Subsidiary
Guarantor whose Capital Stock is so sold being the "Sold Mortgaged
Rig"), the Company shall apply funds in an amount (the "Sale
Redemption Amount") equal to the principal amount of the Issuer Loan
secured by such Sold Mortgaged Rig on the date of such sale (the
"Sale Date"), together with all accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
thereon, plus any additional amounts required by the Issuer to redeem
the Secured Notes to the extent required by the next paragraph, to
the repayment of such Issuer Loan. If a Default shall have occurred
and be continuing at the time of receipt of the cash consideration
with respect to such Sold Mortgaged Rig, the Company will also be
required to prepay other Issuer Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Issuer Loan or Loans shall be allocated
between the 7-year Tranche and the 10-year Tranche of each such
Issuer Loan on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account. Such funds shall
constitute part of the Collateral pending application in accordance
with the next paragraph.
Upon the earlier to occur of (A) 30 days after the receipt of such
Net Available Cash (the "Sale Proceeds Receipt Date") and (B) 60
days after the Sale Date, the Issuer shall redeem Secured Notes of
both series, in whole or in part on a pro rata basis, in an aggregate
principal amount equal to the Sale Redemption Amount or the Net
Available Cash, as the case may be, at a Redemption Price equal to:
(x) In respect to the 10-year Secured Notes (i) if such
redemption is before March 15, 2004, the sum of the remaining
scheduled payments of interest, through March 15, 2004
(including Additional Amounts and Special Interest) and the
Redemption Price as of March 15, 2004 as set forth in paragraph
7 above as discounted to their present values to the Redemption
Date on a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate plus 50 basis
points, plus accrued and unpaid interest on the Secured Notes
to the Redemption Date or (ii) if such redemption is on or
after March 15, 2004, the Redemption Price then applicable as
described in paragraph 7 above, or
(y) In respect of the 7-year Secured Notes, the sum of the
remaining scheduled payments of principal and interest
(including Additional Amounts and Special Interest, if any)
thereon, as discounted to their present values to the
redemption date on a semiannual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus
50 basis points;
in each case plus accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) on the Secured
Notes to the Redemption Date.
9. Repurchase at Option of Holder.
(a) Upon the occurrence of a Change of Control, each
Holder will have the right to require the Issuer to repurchase such
Holder's Secured Notes in whole or in part (the "Change of Control
Offer") at a purchase price (the "Change of Control Purchase Price")
in cash equal to 101% of the aggregate principal amount thereof, plus
accrued and unpaid interest thereon, if any, and Special Interest, if
any, and Additional Amounts, if any, to the Change of Control Payment
Date on the terms described in this Indenture.
Notwithstanding the foregoing, a Change of Control shall
not be deemed to have occurred if (a) the ratings assigned to the
Secured Notes by Moody's and S&P prior to the announcement are not
downgraded or placed on a negative credit watch by either such rating
agency as a result thereof and (b) no Default has occurred and is
continuing.
Within 30 days following any Change of Control, the Company
shall send, or cause to be sent, by first class mail, postage
prepaid, a notice regarding the Change of Control Offer to each
Holder of Secured Notes. The Holder of this Secured Note may elect
to have this Secured Note or a portion hereof in an authorized
denomination purchased by completing the form entitled "Option of
Holder to Require Purchase" appearing below and tendering this
Secured Note pursuant to the Change of Control Offer. Unless the
Issuer defaults in the payment of the Change of Control Payment with
respect thereto, all Secured Notes or portions thereof accepted for
payment pursuant to the Change of Control Offer will cease to accrue
interest (and Additional Amounts, if any, and Special Interest, if
any) from and after the Change of Control Purchase Date.
(b) If, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
excess aggregate amount of Sale Excess Proceeds and Loss Excess
Proceeds not theretofore subject to an Excess Proceeds Offer (the
"Excess Proceeds Offer Amount"), totals as least $10.0 million, the
Issuer must, not later than the fifteenth Business Day of such month,
make an offer (an "Excess Proceeds Offer") to purchase from the
Holders pursuant to and subject to the conditions contained in the
Indenture on a pro rata basis an aggregate principal amount of
Secured Notes equal to such excess aggregate amount of Sale Excess
Proceeds and Loss Excess Proceeds available on such first day of the
month, at a purchase price equal to 100% of their principal amount,
plus, in each case, any accrued interest (including Additional
Amounts and Special Interest, if any) to the date of purchase. The
Company is also required, not later than the fifteenth Business Day
of such month, to make an offer to purchase 12 1/4% Senior Notes due
2006 (the "New Senior Notes") at a purchase price equal to 100% of
their principal amount, plus any accrued interest (including "special
interest") to the date of purchase. The Excess Proceeds Offer Amount
will be allocated on a pro rata basis between the Issuer for its
Excess Proceeds Offer to Holders of the Secured Notes and the Company
for its "Excess Proceeds Offer" to the Holders of the New Senior
Notes. The Company will prepay the Issuer Loans on a pro rata basis,
or make loans constituting Subordinated Obligations to the Issuer, to
permit the Issuer to purchase any Secured Notes validly tendered
pursuant to an Excess Proceeds Offer. Any amounts remaining after
all Secured Notes validly tendered are purchased shall no longer
constitute Sale Excess Proceeds or Loss Excess Proceeds.
Within 30 days of the date the excess amount of Sale Excess
Proceeds and Loss Excess Proceeds in excess of 10% of consolidated
total assets of the Company exceeds $10.0 million, the Issuer shall
send, or cause to be sent, by first class mail, postage prepaid, a
notice regarding the Excess Proceeds Offer to each Holder of Secured
Notes. The Holder of this Secured Note may elect to have this
Secured Note or a portion hereof in an authorized denomination
purchased by completing the form entitled "Option of Holder to Elect
Purchase" appearing below and tendering this Secured Note pursuant to
the Excess Proceeds Offer. Unless the Issuer defaults in the payment
of the Excess Proceeds Offer Purchase Price with respect thereto, all
Secured Notes or portions thereof selected for payment pursuant to
the Excess Proceeds Offer will cease to accrue interest (including
Special Interest and Additional Amounts, if any) from and after the
Excess Proceeds Offer Purchase Date.
10. Denominations; Transfer and Exchange. The Secured
Notes of each series are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. The
transfer of Secured Notes may be registered and Secured Notes may be
exchanged as provided in the Indenture. The Registrar and the Trustee
may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents (including in certain cases,
opinions of counsel) and the Issuer may require a Holder to pay any
taxes and fees required by law or permitted by the Indenture. The
Issuer need not exchange or register the transfer of any Secured Note
or portion of a Secured Note selected for redemption, except for the
unredeemed portion of any Secured Note being redeemed in part. Also,
it need not exchange or register the transfer of any Secured Notes
for a period of 15 days before a selection of Secured Notes to be
redeemed or during the period between a Record Date and the
corresponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a
Secured Note may be treated as its owner for all purposes.
12. Amendment, Supplement and Waiver. With the consent of
the Holders of not less than a majority in aggregate principal amount
of the outstanding Secured Notes (including consents obtained in
connection with a tender offer or exchange offer for the Secured
Notes), the Issuer, the Company, the Subsidiary Guarantors, if any,
and the Trustee may enter into one or more indentures supplemental to
the Indenture for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Indenture
or of modifying in any manner the rights of the holders; provided
that no such supplemental indenture may, among other things, without
the consent of the Holder of each outstanding Secured Noted affected
thereby, (i) reduce the amount Secured Notes whose Holders must
consent to an amendment, (ii) reduce the rate of or extend the time
for payment of interest on any Secured Note or any Issuer Loan,
(iii) reduce the principal of or extend the Stated Maturity of any
Secured Note or any Issuer Loan, (iv) modify the obligations of
Issuer to make mandatory redemptions or otherwise reduce the premium
payable upon the redemption of any Secured Note or change the time at
which any Secured Note may be or is required to be redeemed as
described under the covenant described in the paragraphs 6, 7 and 8
above, (v) modify the obligations of the Company to make mandatory
repayments or change the time at which an Issuer Loan may be or is
required to be repaid under the covenant described in the paragraphs
7 and 8 above, (vi) make any Secured Note payable in money other than
that stated in the Secured Note, (vii) impair the right of any Holder
of the Secured Notes to receive payment of principal of and interest
on such Holder's Secured Notes on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with
respect to such Holder's Secured Notes, (viii) make any change in the
amendment provisions which require each Holder's consent or in the
waiver provisions, (ix) make any change in the Guarantee or any
Security Agreement or Issuer Loan Agreement that would adversely
affect the Noteholders or terminate the Lien of the Indenture or any
Security Agreement on any property at any time subject thereto or
deprive the Holders of the security afforded by the Lien of the
Indenture or the Security Agreements or the Issuer of the Liens
securing the Issuer Loans.
13. Defaults and Remedies. Events of Default include in
summary form: (i) default for 30 days in the payment when due of
interest on, or Special Interest or Additional Amounts with respect
to, the Secured Notes or an Issuer Loan; (ii) default in payment when
due of the principal of or premium, if any, on any Secured Note or
Issuer Loan; (iii) failure by the Issuer to comply with Sections 3.8,
3.9, 4.8, 4.15 or 5.1 of the Indenture; (iv) failure by the Issuer,
the Company and the Subsidiary Guarantee secured for 60 days after
notice to comply with any of its other agreements in this Indenture
or the Secured Notes or the occurrence of an event of default under a
Mortgage; (v) Indebtedness of the Issuer or any Subsidiary is not
paid when due within the applicable grace period, if any, or is
accelerated by the holders thereof and, in either case, the aggregate
principal amount of such unpaid or accelerated Indebtedness exceeds
$20,000,000 or more; (vi) failure by the Issuer or any of its
Restricted Subsidiaries to pay final judgments aggregating in excess
of $20,000,000, which judgments are not paid, discharged or stayed
for a period of 60 days; (viii) certain events of bankruptcy or
insolvency with respect to the Issuer, the Company or any Significant
Subsidiary; (ix) the Guarantee or any Subsidiary Guarantee shall for
any reason cease to be, or be asserted by the Company or any
Subsidiary Guarantor, as applicable, not to be, in full force as
effect (except pursuant to the release of any Subsidiary Guarantee in
accordance with this Indenture); and (x) the Liens under the Security
Agreements shall, at any time, cease to be in full force and effect
for any reason (other than by operation of the provisions of the
Indenture and the Security Agreements) other than the satisfaction in
full of all obligations under the Indenture and discharge of the
Indenture, or any Lien created thereunder shall be declared invalid
or unenforceable or the Issuer, the Company or the Subsidiary
Guarantee shall assert, in any pleading in any court of competent
jurisdiction, that any such Lien is invalid or unenforceable.
Holders of the Secured Notes may not enforce this Indenture
or the Secured Notes except as provided in this Indenture. Subject
to certain limitations, Holders of a majority in principal amount of
the then outstanding Secured Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from
Holders of the Secured Notes notice of any continuing Default or
Event of Default (except a Default or Event of Default relating to
the payment of principal, premium, if any, or interest) if it
determines that withholding notice is not opposed to the interests of
the Holders. Subject to certain limitations, the Holders of a
majority in aggregate principal amount of the Secured Notes then
outstanding by notice to the Trustee may on behalf of the Holders of
all of the Secured Notes then outstanding waive any existing Default
or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on,
or the principal of, premium, if any, on, interest (including Special
Interest and Additional Amounts, if any) on, and, if any, on, the
Secured Notes. The Issuer is required to deliver to the Trustee
annually a statement regarding compliance with the Indenture, and the
Issuer is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
14. Defeasance Prior to Maturity or Redemption. The
Issuer, at its election, shall (a) be deemed to have paid and
discharged its debt on the Secured Notes and this Indenture and on
Security Agreements, the Guarantee and the Subsidiary Guarantees
shall cease to be of further effect as to all outstanding Secured
Notes (except as to (i) rights of registration of transfer,
substitution and exchange of Secured Notes, (ii) the Issuer's right
of optional redemption, (iii) rights of Holders to receive payments
of principal of, premium, if any, and interest (including Special
Interest and Additional Amounts, if any) on the Secured Notes (but
not the Change of Control Purchase Price or the Excess Proceeds Offer
Purchase Price) and any rights of the Holders with respect to such
amounts, (iv) the rights, obligations and immunities of the Trustee
under this Indenture, and (v) certain other specified provisions in
this Indenture) or (b) cease to be under any obligation to comply
with certain restrictive covenants that are described in this
Indenture, after the irrevocable deposit by the Issuer with the
Trustee, in trust for the benefit of the Holders, at any time prior
to the Stated Maturity of the Secured Notes, of (i) money in an
amount, (ii) U.S. Government Obligations which through the payment of
interest and principal will provide, not later than one Business Day
before the due date of payment in respect of such Secured Notes,
money in an amount, or (C) a combination thereof sufficient to pay
and discharge the principal of, premium, if any on, and interest
(including Additional Amounts and Special Interest, if any) on, such
Secured Notes then outstanding on the dates on which any such
payments are due in accordance with the terms of this Indenture and
of such Secured Notes.
15. Security Agreements. As provided in the Indenture and
the Security Agreements and subject to certain limitations set forth
therein, the Obligations of the Issuer under the Indenture, and the
Security Agreements are secured by the Collateral as provided in the
Security Agreements. Each Holder, by accepting a Secured Note,
agrees to be bound to all terms and provisions of the Security
Agreements, as the same may be amended from time to time. The Liens
created under the Security Agreements shall be released upon the
terms and subject to the conditions set forth in the Indenture, and
the Security Agreements.
16. Trustee Dealings with the Issuer and the Company.
Subject to certain limitations imposed by the Trust Indenture Act,
the Trustee, in its individual or any other capacity, may make loans
to, accept deposits from, and perform services for the Issuer, the
Company or its Affiliates, and may otherwise deal with the Issuer,
the Company or its Affiliates, as if it were not the Trustee.
17. No Recourse Against Others. A director, officer,
employee, incorporator or stockholder of the Issuer, the Company or
any Subsidiary Guarantor, as such, shall not have any liability for
any obligations of the Issuer, the Company or any Subsidiary
Guarantors under the Secured Notes, this Indenture, the Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of,
such Obligations or their creation. Each Holder by accepting a
Secured Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Secured
Notes.
18. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SECURED NOTE, WITHOUT
REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
19. Authentication. This Secured Note shall not be valid
until authenticated by the manual signature of the Trustee or an
authenticating agent.
20. Abbreviations. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
21. Additional Rights of Holders of Transfer Restricted
Secured Notes. In addition to the rights provided to Holders of
Secured Notes under the Indenture, Holders of Transferred Restricted
Secured Notes (as defined in the Registration Rights Agreement) shall
have all the rights set forth in the Registration Rights Agreement
dated as of the date of this Indenture, between the Issuer, the
Company and the parties named on the signature pages thereof (the
"Registration Rights Agreement").
22. CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification
Procedures, the Issuer has caused CUSIP numbers to be printed on the
Secured Notes and the Trustee may use CUSIP numbers in notices of
redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Secured
Notes or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
The Issuer will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration
Rights Agreement. Requests may be made to:
RBF Finance Co.
901 Threadneedle
Houston, Texas 77079-2982
Telephone No.: (281) 496-5000
Telecopier No.: (281) 496-0285
GUARANTEE
Subject to the limitations set forth in the Indenture, the
Company and each Subsidiary Guarantor (each hereinafter referred to
as a "Guarantor," which term includes any successor or additional
Guarantors under the Indenture) have jointly and severally,
irrevocably and unconditionally guaranteed (a) the due and punctual
payment of the principal (and premium, if any) of and interest (and
Special Interest, if any and Additional Amounts, if any), on the
Secured Notes, whether at Maturity, by acceleration, call for
redemption, upon a Change of Control Offer, Excess Proceeds Offer,
purchase or otherwise, (b) the due and punctual payment of interest
on the overdue principal of and interest (and Special Interest, if
any and Additional Amounts, if any), on the Secured Notes to the
extent lawful, (c) the due and punctual performance of all other
Obligations of the Issuer and the Guarantors to the Holders under
this Indenture and the Secured Notes and (d) in case of any extension
of time of payment or renewal of any Secured Notes or any of such
other Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal,
whether at Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Excess Proceeds Offer, purchase or
otherwise, provided that to the extent that the Company makes a
payment on the Guarantee, it will be deemed to have made a payment on
the Issuer Loans then outstanding, and will otherwise be subrogated
to the Issuer's rights on the Issuer Loans, to the extent that such
Issuer Loans remain unpaid. Capitalized terms used herein shall have
the same meanings assigned to them in this Indenture unless otherwise
indicated.
Payment on each Secured Note is guaranteed, jointly and
severally, by the Guarantor pursuant to Article XIII of this
Indenture and reference is made to such Indenture for the precise
terms of the Guarantees.
The Obligations of each Guarantor are limited to the
maximum amount as will, after giving effect to such maximum amount
and all other contingent and fixed liabilities of such Guarantor, and
after giving effect to any collections from or payments made by or on
behalf of any other Guarantor in respect of the Obligations of such
other Guarantor under the Guarantee or its Subsidiary Guarantee, as
applicable, or pursuant to its contribution obligations under this
Indenture, result in the Obligations of such Guarantor under the
Guarantee or its Subsidiary Guarantee, as applicable, not
constituting a fraudulent conveyance or fraudulent transfer under any
applicable Federal, State or foreign bankruptcy law or not otherwise
being void, voidable or unenforceable under any such applicable
bankruptcy law. Each Guarantor that makes a payment or distribution
under the Guarantee or a Guarantee, as applicable, shall be entitled
to a contribution from each other Guarantor in a pro rata amount
based on the Adjusted Net Assets of each Guarantor.
Certain of the Guarantor may be released from their
Subsidiary Guarantees upon the terms and subject to the conditions
provided in the Indenture.
The Guarantee or Subsidiary Guarantee shall be binding upon
each Guarantor listed below and its successors and assigns and shall
inure to the benefit of the Trustee and the Holders and, in the event
of any transfer or assignment of rights by any Holder or the Trustee,
the rights and privileges herein conferred upon that party shall
automatically extend to and be vested in such transferee or assignee,
all subject to the terms and conditions in the Indenture.
[SIGNATURE PAGE FOLLOWS]
R&B FALCON CORPORATION
By:
Name:
Title:
ASSIGNMENT FORM
To assign this Secured Note, fill in the form below: (I) or (we)
assign and transfer this Secured Note to
_____________________________________________________________________
_________
(Insert assignee's Social Security or tax I.D. no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint______________________________________________
to transfer this Secured Note on the books of the Issuer or the agent
appointed by the Issuer to maintain such books. The agent appointed
hereby may substitute another to act for him.
Date: ________________________
Your signature: __________________________________
(Sign exactly as your name appears on the face of this Secured Note)
Signature Guarantee:
Option of Holder to Elect Purchase
If you want to elect to have this Secured Note purchased by
the Issuer pursuant to Section 3.10 or 4.8 of this Indenture, check
the box below:
Section 3.10 Section 4.8
If you want to elect to have only part of the Secured Note
purchased by the Issuer pursuant to Section 3.10 or Section 4.8 of
this Indenture, state the amount you elect to have purchased (must be
an integral multiple of $1,000): $__________________
Your Signature:
(Sign exactly as your
name appears on the Secured
Note)
Signature Guarantee: Social Security or Tax Identification
No.:
- -------------------------------------------------------------------------
SCHEDULE A
CHANGES IN PRINCIPAL AMOUNT OF SECURED NOTE 5
The following changes in the principal amount of this
Global Note have been recorded:
Principal
Amount of Amount of Amount of
decrease in increase in this
Principal Principal Global Note Signature
Date of Amount of Amount of following of
Transaction this Global this Global such authorized
Note Note decrease officer
(or of Trustee
increase)
_____________________________
5 This should only be included if the Secured Note is issued in
global form.
- -------------------------------------------------------------------------
Exhibit B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.6(a)(1) of this Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 11% Senior Secured Notes due 2006 of RBF Finance Co.
11 3/8% Senior Secured Notes due 2009 of RBF Finance Co.
Reference is hereby made to this Indenture, dated as of
March 26, 1999 (the "Indenture"), between RBF Finance Corp. (the
"Issuer"), R&B Falcon Corporation (the "Company"), the Persons acting
as Subsidiary Guarantors and named therein (the "Subsidiary
Guarantors") and United States Trust Company of New York, as trustee
(the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given them in this Indenture.
This letter relates to U.S.$___________ principal amount of
[7-year Secured Notes] [10-year Secured Notes] which are evidenced by
one or more U.S. Global Notes and held with the Depositary in the
name of _____________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Secured Notes
to a Person who will take delivery thereof in the form of an equal
principal amount of Secured Notes of the same series evidenced by one
or more Regulation S Global Secured Notes, which amount, immediately
after such transfer, is to be held with the Depositary through
Euroclear or Cedel or both.
In connection with such request and in respect of such
Secured Notes, the Transferor hereby certifies that such transfer has
been effected in compliance with the transfer restrictions applicable
to the Global Notes and pursuant to and in accordance with Rule 903
or Rule 904 under the United States Securities Act of 1933, as
amended (the "Securities Act"), and accordingly the Transferor hereby
further certifies that:
(1) The offer of the Secured Notes was not made
to a person in the United States and, if the 40-day
restricted period has not yet expired and the
Transferor is a dealer (as defined in Section 2(12) of
the Securities Act), or a person receiving a selling
concession, fee or other remuneration in respect of
the Secured Notes being sold (collectively,
"Dealers"), (i) neither the Transferor or any person
acting on its behalf knows that the transferee is a
U.S. person and (ii) if the Transferor or any person
acting on its behalf knows that the transferee is a
Dealer, the Transferor or person acting on its behalf
has sent a confirmation or other notice to the
transferee stating that the Secured Notes may be
offered or sold during the 40-day restricted period
only in accordance with the provisions of Regulation
S, pursuant to registration under the Securities Act
or pursuant to an available exemption from the
registration requirements of the Securities Act;
(2) either:
(a) at the time the buy order was
originated, the transferee was outside the United
States or the Transferor and any person acting on
its behalf reasonably believed and believes that
the transferee was outside the United States; or
(b) the transaction was executed in,
on or through the facilities of a designated
offshore securities market and neither the
Transferor nor any person acting on its behalf
knows that the transaction was prearranged with a
buyer in the United States;
(3) no directed selling efforts have been made
in contravention of the requirements of Rule 904(b) of
Regulation S;
(4) the transaction is not part of a plan or
scheme to evade the registration provisions of the
Securities Act; and
(5) upon completion of the transaction, the
beneficial interest being transferred as described
above is to be held with the Depositary through
Euroclear or Cedel or both.
Upon giving effect to this request to exchange a beneficial
interest in a U.S. Global Note for a beneficial interest in a
Regulation S Global Note. The resulting beneficial interest shall be
subject to the restrictions on transfer applicable to Regulation S
Global Notes pursuant to the Indenture and the Securities Act and, if
such transfer occurs prior to the end of the 40-day restricted period
associated with the initial offering of Secured Notes, the additional
restrictions applicable to transfers of interest in the Regulation S
Temporary Global Note.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Issuer, the Company and
Donaldson, Lufkin & Jenrette Securities Corporation, (the "Initial
Purchaser"), the Initial Purchaser of such Secured Notes being
transferred. We acknowledge that you, the Issuer, the Company and the
Initial Purchaser will rely upon our confirmations, acknowledgments
and agreements set forth herein, and we agree to notify you promptly
in writing if any of our representations or warranties herein ceases
to be accurate and complete. Terms used in this certificate and not
otherwise defined in this Indenture have the meanings set forth in
Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: RBF Finance Co.
Initial Purchaser
- -------------------------------------------------------------------------
Exhibit B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO U.S. GLOBAL NOTE
(Pursuant to Section 2.6(a)(ii) of this Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 11% Senior Secured Notes due 2006 of RBF Finance Co.
11 3/8% Senior Secured Notes due 2009 of RBF Finance Co.
Reference is hereby made to this Indenture dated as of March 26,
1999 (the "Indenture"), between RBF Finance Co. (the "Issuer"), R&B
Falcon Corporation (the "Company'), the Persons acting as Subsidiary
Guarantors and named therein (the "Subsidiary Guarantors") and United
States Trust Company of New York, as trustee (the "Trustee").
Capitalized terms used but not defined herein shall have the meanings
given them in this Indenture.
This letter relates to $____________ principal amount of [7-
year Secured Notes] [10-year Secured Notes] which are evidenced by
one or more Regulation S Global Secured Notes and held with the
Depositary through Euroclear or Cedel in the name of
_________________ (the "Transferor"). The Transferor has requested a
transfer of such beneficial interest in the Secured Notes to a Person
who will take delivery thereof in the form of an equal principal
amount of Secured Notes of the same series evidenced by one or more
U.S. Global Notes, to be held with the Depositary.
In connection with such request and in respect of such
Secured Notes, the Transferor hereby certifies that:
[CHECK ONE]
- - such transfer is being effected pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act") and, accordingly, the
Transferor hereby further certifies that the Secured Notes are
being transferred to a Person that the Transferor reasonably
believes is purchasing the Secured Notes for its own account, or
for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each
such account is a "qualified institutional buyer" within the
meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A;
or
- - such transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
- - the Surrendered Secured Notes are being transferred to
Institutional Accredited Investor pursuant to an exemption under the
Securities Act other than Rule 144A, Rule 144 or Rule 904 and the
Transferor further certifies that the Transfer complies with the
transfer restrictions applicable to beneficial interests in Global
Notes and Certificated Secured Notes bearing the Private Placement
Legend and the requirements of the exemption claimed, which
certification is supported by a certificate attached hereto executed
by the Transferee in the form of Exhibit C to the Indenture, and, if
the Issuer should so request, an Opinion of Counsel provided by the
Transferor or the Transferee (a copy of which the Transferor has
attached to this certification), in form reasonably acceptable to the
Issuer and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act to the effect that such Transfer
is in compliance with the Securities Act;
or
- - such transfer is being effected in an offshore transaction
pursuant to and in accordance with Rule 904 under the Securities
Act;
or
- - such transfer is being effected pursuant to an effective
registration statement under the Securities Act;
or
- - such transfer is being effected pursuant to an exemption from
the registration requirements of the Securities Act other than
those contemplated above, and the Transferor hereby further
certifies that the Secured Notes are being transferred in
compliance with the transfer restrictions applicable to the
Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Issuer and
to the Registrar, to the effect that such transfer is in
compliance with the Securities Act;
and such Secured Notes are being transferred in compliance with any
applicable blue sky or securities laws of any state of the United
States or any other applicable jurisdiction.
Upon giving effect to this request to exchange a beneficial
interest in Regulation S Global Notes for a beneficial interest in
U.S. Global Notes, the resulting beneficial interest shall be subject
to the restrictions on transfer applicable to U.S. Global Notes
pursuant to the Indenture and the Securities Act.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Issuer, the Company and
Donaldson, Lufkin & Jenrette Securities Corporations (the "Initial
Purchaser"), the Initial Purchaser of such Secured Notes being
transferred. We acknowledge that you, the Issuer, the Company and the
Initial Purchaser will rely upon our confirmations, acknowledgments
and agreements set forth herein, and we agree to notify you promptly
in writing if any of our representations or warranties herein ceases
to be accurate and complete. Terms used in this certificate and not
otherwise defined in this Indenture have the meanings set forth in
Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: _______________________
cc: RBF Finance Co.
Initial Purchaser
- -------------------------------------------------------------------------
Exhibit B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(Pursuant to Section 2.6(b) of this Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 11% Senior Secured Notes due 2006 of RBF Finance Co.
11 3/8% Senior Secured Notes due 2009 of RBF Finance Co.
Reference is hereby made to this Indenture dated as of
March 26, 1999 (the "Indenture"), between RBF Finance Co. (the
"Issuer"), R&B Falcon Corporation (the "Company"), the Persons acting
as Subsidiary Guarantors and named therein (the "Subsidiary
Guarantors") and United States Trust Company of New York as trustee
(the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given them in this Indenture.
This relates to $_________ principal amount of [7-year
Secured Notes] [10-year Secured Notes] which are evidenced by one or
more Certificated Secured Notes in the name of ______________ (the
"Transferor"). The Transferor has requested an exchange or transfer
of such Certificated Secured Note(s) in the form of an equal
principal amount of Secured Notes of the same series evidenced by one
or more Certificated Secured Notes, to be delivered to the Transferor
or, in the case of a transfer of such Secured Notes, to such Person
as the Transferor instructs the Trustee.
In connection with such request and in respect of the
Secured Notes surrendered to the Trustee herewith for exchange (the
"Surrendered Secured Notes"), the Holder of such Surrendered Secured
Notes hereby certifies that:
[CHECK ONE]
- - the Surrendered Secured Notes are being acquired for the
Transferor's own account, without transfer;
or
- - the Surrendered Secured Notes are being transferred to the
Issuer;
or
- - the Surrendered Secured Notes are being transferred pursuant to
and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the
Surrendered Secured Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the Surrendered
Secured Notes for its own account, or for one or more accounts
with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A,
in each case in a transaction meeting the requirements of Rule
144A;
or
- - the Surrendered Secured Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
- - the Surrendered Secured Notes are being transferred in an
offshore transaction pursuant to and in accordance with Rule 904
under the Securities Act;
or
- - the Surrendered Secured Notes are being transferred to
Institutional Accredited Investor pursuant to an exemption under
the Securities Act other than Rule 144A, Rule 144 or Rule 904
and the Transferor further certifies that the Transfer complies
with the transfer restrictions applicable to beneficial
interests in Global Notes and Certificated Secured Notes bearing
the Private Placement Legend and the requirements of the
exemption claimed, which certification is supported by a
certificate attached hereto executed by the Transferee in the
form of Exhibit C to the Indenture, and, if the Issuer should so
request, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification), in form reasonably acceptable to the Issuer and
to the Registrar, to the effect that such transfer is in
compliance with the Securities Act to the effect that such
Transfer is in compliance with the Securities Act;
or
- - the Surrendered Secured Notes are being transferred pursuant to
an effective registration statement under the Securities Act;
or
- - such transfer is being effected pursuant to an exemption from
the registration requirements of the Securities Act other than
those contemplated above, and the Transferor hereby further
certifies that the Secured Notes are being transferred in
compliance with the transfer restrictions applicable to the
Global Notes and in accordance with the requirements of the
exemption claimed, which certification is supported by an
Opinion of Counsel, provided by the transferor or the transferee
(a copy of which the Transferor has attached to this
certification) in form reasonably acceptable to the Issuer and
to the Registrar, to the effect that such transfer is in
compliance with the Securities Act;
and the Surrendered Secured Notes are being transferred in compliance
with any applicable blue sky or securities laws of any state of the
United States or any other applicable jurisdiction.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Issuer, the Company and
Donaldson, Lufkin & Jenrette Securities Corporation, the "Initial
Purchaser"), the Initial Purchaser of such Secured Notes being
transferred. We acknowledge that you, the Issuer and the Initial
Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in
writing if any of our representations or warranties herein ceases to
be accurate and complete. Terms used in this certificate and not
otherwise defined in this Indenture have the meanings set forth in
Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: ________________________
cc: RBF Finance Co.
Initial Purchaser
- ------------------------------------------------------------------------
Exhibit B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE
TO DEFINITIVE NOTE
(Pursuant to Section 2.6(c) of this Indenture)
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Re: 11% Senior Secured Notes due 2006 of RBF Finance Co.
11 3/8% Senior Secured Notes due 2009 of RBF Finance Co.
Reference is hereby made to this Indenture dated as of
March 26, 1999 (the "Indenture"), between RBF Finance Co.. (the
"Issuer"), R&B Falcon Corporation (the "Company"), the Persons acting
as Subsidiary Guarantors and named therein (the "Subsidiary
Guarantors") and United States Trust Company of New York, as trustee
(the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given them in this Indenture.
This letter relates to $_____________ principal amount of
[7-year Secured Notes] [10-year Secured Notes] which are evidenced by
a beneficial interest in one or more U.S. Global Secured Notes or
Regulation S Permanent Global Notes in the name of __________________
(the "Transferor"). The Transferor has requested an exchange or
transfer of such beneficial interest in the form of an equal
principal amount of Secured Notes of such series evidenced by one or
more Certificated Secured Notes, to be delivered to the Transferor
or, in the case of a transfer of such Secured Notes, to such Person
as the Transferor instructs the Trustee.
In connection with such request and in respect of the
Secured Notes surrendered to the Trustee herewith for exchange (the
"Surrendered Secured Notes"), the Holder of such surrendered Secured
Notes hereby certifies that:
[CHECK ONE]
- - the Surrendered Secured Notes are being transferred to the
beneficial owner of such Secured Notes;
or
- - the Surrendered Secured Notes are being transferred pursuant to
and in accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the
Surrendered Secured Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the Surrendered
Secured Notes for its own account, or for one or more accounts
with respect to which such Person exercises sole investment
discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A,
in each case in a transaction meeting the requirements of Rule
144A;
or
- - the Surrendered Secured Notes are being transferred in a
transaction permitted by Rule 144 under the Securities Act;
or
- - such transfer is being effected in an offshore transaction
pursuant to and in accordance with Rule 904 under the Securities
Act;
or
- - the Surrendered Secured Notes are being transferred to
Institutional Accredited Investor pursuant to an exemption under
the Securities Act other than Rule 144A, Rule 144 or Rule 904
and the Transferor further certifies that the Transfer complies
with the transfer restrictions applicable to beneficial
interests in Global Notes and Certificated Secured Notes bearing
the Private Placement Legend and the requirements of the
exemption claimed, which certification is supported by a
certificate attached hereto executed by the Transferee in the
form of Exhibit C to this Indenture, and, if the Issuer should
so request, an Opinion of Counsel provided by the Transferor or
the Transferee (a copy of which the Transferor has attached to
this certification), in form reasonably acceptable to the Issuer
and to the Registrar, to the effect that such transfer is in
compliance with the Securities Act to the effect that such
Transfer is in compliance with the Securities Act;
or
- - the Surrendered Secured Notes are being transferred pursuant to
an effective registration statement under the Securities Act;
or
- - the Surrendered Secured Notes are being transferred pursuant to
an exemption from the registration requirements of the
Securities Act other than those contemplated above, and the
Transferor hereby further certifies that the Secured Notes are
being transferred in compliance with the transfer restrictions
applicable to the Global Secured Notes and in accordance with
the requirements of the exemption claimed, which certification
is supported by an Opinion of Counsel, provided by the
transferor or the transferee (a copy of which the Transferor has
attached to this certification) in form reasonably acceptable to
the Issuer and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Secured Notes are being transferred in compliance
with any applicable blue sky securities laws of any state of the
United States.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Issuer, the Company and
Donaldson, Lufkin & Jenrette Securities Corporation, (the "Initial
Purchaser"), the Initial Purchaser of such Secured Notes being
transferred. We acknowledge that you, the Issuer and the Initial
Purchasers will rely upon our confirmations, acknowledgments and
agreements set forth herein, and we agree to notify you promptly in
writing if any of our representations or warranties herein ceases to
be accurate and complete. Terms used in this certificate and not
otherwise defined in this Indenture have the meanings set forth in
Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: ________________________
cc: RBF Finance Co.
Initial Purchaser
- ----------------------------------------------------------------------
Exhibit C
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
United States Trust Company of New York
114 West 47th Street, 25th Floor
New York, New York 10036
Attention: Corporate Trust Administration
Reference is hereby made to this Indenture, dated as of
March 26, 1999 (the "Indenture"), between RBF Finance Co., as issuer,
R&B Falcon Corporation (the "Company") and Persons acting as
Subsidiary Guarantors and named therein (the "Subsidiary Guarantors")
and United States Trust Company of New York, as trustee. Capitalized
terms used but not defined herein shall have the meanings given them
in this Indenture.
In connection with our proposed purchase of
$________________ aggregate principal amount of:
(a) - Beneficial interests, or
(b) - Certificated Secured Notes,
we confirm that:
(i) we are an entity which is an "accredited investor"
within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended (the "Securities Act"), or an
entity in which all of the equity owners are accredited
investors within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act (an "Institutional Accredited
Investor");
(ii) any purchase of Secured Notes by us will be for our
own account or for the account of one or more other
Institutional Accredited Investors;
(iii) in the event that we purchase any Secured Notes,
we will acquire Secured Notes having a minimum purchase price of
at least $250,000 for our own account and for each separate
account for which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits
and risks of purchasing Secured Notes;
(v) we are not acquiring Secured Notes with a view to any
distribution thereof in a transaction that would violate the
Securities Act or the securities laws of any State of the United
States or any other applicable jurisdiction; provided that the
disposition of our property and the property of any accounts for
which we are acting as fiduciary shall remain at all times
within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such
questions of representatives of the Issuer and receive answers
thereto, as we deem necessary in connection with our decision to
purchase Secured Notes.
We understand that the Secured Notes are being offered in a
transaction not involving any public offering within the meaning of
the Securities Act and that the Secured Notes have not been
registered under the Securities Act, and we agree, on our own behalf
and on behalf of each account for which we acquire any notes, that
(A) such Secured Notes may be offered, resold, pledged or otherwise
transferred only (i) to a person whom we reasonably believe to be a
"qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule
144A, in a transaction meeting the requirements of Rule 144 under the
Securities Act, outside the United States in a transaction meeting
the requirements of Rule 904 under the Securities Act or in
accordance with another exemption from the registration requirements
of the Securities Act (and based upon an opinion of counsel if the
Issuer so requests), (ii) to the Issuer or (iii) pursuant to an
effective registration statement under the Securities Act, and, in
each case, in accordance with any applicable securities laws of any
State of the United States or any other applicable jurisdiction and
(B) that we will, and each subsequent Holder is required to, notify
any subsequent purchaser from it of the resale restrictions set forth
in (A) above. We understand that the registrar and transfer agent
will not be required to accept for registration of transfer any
Secured Notes, except upon presentation of evidence satisfactory to
the Issuer that the foregoing restrictions on transfer have been
complied with. We further understand that the Secured Notes purchased
by us will bear a legend reflecting the substance of this paragraph.
This certificate and the statements contained herein are
made for your benefit and the benefit of the Issuer and Donaldson,
Lufkin & Jenrette Securities Corporation, (the "Initial Purchaser"),
the Initial Purchaser of such Secured Notes being transferred. We
acknowledge that you, the Issuer and the Initial Purchaser will rely
upon our confirmations, acknowledgments and agreements set forth
herein, and we agree to notify you promptly in writing if any of our
representations or warranties herein ceases to be accurate and
complete. Terms used in this certificate and not otherwise defined in
this Indenture have the meanings set forth in Regulation S under the
Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
____________________________________
(Name of Purchaser)
By:
Name:
Title:
Address:
- -----------------------------------------------------------------------
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.3; 7.8; 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.5
(b) 12.3
(c) 12.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6; 12.2
(d) 7.6
314(a) 4.13; 4,23; 12.2
(b) N.A.
(c)(1) 12.4, 12.5
(c)(2) 7.2; 12.4; 12.5
(c)(3) N.A.
(d) N.A.
(e) 10.5
(f) N.A.
315(a) 7.1(a)
(b) 4.23; 7.5; 12.4
(c) 7.1
(d) 7.1
(e) 6.12
316(a)(last sentence) 2.9
(a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) N.A.
(b) 6.7
317(a)(1) 6.3; 6.8
(a)(2) 6.9
(b) 2.4
318(a) 12.1
___________________________________
N.A. means not applicable.
* This Cross-Reference Table is not part of this Indenture.
EXHIBIT 4.2
=========================================================================
R&B FALCON CORPORATION
as Issuer
$200,000,000
12 1/4% Senior Notes due 2006
_______________
INDENTURE
Dated as of March 26, 1999
_______________
U.S. TRUST COMPANY OF TEXAS, NATIONAL ASSOCIATION
as Trustee
=========================================================================
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions.
SECTION 1.2 Other Definitions.
SECTION 1.3 Incorporation By Reference of Trust
Indenture Act.
SECTION 1.4 Rules of Construction.
ARTICLE 2 THE NOTES
SECTION 2.1 Form and Dating.
SECTION 2.2 Execution and Authentication.
SECTION 2.3 Registrar and Paying Agent.
SECTION 2.4 Paying Agent to Hold Money in Trust.
SECTION 2.5 Holder Lists.
SECTION 2.6 Transfer and Exchange.
SECTION 2.7 Replacement of Notes.
SECTION 2.8 Outstanding Notes.
SECTION 2.9 Treasury Notes.
SECTION 2.10 Temporary Notes.
SECTION 2.11 Cancellation.
SECTION 2.12 Payment of Interest; Interest Rights
Preserved.
SECTION 2.13 Computation of Interest.
SECTION 2.14 CUSIP Number.
ARTICLE 3 REDEMPTION AND PREPAYMENT
SECTION 3.1 Notices to Trustee.
SECTION 3.2 Selection of Notes to be Redeemed.
SECTION 3.3 Notice of Redemption.
SECTION 3.4 Effect of Notice of Redemption.
SECTION 3.5 Deposit of Redemption Price.
SECTION 3.6 Notes Redeemed in Part.
SECTION 3.7 Optional Redemption.
ARTICLE 4 COVENANTS
SECTION 4.1 Payment of Notes.
SECTION 4.2 Maintenance of Office or Agency.
SECTION 4.3 Corporate Existence.
SECTION 4.4 Maintenance of Properties and Insurance.
SECTION 4.5 Compliance With Laws.
SECTION 4.6 Taxes and Other Claims.
SECTION 4.7 Stay, Extension and Usury Laws.
SECTION 4.8 Change of Control.
SECTION 4.9 Limitations on Indebtedness.
SECTION 4.10 Limitation on Liens.
SECTION 4.11 Limitation on Restricted Payments.
SECTION 4.12 Limitation on Sale/Leaseback Transactions.
SECTION 4.13 SEC Reports.
SECTION 4.14 Limitation on Restrictions on
Distributions from Restricted Subsidiaries.
SECTION 4.15 Limitation on Asset Sales.
SECTION 4.16 Limitation on Asset Swaps.
SECTION 4.17 Limitation on Affiliate Transactions.
SECTION 4.18 Limitation on the Sale or Issuance of
Capital Stock of Restricted Subsidiaries.
SECTION 4.19 Future Subsidiary Guarantors.
SECTION 4.20 Compliance Certificate; Notice of Default
or Event of Default.
SECTION 4.21 Prohibition on Company and Guarantors
Becoming an Investment Company.
ARTICLE 5 CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.1 Limitation on Mergers and Consolidations.
SECTION 5.2 Successor Corporation Substituted.
ARTICLE 6 DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
SECTION 6.2 Acceleration.
SECTION 6.3 Other Remedies.
SECTION 6.4 Waiver of Past Defaults.
SECTION 6.5 Control By Majority.
SECTION 6.6 Limitation on Suits.
SECTION 6.7 Rights of Holders of Notes to Receive Payment.
SECTION 6.8 Collection Suit by Trustee.
SECTION 6.9 Trustee May File Proofs of Claim.
SECTION 6.10 Priorities.
SECTION 6.11 Undertaking For Costs.
SECTION 6.12 Restoration of Rights and Remedies.
SECTION 6.13 Rights and Remedies Cumulative.
SECTION 6.14 Delay or Omission Not Waiver.
ARTICLE 7 TRUSTEE
SECTION 7.1 Duties of Trustee.
SECTION 7.2 Rights of Trustee.
SECTION 7.3 Individual Rights of Trustee.
SECTION 7.4 Trustee's Disclaimer.
SECTION 7.5 Notice of Defaults.
SECTION 7.6 Reports by Trustee to Holders of the Notes.
SECTION 7.7 Compensation and Indemnity.
SECTION 7.8 Replacement of Trustee.
SECTION 7.9 Successor Trustee by Merger, Etc.
SECTION 7.10 Eligibility; Disqualification.
SECTION 7.11 Preferential Collection of Claims Against
the Company.
ARTICLE 8 SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge.
SECTION 8.2 Application of Trust Money.
SECTION 8.3 Repayment of the Company.
SECTION 8.4 Reinstatement.
ARTICLE 9 DEFEASANCE AND COVENANT DEFEASANCE
SECTION 9.1 Option to Effect Defeasance or
Covenant Defeasance.
SECTION 9.2 Defeasance and Discharge.
SECTION 9.3 Covenant Defeasance.
SECTION 9.4 Conditions to Defeasance or
Covenant Defeasance.
SECTION 9.5 Deposited Money and U.S. Government
Obligations To Be Held in Trust; Other
Miscellaneous Provisions.
SECTION 9.6 Repayment to the Company.
SECTION 9.7 Reinstatement.
ARTICLE 10 AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 10.1 Without Consent of Holders of Notes.
SECTION 10.2 With Consent of Holders of Notes.
SECTION 10.3 Effect of Supplemental Indentures.
SECTION 10.4 Compliance with Trust Indenture Act.
SECTION 10.5 Revocation and Effect of Consents.
SECTION 10.6 Notation on or Exchange of Notes.
SECTION 10.7 Trustee to Sign Supplemental Indentures.
SECTION 10.8 Payment for Consent.
ARTICLE 11 MISCELLANEOUS
SECTION 11.1 Trust Indenture Act Controls.
SECTION 11.2 Notices.
SECTION 11.3 Communication By Holders of Notes With Other
Holders of Notes.
SECTION 11.4 Certificate and Opinion as to Conditions
Precedent.
SECTION 11.5 Statements Required in a Certificate or
Opinion.
SECTION 11.6 Acts of Holders.
SECTION 11.7 Rules by Trustee and Agents.
SECTION 11.8 No Personal Liability of Directors, Officers,
Employees and Stockholders.
SECTION 11.9 Governing Law.
SECTION 11.10 Agent for Service; Submission to
Jurisdiction; Waiver of Immunities.
SECTION 11.11 No Adverse Interpretation of Other
Agreements.
SECTION 11.12 Successors.
SECTION 11.13 Severability.
SECTION 11.14 Counterpart Originals.
SECTION 11.15 Table of Contents, Headings, Etc.
ARTICLE 12 GUARANTEES
SECTION 12.1 Subsidiary Guarantors.
SECTION 12.2 Limitation on Liability.
SECTION 12.3 Execution and Delivery of Guarantees.
SECTION 12.4 When A Subsidiary Guarantor May Merge, Etc.
SECTION 12.5 No Waiver.
SECTION 12.6 Modification.
SECTION 12.7 Release of Guarantor.
SECTION 12.8 Execution of Supplemental Indentures
for Future Guarantors.
EXHIBITS
Exhibit A Form of Note
Exhibit B-1 Form of Certificate for Exchange or
Registration of Transfer from U.S. Global
Note to Regulation S Global Note
Exhibit B-2 Form of Certificate for Exchange or
Registration of Transfer from Regulation S
Global Note to U.S. Global Note
Exhibit B-3 Form of Certificate for Exchange or
Registration of Transfer of Certificated
Notes
Exhibit B-4 Form of Certificate for Exchange or
Registration of Transfer from U.S. Global
Note or Regulation S Permanent Global Note
to Certificated Note
Exhibit C Form of Certificate From Acquiring
Institutional Accredited Investor
- -------------------------------------------------------------------------
INDENTURE, dated as of March 26, 1999, among R&B Falcon
Corporation, a Delaware corporation (the "Company"), and U.S. Trust
Company of Texas, National Association, as trustee (the "Trustee").
RECITALS
The Company has duly authorized the creation and issuance of
its 12 1/4% Senior Notes due 2006 (the "Initial Notes") of substantially the
tenor and amount hereinafter set forth; and to provide therefor and for,
if and when issued as further evidence of the Company's indebtedness and
in substitution for the Initial Notes pursuant to this Indenture and the
Registration Rights Agreement (as defined herein), the Company's 12 1/4%
Senior Notes due 2006 (the "Exchange Notes," and together with the
Initial Notes, the "Notes"), the Company has duly authorized the
execution and delivery of this Indenture.
All things necessary to make the Notes, when executed by the
Company and authenticated and delivered by the Trustee hereunder and duly
issued by the Company, the valid obligations of the Company, and to make
this Indenture a valid instrument of the Company and the Subsidiary
Guarantors, if any, in accordance with their respective terms, have been
done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that, for and in
consideration of the premises and the purchase of the Initial Notes by
the Holders thereof, it is mutually covenanted and agreed, for the equal
and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.1 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
"Acquired Indebtedness" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with,
or in contemplation of, such other Person merging with or into, or
becoming a Subsidiary of such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Related Business; (ii) the Capital
Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by the Company or another Restricted
Subsidiary or (iii) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary; provided, however,
that any such Restricted Subsidiary described in clause (ii) or (iii)
above is primarily engaged in a Related Business. Proceeds of insurance
arising from damage to an asset shall be deemed to have been invested in
Additional Assets to the extent of the cost of such repairs made to such
asset.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date means
the amount by which the fair value of the assets and property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including,
without limitation, contingent liabilities (after giving effect to all
other fixed and contingent liabilities incurred or assumed on such date),
but excluding liabilities under its Subsidiary Guarantee, of such
Subsidiary Guarantor at such date.
"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 Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of Voting Stock, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing; provided, however, that "Affiliate" shall
also mean any beneficial owner of Capital Stock representing 5% or more
of the total voting power of the Voting Stock (on a fully diluted basis)
of such a Person or of rights or warrants to purchase such Capital Stock
(whether or not currently exercisable).
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of beneficial interest in a Global Note, the rules and
procedures of the Depositary and the Trustee that apply to such transfer
and exchange.
"Asset Sale" means any direct or indirect sale, capital lease,
transfer or other disposition (or series of related sales, capital
leases, transfers or dispositions) by the Company or any Restricted
Subsidiary, including any disposition by means of a merger, consolidation
or similar transaction (each referred to for the purposes of this
definition as a "disposition") in one transaction or a series of related
transactions (including the receipt of proceeds of insurance paid on
account of the actual or constructive total loss or damage to any asset
and awards of compensation for any asset taken by condemnation, eminent
domain, nationalization, expropriation or similar proceeding or action,
but excluding the receipt of proceeds of business interruption insurance
or environmental damage insurance or similar types of policies) of (i)
any shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares or shares required by applicable law to be
held by a Person other than the Company or a Restricted Subsidiary), (ii)
any drillship or drilling rig or all or substantially all the assets of
any division or line of business of the Company or any Restricted
Subsidiary or (iii) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the Company or
such Restricted Subsidiary (other than, in the case of (i), (ii) and
(iii) above, (u) a disposition by a Restricted Subsidiary to the Company
or by the Company or a Restricted Subsidiary to a Wholly Owned Restricted
Subsidiary, (v) for purposes of the covenant described under Section 4.15
hereof only, a disposition that constitutes a Restricted Payment
permitted by the covenant described under Section 4.11 hereof, (w) Asset
Swaps permitted under Section 4.16 hereof, (x) dispositions of Incidental
Assets, (y) dispositions of Temporary Cash Investments and (z) a
disposition of assets with a fair market value of less than $100,000).
"Asset Swap" means a substantially concurrent purchase and sale, or
exchange, of assets constituting Additional Assets described in clause
(i) of the definition thereof between the Company or any Restricted
Subsidiary and another Person or group of Persons; provided, however,
that the cash and other assets to be received by the Company or such
Restricted Subsidiary which do not constitute Additional Assets do not
constitute more than 25% of the total consideration to be received by the
Company or such Restricted Subsidiary in such Asset Swap.
"Attributable Indebtedness," when used with respect to any
Sale/Leaseback Transaction, means, as at the time of determination, the
present value (discounted at the rate set forth or implicit in the terms
of the lease included in such transaction) of the total obligations of
the lessee for rental payments (other than amounts required to be paid on
account of property taxes, maintenance, repairs, insurance, assessments,
utilities, operating and labor costs and other items which do not
constitute payments for property rights) during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period
for which such lease has been extended).
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing
(i) the sum of the products of numbers of years from the date of
determination to the dates of each successive scheduled principal payment
of such Indebtedness or redemption or similar payment with respect to
such Preferred Stock multiplied by the amount of such payment by (ii) the
sum of all such payments.
"Board of Directors" means the Board of Directors of a Person or any
committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means a copy of a resolution certified by a
Secretary or Assistant Secretary of a Person to have been duly adopted by
the Board of Directors thereof 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 not a Legal Holiday.
"Capitalized Lease Obligation" of any Person means any obligation of
such Person to pay rent or other amounts under a lease of property, real
or personal, that is required to be capitalized for financial reporting
purposes in accordance with GAAP and the amount of such obligation shall
be the capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, rights to purchase, warrants or options (whether or
not currently exercisable), participations or other equivalents of or
interests in (however designated) the equity (which includes, but is not
limited to, common stock, preferred stock and partnership and joint
venture interests) of such Person (excluding any debt securities that are
convertible into, or exchangeable for, such equity).
"Cedel" means Cedel Bank, societe anonyme (or any successor
securities clearing agency).
"Certificated Notes" means Notes that are substantially in the form
of the Note attached hereto as Exhibit A that do not include the
information or text called for by footnotes 1, 2 and 3 thereto.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means Capital Stock other than Preferred Stock.
"Company Order" means a written order or request signed in the name
of an Officer and delivered to the Trustee.
"Company" means the Person named as such in the preamble of this
Indenture unless and until a successor replaces it pursuant to the
applicable provisions hereof and thereafter means such successor.
"Consolidated EBITDA Coverage Ratio" as of any date of determination
means the ratio of (a) the aggregate amount of EBITDA for the period of
the most recent four consecutive fiscal quarters ending at least 45 days
prior to the date of such determination to (b) Consolidated Interest
Expense for such four fiscal quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding
or if the transaction giving rise to the need to calculate the
Consolidated EBITDA Coverage Ratio is an issuance of Indebtedness, or
both, EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Indebtedness
as if such Indebtedness had been issued on the first day of such period
and the discharge of any other Indebtedness repaid, repurchased, defeased
or otherwise discharged with the proceeds of such new Indebtedness as if
such discharge had occurred on the first day of such period,
(2) if since the beginning of such period the Company or any Restricted
Subsidiary shall have made any asset disposition, the EBITDA for such
period shall be reduced by an amount equal to the EBITDA (if positive)
directly attributable to the assets which are the subject of such asset
disposition for such period, or increased by an amount equal to the
EBITDA (if negative), directly attributable thereto for such period, and
Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable
to any Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the Company
and its continuing Subsidiaries in connection with such asset
dispositions for such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for such period
directly attributable to the Indebtedness of such Restricted Subsidiary
to the extent the Company and its continuing Subsidiaries are no longer
liable for such Indebtedness after such sale),
(3) if since the beginning of such period the Company or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted
Subsidiary) or an acquisition of assets, including any acquisition of
assets occurring in connection with a transaction causing a calculation
to be made hereunder, which constitutes all or substantially all of an
operating unit of a business (which shall include the acquisition or
construction of a vessel or drilling rig, provided the Company has paid
75% or more of the cost thereof and such vessel or drilling rig is
reasonably expected to be delivered within 90 days), EBITDA and
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the issuance of any
Indebtedness) as if such Investment or acquisition occurred on the first
day of such period, and
(4) if since the beginning of such period any Person (that subsequently
became a Restricted Subsidiary or was merged with or into the Company or
any Restricted Subsidiary since the beginning of such period) shall have
made any asset disposition or any Investment that would have required an
adjustment pursuant to clause (2) or (3) above if made by the Company or
a Restricted Subsidiary during such period, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro
forma effect thereto as if such asset disposition or Investment occurred
on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be
given to an acquisition of assets, the amount of income or earnings
relating thereto, and the amount of Consolidated Interest Expense
associated with any Indebtedness issued in connection therewith, the pro
forma calculations shall be determined in good faith by a responsible
financial or accounting officer of the Company. If any Indebtedness bears
a floating rate of interest and is being give pro forma effect, the
interest of such Indebtedness shall be calculated as if the rate in
effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Protection Agreement
applicable to such Indebtedness if such Interest Rate Protection
Agreement has a remaining term in excess of 12 months).
For purposes of this definition, in the case of the acquisition
since the beginning of such period of a drilling rig or drillship (or of
a Restricted Subsidiary owning same) by the Company or by a Restricted
Subsidiary pursuant to a binding purchase agreement or the delivery since
the beginning of such period of a drilling rig or drillship to the
Company or a Restricted Subsidiary pursuant to a binding construction
contract, which drilling rig or drillship has been subject for at least
one full fiscal quarter to a binding drilling contract constituting a
Qualifying Contract, then, for purposes of making the pro forma
calculations provided for in the first sentence of the preceding
paragraph, the financial or accounting officer of the Company shall give
pro forma effect to the earnings (losses) of such drilling rig or
drillship as if such drilling rig or drillship were acquired on the first
day of such period, by basing such earnings (losses) on the annualized
(x) historical revenues actually earned from such Qualifying Contract and
(y) actual expenses related thereto, in each case for each quarter during
such period in which the Qualifying Contract is in effect.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted
Subsidiaries, plus, to the extent not included in such interest expense:
(1) interest expense attributable to Capitalized Lease Obligations,
(2) amortization of debt discount and debt issuance cost,
(3) capitalized interest,
(4) non-cash interest payments,
(5) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing,
(6) net costs under Interest Rate Protection Agreements (including
amortization of fees),
(7) dividends in respect of any Redeemable Stock held by Persons
other than the Company or a Restricted Subsidiary,
(8) interest expense attributable to deferred payment obligations,
and
(9) interest expense on Indebtedness of another Person to the
extent that such Indebtedness is guaranteed by the Company or a
Restricted Subsidiary.
"Consolidated Net Income" means, for any period, the net income of
the Company and its consolidated subsidiaries; provided, however, that
there shall not be included in such Consolidated Net Income:
(a) any net income of any Person if such Person is not a Restricted
Subsidiary, except that (1) the Company's equity in the net income of any
such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually distributed by such
Person during such period to the Company or a Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend or
other distribution to a Restricted Subsidiary, to the limitations
contained in clause (c) below) and (2) the Company's equity in a net loss
of any such Person for such period shall be included in determining such
Consolidated Net Income;
(b) any net income of any Person acquired by the Company or a Restricted
Subsidiary in a pooling of interests transaction for any period prior to
the date of such acquisition;
(c) any net income of any Restricted Subsidiary to the extent such
Restricted Subsidiary is subject to restrictions, directly or indirectly,
on the payment of dividends or the making of distributions by such
Restricted Subsidiary, directly or indirectly, to the Company, except
that (1) the net income of Cliffs Drilling Company shall be included
notwithstanding the foregoing, (2) the net income of a Restricted
Subsidiary shall be included to the extent such net income could be paid
to the Company or a Restricted Subsidiary by loans, advances,
intercompany transfers, principal repayments or otherwise; (3) the
Company's equity in the net income of any such Restricted Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Restricted
Subsidiary during such period to the Company or another Restricted
Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution to another Restricted Subsidiary, to the
limitation contained in this clause) and (4) the Company's equity in a
net loss of any such Restricted Subsidiary for such period shall be
included in determining such Consolidated Net Income;
(d) any gain (but not loss) realized upon the sale or other disposition
of any property, plant or equipment of the Company or its consolidated
subsidiaries (including pursuant to any sale-and-leaseback arrangement)
which is not sold or otherwise disposed of in the ordinary course of
business and any gain (but not loss) realized upon the sale or other
disposition of any Capital Stock of any Person;
(e) extraordinary, unusual or nonrecurring charges;
(f) charges relating to the extinguishment of debt obligations of R&B
Falcon Holdings Inc.; and
(g) the cumulative effect of a change in accounting principles.
"Consolidated Net Worth" of a Person means the consolidated
stockholders' equity of such Person and its Subsidiaries, as determined
in accordance with GAAP.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 11.2 hereof or such other address as to
which the Trustee may give notice to the Company.
"Credit Facilities" means, with respect to the Company or any
Restricted Subsidiary, one or more debt facilities or commercial paper
facilities, in each case with banks or other institutional lenders
providing for revolving credit loans, term loans, receivables financing
(including through the sale of receivables to such lenders or to special
purpose entities formed to borrow from such lenders against such
receivables) or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole or in part
from time to time.
"Default" means any event, act or condition the occurrence of which
is, or after notice or the passage of time or both would be, an Event of
Default.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3
hereof as the Depositary with respect to the Notes, until a successor
shall have been appointed and become such Depositary pursuant to the
applicable provision of this Indenture, and thereafter, "Depositary"
shall mean or include such successor.
"Devco" means Reading to Bates Development Co., a Delaware
corporation, which is a Restricted Subsidiary of the Company.
"EBITDA" for any period means the Consolidated Net Income for such
period, plus the following (but without duplication) to the extent
deducted in calculating such Consolidated Net Income for such period: (a)
income tax expense, (b) Consolidated Interest Expense, (c) depreciation
expense and (d) amortization expense.
"Euroclear" means the Euroclear System (or any successor securities
clearing agency).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Global Note" means one or more Global Notes that do not
and are not required to bear the Private Placement Legend.
"Exchange Notes" has the meaning set forth in the Recitals to this
Indenture and more particularly means any of the Notes authenticated and
delivered under this Indenture pursuant to the Exchange Offer.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registrations Rights Agreement to exchange Exchange Notes
for Initial Notes.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Exchangeable Stock" means any Capital Stock which is exchangeable
or convertible into another security (other than Capital Stock of the
Company which is neither Exchangeable Stock nor Redeemable Stock).
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may
be approved by a significant segment of the accounting profession of the
United States, as in effect from time to time.
"Global Note" means, individually and collectively, the Regulation S
Temporary Global Note, the Regulation S Permanent Global Note, the U.S.
Global Notes and the Exchange Global Notes.
"guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person
and any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation of such
Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or
services, to take-or-pay or to maintain financial statement conditions or
otherwise) or (ii) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in
part); provided, however, that the term "guarantee" shall not include
endorsements for collection or deposit in the ordinary course of
business. The term "guarantee" used as a verb has a corresponding
meaning. The term "guarantor" shall mean any Person guaranteeing any
obligation.
"Hedging Obligations" of any Person means the net obligation (not
the notional amount) of such Person pursuant to any interest rate swap
agreement, foreign currency exchange agreement, interest rate collar
agreement, option or futures contract or other similar agreement or
arrangement relating to interest rates or foreign exchange rates.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Incidental Asset" is defined to mean any equipment, outfit,
furniture, furnishings, appliances, spare or replacement parts or stores
owned by the Company or a Restricted Subsidiary that have become obsolete
or unfit for use or no longer useful, necessary or profitable in the
conduct of the business of the Company or such Restricted Subsidiary, as
the case may be. In no event shall the term "Incidental Asset" include a
drilling rig or a drillship.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for, provided, however, that any Indebtedness or Capital Stock of
a Person existing at the time such Person becomes a Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. The term
"Incurrence" when used as a noun shall have a correlative meaning.
"Indebtedness" of any Person at any date means, without duplication:
(1) all indebtedness of such Person for borrowed money (whether or not
the recourse of the lender is to the whole of the assets of such Person
or only to a portion thereof),
(2) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments,
(3) all obligations of such Person in respect of letters of credit or
other similar instruments (or reimbursement obligations with respect
thereto), other than standby letters of credit and performance bonds
issued by such Person in the ordinary course of business, to the extent
not drawn or, to the extent drawn, if such drawing is reimbursed not
later than the third Business Day following demand for reimbursement,
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, except trade payables and accrued
expenses incurred in the ordinary course of business,
(5) all Capitalized Lease Obligations of such Person,
(6) all Indebtedness of others secured by a Lien on any asset of such
Person, whether or not such Indebtedness is assumed by such Person, to
the extent of the fair market value of all the assets of such Person
subject to such Lien,
(7) all Indebtedness of others guaranteed by such Person to the extent
of such guarantee,
(8) Redeemable Stock, and
(9) all Hedging Obligations of such Person.
For purposes of clause (8) of the preceding sentence, Redeemable
Stock shall be valued at the maximum fixed redemption, repayment or
repurchase price, which shall be calculated in accordance with the terms
of such Redeemable Stock as if such Redeemable Stock were repurchased on
any date on which Indebtedness shall be required to be determined
pursuant to this Indenture; provided, however, that if such Redeemable
Stock is not then permitted to be redeemed, repaid or repurchased, the
redemption, repayment or repurchase price shall be the book value of such
Redeemable Stock. The amount of Indebtedness of any Person at any date
shall be the outstanding balance at such date of all unconditional
obligations as described above and the maximum liability of any
guarantees at such date; provided that for purposes of calculating the
amount of any non-interest bearing or other discount security, such
Indebtedness shall be deemed to be the principal amount thereof that
would be shown on the balance sheet of the Company thereof dated such
date prepared in accordance with GAAP but that such security shall be
deemed to have been Incurred only on the date of the original issuance
thereof. The amount of Indebtedness of any Person at any date shall be
the outstanding balance at such date of all unconditional obligations as
described above and the maximum liability, upon the occurrence of the
contingency giving rise to the obligation, of any contingent obligations
at such date.
"Indenture" means this Indenture, as amended or supplemented from
time to time by one or more indentures supplemental hereto entered into
pursuant to the applicable provisions hereof, including for all purposes
of this Indenture and any supplemental indenture the provisions of the
Trust Indenture Act that are deemed to be a part of and govern this
Indenture and any supplemental indenture.
"Indirect Participant" means a Person who holds an interest through
a Participant.
"Initial Purchaser" means Donaldson, Lufkin & Jenrette Securities
Corporation.
"Initial Notes" has the meaning set forth in the Recitals to this
Indenture and more particularly means any of the Notes authenticated and
delivered under this Indenture other than Exchange Notes.
"Institutional Accredited Investor" means an entity which is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under
the Securities Act.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted Subsidiary
against fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business
that are recorded as accounts receivable on the balance sheet of the
lender) or other extensions of credit (including by way of guarantee or
similar arrangement) or capital contribution to (by means of any transfer
of cash or other property to others or any payment for property or
services for the account or use of others), or any purchase or
acquisition of Capital Stock, Indebtedness or other similar instruments
issued by such Person. For purposes of the definition of "Unrestricted
Subsidiary," the definition of "Restricted Payment" and Section 4.11 (i)
"Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net
assets of any Subsidiary of the Company at the time that such Subsidiary
is designated an Unrestricted Subsidiary, provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company
shall be deemed to continue to have a permanent "Investment" in such
Subsidiary at the time of such redesignation equal to (x) the amount of
such Investment immediately prior to such redesignation less (y) the
portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of such Subsidiary
at the time of such redesignation; and (ii) any property transferred to
or from an Unrestricted Subsidiary shall be valued at its fair market
value at the time of such transfer, in each case as determined in good
faith by the Company's Board of Directors.
"Investment Grade Rating" means BBB- or above, in the case of S&P
(or its equivalent under any successor rating categories of S&P), Baa3 or
above, in the case of Moody's (or its equivalent under any successor
rating categories of Moody's), and the equivalent in respect of the
ratings categories of any Rating Agencies substituted for S&P or Moody's.
"Issue Date" means the date on which the Initial Notes are
originally issued.
"Issuer" means RBF Finance Co., a Delaware corporation.
"Issuer Loans" mean loans made under loan agreements between the
Issuer and the Company for the purpose of (i) financing all or a portion
of the cost of acquiring, constructing, altering, improving or repairing
drilling rigs owned by the Company or improvements used or to be used in
connection with such rigs; or (ii) financing all or any part of the
purchase price of such rigs and improvements within one year after the
later of the completion of construction, alteration, improvement or
repair or the commencement of commercial operations thereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which federal
offices or banking institutions in The City of New York , in the city of
the Corporate Trust Office of the Trustee, or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a
payment date is a Legal Holiday, payment may be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"Lien" means any mortgage, pledge, hypothecation, charge,
assignment, deposit arrangement, encumbrance, security interest, lien
(statutory or other), or preference, priority or other security or
similar agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any agreement to give or grant
a Lien or any lease, conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
For the purposes of this Indenture, the Company or any of its
Subsidiaries shall be deemed to own subject to a Lien any asset which the
Company has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, Capitalized Lease Obligation
or other title retention agreement relating to such asset.
"Maturity" means the date on which the principal of a Note becomes
due and payable as provided therein or in the Indenture, whether at the
Stated Maturity or the Change of Control Payment Date or the purchase
date established pursuant to the terms of this Indenture for an Asset
Sale Offer or by declaration of acceleration, call for redemption or
otherwise.
"Moody's" is defined to mean Moody's Investor Service, Inc. and its
successors.
"Net Available Cash" from an Asset Sale means cash payments or
Temporary Cash Equivalents received therefrom (including any cash
payments received by way of deferred payment of principal pursuant to a
note or installment receivable or otherwise and proceeds from the sale or
other disposition of any securities received as consideration, but only
as and when received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any
other noncash form), in each case net of (i) all legal, title and
recording tax expenses, commissions and other fees and expenses incurred,
and all federal, state, provincial, foreign and local taxes required to
be accrued as a liability under GAAP, as a consequence of such Asset
Sale, (ii) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Sale, in accordance with the terms of any
Lien upon or other security agreement of any kind with respect to such
assets, or which must by its terms, or in order to obtain a necessary
consent to such Asset Sale, or by applicable law, be repaid out of the
proceeds from such Asset Sale, (iii) all distributions and other payments
required to be made to minority interest holders in Subsidiaries or joint
ventures as a result of such Asset Sale and (iv) the deduction of
appropriate amounts provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the property or other
assets disposed in such Asset Sale and retained by the Company or any
Restricted Subsidiary after such Asset Sale.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Capital Stock, the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.
"Non-Convertible Capital Stock" means, with respect to any Person,
any non-convertible Capital Stock of such Person and any Capital Stock of
such Person convertible solely into non-convertible common stock of such
Person; provided, however, that Non-Convertible Capital Stock shall not
include any Redeemable Stock or Exchangeable Stock.
"Non-Recourse Indebtedness" means Indebtedness or that portion of
Indebtedness of an Unrestricted Subsidiary as to which neither the
Company or any Restricted Subsidiary:
(1) provides credit support including any undertaking, agreement
or instrument which would constitute Indebtedness; or
(2) is directly or indirectly liable for such Indebtedness.
"Note Custodian" means the Trustee, as custodian for the Depositary
with respect to the Notes in global form, or any successor entity
thereto.
"Notes" has the meaning set forth in the Recitals of this Indenture
and more particularly means any of the Notes authenticated and delivered
under this Indenture.
"Obligations" means, with respect to any Indebtedness, any
obligation thereunder, including, without limitation, principal, premium
and interest (including post petition interest thereon and, with respect
to the Notes, Special Interest), penalties, fees, costs, expenses,
indemnifications, reimbursements, damages and other liabilities.
"Obligors" means the Company and any Subsidiary Guarantor,
collectively; "Obligor" means the Company or any Subsidiary Guarantor.
"Offering Memorandum" means the Offering Memorandum, dated March 19,
1999, relating to the Company's offering and placement of the Initial
Notes.
"Offering" means the Offering of the Initial Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President, the Chief Financial Officer, the Chief Accounting Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary, an
Assistant Secretary or any Vice President of such Person.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board, a Vice Chairman of the Board, the President, the Chief
Executive Officer or a Vice President, and by the Chief Financial
Officer, the Chief Accounting Officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of the Company, or a
Subsidiary and delivered to the Trustee, which shall comply with this
Indenture.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of
Sections 11.4 and 11.5 hereof. The counsel may be an employee of or
counsel to the Company, any Subsidiary or the Trustee.
"Pari Passu Indebtedness" means any Indebtedness of the Company,
whether outstanding on the date on which the Notes are originally issued
or thereafter created, incurred or assumed, unless, in the case of any
particular Indebtedness the instrument creating or evidencing the same or
pursuant to which the same is outstanding expressly provides that such
Indebtedness shall be subordinated in right of payment to Notes.
"Participant" means, with respect to DTC, Euroclear or Cedel, a
Person who has an account with DTC, Euroclear or Cedel, respectively
(and, with respect to DTC, shall include Euroclear and Cedel).
"Permitted Investments" means:
(a) certificates of deposit, bankers acceptances, time deposits,
Eurocurrency deposits and similar types of Investments routinely offered
by commercial banks with final maturities of one year or less issued by
commercial banks having capital and surplus in excess of $100 million;
(b) commercial paper issued by any corporation, if such commercial paper
has credit ratings of at least "A-1" by S&P and at least "P-1" by
Moody's;
(c) U.S. Government Obligations with a maturity of four years or less;
(d) repurchase obligations for instruments of the type described in
clause (c);
(e) shares of money market mutual or similar funds having assets in
excess of $100,000,000;
(f) payroll advances in the ordinary course of business;
(g) other advances and loans to officers and employees of the Company or
any Restricted Subsidiary, so long as the aggregate principal amount of
such advances and loans does not exceed $1,000,000 at any one time
outstanding;
(h) Investments in any Person in the form of a capital contribution of
the Company's Common Stock;
(i) Investments made by the Company in its Restricted Subsidiaries (or
any Person that will be a Restricted Subsidiary as a result of such
Investment) or by a Restricted Subsidiary in the Company or in one or
more Restricted Subsidiaries (or any Person that will be a Restricted
Subsidiary as a result of such Investment);
(j) Investments in stock, obligations or securities received in
settlement of debts owing to the Company or any Restricted Subsidiary as
a result of bankruptcy or insolvency proceedings or upon the foreclosure,
perfection or enforcement of any Lien in favor of the Company or any
Restricted Subsidiary, in each case as to debt owing to the Company or
any Restricted Subsidiary that arose in the ordinary course of business
of the Company or any such Restricted Subsidiary;
(k) Investments made in exchange for Indebtedness permitted by Section
4.9(b)(4) and Section 4.9(b)(5) hereof;
(l) Investments in the capital stock of Navis ASA, a Norwegian
corporation, in exchange for cash and non-cash assets (the fair market
value of which shall be determined in good faith by the Board of
Directors of the Company), in an aggregate amount not to exceed
$50,000,000 at any time outstanding;
(m) Investments consisting of the redesignation of the Subsidiary owning
or operating the drillship Deepwater Frontier or the semisubmersible
RBS8M as an Unrestricted Subsidiary, or the contribution, transfer or
other disposition of the drillship Deepwater Frontier or the
semisubmersible RBS8M and related equipment and assets (including any
drilling contract) by the Company or any Restricted Subsidiary to a
Person other than a Restricted Subsidiary, in connection with the
refinancing of the Indebtedness Incurred to finance the construction of
such rigs;
(n) Investments in a Person other than a Restricted Subsidiary for the
purpose of financing the construction or upgrade prior to delivery of the
drillship Deepwater Frontier or the semisubmersible RBS8M pursuant to the
terms of applicable construction and equipment installation agreements;
(o) Investments in a Person other than a Restricted Subsidiary for the
purpose of financing the construction or upgrade of new drilling rigs,
drillships or similar vessels and related equipment, in an aggregate
amount not to exceed at any time outstanding (i) $100,000,000 less
(ii) the aggregate amount of all payments actually made pursuant to
paragraph (n) of this definition that represent payments for amounts in
excess of the Company's estimated costs for the vessels referred to
therein, as in effect on the Issue Date; provided, however, that at the
time of such Investment, the Company or such Person has entered into a
Qualifying Contract with respect thereto;
(p) Investments represented by that portion of the proceeds from Asset
Sales that is not required to be cash or Temporary Cash Equivalents by
the covenant described in Section 4.15; and
(q) Investments in Devco in an aggregate amount not to exceed
$10,000,000 at any time outstanding.
"Person" means any individual, corporation, limited liability
company, limited or general partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, government or
any agency or political subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of
such Person, over shares of Capital Stock of any other class of such
Person.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Qualifying Contract" with respect to a drilling rig, drillship or
similar vessel means a contract for the use thereof (i) between the
Company or a Restricted Subsidiary or, for the purposes of clause (o) of
the definition of "Permitted Investments," a Person other than a
Restricted Subsidiary and a counterparty that, as certified in an
Officers' Certificate delivered to the Trustee in connection therewith,
is either generally recognized in the offshore drilling industry as a
major oil company or has an investment grade rating on its long-term debt
from Moody's or S&P, (ii) having a minimum term of two years and (iii)
containing a minimum dayrate for such drilling, rig, drillship or similar
vessel.
"Rating Agencies" means (a) S&P and Moody's or (b) if S&P or Moody's
or both of them are not making ratings of the Notes publicly available, a
nationally recognized U.S. rating agency or agencies, as the cases may
be, selected by the Company, which will be substituted for S&P or Moody's
or both, as the case may be.
"Record Date" means, for the interest payment on any Interest
Payment Date, the date specified in Section 2.12 hereof.
"Redeemable Stock" means, with respect to the Notes, any Capital
Stock that, by its terms (or by the terms of any security into which it
is convertible, or for which it is exchangeable, in each case at the
option of the holder thereof), or upon the happening of any event,
matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date on which the Notes
mature. Notwithstanding the preceding sentence, any Capital Stock that
would constitute Redeemable Stock solely because the holders thereof have
the right to require the Company to repurchase such Capital Stock upon
the occurrence of a change of control or an asset sale shall not
constitute Redeemable Stock if the terms of such Capital Stock provide
that the Company may not repurchase or redeem any such Capital Stock
pursuant to such provisions unless such repurchase or redemption complies
with Article 3 and in Sections 4.8, 4.11 and 4.15 hereof.
"Redemption Date" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the date fixed for redemption of such
Notes pursuant to the terms of the Notes and this Indenture.
"Redemption Price" means, when used with respect to any Note or part
thereof to be redeemed hereunder, the price fixed for redemption of such
Note pursuant to the terms of the Notes and this Indenture, plus accrued
and unpaid interest, if any, and Special Interest, if any, thereon, to
the Redemption Date.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to
issue other Indebtedness in exchange or replacement for, such
Indebtedness. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and between the
Company and the Initial Purchaser, as such agreement may be amended,
modified or supplemented from time to time.
"Regulation S" means Regulation S under the Securities Act
(including any successor regulation thereto), as it may be amended from
time to time.
"Regulation S Global Note" means a Regulation S Temporary Global
Note or Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent Global Note
that contains the paragraph referred to in footnote 1, the phrase
referred to in footnote 1 and the additional schedule referred to in
footnote 5 to the form of the Note attached hereto as Exhibit A, and that
is deposited with the Note Custodian and registered in the name of the
Depositary or its nominee, representing the Initial Notes sold in
reliance on Regulation S.
"Regulation S Temporary Global Note" means a single temporary Global
Note that contains the paragraphs referred to in footnote 1, a legend
restricting payments of interest thereon, the phrase referred to in
Footnote 4 and the additional schedule referred to in footnote 4 to the
form of the Note attached hereto as Exhibit A, that is deposited with the
Note Custodian and registered in the name of the Depositary or its
nominee, representing the Initial Notes sold in reliance on Regulation S.
"Related Business" means any business related, ancillary or
complementary to the businesses of the Company and the Restricted
Subsidiaries on the Issue Date.
"Responsible Officer," when used with respect to the Trustee, means
any officer of the Trustee with direct responsibility of the
administration of this Indenture 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.
"Restricted Subsidiary" means any Subsidiary other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor regulation thereto), as it may be amended from time to time.
"S&P" is defined to mean Standard & Poors Ratings Group, a division
of McGraw-Hill Companies, Inc. and its successors.
"Sale/Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Company or any of its Restricted
Subsidiaries, for a period of more than three years, of any real or
tangible personal property, which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to such Person
in contemplation of such leasing.
Secured Note Indenture" means the Indenture dated as of March 26,
1999 among the Issuer as issuer, the Company as guarantor and United
States Trust Company of New York as trustee thereunder relating to the
Secured Notes, as amended and supplemented from time to time.
"Secured Notes" means the $400,000,000 in aggregate principal amount
of the Issuer's 11% Senior Secured Notes due 2006 and $400,000,000 in
aggregate principal amount of the Issuer's 11 3/8% Senior Secured Notes
due 2009 issued pursuant to the Secured Note Indenture.
"SEC" or "Commission" means the Securities and Exchange Commission.
"Securities Act" means the U.S. Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Senior Indebtedness" of any Person means (i) Indebtedness of such
Person, whether outstanding on the Issue Date or thereafter Incurred, and
(ii) accrued and unpaid interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating
to the Company to the extent post-filing interest is allowed in such
proceeding) in respect of (A) indebtedness for money borrowed and (B)
indebtedness evidenced by notes, debentures, bonds or other similar
instruments for the payment of which such Person is responsible or liable
unless, in the case of (i) and (ii), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is
provided that such obligations are subordinate in right of payment to the
Notes or the Subsidiary Guarantees, as applicable; provided, however,
that Senior Indebtedness shall not include (1) any obligation of such
Person to any Subsidiary of such Person, (2) any liability for federal,
state, local, foreign or other taxes owed or owing by such Person, (3)
any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of such Person (and
any accrued and unpaid interest in respect thereof) which is subordinate
or junior in any respect to any other Indebtedness or other obligation of
such Person or (5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture.
"Significant Subsidiary" means any Subsidiary Guarantor and any
other Restricted Subsidiary that would be a "Significant Subsidiary" of
the Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC. For purposes of Section 6.1(g) and Section 6.1(h)
hereof only, the term "Significant Subsidiary" shall also include any
group of Restricted Subsidiaries that, taken as a whole as of the latest
audited consolidated financial statements for the Company and its
Subsidiaries, would constitute a Significant Subsidiary.
"Special Interest" means all "special interest" owing pursuant to
the Registration Rights Agreement.
"Special Record Date" means a date fixed by the Trustee pursuant to
Section 2.12 hereof for the payment of Defaulted Interest.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment
of principal of such security is due and payable, including pursuant to
any mandatory redemption provision (but excluding any provision providing
for the repurchase of such security at the option of the holder thereof
upon the happening of any contingency unless such contingency has
occurred).
"Subordinated Obligation" means any Indebtedness of the Company or a
Subsidiary Guarantor, as the case may be (whether outstanding on the
Issue Date or thereafter Incurred), which is subordinate or junior in
right of payment to the Notes or the Subsidiary Guarantee, as applicable,
whether pursuant to a written agreement to that effect or by operation of
law.
"Subsidiary" means, with respect to any Person:
(1) any corporation of which more than 50% of the total voting power of
all classes of the capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors is
owned by such Person directly or through one or more other Subsidiaries
of such Person, and
(2) any entity other than a corporation of which at least a majority of
the capital stock or other equity interest (however designated) entitled
(without regard to the occurrence of any contingency) or vote in the
election of the governing body, partners, managers or others that will
control the management of such entity is owned by such Person directly or
through one or more other Subsidiaries of such Person.
"Subsidiary Guarantee" means a guarantee of the Company's
obligations with respect to the Notes issued by a Subsidiary of the
Company.
"Subsidiary Guarantor" means each Subsidiary of the Company, whether
now owned or hereafter formed, which shall execute and deliver a
Subsidiary Guarantee.
"Tangible Property" means all land, buildings, machinery and
equipment and leasehold interests and improvements which would be
reflected on a balance sheet of the Company prepared in accordance with
GAAP, excluding (a) all rights, contracts and other intangible assets of
any nature whatsoever and (b) all inventories and other current assets.
"Temporary Cash Investments" means Investments described in clauses
(a), (b), (c) and (d) of the definition of "Permitted Investments."
"Transfer Restricted Notes" means Notes that bear or are required to
bear the Private Placement Legend.
"Trust Indenture Act" or "TIA" means the U.S. Trust Indenture Act of
1939 (15 U.S.C. 77aaa-77bbbb) as in effect on the date on which this
Indenture is qualified under the Trust Indenture Act except as required
by Section 9.3 hereof, provided that if the Trust Indenture Act of 1939
is amended after such date, "Trust Indenture Act" or "TIA" means, if so
required by such amendment, the Trust Indenture Act of 1939, as so
amended.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means:
(a) any Subsidiary of the Company that at the time of determination will
be designated an Unrestricted subsidiary by the Board of Directors of the
Company as provided below and
(b) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors of the Company may designate any Subsidiary
of the Company as an Unrestricted Subsidiary so long as:
(1) it has no Indebtedness other than Non-Recourse Indebtedness;
provided, however, that notwithstanding any other provision of this
Indenture, a Subsidiary shall not fail to constitute an Unrestricted
Subsidiary by reason of (a) the guarantee by the Company or a Restricted
Subsidiary in connection with synthetic lease obligations Incurred to
finance the construction or upgrade of drilling rigs, drillships or
similar vessels; and (b) obligations of the Company or a Restricted
Subsidiary relating to Indebtedness of an Unrestricted Subsidiary if such
Indebtedness constituted a Permitted Investment or a Restricted Payment
permitted by Section 4.11 hereof at the time of its Incurrence or at the
time of designation of such Subsidiary as an Unrestricted Subsidiary; and
(2) after giving effect thereto, such designation was permitted by
Section 4.11 hereof.
Any such designation by the Board of Directors of the Company shall
be evidenced to the Trustee by filing a resolution of the Board of
Directors with the Trustee giving effect to such designation. The Board
of Directors of the Company may designate any Unrestricted Subsidiary as
a Restricted Subsidiary if, immediately after giving effect to such
designation, (A) no Default or Event of Default shall have occurred and
be continuing and (B) the Company could incur $1.00 of additional
Indebtedness under Section 4.9(a) hereof.
"U.S. Global Note" means a permanent Global Note that contains the
paragraphs referred to in footnote 1, in the phrase referred to in
footnote 4 and the additional schedule referred to in footnote 5 to the
form of the Note attached hereto as Exhibit A, and that is deposited with
the Note Custodian and registered in the name of the Depositary or its
nominee, representing Notes sold in reliance on Rule 144A or in reliance
on another exemption from the registration requirements of the Securities
Act.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of
the United States of America (including any agency or instrumentality
thereof) for the payment of which the full faith and credit of the United
States of America is pledged and which are not callable at the Company's
option.
"U.S. Person" means (i) any individual resident in the United
States, (ii) any partnership or corporation organized or incorporated
under the laws of the United States, (iii) any estate of which an
executor or administrator is a U.S. Person (other than an estate governed
by foreign law and of which at least one executor or administrator is a
non-U.S. Person who has sole or shared investment discretion with
respects to its assets), (iv) any trust of which any trustee is a U.S.
Person (other than a trust of which at least one trustee is an non-U.S.
Person who has sole or shared investment discretion with respect to its
assets and no beneficiary of the trust (and no settler, if the trust is
revocable) is a U.S. Person), (v) any agency or branch of a foreign
entity located in the United States, (vi) any non-discretionary or
similar account (other than an estate or trust) held by a dealer or other
fiduciary for the benefit or account of a U.S. person, (vii) any
discretionary or similar account (other than an estate or trust) held by
a dealer or other fiduciary organized, incorporated or (if an individual)
resident in the United States (other than such an account held for the
benefit or account of a non-U.S. Person), (viii) any partnership or
corporation organized or incorporated under the laws of a foreign
jurisdiction and formed by a U.S. Person principally for the purpose of
investing in securities not registered under the Securities Act (unless
it is organized or incorporated and owned, by "accredited investors"
within the meaning of Rule 501(a) under the Securities Act who are not
natural persons, estates or trusts); provided, however, that the term
"U.S. Person" shall not include (A) a branch or agency of a U.S. Person
that is located and operating outside the United States for valid
business purposes as a locally regulated branch or agency engaged in the
banking or insurance business, (B) any employee benefit plan established
and administered in accordance with the law, customary practices and
documentation of a foreign country and (C) the international
organizations set forth in Section 902(k)(2)(vi) of Regulation S and any
other similar international organizations, and their agencies, affiliates
and pension plans.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or
trustees thereof.
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary
all the Capital Stock of which (other than directors' qualifying shares)
is owned by the Company or one or more Wholly Owned Restricted
Subsidiaries.
SECTION 1.2 Other Definitions.
Defined in
Term Section or Article
"Act" 11.6
"Affiliate Transaction" 4.17(a)
"Change of Control" 4.8(a)
"Change of Control Offer" 4.8(a)
"Change of Control Purchase Price" 4.8(a)
"Change of Control Offer Period" 4.8(b)
"Change of Control Payment Date" 4.8(b)
"Covenant Defeasance" 9.3
"DTC" 2.3
"Defaulted Interest" 2.12
"Defeasance" 9.2
"Event of Default" 6.1
"Excess Proceeds" 4.15(a)
"Excess Proceeds Offer" 4.15(b)
"Excess Proceeds Offer Amount" 4.15(b)
"Excess Proceeds Offer Period" 4.15(c)
"Excess Proceeds Purchase Date" 4.15(c)
"40-day restricted period" 2.1(b)
"Guaranteed Indebtedness" 4.19, 12.8
"H.15 Statistical Release" 3.7(b)
"Independent Investment Banker" 3.7(b)
"Interest Payment Date" 2.12
"Make Whole Premium" 3.7(b)
"Paying Agent" 2.3
"Payment Default" 6.1(e)
"Primary Treasury Dealer" 3.7(b)
"Private Placement Legend" 2.6(e)(i)
"Process Agent" 11.10
"Reference Treasury Dealer: 3.7(b)
"Registrar" 2.3
"Remaining Term" 3.7(b)
"Restricted Payment" 4.11(a)(iv)
"Securities Register" 2.3
"Successor" 5.1(a)(1)
"Suspended Covenants" 4
"Treasury Yield" 3.7(b)
SECTION 1.3 Incorporation By Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust
Indenture Act, the provision is incorporated by reference in and made a
part of this Indenture.
The following Trust Indenture Act terms used in this Indenture
have the following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the
Trustee;
"obligor" on the Notes means the Company or any other obligor
on the Notes.
All other terms used in this Indenture that are defined by the
Trust Indenture Act, defined by the Trust Indenture Act reference to
another statute or defined by SEC rule under the Trust Indenture Act have
the meanings so assigned to them therein.
SECTION 1.4 Rules of Construction.
Unless the context otherwise requires:
(1) 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;
(2) a term has the meaning assigned to it;
(3) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(4) "or" is not exclusive;
(5) words in the singular include the plural, and in the plural
include the singular;
(6) provisions apply to successive events and transactions;
(7) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement or successor sections or
rules adopted by the SEC from time to time;
(8) the principal amount of any non-interest bearing or other
discount security at any date shall be the principal amount thereof that
would be shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(9) when used with respect to the Notes, the term "principal amount"
shall mean the principal amount thereof at Maturity;
(10) unless otherwise expressly provided herein, the principal
amount of any preferred stock shall be greater of (i) the maximum liquidation
value of such preferred stock or (ii) the maximum mandatory redemption or
mandatory repurchase price with respect to such preferred stock; and
(11) all references to amounts of money or $ mean U.S. Dollars.
ARTICLE 2
THE NOTES
SECTION 2.1 Form and Dating.
(a) General. The Notes, together with the Trustee's certificate of
authentication and the Subsidiary Guarantors' notation of Subsidiary
Guarantees, shall be substantially in the form set forth in Exhibit A
hereto. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Note shall be dated the date of
its authentication. The Notes shall be in denominations of $1,000 and
integral multiples thereof. The Initial Notes and the Exchange Notes will
be the same except that the Private Placement Legend and paragraph 18
will be omitted from the Exchange Notes.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and
the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound
thereby.
(b) Initial Notes. Initial Notes, with the notations of any the
Subsidiary Guarantees endorsed thereon, shall be issued in the form of
one or more permanent Global Notes in definitive fully registered form
without interest coupons. Notes offered and sold to QIBs in reliance on
Rule 144A shall be issued initially in the form of the U.S. Global Notes,
which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Note Custodian, and registered in the name
of the Depositary or a nominee of the Depositary, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the U.S. Global Notes may from time to time
be increased or decreased by adjustments made on the records of the
Trustee and the Depositary or its nominee as hereinafter provided.
Initial Notes offered and sold in reliance on Regulation S shall be
issued initially in the form of the Regulation S Temporary Global Note,
which shall be deposited on behalf of the purchasers of the Notes
represented thereby with the Note Custodian, and registered in the name
of the Depositary or the nominee of the Depositary for the accounts of
designated agents holding on behalf of Euroclear or Cedel, duly executed
by the Company and authenticated by the Trustee as hereinafter provided.
The "40-day restricted period" (as defined in Regulation S) shall be
terminated upon the receipt by the Trustee of a written certificate from
the Depositary, together with copies of certificates from Euroclear and
Cedel certifying that they have received certification of non-United
States beneficial ownership of 100% of the aggregate principal amount of
the Regulation S Temporary Global Note (except to the extent of any
beneficial owners thereof who acquired an interest therein pursuant to
another exemption from registration under the Securities Act and who will
take delivery of a beneficial ownership interest in a 144A Global Note,
all as contemplated by Section 2.6(a)(ii) hereof). Following the
termination of the 40-day restricted period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial
interests in the Regulation S Permanent Global Note pursuant to the
Applicable Procedures. Simultaneously with the authentication of the
Regulation S Permanent Global Note, the Trustee shall cancel the
Regulation S Temporary Global Note. The aggregate principal amount of
the Regulation S [Temporary] Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee
and the Depository or its nominee, as the case may be, in connection with
transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes
as shall be specified therein and each shall provide that it shall
represent the aggregate amount of outstanding Notes from time to time
endorsed on Schedule A thereto and that the aggregate amount of
outstanding Notes represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions and
transfers of interests. Any endorsement of Schedule A of a Global Note to
reflect the amount of any increase or decrease in the amount of
outstanding Notes represented thereby shall be made by the Trustee or the
Note Custodian, at the direction of the Trustee, in accordance with
instructions given by the Holder thereof as required by Section 2.6
hereof.
The provisions of the "Operating Procedures of the Euroclear
Clearance System" and "Terms and Conditions Governing Use of Euroclear"
and the "Management Regulations" and "Instructions to Participants" of
Cedel shall be applicable to interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Note that are held by
Participants through Euroclear or Cedel. The Trustee shall have no
obligation to notify Holders of any such procedures or to monitor or
enforce compliance with the same.
Except as set forth in Section 2.6 hereof, the Global Notes may
be transferred, in whole and not in part, only to another nominee of the
Depositary or to a successor of the Depositary or its nominee.
(c) Book-Entry Provisions. This Section 2.1(c) shall apply only to
Global Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.1(c), authenticate and deliver the Global Notes that
(i) shall be registered in the name of the Depositary or the nominee of
the Depositary and (ii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instructions or held by the
Note Custodian.
Participants shall have no rights either under this Indenture
with respect to any Global Note held on their behalf by the Depositary or
by the Note Custodian as custodian for the Depositary or under such
Global Note, and the Depositary may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner
of such Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary
or impair, as between the Depositary and its Participants, the operation
of customary practices of such Depositary governing the exercise of the
rights of an owner of a beneficial interest in any Global Note.
(d) Certificated Notes. Notes issued in certificated form shall be
substantially in the form of Exhibit A attached hereto (but without
including the text referred to in footnotes 1, 3 and 4 thereto) and shall
be printed, typewritten, lithographed or engraved or produced by any
combination of these methods or may be produced by any other method
permitted by the rules of any securities exchange on which the Notes may
be listed, as evidenced by the execution of such Notes.
(e) Applicable to Forms of Notes. The Notes may also have such
additional provisions, omissions, variations or substitutions as are not
inconsistent with the provisions of 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 this
Indenture, any applicable law or with any rules made pursuant thereto or
with the rules of any securities exchange or governmental agency or as
may be determined consistently herewith by the Officers of the Company
executing such Notes, as conclusively evidenced by their execution of
such Notes. All Notes will be otherwise substantially identical except as
provided herein.
Subject to the provisions of this Article 2, a Holder of a
Global Note may grant proxies and otherwise authorize any Person to take
any action that a Holder is entitled to take under this Indenture or the
Notes.
SECTION 2.2 Execution and Authentication.
Two Officers shall sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless
be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that
the Note has been authenticated under this Indenture. The form of
Trustee's certificate of authentication to be borne by the Notes shall be
substantially as set forth in Exhibit A hereto.
The Trustee shall authenticate (i) Initial Notes for original
issue in an aggregate principal amount not to exceed $200,000,000 and
(ii) Exchange Notes for issue only in the Exchange Offer pursuant to the
Exchange Offer Registration Statement for a like principal amount of
Initial Notes exchanged in such Exchange Offer, in each case upon the
receipt of a Company Order directing the Trustee to authenticate such
Notes and certifying that all conditions precedent to the issuance of the
relevant Notes contained herein have been complied with. The aggregate
principal amount of Notes outstanding at any time may not exceed
$200,000,000, except as provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. Unless limited by the terms of such
appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating
agent has the same rights as an Agent to deal with the Company or an
Affiliate of the Company.
SECTION 2.3 Registrar and Paying Agent.
The Company shall maintain (i) an office or agency where Notes
may be presented for registration of transfer or for exchange
("Registrar"), (ii) an office or agency where Notes may be presented for
payment ("Paying Agent"), and (iii) and an office or agency where notices
or demands to or upon the Company and the Subsidiary Guarantors in
respect of the Notes and this Indenture may be served. The Registrar
shall keep a register of the Notes and of their transfer and exchange
(the "Securities Register"). The Company may appoint one or more
co-registrars and one or more additional paying agents except as
otherwise provided in this Indenture. The term "Registrar" includes any
co-registrar and the term "Paying Agent" includes any additional paying
agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or
Paying Agent, the Trustee shall act as such. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee (at the Corporate
Trust Office of the Trustee) to act as the Registrar and Paying Agent and
to act as Note Custodian with respect to the Global Notes.
SECTION 2.4 Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent will hold in trust for
the benefit of Holders or the Trustee all money held by the Paying Agent
for the payment of principal of, premium, if any, on, interest on, and
Special Interest, if any, on, the Notes, and shall notify the Trustee of
any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all
money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company
or a Subsidiary acts as Paying Agent, it shall segregate and hold in a
separate trust fund for the benefit of the Holders all money held by it
as Paying Agent. Upon any bankruptcy or reorganization proceedings
relating to the Company, the Trustee shall serve as Paying Agent for the
Notes.
SECTION 2.5 Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names
and addresses of all Holders and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall
furnish to the Trustee at least seven Business Days before each Interest
Payment Date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may
reasonably require of the names and addresses of the Holders of Notes,
and the Company shall otherwise comply with TIA Section 312(a).
SECTION 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. The transfer and
exchange of beneficial interests in Global Notes shall be effected through
the Depositary, in accordance with this Indenture and the Applicable
Procedures, which shall include restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act.
Beneficial interests in a Global Note may be transferred to Persons who
take delivery thereof in the form of a beneficial interest in the same
Global Note in accordance with the transfer restrictions set forth in the
legend in subsection (e) of this Section 2.6. Transfers of beneficial
interests in the Global Notes to Persons required to take delivery
thereof in the form of an interest in another Global Note shall be
permitted as follows:
(i) U.S. Global Note to Regulation S Global Note. Prior to the
expiration of the 40-day restricted period, an owner of a beneficial
interest in a U.S. Global Note deposited with the Depositary (or the Note
Custodian) will not be permitted to transfer its interest to a Person who
wishes to take delivery thereof in the form of an interest in the
Regulation S Global Note. If, at any time after the expiration of the
40-day restricted period, an owner of a beneficial interest in a U.S.
Global Note deposited with the Depositary (or the Note Custodian) wishes
to transfer its beneficial interest in such U.S. Global Note to a Person
who is required or permitted to take delivery thereof in the form of an
interest in a Regulation S Global Note, such owner shall, subject to the
Applicable Procedures, exchange or cause the exchange of such interest
for an equivalent beneficial interest in a Regulation S Global Note as
provided in this Section 2.6(a)(i). Upon receipt by the Trustee of (1)
instructions given in accordance with the Applicable Procedures from a
Participant directing the Trustee to credit or cause to be credited a
beneficial interest in the Regulation S Global Note in an amount equal to
the beneficial interest in the U.S. Global Note to be exchanged, (2) a
written order given in accordance with the Applicable Procedures
containing information regarding the Participant account of the
Depositary and the Euroclear or Cedel account to be credited with such
increase, and (3) a certificate in the form of Exhibit B-1 hereto given
by the owner of such beneficial interest stating that the transfer of
such interest has been made in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with
Rule 903 or Rule 904 of Regulation S, then the Trustee, as Registrar,
shall instruct the Depositary to reduce or cause to be reduced the
aggregate principal amount at Maturity of the applicable U.S. Global Note
and to increase or cause to be increased the aggregate principal amount
at Maturity of the applicable Regulation S Global Note by the principal
amount at Maturity of the beneficial interest in the U.S. Global Note to
be exchanged or transferred, to credit or cause to be credited to the
account of the Person specified in such instructions, a beneficial
interest in the Regulation S Global Note equal to the reduction in the
aggregate principal amount at Maturity of the U.S. Global Note, and to
debit, or cause to be debited, from the account of the Person making such
exchange or transfer the beneficial interest in the U.S. Global Note that
is being exchanged or transferred.
(ii) Regulation S Global Note to U.S. Global Note. Prior to the
expiration of the 40-day restricted period, an owner of a beneficial
interest in a Regulation S Global Note deposited with the Depositary (or
the Note Custodian) will not be permitted to transfer its interest to a
Person who wishes to take delivery thereof in the form of an interest in
a U.S. Global Note. If, at any time, after the expiration of the 40-day
restricted period, an owner of a beneficial interest in a Regulation S
Global Note deposited with the Depositary or with the Note Custodian
wishes to transfer its beneficial interest in such Regulation S Global
Note to a Person who is required or permitted to take delivery thereof in
the form of an interest in a U.S. Global Note, such owner shall, subject
to the Applicable Procedures, exchange or cause the exchange of such
interest for an equivalent beneficial interest in a U.S. Global Note as
provided in this Section 2.6(a)(ii). Upon receipt by the Trustee of (1)
instructions from Euroclear or Cedel, if applicable, and the Depositary,
directing the Trustee, as Registrar, to credit or cause to be credited a
beneficial interest in the U.S. Global Note equal to the beneficial
interest in the Regulation S Global Note to be exchanged, such
instructions to contain information regarding the Participant account
with the Depositary to be credited with such increase, (2) a written
order given in accordance with the Applicable Procedures containing
information regarding the Participant account of the Depositary and (3) a
certificate in the form of Exhibit B-2 attached hereto given by the owner
of such beneficial interest stating (A) if the transfer is pursuant to
Rule 144A, that the Person transferring such interest in a Regulation S
Global Note reasonably believes that the Person acquiring such interest
in a U.S. Global Note is a QIB and is obtaining such beneficial interest
in a transaction meeting the requirements of Rule 144A and any applicable
blue sky or securities laws of any state of the United States, (B) that
the transfer complies with the requirements of Rule 144 under the
Securities Act, (C) if the transfer is to an Institutional Accredited
Investor that such transfer is in compliance with the Securities Act and
that a certificate in the form of Exhibit C attached hereto is attached
thereto, together with, if the Company should so request or if the
transfer is in respect of an aggregate principal amount of Notes less
than $250,000, an Opinion of Counsel in form reasonably acceptable to the
Company that such transfer is in compliance with the Securities Act or
(D) if the transfer is pursuant to any other exemption from the
registration requirements of the Securities Act, that the transfer of
such interest has been made in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with the
requirements of the exemption claimed, such statement to be supported by
an Opinion of Counsel from the transferee or the transferor in form
reasonably acceptable to the Company and to the Registrar and, in each
case, in accordance with any applicable securities laws of any state of
the United States or any other applicable jurisdiction, then the Trustee,
as Registrar, shall instruct the Depositary to reduce or cause to be
reduced the aggregate principal amount at Maturity of such Regulation S
Global Note and to increase or cause to be increased the aggregate
principal amount at Maturity of the applicable U.S. Global Note by the
principal amount at Maturity of the beneficial interest in the
Regulation S Global Note to be exchanged or transferred, and the Trustee,
as Registrar, shall instruct the Depositary, concurrently with such
redemption, to credit or cause to be credited to the account of the
Person specified in such instructions a beneficial interest in the
applicable U.S. Global Note equal to the reduction in the aggregate
principal amount at Maturity of such Regulation S Global Note and to
debit or cause to be debited from the account of the Person making such
transfer the beneficial interest in the Regulation S Global Note that is
being exchanged or transferred.
(iii) U.S. Global Notes to Institutional Accredited Investor. If, at
any time, an owner of a beneficial interest in a U.S. Global Note
deposited with the Depositary (or the Note Custodian) wishes to transfer
its beneficial interest in such U.S. Global Note to a Person who is an
Institutional Accredited Investor, such owner shall, subject to the
Applicable Procedures and the other provisions of this Section 2.6,
exchange or cause the exchange of such interest for an equivalent
beneficial interest in a U.S. Global Note as provided in this
Section 2.6(a)(iii). Upon receipt by the Trustee of (1) instructions
given in accordance with the Applicable Procedures from a Participant
directing the Trustee to credit or cause to be credited a beneficial
interest in the U.S. Global Note in an amount equal to the beneficial
interest in the U.S. Global Note to be exchanged, (2) a written order
given in accordance with the Applicable Procedures containing information
regarding the Participant account of the Depositary to be credited with
such increase, and (3) a certificate in the form of Exhibit C hereto
given by the proposed transferee, and, if the Company should so request,
an Opinion of Counsel provided by the transferor or the transferee (a
copy of which the Transferor attaches to such certificate), in form
reasonably acceptable to the Company and to the Registrar, to the effect
that such transfer is in compliance with the Securities Act, then the
Trustee, as Registrar, shall instruct the Depositary to credit or cause
to be credited to the account of the Person specified in such
instructions, a beneficial interest in the U.S. Global Note equal to the
aggregate principal amount being transferred, and to debit, or cause to
be debited, from the account of the Person making such exchange or
transfer the beneficial interest in the U.S. Global Note that is being
exchanged or transferred.
(b) Transfer and Exchange of Certificated Notes. When Certificated Notes
are presented by a Holder to the Registrar with a request to register the
transfer of the Certificated Notes or to exchange such Certificated Notes
for an equal principal amount of Certificated Notes of other authorized
denominations, the Registrar shall register the transfer or make the
exchange as requested only if the Certificated Notes are presented or
surrendered for registration of transfer or exchange, are endorsed and
contain a signature guarantee or are accompanied by a written instrument
of transfer in form satisfactory to the Registrar duly executed by such
Holder or by his attorney and contains a signature guarantee, duly
authorized in writing and the Registrar received the following
documentation (all of which may be submitted by facsimile):
in the case of Certificated Notes that are Transfer
Restricted Notes, such request shall be accompanied by the
following additional information and documents, as
applicable:
(A) if such Transfer Restricted Note is being delivered to the Registrar
by a Holder for registration in the name of such Holder, without
transfer, or such Transfer Restricted Note is being transferred to the
Company, a certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto); or
(B) if such Transfer Restricted Note is being transferred to a QIB in
accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 under the
Securities Act or in an offshore transaction pursuant to and in
compliance with Rule 904 under the Securities Act or pursuant to an
effective registration statement under the Securities Act, a
certification to that effect from such Holder (in substantially the form
of Exhibit B-3 hereto); or
(C) if such Transfer Restricted Note is being transferred in reliance on
any other exemption from the registration requirements of the Securities
Act, a certification to that effect from such Holder (in substantially
the form of Exhibit B-3 hereto) and an Opinion of Counsel from such
Holder or the transferee in form reasonably acceptable to the Company and
to the Registrar to the effect that such transfer is in compliance with
the Securities Act.
(c) Transfer of a Beneficial Interests in Global Notes for Certificated
Notes.
(i) The Global Notes that are Transfer Restricted Notes or the Exchange
Global Notes, as the case may be, shall be exchanged by the Company for
one or more Certificated Notes representing Initial Notes or Exchange
Notes, as the case may be, if (x) the Depositary (i) has notified the
Company that it is unwilling or unable to continue as, or ceases to be, a
"Clearing Agency" registered under Section 17A of the Exchange Act and
(ii) a successor to the Depositary registered as a "Clearing Agency"
under Section 17A of the Exchange Act is not able to be appointed by the
Company within 90 calendar days or (y) the Depositary is at any time
unwilling or unable to continue as Depositary and a successor to the
Depositary is not able to be appointed by the Company within 90 calendar
days or (iii) the Company, at its option, delivers a notice in the form
of an Officers' Certificate that it elects to cause the issuance of
Certificated Notes. If an Event of Default occurs and is continuing, the
Company shall, at the request of the Holder thereof, exchange all or part
of a Global Note that is a Transfer Restricted Note or an Exchange Global
Note, as the case may be, for one or more Certificated Notes representing
Initial Notes or Exchange Notes, as the case may be; provided that the
principal amount of each of such Certificated Notes, and such Global
Note, after such exchange, shall be $1,000 or an integral multiple
thereof. Whenever a Global Note is exchanged as a whole for one or more
Certificated Notes, it shall be surrendered by the Holder thereof to the
Trustee for cancellation. Whenever a Global Note is exchanged in part for
one or more Certificated Notes, it shall be surrendered by the Holder
thereof to the Trustee and the Trustee shall make the appropriate
notations to Schedule A thereof pursuant to Section 2.1 hereof. All
Certificated Notes or Exchange Notes, as the case may be, issued in
exchange for a Global Note or any portion thereof shall be registered in
such names, and delivered, as the Depositary shall instruct the Trustee.
Any Certificated Notes issued pursuant to this Section 2.6(c)(i) shall
include the Private Placement Legend, except as otherwise provided for by
Section 2.6 hereof. Interests in a Global Note may not be exchanged for
Certificated Notes other than as provided in this Section 2.6. If a
beneficial interest in a Transfer Restricted Note is being transferred,
the following additional documents and information must be submitted
(including by facsimile):
(A) if such beneficial interest is being transferred to the Person
designated by the Depositary as being the beneficial owner, a
certification to that effect from such Person (in substantially
the form of Exhibit B-4 hereto);
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act or pursuant
to an exemption from registration in accordance with Rule 144
under the Securities Act or in an offshore transaction pursuant
to and in compliance with Rule 904 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B-4 hereto);
(C) if such beneficial interest is being transferred in reliance on any
other exemption from the registration requirements of the
Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B-4 hereto) and
an Opinion of Counsel from the transferee or the transferor in form
reasonably acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the Securities Act,
in which case the Trustee or the Note Custodian, at the direction
of the Trustee, shall, in accordance with the standing instructions
and procedures existing between the Depositary and the Note
Custodian, cause the aggregate principal amount of U.S. Global
Notes or Regulation S Permanent Global Notes as applicable, to be
reduced accordingly and, following such reduction, the Company
shall execute and, the Trustee shall authenticate and deliver to
the transferee a Certificated Note in the appropriate principal
amount.
(ii) Certificated Notes issued in exchange for a beneficial interest in a
U.S. Global Note or Regulation S Permanent Global Note, as applicable,
pursuant to this Section 2.6(c) shall be registered in such names and in
such authorized denominations as the Depositary, pursuant to
instructions from its Participants or Indirect Participants or
otherwise, shall instruct the Trustee. The Trustee shall deliver such
Certificated Notes to the Persons in whose names such Notes are so
registered. Following any such issuance of Certificated Notes, the
Trustee, as Registrar, shall instruct the Depositary to reduce or
cause to be reduced the aggregate principal amount at maturity of the
applicable Global Note to reflect the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the
provisions set forth in subsection (e) of this Section 2.6), a Global
Note may not be transferred as a whole except 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. Any Holder of a beneficial interest in a Global Note shall,
by acceptance of such Global Note, agree that transfers of beneficial
interests in such Global Note may be effected only through a book entry
system maintained by the Holder of such Global Note (or its agent), and
that ownership of a beneficial interest in the Notes represented hereby
shall be required to be reflected in book entry form. Interests of
beneficial owners in a Global Note may be transferred in accordance with
the rules and procedures of the Depositary (or its successors).
(e) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Note certificate evidencing Global Notes and Certificated
Notes (and all Notes issued in exchange therefor or substitution
thereof) shall bear a legend (the "Private Placement Legend") in
substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS
SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF
OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
(A "QIB"), (B) IT IS ACQUIRING THIS NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE
SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
UNDER REGULATION D UNDER THE SECURITIES ACT (AN "IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO
AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE
WITH A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE
FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF
SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE
902 OF REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION
OF THE FOREGOING.
(ii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a
Global Note) pursuant to Rule 144 under the Securities Act
or pursuant to an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted Note that is a
Certificated Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a
Certificated Note that does not bear the legend set forth in
(i) above and rescind any restriction on the transfer of such
Transfer Restricted Note upon receipt of a certification from
the transferring Holder substantially in the form of Exhibit
B-4 hereto; and
(B) in the case of any Transfer Restricted Note represented by a Global
Note, such Transfer Restricted Note shall not be required to bear the
legend set forth in (i) above, but shall continue to be subject to
the provisions of Section 2.6(a) and (b) hereof; provided, however,
that with respect to any request for an exchange of a Transfer
Restricted Note that is represented by a Global Note for a
Certificated Note that does not bear the legend set forth in (i)
above, which request is made in reliance upon Rule 144, the Holder
thereof shall certify in writing to the Registrar that such request
is being made pursuant to Rule 144 (such certification to be
substantially in the form of Exhibit B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Global Note) in
reliance on any exemption from the registration requirements of the
Securities Act (other than exemptions pursuant to Rule 144A or Rule 144
under the Securities Act) in which the Holder or the transferee provides
an Opinion of Counsel to the Company and the Registrar in form and
substance reasonably acceptable to the Company and the Registrar (which
Opinion of Counsel shall also state that the transfer restrictions
contained in the legend are no longer applicable):
(A) in the case of any Transfer Restricted Note that is a Certificated
Note, the Registrar shall permit the Holder thereof to exchange such
Transfer Restricted Note for a Certificated Note that does not bear the
legend set forth in (i) above and rescind any restriction on the transfer
of such Transfer Restricted Note; and
(B) in the case of any Transfer Restricted Note represented by a Global
Note, such Transfer Restricted Note shall not be required to bear the
legend set forth in (i) above, but shall continue to be subject to the
provisions of Section 2.6(a) and (b) hereof.
(iv) By its acceptance of any Initial Note represented by a certificate
bearing the Private Placement Legend, each Holder of, and beneficial
owner of an interest in, such Initial Note acknowledges the restrictions
on transfer of such Initial Note set forth in the Private Placement
Legend and under the heading "Notice to Investors" in the Offering
Memorandum and agrees that it will transfer such Initial Note only in
accordance with the Private Placement Legend and the restrictions set
forth under the heading "Notice to Investors" in the Offering Memorandum.
(v) Notwithstanding the foregoing, upon the occurrence of the Exchange
Offer in accordance with the Registration Rights Agreement, the Company
shall issue and, upon receipt of an authentication order in accordance
with Section 2.2 hereof, the Trustee shall authenticate (i) one or more
unrestricted Global Notes in aggregate principal amount equal to the
principal amount of the restricted beneficial interests validly tendered
and not properly withdrawn by Persons that certify in the letter of
transmittal delivered in the Exchange Offer that they are not (x) broker-
dealers, (y) Persons participating in the distribution of the Exchange
Notes or (z) Persons who are affiliates (as defined in Rule 144 under the
Securities Act) of the Company and accepted for exchange in the Exchange
Offer and (ii) Certificated Notes that do not bear the Private Placement
Legend in an aggregate principal amount equal to the principal amount of
the Certificated Notes that are Transfer Restricted Notes accepted for
exchange in the Exchange Offer. Concurrently with the issuance of such
Notes, the Trustee shall cause the aggregate principal amount of the
applicable Global Notes to be reduced accordingly and the Company shall
execute and the Trustee shall authenticate and deliver to the Persons
designated by the Holders of Certificated Notes so accepted Certificated
Notes in the appropriate principal amount.
(f) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in Global Notes have been exchanged for Certificated
Notes, redeemed, repurchased or cancelled, all Global Notes shall be
returned to or retained and cancelled by the Trustee in accordance with
Section 2.11 hereof. At any time prior to such cancellation, if any
beneficial interest in a Global Note is exchanged for Certificated Notes,
redeemed, repurchased or cancelled, the principal amount of Notes
represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note, by the Trustee or the Note
Custodian, at the direction of the Trustee, to reflect such reduction.
(g) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Certificated Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any stamp or transfer tax or similar governmental
charge payable in connection therewith (other than any such stamp or
transfer taxes or similar governmental charge payable upon exchange or
transfer pursuant to Sections 2.10, 3.6, 4.8, 4.15 and 10.6 hereto).
(iii) All Global Notes and Certificated Notes issued upon any
registration of transfer or exchange of Global Notes or Certificated
Notes shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Certificated Notes surrendered upon such registration of
transfer or exchange.
(iv) The Registrar shall not be required: (A) to issue, to register the
transfer of or to exchange Notes during a period beginning at the opening
of fifteen (15) Business Days before the day of any selection of Notes
for redemption under Section 3.2 hereof and ending at the close of
business on the day of selection, (B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part, or (C) to
register the transfer of or to exchange a Note between a Record Date and
the next succeeding Interest Payment Date.
(v) Prior to due presentment for the registration of a transfer of any
Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and neither the Trustee, any Agent
nor the Company shall be affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes and Certificated Notes
in accordance with the provisions of Section 2.2 hereof.
Notwithstanding anything herein to the contrary, as to any certifications
or certificates delivered to the Trustee or Registrar pursuant to this
Section 2.6, the Trustee's or the Registrar's duties shall be limited to
confirming that any such certifications and certificates delivered to it
are in the form of Exhibits B-1 through B-4 and C attached hereto. The
Trustee or Registrar shall not be responsible for confirming the truth or
accuracy of representations made in any such certifications or
certificates.
SECTION 2.7 Replacement of Notes.
If any mutilated Note is surrendered to the Trustee or the
Company, and the Trustee and the Company receive evidence to their
satisfaction of the destruction, loss or theft of any Note, the Company
shall issue, and the Trustee, upon the receipt of a Company Order, shall
authenticate, a replacement Note if the Trustee's requirements are met.
If required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the Trustee
and the Company to protect the Company, each Subsidiary Guarantor, the
Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture
equally and proportionately with all other Notes duly issued hereunder.
The provisions of this Section 2.7 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement of mutilated, destroyed, lost or stolen Notes.
SECTION 2.8 Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions
hereof, and those described in this Section as not outstanding. Except as
set forth in Section 2.9 hereof, a Note does not cease to be outstanding
because the Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest (including
Special Interest, if any) on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary
Guarantor, a Subsidiary or an Affiliate of any thereof) holds, on a
Redemption Date or Maturity, money sufficient to pay Notes payable on
that date, then on and after that date such Notes shall be deemed to be
no longer outstanding and shall cease to accrue interest (including
Special Interest, if any).
SECTION 2.9 Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes
owned by the Company or any Subsidiary Guarantor, or by any Person
directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any Subsidiary Guarantor,
shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying
on any such direction, waiver or consent, only Notes that a Responsible
Officer knows are so owned shall be so disregarded.
SECTION 2.10 Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a Company
Order. Temporary Notes shall be substantially in the form of definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes and as shall be reasonably acceptable to the Trustee.
Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
SECTION 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Notes surrendered
for registration of transfer, exchange, payment, replacement or
cancellation and shall upon the written request of the Company, return
such cancelled Notes to the Company. The Company may not issue new Notes
to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
SECTION 2.12 Payment of Interest; Interest Rights Preserved.
Interest (including Special Interest, if any) on any Note which
is payable, and is punctually paid or duly provided for, on any
September 15 or March 15 (an "Interest Payment Date"), commencing on
September 15, 1999, shall be paid to the Person in whose name such Note
is registered at the close of business on the Record Date for such
interest payment, which shall be the September 1 or March 1 (whether or
not a Business Day) immediately preceding such Interest Payment Date.
Any interest on any Note 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 Record Date, and, except as
hereinafter provided, such Defaulted Interest and any interest payable on
such Defaulted Interest may be paid by the Company, at its election, as
provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest, and
any interest payable on such Defaulted Interest, to the Persons in whose
names the Notes 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 the
Notes 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 (including Special Interest, if any) 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 provided in
this clause (a). Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 calendar days and not less than 10 calendar days prior to the date of
the proposed payment and not less than 10 calendar 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 sent, first class mail, postage prepaid, to each Holder at such
Holder's address as it appears in the Securities Register, not less than
10 calendar 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 the Notes are registered at the
close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest (including
Special Interest, if any), and any interest payable on such Defaulted
Interest, on the Notes in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Notes 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.
Subject to the foregoing provisions of this Section 2.12, each Note
delivered under this Indenture upon registration of transfer of, or in
exchange for, or in lieu of, or in substitution for, any other Note,
shall carry the rights to interest (and Special Interest, if any) accrued
and unpaid, and to accrue, which were carried by such other Note.
SECTION 2.13 Computation of Interest.
Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
SECTION 2.14 CUSIP Number.
The Company in issuing the Notes may use a "CUSIP" number, and
if it does so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders; provided that any
such notice may state that no representation is made as to the
correctness or accuracy of the CUSIP number printed in the notice or on
the Notes and that reliance may be placed only on the other
identification numbers printed on the Notes. The Company shall promptly
notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof and of the Notes, it shall
furnish to the Trustee, at least 45 days (unless a shorter period is
acceptable to the Trustee) but not more than 60 days before a Redemption
Date, an Officers' Certificate setting forth (i) the clause of this
Indenture pursuant to which the redemption shall occur, (ii) the
Redemption Date, (iii) the principal amount of Notes to be redeemed and
(iv) the Redemption Price.
SECTION 3.2 Selection of Notes to be Redeemed.
In the case of any partial redemption provided for in
Section 3.7 hereof, selection of the Notes for redemption will be made by
the Trustee on a pro rata basis, by lot or by such other method as the
Trustee in its sole discretion shall deem to be fair and appropriate,
although no Note of $1,000 in then outstanding principal amount or less
shall be redeemed in part. If any Note is to be redeemed in part only,
the notice of redemption relating to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion thereof will be issued in the name
of the Holder thereof upon cancellation of the original Note.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for
partial redemption, the portion of the principal amount thereof to be
redeemed. Notes and portions of Notes selected shall be in amounts of
$1,000 or integral multiples of $1,000, except that if all of the Notes
of a Holder are to be redeemed, the entire outstanding amount of Notes
held by such Holder, even if not an integral multiple of $1,000, shall be
redeemed. Except as provided in the preceding sentence, provisions of
this Indenture that apply to Notes called for redemption also apply to
portions of Notes called for redemption.
SECTION 3.3 Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption
Date, the Company shall mail or cause to be mailed, by first class mail,
a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address as it appears in the Securities Register.
The notice shall identify the Notes to be redeemed including
CUSIP number and shall state:
(a) the Redemption Date;
(b) the Redemption Price and the method of calculating such Redemption
Price pursuant to this Indenture;
(c) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date
upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption (other than a Global Note) must be
surrendered to the Paying Agent to collect the Redemption Price;
(f) that, unless the Company defaults in making such Redemption Payment,
interest (and Special Interest, if any) on Notes (or portions thereof)
called for redemption shall cease to accrue on and after the Redemption
Date;
(g) the paragraph of the Notes and/or Section of this Indenture pursuant
to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy of
the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however,
that the Company shall have delivered to the Trustee, at least 45 days
prior to the Redemption Date (unless a shorter time is acceptable to the
Trustee), an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as
provided in the preceding paragraph.
SECTION 3.4 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with
Section 3.3 hereof, Notes called for redemption become irrevocably due
and payable on the Redemption Date at the Redemption Price including
interest and Special Interest, if any, accrued and unpaid on the
Redemption Date. Upon surrender to the Paying Agent, such Notes shall be
paid at the Redemption Price stated in such notice. Failure to give
notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder. A notice of redemption may
not be conditional.
SECTION 3.5 Deposit of Redemption Price.
On or prior to the Redemption Date, the Company shall deposit
with the Trustee or with the Paying Agent immediately available funds
sufficient to pay the Redemption Price of and accrued and unpaid
interest, if any, on (and Special Interest, if any, on) all Notes to be
redeemed on that date. The Trustee or the Paying Agent shall promptly
return to the Company any money deposited with the Trustee or the Paying
Agent by the Company in excess of the amounts necessary to pay the
Redemption Price of, and accrued interest (including Special Interest, if
any) on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the Redemption Date, interest (and Special
Interest, if any) shall cease to accrue on the Notes or the portions of
Notes called for redemption. If a Note is redeemed on or after a Record
Date but on or prior to the related Interest Payment Date, then any
accrued and unpaid interest (and Special Interest, if any) shall be paid
to the Person in whose name such Note was registered at the close of
business on such Record Date. If any Note called for redemption shall not
be so paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest (and Special
Interest, if any) shall be paid on the unpaid principal, from the
Redemption Date until such principal is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.1 hereof.
SECTION 3.6 Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the Company's written request, the Trustee shall
authenticate for the Holder at the expense of the Company a new Note
equal in principal amount to the unredeemed portion of the Note
surrendered. The records of the Registrar and the Depositary shall
reflect any partial redemption of any Global Note.
SECTION 3.7 Optional Redemption.
(a) The Notes will be redeemable, at the Company's option, at any time
in whole or from time to time in part upon not less than 30 and not more
than 60 days' prior notice mailed by first class mail to each Holder's
registered address appearing in the Securities Register, on any date
prior to Maturity at a price equal to 100% of the principal amount
thereof plus accrued and unpaid interest (including Special Interest, if
any) to the Redemption Date (subject to the right of Holders of record on
the relevant Record Date to receive interest due on an Interest Payment
Date that is on or prior to the Redemption Date) plus the Make-Whole
Premium applicable to the Notes (the "Make-Whole Premium"). In no event
will the Redemption Price ever be less than 100% of the principal amount
of the Notes plus accrued and unpaid interest (including Special
Interest, if any) to the Redemption Date.
(b) The amount of the Make-Whole Premium with respect to any Notes (or
portion thereof) to be redeemed will be equal to the excess, if any, of:
(i) the sum of the present values, calculated as of the redemption date,
of:
(A) each interest payment that, but for such redemption, would have been
payable on the Notes (or portion thereof) of such series being
redeemed on each Interest Payment Date occurring after the
Redemption Date (excluding any accrued and unpaid interest for the
period prior to the Redemption Date); and
(B) the principal amount that, but for such redemption, would have been
payable at the final maturity of the Notes (or portion thereof) of
such series being redeemed, over
(ii) the principal amount of the Notes (or portion thereof) of such
series being redeemed.
The present values of interest and principal payments referred to in
clause (i) above will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated
by discounting the amount of each payment of interest or principal from
the date that each such payment would have been payable, but for the
redemption, to the redemption date at a discount rate equal to the
Treasury Yield (as defined below) plus 50 basis points.
The Make-Whole Premium will be calculated by the Independent
Investment Banker. For purposes of determining the Make-Whole Premium,
"Treasury Yield" means a rate of interest per annum equal to the weekly
average yield to maturity of United States Treasury Notes that have a
constant maturity that corresponds to the remaining term to maturity of
the Notes, calculated to the nearest 1/12th of a year (the "Remaining
Term"). The Treasury Yield will be determined as of the third business
day immediately preceding the applicable Redemption Date.
The "Independent Investment Banker" means the Reference
Treasury Dealer appointed by the Trustee after consultation with the
Company. The "Reference Treasury Dealer" is defined to mean each of
Donaldson, Lufkin & Jenrette Securities Corporation and its successors,
provided, however, that if Donaldson, Lufkin & Jenrette Securities
Corporation shall cease to be a primary U.S. Government securities dealer
in New York City (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasury Dealer.
The weekly average yields of United States Treasury Notes will
be determined by reference to the most recent statistical release
published by the Federal Reserve Bank of New York and designated
"H.15(519) Selected Interest Rates" or any successor release (the "H.15
Statistical Release"). If the H.15 Statistical Release sets forth a
weekly average yield for United States Treasury Notes having a constant
maturity that is the same as the Remaining Term, then the Treasury Yield
will be equal to such weekly average yield. In all other cases, the
Treasury Yield will be calculated by interpolation, on a straight-line
basis, between the weekly average yields on the United States Treasury
Notes that have a constant maturity closest to and greater than the
Remaining Term and the United States Treasury Notes that have a constant
maturity closest to and less than the Remaining Term (in each case as set
forth in H.15 Statistical Release). Any weekly average yields so
calculated by interpolation will be rounded to the nearest 1/100th of 1%,
with any figure of 1/200th of 1% or above being rounded upward. If weekly
average yields for United States Treasury Notes are not available in the
H.15 Statistical Release or otherwise, then the Treasury Yield will be
calculated by interpolation of comparable rates selected by the
Independent Investment Banker.
(c) Any redemption pursuant to this Section 3.7 shall be made pursuant
to the provisions of Section 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
In the event that at any time (a) the ratings assigned to the
Notes by both of the Rating Agencies are Investment Grade Ratings and (b)
no Default has occurred and is continuing under this Indenture, the
Company and its Restricted Subsidiaries will no longer be subject to the
provisions of this Indenture found in Section 4.9 and Section 4.11
(together, the "Suspended Covenants"). In the event that the Company is
not subject to the Suspended Covenants for any period of time as a result
of the preceding sentence and, subsequently, one or both Rating Agencies
withdraws its ratings or downgrades the ratings assigned to the Notes
below the required Investment Grade Ratings, then the Company and its
Restricted Subsidiaries will again be subject to the Suspended Covenants
and compliance with the Suspended Covenants with respect to Restricted
Payments made after the time of such withdrawal or downgrade will be
calculated in accordance with the terms of Section 4.11 as if such
covenant had been in effect during the entire period of time from the
date of this Indenture.
SECTION 4.1 Payment of Notes.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest (and Special Interest, if any) on, the
Notes on the dates and in the manner provided in the Notes and in this
Indenture. Principal, premium, if any, and interest (and Special
Interest, if any) shall be considered paid on the date due if the Trustee
or the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 11:00 a.m., New York Time, on the due date money deposited by
the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest (and
Special Interest, if any) then due. The Company shall pay all Special
Interest, if any, in the same manner on the dates and in the amounts set
forth in the Registration Rights Agreement. The Company will promptly
notify the Trustee of a Registration Default (as defined in the
Registration Rights Agreement) under the Registration Rights Agreement
and any cure thereof.
The Company shall pay interest (including post-petition
interest in any proceeding under any applicable Federal, state or foreign
bankruptcy law) on Defaulted Interest and Special Interest, if any,
(without regard to any applicable grace period) at the same rate to the
extent lawful.
SECTION 4.2 Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency (which may be an office of the
Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and
where notices and demands to or upon the Company in respect of the Notes
and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of
such office or agency. If at any time the Company shall fail to maintain
any such required 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 Corporate Trust Office of the
Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, The City of New York for
such purposes. The Company shall give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with
Section 2.3 hereof.
SECTION 4.3 Corporate Existence.
Subject to the provisions of Article 5 hereof, the Company
shall do or cause to be done all things necessary to preserve and keep in
full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of the Restricted Subsidiaries, in
accordance with the respective organizational documents (as the same may
be amended from time to time) of each of the Company or any such
Restricted Subsidiary and (ii) the rights (charter and statutory),
licenses and franchises of each of the Company and the Restricted
Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate,
partnership or other existence of any of the Restricted Subsidiaries, if
the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the
business of the Company and the Restricted Subsidiaries taken as a whole
and that the loss thereof is not adverse in any material respect to the
Holders of the Notes.
SECTION 4.4 Maintenance of Properties and Insurance.
(a) The Company shall cause all material properties owned by or leased
by it or any of the Restricted Subsidiaries useful and necessary to the
conduct of its business or the business of any of its Restricted
Subsidiaries to be maintained and kept in good condition, repair and
working order (reasonable wear and tear excepted) and shall cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in its judgment may be necessary, so that
the business carried on in connection therewith may be properly conducted
at all times; provided, however, that nothing in this Section 4.4 shall
prevent the Company or any of the Restricted Subsidiaries from
discontinuing the use, operation or maintenance of any of such
properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors of the Company or
the Restricted Subsidiary so concerned, or of an officer (or other agent
employed by the Company or of the Restricted Subsidiary so concerned) of
the Company or a Restricted Subsidiary having managerial responsibility
for any such properties or amounts, desirable in the conduct of the
business of the Company or such Restricted Subsidiary of the Company, and
if such discontinuance or disposal is not adverse in any material respect
to the Holders.
(b) To the extent available at commercially reasonable rates, the
Company shall maintain, and shall cause the Restricted Subsidiaries, to
the extent such Restricted Subsidiaries maintain operations, to maintain,
insurance with responsible carriers against such risks and in such
amounts, and with such deductibles, retentions, self-insured amounts and
co-insurance provisions, as are customarily carried by similar
businesses, of similar size.
SECTION 4.5 Compliance With Laws.
The Company shall comply, and shall cause each of the
Restricted Subsidiaries to comply, with all applicable statutes, rules,
regulations, orders and restrictions in respect of the conduct of their
respective businesses and the ownership of their respective properties,
except for such noncompliances as would not in the aggregate have a
material adverse effect on the financial condition or results of
operations of the Company and the Restricted Subsidiaries taken as a
whole.
SECTION 4.6 Taxes and Other Claims.
The Company shall pay, and shall cause each of the Restricted
Subsidiaries to pay, prior to delinquency, (a) all material taxes,
assessments, and governmental charges levied or imposed upon the Company
or any of the Restricted Subsidiaries or upon the income, profits or
property or assets of the Company or any of the Restricted Subsidiaries
and (b) all lawful claims for labor, materials and supplies, which, if
unpaid, might by law become a Lien upon the property or assets of the
Company or any of the Restricted Subsidiaries, except such as are
contested in good faith and by appropriate proceedings or where the
failure to effect such payment is not adverse in any material respect to
the Holders of the Notes and for which adequate reserves in accordance
with GAAP or other appropriate provisions have been made.
SECTION 4.7 Stay, Extension and Usury Laws.
The Company and each of the Subsidiary Guarantors covenant (to
the extent that they may lawfully do so) that they shall not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay, extension or usury law wherever enacted, now
or at any time hereafter in force, that may affect the covenants or the
performance of this Indenture; and the Company and each of the Subsidiary
Guarantors (to the extent that they may lawfully do so) hereby expressly
waive all benefit or advantage of any such law, and covenant that they
shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer
and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.8 Change of Control.
(a) Upon the occurrence of any of the following events (each a "Change
of Control"), the Company shall make an offer to repurchase all
outstanding Notes in whole or in part (the "Change of Control Offer") at
a purchase price (the "Change of Control Purchase Price") in cash equal
to 101% of the aggregate principal amount thereof, plus accrued and
unpaid interest thereon, if any, and Special Interest, if any, to the
date of purchase (subject to the right of Holders of record on the
relevant Record Date to receive interest (including Special Interest, if
any) due on the relevant Interest Payment Date).
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), is or becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of
this clause (i) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire,
whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total voting
power of the Voting Stock of the Company;
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of 66-2/3% of the directors of the Company
then still in office who were either directors at 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 then in office; and
(iii) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company or the Company
and its Restricted Subsidiaries taken as a whole to another Person and,
in the case of any such merger or consolidation, the securities of the
Company that are outstanding immediately prior to such transaction and
which represent 100% of the aggregate voting power of the Voting Stock of
the Company are changed into or exchanged for cash, securities or
property, unless pursuant to such transaction such securities are changed
into or exchanged for, in addition to any other consideration, securities
of the surviving corporation that represent immediately after such
transaction, at least a majority of the aggregate voting power of the
Voting Stock of the surviving corporation.
Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred if (a) the ratings assigned to the Notes by the
Rating Agencies prior to the announcement are not downgraded or placed on
a negative credit watch by either such Rating Agency as a result thereof
and (b) no Default has occurred and is continuing.
(b) The Change of Control Offer will remain open for a period of at
least 30 days following its commencement but no longer than 60 days,
except to the extent that a longer period is required by applicable law
(the "Change of Control Offer Period"). On the first Business Day after
the termination of the Change of Control Offer Period (the "Change of
Control Payment Date"), the Issuer will purchase all Notes validly
tendered and not properly withdrawn pursuant to the Change of Control
Offer. Payment for any Notes so purchased will be made in the same manner
as interest payments are made on the Notes. If the Change of Control
Payment Date is on or after a Record Date and on or before the related
Interest Payment Date, any accrued and unpaid interest and Special
Interest (to the extent involving interest that is due and payable on
such Interest Payment Date), if any, shall be paid to the Person in whose
name a Note is registered at the close of business on such Record Date,
and no additional interest (or Special Interest, if any) (to the extent
involving interest that is due and payable on such Interest Payment
Date)) shall be payable to Holders who validly tender Notes pursuant to
the Change of Control Offer.
(c) Within 30 days following any Change of Control, the Company or the
Trustee (at the expense of the Issuer) shall mail by first class mail, a
notice to each Holder, with a copy of such notice to the Trustee. The
notice, which shall govern the terms of the Change of Control Offer,
shall state, among other things:
(i) that a Change of Control has occurred and a Change of Control Offer
is being made as provided for herein that each Holder has the right to
require the Issuer to purchase such Holder's Notes at the Change of
Control Purchase Price, and that, although Holders are not required to
tender their Notes, all Notes that are validly tendered shall be accepted
for payment;
(ii) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization after giving effect to such Change
of Control);
(iii) the Change of Control Purchase Price and the Change of Control
Payment Date, which will be no earlier than 30 days and no later than 60
days after the date such notice is mailed;
(iv) that any Note accepted for payment pursuant to the Change of Control
Offer (and duly paid for on the Change of Control Payment Date) shall
cease to accrue interest and Special Interest, if applicable, after the
Change of Control Payment Date;
(v) that any Notes (or portions thereof) not validly tendered shall
continue to accrue interest and Special Interest, if applicable;
(vi) that any Holder electing to have a Note purchased pursuant to any
Change of Control Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Issuer, a
depositary, if appointed by the Issuer, or a Paying Agent at the address
specified in the notice at least one (1) Business Day before the Change
of Control Purchase Date;
(vii) that Holders shall be entitled to withdraw their election if
the Issuer, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Change of Control Offer
Period, a telegram, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder delivered
for purchase and a statement that such Holder is withdrawing his election
to have such Note purchased; and
(viii) the instructions and any other information necessary to enable
Holders to tender their Notes (or portions thereof) and have such Notes
(or portions thereof) purchased pursuant to the Change of Control Offer.
(d) On or before the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment all Notes or portions
thereof validly tendered and not properly withdrawn pursuant to the
Change of Control Offer, (2) deposit by 11:00 a.m., New York City time,
on such date with the Paying Agent an amount equal to the Change of
Control Purchase Price in respect of all Notes or portions thereof so
validly tendered and not properly withdrawn and (3) deliver or cause to
be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company. The Paying Agent shall
promptly (but in any case not later than five days after the Change of
Control Payment Date) mail to each Holder of Notes so validly tendered
and not properly withdrawn the Change of Control Purchase Price for such
Notes.
(e) Upon surrender and cancellation of a Certificated Note that is
purchased in part pursuant to the Change of Control Offer, the Company
shall promptly issue and the Trustee shall authenticate and mail (or
cause to be transferred by book entry) to the surrendering Holder of such
Certificated Note, a new Certificated Note equal in principal amount to
the unpurchased portion of such surrendered Certificated Note; provided
that each such new Certificated Note shall be in a principal amount of
$1,000 or an integral multiple thereof.
(f) Upon surrender of a Global Note that is purchased in part pursuant
to a Change of Control Offer, the Paying Agent shall forward such Global
Note to the Trustee who shall make a notation on Schedule A thereof to
reduce the principal amount of such Global Note to an amount equal to the
unpurchased portion of such Global Note, as provided in Section 2.6
hereof. The Company shall publicly announce the results of the Change of
Control Offer on the Change of Control Payment Date. For purposes of this
Section 4.8, the Trustee shall act as the Paying Agent.
(g) The Company shall comply with the requirements of Rules 13e-4 and
14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of
a Change of Control. To the extent that the provisions of any securities
laws or regulations conflict with this Section 4.8, the Company shall
comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations hereunder by virtue thereof.
SECTION 4.9 Limitations on Indebtedness.
(a) The Company will not, and will not permit any Restricted Subsidiary
to, Incur, directly or indirectly, any Indebtedness; provided, however,
that the Company may Incur Indebtedness if the Consolidated EBITDA
Coverage Ratio at the date of such Incurrence and after giving effect
thereto exceeds 2.25 to 1.0.
(b) Notwithstanding paragraph (a), the following Indebtedness may be
Incurred:
(1) Indebtedness of the Company pursuant to one or more Credit
Facilities (and the guarantee of such Indebtedness by Restricted
Subsidiaries); provided, however, that the aggregate amount of such
Indebtedness outstanding at such time shall not exceed $350,000,000 less
any amounts derived from Asset Sales and applied to the required
permanent reduction of Senior Indebtedness (and a permanent reduction of
the related commitment to lend or amount available to be reborrowed in
the case of a revolving credit facility) under such Credit Facilities as
contemplated by Section 4.15;
(2) Indebtedness of the Company or a Restricted Subsidiary owed to and
held by a Restricted Subsidiary or Indebtedness of a Restricted
Subsidiary owed to and held by the Company; provided, however, that any
subsequent issuance or transfer of any Capital Stock that results in such
Restricted Subsidiary to whom Indebtedness is owed ceasing to be a
Restricted Subsidiary or any transfer of such Indebtedness (other than to
the Company or another Restricted Subsidiary) shall be deemed, in each
case, to constitute the Incurrence of such Indebtedness;
(3) The Subsidiary Guarantees, if any, and Indebtedness incurred in
exchange for, or the proceeds of which are used to Refinance any
Indebtedness permitted by this clause (3); provided, however, that (i)
the principal amount of the Indebtedness so Incurred shall not exceed the
principal amount of the Indebtedness so Refinanced (plus the amount of
reasonable fees and expenses incurred in connection therewith, including
any premium or defeasance costs) and (ii) the Indebtedness so Incurred
(A) shall not mature prior to the Stated Maturity of the Indebtedness so
Refinanced and (B) shall have an Average Life equal to or greater than
the remaining Average Life of the Indebtedness so Refinanced;
(4) Indebtedness of the Company or any Restricted Subsidiary (other than
Indebtedness described in clause (1), (2) or (3) above) (x) outstanding
on the Issue Date (including without limitation, the Issuer Loans, the
guarantee of the Company issued under the Secured Note Indenture and
guarantees of any Subsidiaries of the Company issued thereunder, the
Company's 6 1/2% Senior Notes due 2003, the Company's 6 3/4% Senior Notes due
2005, the Company's 6.95% Senior Notes due 2008, the Company's 7 3/8%
Senior Notes due 2018, the Company's 9 1/8% Senior Notes due 2003, the
Company's 9 1/2% Senior Notes due 2008, and the 10 1/4% Senior Notes due 2003
of Cliffs Drilling Company) or Incurred pursuant to agreements as in
effect on the Issue Date and (y) Indebtedness Incurred in exchange for,
or the proceeds of which are used to Refinance, any Indebtedness
permitted by this clause (4) or permitted by clause (a) above; provided,
however, that (i) the principal amount of the Indebtedness so Incurred
shall not exceed the principal amount of the Indebtedness Refinanced
(plus the amount of reasonable fees and expenses incurred in connection
therewith, including any premium or defeasance costs); and (ii) the
Indebtedness so Incurred (A) shall not mature prior to the Stated
Maturity of the Indebtedness so Refinanced and (B) shall have an Average
Life equal to or greater than the remaining Average Life of the
Indebtedness so Refinanced;
(5) Indebtedness of the Company or any Restricted Subsidiary consisting
of guarantees in connection with any synthetic lease obligations of
Persons Incurred to finance the construction or upgrade of the drillship
Deepwater Frontier and the drillship Deepwater Pathfinder pursuant to
agreements governing such obligations;
(6) Acquired Indebtedness of any Restricted Subsidiary in an aggregate
amount not to exceed $300,000,000, provided that the Company on a pro
forma basis could Incur $1.00 of additional Indebtedness pursuant to
paragraph (a) of this covenant;
(7) Indebtedness of the Company or any Restricted Subsidiary consisting
of guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets,
including, without limitation, shares of Capital Stock;
(8) The Incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Indebtedness; provided, however, that if any such
Indebtedness ceases to be Non-Recourse Indebtedness of any Unrestricted
Subsidiary, subject to the definition of "Unrestricted Subsidiary," such
event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company that was not permitted by this
clause (8);
(9) Obligations of the Company or a Restricted Subsidiary under
performance or surety bonds relating to building contracts for the
construction of drilling rigs, drillships or similar vessels or contracts
for the installation of related equipment;
(10) Hedging Obligations; and
(11) Indebtedness of the Company or any Restricted Subsidiary in an
aggregate principal amount which, together with all other Indebtedness of
the Company then outstanding (other than Indebtedness permitted by
clauses (1) through (10) of this paragraph (b) or paragraph (a)) does not
exceed $50,000,000.
(c) Notwithstanding paragraphs (a) and (b) of this Section 4.9, the
Company shall not issue any Indebtedness if the proceeds thereof are
used, directly or indirectly, to repay, prepay, redeem, defease, retire,
refund or refinance any Subordinated Obligations unless such Indebtedness
shall be subordinated to the Notes to at least the same extent as such
Subordinated Obligations.
(d) For purposes of determining compliance with the foregoing covenant,
(i) in the event that an item of Indebtedness meets the criteria of more
than one of the types of Indebtedness described above, the Company, in
its sole discretion, will classify such item of Indebtedness and only be
required to include the amount and type of such Indebtedness in one of
the above clauses and (ii) an item of Indebtedness may be divided and
classified in more than one of the types of Indebtedness described above.
SECTION 4.10 Limitation on Liens.
The Company will not, and will not permit any Restricted Subsidiary
of the Company to, issue, assume or guarantee any Indebtedness for
borrowed money secured by any Lien on any property or asset now owned or
hereafter acquired by the Company or such Restricted Subsidiary without
making effective provision whereby any and all Notes then or thereafter
outstanding will be secured by a Lien equally and ratably with any and
all other obligations thereby secured for so long as any such obligations
shall be so secured.
The foregoing restriction does not, however, apply to:
(1) Liens existing on the date on which the Notes are originally issued
or provided for under the terms of agreements existing on such date
(including Liens securing the Issuer Loans);
(2) Liens on property securing (a) all or any portion of the cost of
acquiring, constructing, altering, improving or repairing any property or
assets, real or personal, or improvements used or to be used in
connection with such property or (b) Indebtedness incurred by the Company
or any Restricted Subsidiary of the Company prior to or within one year
after the later of the acquisition, the completion of construction,
alteration, improvement or repair or the commencement of commercial
operation thereof, which Indebtedness is incurred for the purpose of
financing all or any part of the purchase price thereof or construction
or improvements thereon;
(3) Liens securing Indebtedness owed by a Restricted Subsidiary of the
Company or to any other Restricted Subsidiary of the Company;
(4) Liens on property existing at the time of acquisition of such
property by the Company or any of its Restricted Subsidiary or Liens on
the property of any Person existing at the time such Person becomes a
Restricted Subsidiary of the Company and, in any case, not incurred as a
result of (or in connection with or in anticipation of) the acquisition
of such property or such Person becoming a Restricted Subsidiary of the
Company, provided that such Liens do not extend to or cover any property
or assets of the Company or any of its Restricted Subsidiaries other than
the property encumbered at the time such property is acquired by the
Company or any of its Restricted Subsidiaries or such Person becomes a
Restricted Subsidiary of the Company and, in any case, do not secure
Indebtedness with a principal amount in excess of the principal amount
outstanding at such time;
(5) Liens on any property securing (a) Indebtedness incurred in
connection with the construction, installation or financing of pollution
control or abatement facilities or other forms of industrial revenue bond
financing or (b) Indebtedness issued or guaranteed by the United States
or any State thereof or any department, agency or instrumentality of
either;
(6) any Lien extending, renewing or replacing (or successive extensions,
renewals or replacements of) any Lien of any type permitted under clause
(1), (2), (4), or (5) above, provided that such Lien extends to or covers
only the property that is subject to the Lien being extended, renewed or
replaced and that the principal amount of the Indebtedness secured
thereby shall not exceed the principal amount of Indebtedness so secured
at the time of such extension, renewal or replacement; or
(7) Liens (exclusive of any Lien of any type otherwise permitted under
clauses (1) through (6) above) securing Indebtedness for borrowed money
of the Company or any Restricted Subsidiary of the Company in an
aggregate principal amount which, together with the aggregate amount of
Attributable Indebtedness deemed to be outstanding in respect of all
Sale/Leaseback Transactions entered into pursuant to Section 4.12(a)
hereof (exclusive of any such Sale/Leaseback Transactions otherwise
permitted under clauses (1) through (6) above), does not at the time such
Indebtedness is incurred exceed 15% of the Consolidated Net Worth of the
Company (as shown in the most recent audited consolidated balance sheet
of the Company and its Restricted Subsidiaries).
SECTION 4.11 Limitation on Restricted Payments.
(a) The Company will not, and will not permit any Restricted Subsidiary,
directly or indirectly, to:
(i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with
any merger or consolidation involving the Company) or to the direct or
indirect holders of its Capital Stock, except:
(1) dividends or distributions payable solely in its Non-Convertible
Capital Stock or in options, warrants or other rights to purchase its
Non-Convertible Capital Stock;
(2) dividends or distributions payable to the Company or a Restricted
Subsidiary; and
(3) pro rata dividends or distributions on the Capital Stock of a
Restricted Subsidiary held by minority stockholders (including, without
limitation, minority stockholders of Arcade Drilling AS, a Norwegian
corporation);
(ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or of any direct or indirect parent of the
Company, or any Restricted Subsidiary (except Capital Stock held by the
Company or a Restricted Subsidiary);
(iii) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Obligation (other than
the purchase, repurchase or other acquisition of Subordinated Obligations
purchased in anticipation of satisfying a sinking fund obligation,
principal installment or final maturity, in each case due within one year
of the date of acquisition); or
(iv) make any Investment other than a Permitted Investment (any such
dividend, distribution, purchase, redemption, repurchase, defeasance,
other acquisition, retirement or Investment being herein referred to as a
"Restricted Payment"),
if at the time the Company or such Restricted Subsidiary makes such
Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom); or
(2) the Company would not be permitted to Incur an additional $1.00 of
Indebtedness pursuant to Section 4.9(a) after giving pro forma effect to
such Restricted Payment; or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal
quarter during which the Notes were originally issued to the end of the
most recent fiscal quarter ending at least 45 days prior to the date of
such Restricted Payment (or, in case such Consolidated Net Income shall
be a deficit, minus 100% of such deficit);
(B) 100% of the aggregate net proceeds (including the fair market
value of non-cash proceeds, which shall be determined in good faith by
the Board of Directors of the Company) received by the Company from the
issue or sale of its Capital Stock (other than Redeemable Stock or
Exchangeable Stock) subsequent to the Issue Date (other than an issuance
or sale to a Restricted Subsidiary or an employee stock ownership plan or
similar trust);
(C) the amount by which Indebtedness of the Company is reduced on
the Company's balance sheet upon the conversion or exchange (other than
by a Restricted Subsidiary) subsequent to the Incurrence of any
Indebtedness of the Company convertible or exchangeable for Capital Stock
(other than Redeemable Stock or Exchangeable Stock) of the Company (less
the amount of any cash, or other property, distributed by the Company
upon such conversion or exchange);
(D) to the extent not otherwise included in Consolidated Net
Income, the net reduction in Investments in Unrestricted Subsidiaries
resulting from dividends, repayments of loans or advances, or other
transfers of assets, in each case to the Company or any Restricted
Subsidiary after the Issue Date from any Unrestricted Subsidiary or from
the redesignation of an Unrestricted Subsidiary as a Restricted
Subsidiary (valued in each case as provided in the definition of
Investment), not to exceed in the case of any Restricted Subsidiary the
total amount of Investments (other than Permitted Investments) in such
Restricted Subsidiary made by the Company and its Restricted Subsidiaries
in such Unrestricted Subsidiary after the Issue Date; and
(E) $20,000,000.
(b) The provisions of Section (a) shall not prohibit:
(i) Any purchase or redemption of Capital Stock or Subordinated
Obligations of the Company made by exchange for, or out of the
proceeds of the substantially concurrent sale of, Capital Stock
of the Company (other than Redeemable Stock or Exchangeable Stock
and other Capital Stock issued or sold to a Restricted Subsidiary
or an employee stock ownership plan); provided, however, that (i)
such purchase or redemption shall be excluded in the calculation of
the amount of Restricted Payments and (ii) the Net Cash Proceeds
from such sale shall be excluded from clauses (3)(B) and (3)(C) of
Section (a);
(ii) Any purchase or redemption of Subordinated Obligations of the Company
made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness of the Company which is permitted to
be issued pursuant to Section 4.9 hereof; provided, however, that
such purchase or redemption shall be excluded in the calculation of
the amount of Restricted Payments;
(iii) Dividends paid within 60 days after the date of declaration if
at such date of declaration such dividend would have complied with
this provision; provided, however, that at the time of payment of
such dividend, no other Default shall have occurred and be continuing
(or would result therefrom); provided further, however, that such
dividend shall be included in the calculation of the amount of
Restricted Payments (unless already included in determining the
amount of Restricted Payments previously made upon the declaration
of such dividend); and
(iv) If the Company issues Preferred Stock which is Non-Convertible
Capital Stock and receives at least $100,000,000 of net proceeds
therefrom, Dividends on such Preferred Stock in an aggregate amount
not to exceed $30,000,000, provided that such Dividends constitute
Restricted Payments for purposes of calculating the amount of
Restricted Payments made pursuant to clause (a)(3) of this Section
4.11.
SECTION 4.12 Limitation on Sale/Leaseback Transactions.
The Company will not, and will not permit any Restricted Subsidiary
to, enter into any Sale/Leaseback Transaction with any Person (other than
the Company or a Restricted Subsidiary) unless:
(a) the Company or such Restricted Subsidiary would be entitled to
incur Indebtedness, in a principal amount equal to the Attributable
Indebtedness with respect to such Sale/Leaseback Transaction, secured by
a Lien on the property subject to such Sale/Leaseback Transaction
pursuant to Section 4.10 hereof without equally and ratably securing the
Notes pursuant to such Section;
(b) after the Issue Date and within a period commencing six months
prior to the consummation of such Sale/Leaseback Transaction and ending
six months after the consummation thereof, the Company or such Restricted
Subsidiary shall have expended for property used or to be used in the
ordinary course of business of the Company and its Restricted
Subsidiaries an amount equal to all or a portion of the net proceeds of
such Sale/Leaseback Transaction and the Company shall have elected to
designate such amount as a credit against such Sale/Leaseback Transaction
(with any such amount not being so designated to be applied as set forth
in clause (c) below); or
(c) the Company during the 12-month period after the effective date of
such Sale/Leaseback Transaction, shall have applied to the voluntary
defeasance or retirement of the Notes or any Pari Passu Indebtedness an
amount equal to the greater of the net proceeds of the sale or transfer
of the property leased in such Sale/Leaseback Transaction and the fair
value, as determined by the Board of Directors of the Company, of such
property at the time of entering into such Sale/Leaseback Transaction (in
either case adjusted to reflect the remaining term of the lease and any
amount expended by the Company as set forth in clause (b) above), less an
amount equal to the principal amount of the Notes and Pari Passu
Indebtedness voluntarily defeased or retired by the Issuer and the
Company within such 12-month period and not designated as a credit
against any other Sale/Leaseback Transaction entered into by the Company
or any Restricted Subsidiary during such period.
SECTION 4.13 SEC Reports.
Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company shall file with the SEC and provide the Trustee
and Noteholders with such annual reports and such information, documents
and other reports specified in Sections 13 and 15(d) of the Exchange Act.
In addition, whether or not required by the rules and regulations of
the SEC, the Company will file a copy of all such information and reports
with the SEC for public availability (unless the SEC will not accept such
filing). In addition, the Company shall furnish to the Noteholders and to
prospective investors, upon the requests of such Noteholders, any
information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act so long as the Notes are not freely transferable under
the Securities Act.
SECTION 4.14 Limitation on Restrictions on Distributions from
Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other
distributions, in cash or otherwise, on its Capital Stock to the Company
or any Restricted Subsidiary or pay any Indebtedness owed to the Company
or any Restricted Subsidiary, (b) make any loans or advances to the
Company or any Restricted Subsidiary or (c) transfer any of its property
or assets to the Company or any Restricted Subsidiary, except:
(i) any encumbrance or restriction pursuant to an agreement in effect or
entered into on the Issue Date;
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Acquired Indebtedness
or Preferred Stock Incurred by such Restricted Subsidiary on or prior to
the date on which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company (other than Indebtedness or
Preferred Stock Incurred as consideration in, or to provide all or any
portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was acquired by
the Company or otherwise Incurred in anticipation of such acquisition)
and outstanding on such date;
(iii) any encumbrance or restriction relating to any assets acquired
after the Issue Date, so long as such encumbrance or restriction relates
only to the assets so acquired and is not or was not created in
anticipation of such acquisition;
(iv) any encumbrance or restriction pursuant to an agreement effecting a
Refinancing of Indebtedness or Preferred Stock Incurred pursuant to an
agreement referred to in clause (i), (ii) or (iii) of this Section 4.14
or this clause (iv) or contained in any amendment to an agreement
referred to in clause (i), (ii) or (iii) of this Section 4.14 or this
clause (iv); provided, however, that the encumbrances and restrictions
with respect to such Restricted Subsidiary contained in any such
refinancing agreement or amendment are in the aggregate no less favorable
to the holders of Notes than the encumbrances and restrictions with
respect to such Restricted Subsidiary contained in such predecessor
agreements;
(v) any such encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold interests or in
license agreements to the extent such provisions restrict the assignment
of such agreement and any rights granted or property leased thereunder;
(vi) in the case of clause (iii) above, restrictions contained in
security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such restrictions restrict the transfer of the
property subject to such security agreements or mortgages; and
(vii) any temporary encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement entered into for
the sale or disposition of all or substantially all the Capital Stock or
assets of such Restricted Subsidiary pending the closing of such sale or
disposition.
Nothing contained in this Section 4.14 shall prevent the Company or
any Restricted Subsidiary from entering into any agreement permitting the
incurrence of Liens otherwise permitted by Section 4.10 hereof.
SECTION 4.15 Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in any Asset Sales unless (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets sold or otherwise disposed of (as determined
in good faith by the Company's Board of Directors), and (ii) at least 75%
of the consideration received by the Company or the Restricted
Subsidiary, as the case may be, from such Asset Sale at the time of such
disposition shall be in the form of cash or Temporary Cash Equivalents
(or the assumption of indebtedness and liabilities of the Company or such
Restricted Subsidiary and the release of the Company or such Restricted
Subsidiary from all liability thereon) or notes or marketable securities
that are converted into cash or Temporary Cash Equivalents within 180
days after the date of such Asset Sale; provided that any Asset Sale of
shares of Capital Stock of Devco or assets owned by Devco shall not have
to comply with the provisions of this clause (ii). If the Company or a
Restricted Subsidiary engages in an Asset Sale in compliance with the
previous sentence, then the Company shall or shall cause a Restricted
Subsidiary to apply an amount equal to such excess Net Available Cash
within 360 days of the Asset Sale either (i) to repay Senior Indebtedness
of the Company or of a Restricted Subsidiary (other than in each case
Indebtedness owed to an Affiliate of the Company), (ii) to invest in
Additional Assets or (iii) treat (no later than the end of such 360-day
period) such excess Net Available Cash (to the extent not applied
pursuant to clauses (i) or (ii) above) as excess proceeds ("Excess
Proceeds").
(b) If, as of the first day of any calendar month, the aggregate amount
of Excess Proceeds exceeds 10% of consolidated total assets of the
Company, and if the excess aggregate amount of such Excess Proceeds in
excess of 10% of consolidated total assets that have not theretofore been
subject to an Excess Proceeds Offer (the "Excess Proceeds Offer
Amount") totals at least $10,000,000, the Company must, not later than
the fifteenth Business Day of such month, make an offer (an "Excess
Proceeds Offer") to purchase from the Holders pursuant to and subject to
the conditions contained in this Indenture, Notes at a purchase price
equal to 100% of their principal amount, plus any accrued interest
(including Special Interest, if any) to the date of purchase. The Secured
Note Indenture requires that the Issuer must, not later than the
fifteenth Business Day of such month, also make an offer to purchase
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including "Special Interest" and
"Additional Amounts", if any, as defined in the Secured Note Indenture)
to the date of purchase. The total amount of the Secured Notes that is
required to be purchased by the Issuer and of the Notes required to be
purchased by the Company shall equal the Excess Proceeds Offer Amount.
Any amounts remaining after all Notes and Secured Notes validly tendered
are purchased shall no longer constitute Excess Proceeds.
(c) The Excess Proceeds Offer will remain open for a period of at least
30 days following its commencement but no longer than 60 days, except to
the extent that a longer period is required by applicable law (the
"Excess Proceeds Offer Period"). On the Business Day following the
termination of the Excess Proceeds Offer Period (the "Excess Proceeds
Purchase Date"), the Company will purchase the principal amount of Notes
required to be purchased pursuant to this Section 3.10 (i.e., the portion
the Excess Proceeds Offer Amount allocable to the Notes) or, if less than
the portion of the Excess Proceeds Offer Amount has been so validly
tendered and not properly withdrawn, all Notes validly tendered and not
properly withdrawn in response to the Excess Proceeds Sale Offer. Payment
for any Notes so purchased will be made in the same manner as interest
payments are made on the Notes. If the Excess Proceeds Purchase Date is
on or after a Record Date and on or before the related Interest Payment
Date, any accrued and unpaid interest and Special Interest, if any, shall
be paid to the Person in whose name a Note is registered at the close of
business on such Record Date, and no additional interest (or Special
Interest (to the extent involving interest that is due and payable on
such Interest Payment Date), if any) shall be payable to Holders who
tender Notes pursuant to the Excess Proceeds Offer.
(d) Upon the commencement of an Excess Proceeds Offer, the Company shall
send, by first class mail, a notice to each of the Holders and a copy of
such Notice to the Trustee. The notice shall contain all instructions and
materials necessary to enable such Holders to tender Notes pursuant to
the Excess Proceeds Offer. The Excess Proceeds Offer shall be made to all
Holders. The notice, which shall govern the terms of the Excess Proceeds
Offer, shall state:
(i) that the Excess Proceeds Offer is being made pursuant to this
Section 4.15 and the Excess Proceeds Offer Period during which the Asset
Sale Offer shall remain open;
(ii) the Excess Proceeds Sale Offer Amount, and the Excess Proceeds
Purchase Date;
(iii) that any Notes which are not validly tendered or are not
otherwise accepted for payment shall continue to accrue interest and
Special Interest, if applicable;
(iv) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Excess Proceeds Offer shall cease to
accrue interest and Special Interest, if applicable, after the Excess
Proceeds Purchase Date.
(v) that any Holder electing to have a Note purchased pursuant to any
Excess Proceeds Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least (1) one Business Day before the Excess
Proceeds Purchase Date;
(vi) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be,
receives, no later than the expiration of the Excess Proceeds Offer
Period, a telegram, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder delivered
for purchase and a statement that such Holder is withdrawing his election
to have such Note purchased;
(vii) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the portion of the Excess Proceeds Offer Amount allocable
to the Notes, the Trustee shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the
Trustee so that only Notes in denominations of $1,000, or integral
multiples thereof, shall be purchased); and
(viii) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
(e) On or before the Excess Proceeds Purchase Date, the Company shall,
to the extent lawful, (1) accept for payment, on a pro rata basis to the
extent necessary, Notes or portions thereof in an aggregate amount equal
to the portion of the Excess Proceeds Offer Amount allocable to the Notes
so validly tendered and not properly withdrawn pursuant to the Excess
Proceeds Offer, of if less than the portion of the Excess Proceeds Offer
Amount has been so validly tendered and not properly withdrawn, all Notes
validly tendered and not properly withdrawn, (2) deposit by 12:00 noon
New York City time, on such date with the Paying Agent an amount equal to
such portion of the Excess Proceeds Offer Amount, plus accrued and unpaid
interest, and Special Interest, if any, in respect of all Notes, or
portions thereof, so accepted and (3) shall deliver to the Trustee an
Officers' Certificate stating that such Notes or portions thereof were
accepted for payment by the Company in accordance with the terms of this
Section 4.15. The Company, the Depositary or the Paying Agent, as the
case may be, shall promptly (but in any case not later than five days
after the Excess Proceeds Purchase Date) mail or deliver to each
tendering Holder an amount equal to the Excess Proceeds Purchase Amount
of the Notes validly tendered and not properly withdrawn by such Holder
and accepted by the Company for purchase. Upon surrender and cancellation
of a Certificated Note that is purchased in part, the Company shall
promptly issue and the Trustee shall authenticate and deliver to the
surrendering Holder of such Certificated Note a new Certificated Note
equal in principal amount to the unpurchased portion of such surrendered
Certificated Note; provided that each such new Certificated Note shall be
in a principal amount at Maturity of $1,000 or an integral multiple
thereof. Upon surrender of a Global Note that is purchased in part
pursuant to an Excess Proceeds Offer, the Paying Agent shall forward such
Global Note to the Trustee who shall make a notation on Schedule A
thereof to reduce the principal amount of such Global Note to an amount
equal to the unpurchased portion of such Global Note, as provided in
Section 2.6 hereof. Any Note not so accepted shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall
publicly announce the results of the Excess Proceeds Offer on the Excess
Proceeds Purchase Date. For purposes of this Section 4.15, the Trustee
shall act as the Paying Agent.
(f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other
securities laws or regulations in connection with the purchase of Notes
pursuant to an Excess Proceeds Offer. To the extent that the provisions
of any securities laws or regulations conflict with provisions in the
Indenture governing Excess Proceeds Offers, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to
have breached its obligations hereunder by virtue thereof.
SECTION 4.16 Limitation on Asset Swaps.
The Company will not, and will not permit any Restricted Subsidiary
to, engage in any Asset Swaps, unless:
(i) at the time of entering into the agreement with respect thereto and
immediately after giving effect to the proposed Asset Swap, no Default
shall have occurred and be continuing;
(ii) the aggregate fair market values of the Additional Assets and other
consideration to be received by the Company or the applicable Restricted
Subsidiary is, at the time the Asset Swap is agreed to, substantially
equal to the aggregate fair market value of the property being disposed
of by the Company or the applicable Restricted Subsidiary (to be
determined in good faith by the Board of Directors of the Company and to
be evidenced by a resolution of such Board set forth in an Officer's
Certificate delivered to the Trustee); and
(iii) the cash payments, if any, received by the Company or such
Restricted Subsidiary in connection with such Asset Swap are treated as
Net Available Cash received from an Asset Sale.
SECTION 4.17 Limitation on Affiliate Transactions.
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless the terms
thereof (1) are no less favorable to the Company or such Restricted
Subsidiary than those that could be obtained at the time of such
transaction in arm's-length dealings with a Person who is not such an
Affiliate, (2) if such Affiliate Transaction involves an amount in excess
of $500,000, (i) are set forth in writing and (ii) have been approved by
a majority of the members of the Board of Directors of the Company having
no personal stake in such Affiliate Transaction and (3) if such Affiliate
Transaction involves an amount in excess of $10,000,000, have been
determined by an investment banking firm of national reputation or, in
the case of the sale or transfer of assets subject to valuation, an
appropriate independent qualified appraiser of national reputation, given
the size and nature of the transaction, to be fair, from a financial
standpoint, to the Company and its Restricted Subsidiaries.
(b) The provisions of the foregoing paragraph (a) shall not prohibit (i)
any Restricted Payment permitted to be paid pursuant to the covenant
described under Section 4.11 hereof, (ii) any issuance of securities, or
other payments, awards or grants in cash, securities or otherwise
pursuant to, or the funding of, employment arrangements of the Company,
stock options, stock ownership and other employee benefit plans approved
by the Board of Directors of the Company, (iii) the grant of stock
options or similar rights to employees, officers and directors of the
Company pursuant to plans approved by its Board of Directors, (iv) loans
or advances to employees in the ordinary course of business in accordance
with the past practices of the Company or its Subsidiaries, but in any
event not to exceed $1,000,000 in aggregate principal amount outstanding
at any one time, (v) the payment of reasonable fees to directors of the
Company and its Restricted Subsidiaries who are not employees of the
Company or its Restricted Subsidiaries and (vi) any Affiliate Transaction
among Issuer, the Company, Navis AS, the Restricted Subsidiaries, any
entity owning or operating any of the Deepwater Pathfinder, the Deepwater
Frontier or the Seillean (but only for transactions relating to such
vessels and Arcade Drilling AS).
SECTION 4.18 Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries.
The Company shall not sell or otherwise dispose of any Capital Stock
of a Restricted Subsidiary, and shall not permit any such Restricted
Subsidiary, directly or indirectly, to issue or sell or otherwise dispose
of any of its Capital Stock except (i) to the Company or a Wholly Owned
Restricted Subsidiary, (ii) if, immediately after giving effect to such
issuance, sale or other disposition, neither the Company nor any of its
Subsidiaries own any Capital Stock of such Restricted Subsidiary, (iii)
to Persons who are entering into joint ventures or other similar business
relationships with the Company or any Subsidiary other than a Subsidiary
Guarantor; provided, however, that transactions pursuant to this clause
(iii) are approved in the manner set forth in Section 4.17(a), (iv)
directors' qualifying shares, (v) if, immediately after giving effect to
such issuance, sale or other disposition, such Restricted Subsidiary
would no longer constitute a Restricted Subsidiary and any Investment in
such Person remaining after giving effect thereto would have been
permitted to be made under Section 4.11 if made on the date of such
issuance, sale or other disposition or (vi) pursuant to the loan
arrangement with Nisho-Iwai.
SECTION 4.19 Future Subsidiary Guarantors.
The Company may not permit any Restricted Subsidiary, directly or
indirectly, to guarantee any Indebtedness of the Company ("Guaranteed
Indebtedness") unless (i) such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture
providing for a Subsidiary Guarantee of payment of the Notes by such
Restricted Subsidiary and (ii) such Restricted Subsidiary waives and will
not in any manner whatsoever claim or take the benefit or advantage of,
any rights of reimbursement, indemnity or subrogation or any other rights
against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guarantee. If
the Guaranteed Indebtedness is pari passu with the Notes, then the
guarantee of such Guaranteed Indebtedness shall be pari passu with or
subordinated to the Subsidiary Guarantee; and if the Guaranteed
Indebtedness is subordinated to the Notes, then the guarantee of such
Guaranteed Indebtedness shall be subordinated to the Subsidiary Guarantee
at least to the extent that all Guaranteed Indebtedness is subordinated
to the Guarantee. Notwithstanding the foregoing, any Subsidiary Guarantee
by a Restricted Subsidiary shall provide by its terms that it shall be
automatically and unconditionally released and discharged upon the
release or discharge of the guarantee which resulted in the creation of
such Restricted Subsidiary's Subsidiary Guarantee, except a discharge or
release by, or as a result of, payment under such guarantee.
SECTION 4.20 Compliance Certificate; Notice of Default or Event of
Default.
(a) The Company and each Subsidiary Guarantor shall deliver to the
Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate (which shall be signed by Officers satisfying the
requirements of Section 314 of the Trust Indenture Act) stating that a
review of the activities of the Company and the Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture,
and further stating, as to each such Officer signing such certificate,
that to the best of his or her knowledge the Company has kept, observed,
performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any
of the terms, provisions and conditions of this Indenture (or, if a
Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect
thereto) and that to the best of his or her knowledge no event has
occurred and remains in existence by reason of which payments on account
of the principal of, interest, if any, or Special Interest, if any, on
the Notes is prohibited or if such event has occurred, a description of
the event and what action the Company is taking or proposes to take with
respect thereto.
(b) The year-end financial statements delivered pursuant to Section 4.13
hereof shall be accompanied by a written statement of the independent
public accountants of the Company, (who shall be a firm of established
national reputation) that in making the examination necessary for
certification of such financial statements, nothing has come to their
attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof (except that, such
written statement need not address the Company's compliance with the
provisions of Sections 4.2, 4.5, 4.6, 4.7, 4.13, 4.17 or 4.21 hereof) or,
if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith upon, but in any event within five
Business Days after, any Officer's becoming aware of any Default or Event
of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with
respect thereto.
(d) For purposes of this Section 4.20, compliance shall be determined
without regard to any period of grace or requirement of notice under this
Indenture.
SECTION 4.21 Prohibition on Company and Guarantors Becoming an
Investment Company.
None of the Company or the Subsidiary Guarantors shall become
an "Investment Company" as defined in the Investment Company Act of 1940,
as amended.
ARTICLE 5
CONSOLIDATION, MERGER, CONVEYANCE, LEASE OR TRANSFER
SECTION 5.1 Limitation on Mergers and Consolidations.
(a) Neither the Company nor any Subsidiary Guarantor (other than
any Subsidiary Guarantor that shall have been released from its
Subsidiary Guarantee pursuant to the provisions of this Indenture) will
consolidate with or merge into any Person, continue in another
jurisdiction, or sell, lease, convey, transfer or otherwise dispose of
all or substantially all of its assets to any Person, unless:
(1) the Person formed by or surviving such consolidation or merger (if
other than the Company or such Subsidiary Guarantor, as the case may be),
or to which such sale, lease, conveyance, transfer or other disposition
shall be made (collectively, the "Successor"), is a corporation organized
and existing under the laws of the United States or any State thereof or
the District of Columbia (or, alternatively, in the case of a Subsidiary
Guarantor organized under the laws of a jurisdiction outside the United
States, a corporation organized and existing under the laws of such
foreign jurisdiction), and the Successor assumes by supplemental
indenture in a form satisfactory to the Trustee all of the applicable
Obligations of the Company or such Subsidiary Guarantor, as the case may
be, under this Indenture and the Subsidiary Guarantees;
(2) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(3) in the case of the Company, immediately after giving effect to such
transactions, the resulting, surviving or transferee Person would be able
to incur at least $1.00 of Indebtedness pursuant to Section 4.9 (a)
hereof.
The provision of clause (3) shall not apply to any merger or
consolidation into or with, or any such transfer of all or substantially
all of the property and assets of, Restricted Subsidiaries into the
Company.
(b) In connection with any consolidation, merger, continuance, transfer
of assets or other transactions contemplated by this Section 5.1, the
Company shall deliver, or cause to be delivered, to the Trustee, in form
and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, continuance, sale, assignment, conveyance or
transfer and the supplemental indenture in respect thereto comply with
the provisions of this Indenture and that all conditions precedent in
this Indenture relating to such transactions have been complied with.
(c) Upon any transaction or series of transactions that are of the type
described in, and are effected in accordance with, this Section 5.1, the
Successor shall succeed to, and be substituted for, and may exercise
every right and power of, the Company or Subsidiary Guarantor, as
applicable under this Indenture and the Notes with the same effect as if
such Successor had been named as the Company or Subsidiary Guarantor, as
applicable in this Indenture; and when a Surviving Person duly assumes
all of the Obligations and covenants of the Company or a Subsidiary
Guarantor pursuant to this Indenture and the Notes, except in the case of
a lease, the predecessor Person shall be relieved of all such Obligations.
SECTION 5.2 Successor Corporation Substituted.
Upon any consolidation or merger by the Company with or into
any other corporation, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.1 hereof, the successor
corporation formed by such consolidation into or with which the Company
is merged or to which such sale, assignment, transfer, lease, conveyance
or other disposition is made shall succeed to, and be substituted for (so
that from and after the date of such consolidation, merger, sale, lease,
conveyance or other disposition, the provisions of this Indenture
referring to "the Company" shall refer instead to the Successor and not
to the Company), and may exercise every right and power of the Company
under this Indenture with the same effect as if such Successor had been
named as the Company herein; provided, however, that the predecessor of
the Company shall not be relieved from the obligation to pay the
principal, premium, if any, and interest and Special Interest, if any, on
the Notes except in the case of a sale of all of the Company's assets
that meets the requirements of Section 5.1 hereof.
If the Successor shall have succeeded to and been substituted
for the Company, such Successor may cause to be signed, and may issue
either in its own name or in the name of the Company prior to such
succession any or all of the Notes issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee;
and, upon the order of such Successor, instead of the Company, and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver any Notes
which previously shall have been signed and delivered by the Officers of
the Company to the Trustee for authentication, and any Notes which such
Successor thereafter shall cause to be signed and delivered to the
Trustee for that purpose (in each instance with notations of Subsidiary
Guarantees thereon by the Subsidiary Guarantors). All of the Notes so
issued and so endorsed shall in all respects have the same legal rank and
benefit under this Indenture as the Notes theretofore or thereafter
issued and endorsed in accordance with the terms of this Indenture and
the Subsidiary Guarantees as though all such Notes had been issued and
endorsed at the date of the execution hereof.
In case of any such consolidation, merger, continuance, sale,
transfer, conveyance or other disposal, such changes in phraseology and
form (but not in substance) may be made in Notes thereafter to be issued
or the Subsidiary Guarantees to be endorsed thereon as may be
appropriate.
For all purposes of this Indenture and the Notes, Subsidiaries
of any Successor will, upon such transaction or series of transactions,
become Restricted Subsidiaries or Unrestricted Subsidiaries as provided
pursuant to this Indenture and all Indebtedness, and all Liens on
property or assets, of the Successor and its Subsidiaries immediately
prior to such transaction or series of transactions shall be deemed to
have been incurred upon such transaction or series of transactions.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 Events of Default.
Each of the following is an "Event of Default" hereunder:
(a) default in the payment of interest (including Special Interest, if
any) on the Notes when due, continued for 30 days;
(b) (i) default in the payment of principal of any Note when due at its
Stated Maturity, upon redemption, required repurchase, declaration of
acceleration or otherwise; or
(ii) the failure to redeem or purchase Notes when required pursuant to
this Indenture;
(c) the failure by the Company to comply with its obligations under
Sections 4.8, 4.15 or 5.1;
(d) the failure by the Company and the Subsidiary Guarantors to comply
with its other agreements contained in this Indenture, and such failure
or event of default continues for 60 days after notice;
(e) default under any mortgage, indenture or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or guarantee now exists, or is
created after the date of this Indenture, which default (i) is caused by
a failure to pay principal of or premium, if any, or interest on such
Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default unless being contested in good
faith by appropriate proceedings (a "Payment Default") or (ii) results in
the acceleration of such Indebtedness prior to its express maturity and,
in each case, the principal amount of any such Indebtedness, together
with the principal amount of any other such Indebtedness under which
there has been a Payment Default or the maturity of which has been so
accelerated, aggregates $20,000,000 or more; provided, however, that a
default under this clause (e) will not constitute an Event of Default
until the Trustee provides a written notice to the Company, or the
Holders of 25% in aggregate principal amount of the outstanding Notes
provide a written notice to the Company and the Trustee, of the default
and the Company does not cure such default within the time specified
after receipt of such notice;
(f) failure by the Company or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $20,000,000, which judgments are
not paid, discharged or stayed for a period of 30 days;
(g) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable Federal,
state, or foreign bankruptcy, insolvency, or other similar law or (ii) a
decree or order adjudging the Company or any Significant Subsidiary a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Company or any Significant Subsidiary under U.S. bankruptcy laws,
as now or hereafter constituted, or any other applicable Federal, state
or foreign bankruptcy, insolvency, or similar law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Significant Subsidiary or of any
substantial part of the property or assets of the Company or any
Significant Subsidiary, or ordering the winding up or liquidation of the
affairs of the Company or any Significant Subsidiary, and the continuance
of any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days;
(h) the commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent; or (ii) the consent
by the Company or any Significant Subsidiary to the entry of a decree or
order for relief in respect of the Company or any Significant Subsidiary
in an involuntary case or proceeding under U.S. bankruptcy laws, as now
or hereafter constituted, or any other applicable Federal, state, or
foreign bankruptcy, insolvency or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against
the Company or any Significant Subsidiary; or (iii) the filing by the
Company or any Significant Subsidiary of a petition or answer or consent
seeking reorganization or relief under U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency or other similar law; or (iv) the consent by the
Company or any Significant Subsidiary to the filing of such petition or
to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or any Significant Subsidiary or of any substantial part of the
property or assets of the Company or any Significant Subsidiary, or the
making by the Company or any Significant Subsidiary of an assignment for
the benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action by
the Company or any Significant Subsidiary in furtherance of any such
action; or
(i) any Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of this Indenture and such
Subsidiary Guarantee) or a Subsidiary Guarantor denies or disaffirms its
obligations under its Subsidiary Guarantee.
SECTION 6.2 Acceleration.
If any Event of Default (other than an Event of Default
specified in clause (g) or (h) of Section 6.1) occurs and is continuing,
then and in every such case the Trustee or the Holders of not less than
25% of the outstanding aggregate principal amount at Stated Maturity of
the Notes, may declare the principal amount at Stated Maturity of,
premium, if any, and any accrued and unpaid interest (and Special
Interest, if any) on all such Notes then outstanding to be immediately
due and payable by a notice in writing to the Company (and to the Trustee
if given by Holders of such Notes), and upon any such declaration all
amounts payable in respect of the Notes will become and be immediately
due and payable. If any Event of Default specified in clause (g) or
(h) of Section 6.1 occurs, the principal amount at Stated Maturity of,
premium, if any, and any accrued and unpaid interest (including Special
Interest, if any) on, the Notes then outstanding shall become immediately
due and payable without any declaration or other act on the part of the
Trustee or any Holder of such Notes. In the event of a declaration of
acceleration because an Event of Default set forth in clause (e) of
Section 6.1 has occurred and is continuing, such declaration of
acceleration shall be automatically rescinded and annulled if the event
of default triggering such Event of Default pursuant to clause (e) of
Section 6.1 shall be remedied or cured or waived by the holders of the
relevant Indebtedness within 30 days after such event of default;
provided that no judgment or decree for the payment of the money due on
the Notes has been obtained by the Trustee as provided in this Indenture.
After any such acceleration, but before a judgment or decree
based on acceleration, Holders of a majority in principal amount at
Stated Maturity of the outstanding Notes by notice to the Company and the
Trustee may rescind an acceleration and its consequences if:
(a) the Company or any Subsidiary Guarantor has paid or deposited with
the Trustee a sum sufficient to pay
(i) all money paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursement and advances of the
Trustee, its agents and counsel, and any other amounts due to the Trustee
under Section 7.7;
(ii) all overdue installments of interest and Special Interest, if any,
on, and any other amounts due in respect of, all Notes;
(iii) the principal of (and premium, if any, on) any Notes that have
become due otherwise than by such declaration of acceleration and
interest thereon at the rate or rates prescribed therefor in the Notes
and this Indenture; and
(iv) to the extent that payment of such interest is lawful, interest upon
Defaulted Interest at the rate or rates prescribed therefor in the Notes
and this Indenture;
(b) all Events of Default, other than the nonpayment of principal of
Notes which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 6.4;
(c) the annulment of such acceleration would not conflict with any
judgment or decree of a court of competent jurisdiction; and
(d) the Company has delivered an Officers' Certificate to the Trustee to
the effect of clauses (b) and (c) of this sentence.
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 6.3 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal of,
premium, on, if any, any interest on, Special Interest, if any, on, and
any other amounts owing and unpaid on, the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a Note in
exercising any right or remedy accruing upon an Event of Default shall
not impair the right or remedy or constitute a waiver of or acquiescence
in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.4 Waiver of Past Defaults.
Subject to Section 6.7 hereof, Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by
notice to the Trustee may on behalf of the Holders of all of the Notes
waive an existing Default or Event of Default and its consequences
hereunder, except (i) an existing Default or Event of Default in the
payment of the principal of, premium, if any, on, or interest and Special
Interest, if any, on, the Notes (including in connection with an offer to
purchase) or (ii) an existing Default or Event of Default in respect of a
provision that under Section 10.2 cannot be amended without the consent
of each Holder affected thereby. 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 6.5 Control By Majority.
The Holders of a majority in aggregate principal amount of the
Notes then outstanding may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the
Trustee may refuse to follow any direction that conflicts with law or
this Indenture or, subject to Section 7.1 hereof, that the Trustee
determines may be unduly prejudicial to the rights of other Holders of
Notes or that may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed by the Trustee that is
not inconsistent with such direction. Prior to taking any action
hereunder, the Trustee shall be entitled to indemnification satisfactory
to it in its sole discretion against all losses and expenses caused by
taking or not taking such action.
SECTION 6.6 Limitation on Suits.
No Holder of any Note shall have the right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, the
Subsidiary Guarantees or the Notes, or for the appointment of a receiver
or a trustee, or for any other remedy, unless:
(a) the Holder of a Note has given to the Trustee written notice of a
continuing Event of Default;
(b) a Holder or Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the Notes then outstanding do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
SECTION 6.7 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of, premium, if any,
on, interest and Special Interest, if any, on, the Notes held by such
Holder, on or after the respective due dates expressed in the Note or
this Indenture (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent
of such Holder.
SECTION 6.8 Collection Suit by Trustee.
If an Event of Default specified in Section 6.1(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment
in its own name and as trustee of an express trust against the Company
for the whole amount of principal of, premium, if any, on, interest and
Special Interest, if any, remaining unpaid on, the Notes and interest on
overdue principal and, to the extent lawful, interest and 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
any other amounts due to the Trustee under Section 7.7.
SECTION 6.9 Trustee May File Proofs of Claim.
The Trustee shall be entitled and empowered, without regard to
whether the Trustee or any Holder shall have made any demand or performed
any other act pursuant to the provisions of this Article and without
regard to whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise, by
intervention in any proceedings relative to the Company or any Obligor
upon the Notes, or to the creditors or property or assets of the Company,
any Subsidiary Guarantor or any other Obligor or otherwise, to take any
and all actions authorized under the Trust Indenture Act in order to have
claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be entitled and empowered in such
instances:
(a) to file and prove a claim or claims for the whole amount of
principal (and premium, if any), interest, Special Interest, if any, and
any other amounts owing and unpaid in respect of the Notes, and to file
such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including all amounts owing to the
Trustee and each predecessor Trustee pursuant to Section 7.7 hereof) and
of the Holders allowed in any judicial proceedings relative to the
Company or other Obligor upon the Notes, or to the creditors or property
of the Company, any Subsidiary Guarantor, or any such other Obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the Holders of the Notes in any election of a trustee or a
standby trustee in arrangement, reorganization, liquidation or other
bankruptcy or insolvency proceedings or Person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other Property or assets
payable or deliverable on any such claims, and to distribute all amounts
received with respect to the claims of the Holders and of the Trustee on
their behalf; and any trustee, receiver, or liquidator, custodian or
other similar official is hereby authorized by each of the Holders to
make payments to the Trustee, and, in the event that the Trustee shall
consent to the making of payments directly to the Holders, to pay to the
Trustee such amounts as shall be sufficient to cover all amounts owing to
the Trustee and each predecessor Trustee pursuant to Section 7.7 hereof.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment
or composition affecting the Notes or the rights of any Holder thereof,
or to authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding except, as aforesaid, to vote for the election of
a trustee in bankruptcy or similar person.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party), the Trustee shall be
held to represent all the Holders of the Notes, and it shall not be
necessary to make any Holders of the Notes parties to any such
proceedings.
SECTION 6.10 Priorities.
If the Trustee collects any money or property pursuant to this
Article, it shall pay out the money or property in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, premium, if any, interest, and Special Interest, if
any, ratably, without preference or priority of any kind, according to
the amounts due and payable on the Notes for principal (premium, if any),
interest, and Special Interest, if any, respectively; and
Third: to the Company or to the Subsidiary Guarantors or to
such other party as a court of competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10. At least 15
days before such record date, the Company shall mail to each Holder and
the Trustee a notice that states the record date, the payment date and
amount to be paid. The Trustee may mail such notice in the name and at
the expense of the Company.
SECTION 6.11 Undertaking For Costs.
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 a Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant
in the suit, having due regard to the merits and good faith of the claims
or defenses made by the party litigant. This Section does not apply to a
suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.7
hereof, or a suit by Holders of more than 10% in aggregate principal
amount of the then outstanding Notes.
SECTION 6.12 Restoration of Rights and Remedies.
If the Trustee or any Holder of Notes has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every
such case the Company, the Subsidiary Guarantors, if any, the Trustee and
the Holders 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 Holders
shall continue as though no such proceeding has been instituted.
SECTION 6.13 Rights and Remedies Cumulative.
Except as otherwise provided in Section 2.7 hereof, no right or
remedy conferred herein, upon or reserved to the Trustee or to the
Holders 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 6.14 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Note 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 6 or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by
the Trustee or by the Holders, as the case may be.
ARTICLE 7
TRUSTEE
SECTION 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise 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 Person would exercise or use under the circumstances in the
conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the express
provisions of this Indenture and the Trustee need perform only those
duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
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. However, the Trustee shall examine the
certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against
any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money
held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
(g) 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 and to the provisions of the
Trust Indenture Act.
SECTION 7.2 Rights of Trustee.
(a) Subject to the provisions of Section 7.1(a) hereof, the Trustee may
rely upon any document believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee
may consult with counsel and the oral or written advice of such counsel
or any Opinion of Counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and
protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the advice
or opinion of such counsel.
(c) The Trustee may act through its attorneys and agents and shall not
be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights
or powers conferred upon it by this Indenture; provided, however, that
the Trustee's conduct does not constitute willful misconduct or
negligence.
(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 Holders unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses
and liabilities that might be incurred by it in compliance with such
request or direction.
(f) Except with respect to Section 4.1 hereof, the Trustee shall have
no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default except (i) any Event of
Default occurring pursuant to Sections 6.1(a) (except that the Trustee
shall not be deemed to have knowledge of a default in the payment of
Special Interest) or 6.1(b), or (ii) any Default or Event of Default of
which a Responsible Officer of the Trustee shall have received written
notification; provided that the Trustee shall comply with the "automatic
stay" provisions contained in U.S. bankruptcy laws, if applicable. As
used herein, the term "actual knowledge" means the actual fact or
statement of knowing, without any duty to make any investigation with
regard thereto.
(g) Prior to the occurrence of an Event of Default hereunder and after
the curing and waiving of all Events of Default, 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, note, other evidence
of indebtedness or other paper or document unless requested in writing to
do so by the Holders of not less than a majority in aggregate principal
amount of the Notes then outstanding; provided that if the payment within
a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in
the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if advanced by the Trustee,
shall be repaid by the Company upon demand. The Trustee shall not be
bound to ascertain or inquire as to the performance or observance of any
covenants, conditions, or agreements on the part of the Company, except
as otherwise set forth herein, but the Trustee may, in its discretion,
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.
(h) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(i) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty.
SECTION 7.3 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company or
any Affiliate of the Company with the same rights it would have if it
were not Trustee. However, in the event that the Trustee acquires any
conflicting interest (as defined in the Trust Indenture Act) it must
eliminate such conflict within 90 days, apply to the SEC for permission
to continue as Trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
SECTION 7.4 Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, any
Subsidiary Guarantee or the Notes, it shall not be accountable for the
Company's use of the proceeds from the Notes or any money paid to the
Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall
not be responsible for any statement or recital herein or any statement
in the Notes or any other document in connection with the sale of the
Notes or pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.5 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes
a notice of the Default or Event of Default within 90 days after it
occurs. Except in the case of a Default or Event of Default in payment of
principal of, premium, if any, or interest on any Note (including
payments pursuant to the mandatory repurchase provisions of such Notes,
if any), the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
SECTION 7.6 Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief
report dated as of such reporting date that complies with TIA
Section 313(a) (but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA
Section 313(b). The Trustee shall also transmit by mail all reports as
required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA
Section 313(d). The Company shall promptly notify the Trustee whenever
the Notes become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7 Compensation and Indemnity.
The Company shall pay to the Trustee promptly from time to time
such compensation for its acceptance of this Indenture and services
hereunder as agreed to by the parties from time to time. The Trustee's
compensation shall not be limited by any law on compensation of a trustee
of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses
incurred or made by it, including the costs of collection, in addition to
the compensation for its services. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses (including reasonable attorneys' fees)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs
and expenses of enforcing this Indenture against the Company (including
this Section 7.7) and defending itself against any claim (whether
asserted by the Company or any Holder or any other Person) or liability
in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence or bad faith. The Trustee
shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay
for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.7 shall
survive the resignation or removal of the Trustee and the satisfaction
and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property
held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Notes. Such Lien shall be a Lien
permitted under this Indenture and shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Sections 6.1(g) or 6.1(h) hereof occurs,
the expenses and the compensation for the services (including the fees
and expenses of its agents and counsel) are intended to constitute
expenses of administration under any applicable bankruptcy laws.
The Trustee shall comply with the provisions of TIA
Section 313(b)(2) to the extent applicable.
SECTION 7.8 Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor
Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of
Notes of a majority in principal amount of the then outstanding Notes may
remove the Trustee by so notifying the Trustee and the Company in
writing. If at any time:
(a) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act after written request thereof by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six months,
unless the Trustee's duty to resign is stayed in accordance with the
provisions of TIA Section 310(b); or
(b) the Trustee shall cease to be eligible under Section 7.10 hereof and
shall fail to resign after written request therefor by the Company or by
any Holder; or
(c) the Trustee shall become incapable of acting or a decree or order
for relief by a court having jurisdiction in the premises shall have been
entered in respect of the Trustee in an involuntary case under the U.S.
bankruptcy laws, as now or hereinafter constituted, or a decree or order
by a court having jurisdiction in the premises shall have been entered
for the appointment of a receiver, custodian, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Trustee or of
its Property and assets or affairs, or any public officer shall take
charge or control of the Trustee or of its Property and assets or affairs
for the purpose of rehabilitation, conservation, winding-up or
liquidation; or
(d) the Trustee shall commence a voluntary case under the U.S.
bankruptcy laws, as now or hereafter constituted, or shall consent to the
appointment of or taking possession by a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Trustee or of its Property and assets or affairs, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action; or
(e) the Trustee becomes incapable of acting,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee with respect to the Notes, or (ii) subject to Section 6.11
hereof, any Holder who has been a bona fide Holder of a Note for at least
six months may, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee for the Notes.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint
a successor Trustee. Within one year after the successor Trustee takes
office, the Holders of a majority in principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee notifies the Company of its resignation or is
removed, the retiring Trustee, the Company, or the Holders of Notes of at
least 10% in principal amount of the then outstanding Notes may petition
any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply
with Section 7.10, such Holder of a Note may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment
of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective,
and the successor Trustee shall have all the rights, powers and duties of
the Trustee under this Indenture. The successor Trustee shall mail a
notice of its succession to Holders of the Notes. The retiring Trustee
shall promptly transfer all Property held by it as Trustee to the
successor Trustee, provided that all sums owing to the Trustee hereunder
have been paid and subject to the Lien provided for in Section 7.7
hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.9 Successor Trustee by Merger, Etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to,
another corporation, the Successor without any further act shall be the
successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver
such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Trustee may
authenticate such Notes either in the name of any predecessor hereunder
or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the
Notes or in this Indenture provided that the certificate of the Trustee
shall have.
SECTION 7.10 Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United
States of America or of any state thereof that is authorized under such
laws to exercise corporate trustee power, that is subject to supervision
or examination by federal or state authorities and that together, in the
case of the initial Trustee, with its ultimate parent entity, has a
combined capital and surplus of at least $50,000,000 as set forth in its
most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall
comply with TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are
met.
SECTION 7.11 Preferential Collection of Claims Against the Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE 8
SATISFACTION AND DISCHARGE
SECTION 8.1 Satisfaction and Discharge.
This Indenture shall upon the request of the Company cease to
be of further effect (except as to surviving rights of registration of
transfer, substitution or exchange of Notes herein expressly provided
for, the Company's obligations under Sections 7.7 and 8.4 hereof, the
Company's rights of optional redemption under Article 3 hereof, and the
Company's, the Trustee's and the Paying Agent's obligations under
Section 8.3 hereof) and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of
this Indenture when:
(a) either
(i) all outstanding Notes have been delivered to the Trustee for
cancellation, or
(ii) all such Notes not theretofore delivered to the Trustee for
cancellation have become due and payable, will become due and payable
within one year or are to be called for redemption within one year
under irrevocable 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 has irrevocably deposited or
caused to be deposited with the Trustee funds or U.S. Government
Obligations in an amount sufficient to pay and discharge the entire
debt on the Notes not theretofore delivered to the Trustee for
cancellation, for principal of (premium, if any, on) and interest
(including Special Interest, if any) to the date of deposit or
Maturity or date of redemption;
(b) the Company has paid or caused to be paid all sums then due and
payable by the Company under this Indenture; and
(c) the Company has delivered an Officers' Certificate and an Opinion of
Counsel relating to compliance with the conditions set forth in this
Indenture.
Notwithstanding the satisfaction and discharge of this
Indenture, the Company's obligations in Sections 2.3, 2.4, 2.6, 2.7,
2.11, 2.13, 7.7, 7.8, 8.2, 8.3 and 8.4, and the Trustee's and Paying
Agent's obligations in Section 8.3 shall survive until the Notes are no
longer outstanding. Thereafter, only the Company's obligations in
Sections 7.7, 8.3 and 8.4 and the Trustee's and Paying Agent's
obligations in Section 8.3 shall survive.
In order to have money available on a payment date to pay
principal (and premium, if any, on) or interest (and Special Interest, if
any) on the Notes, the U.S. Government Obligations shall be payable as to
principal (and premium, if any) or interest (and Special Interest, if
any) at least one Business Day before such payment date in such amounts
as will provide the necessary money. U.S. Government Obligations shall
not be callable at the issuer's option.
SECTION 8.2 Application of Trust Money.
All money deposited with the Trustee pursuant to Section 8.1
shall be held in trust and, at the written direction of the Company, be
invested prior to maturity in non-callable U.S. Government Obligations,
and applied by the Trustee in accordance with the provisions of the Notes
and this Indenture, to the payment, either directly or through any Paying
Agent as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest (and Special Interest,
if any) for the payment of which money has been deposited with the
Trustee; but such money need not be segregated from other funds except to
the extent required by law.
SECTION 8.3 Repayment of the Company.
The Trustee and the Paying Agent shall promptly pay to the
Company upon written request any excess money or securities held by them
at any time.
The Trustee and the Paying Agent shall pay to the Company upon
written request any money held by them for the payment of principal or
interest that remains unclaimed for two years after the date upon which
such payment shall have become due; provided that the Company shall have
either caused notice of such payment to be mailed to each Holder of the
Notes entitled thereto no less than 30 days prior to such repayment or
within such period shall have published such notice in a financial
newspaper of widespread circulation published in The City of New York,
including, without limitation, The Wall Street Journal (national
edition). After payment to the Company, Holders entitled to the money
must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another Person, and all
liability of the Trustee and such Paying Agent with respect to such money
shall cease.
SECTION 8.4 Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations in accordance with Section 8.1 by reason of
any legal proceeding or by reason of any order or judgment of any court
of governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's and Subsidiary Guarantors' obligations
under this Indenture, the Notes and the Subsidiary Guarantees shall be
revived and reinstated as though no deposit has occurred pursuant to
Section 8.1 until such time as the Trustee or Paying Agent is permitted
to apply all such money or U.S. Government Obligations in accordance with
Section 8.2; provided, however, that if the Company or the Subsidiary
Guarantors have made any payment of interest (including Special Interest)
on or principal of any Notes because of the reinstatement of their
Obligations, the Company or such Subsidiary Guarantors shall be
subrogated to the rights of the Holders of such Notes to receive such
payment from the money or U.S. Government Obligations held by the Trustee
or Paying Agent.
ARTICLE 9
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 9.1 Option to Effect Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors
evidenced by a Board Resolution, at any time, elect to have either
Section 9.2 or 9.3 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 9.
SECTION 9.2 Defeasance and Discharge.
Upon the Company's exercise under Section 9.1 hereof of the
option applicable to this Section 9.2, the Company and the Subsidiary
Guarantors shall, subject to the satisfaction of the conditions set forth
in Section 9.4 hereof, be deemed to have been discharged from their
respective Obligations with respect to all outstanding Notes, this
Indenture and the Subsidiary Guarantees on the date the conditions set
forth below are satisfied (hereinafter, "Defeasance"). For this purpose,
Defeasance means that the Company shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes
and the Company and the Subsidiary Guarantors shall be deemed to have
satisfied all of their obligations under such Notes, this Indenture and
the Subsidiary Guarantees (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same),
subject to the following which shall survive until otherwise terminated
or discharged hereunder:
(a) the rights of Holders of such Notes to receive, solely from the
trust fund described in Section 9.4 hereof and as more fully set forth in
Section 9.4, payments in respect of the principal and of and any premium
and interest (including Special Interest, if any) on such Notes when
payments are due, (but not the Change of Control Purchase Price or the
Excess Proceeds Offer Amount).
(b) the Company's obligations with respect to such Notes under Sections
2.6, 2.7, 2.11, and 4.2 hereof,
(c) the rights, powers, trusts, duties and immunities of the Trustee
under this Indenture,
(d) Article 3 hereof, and
(e) this Article 9.
Subject to compliance with this Article 9, the Company may exercise its
option under this Section 9.2 notwithstanding the prior exercise of its
option under Section 9.3 hereof.
SECTION 9.3 Covenant Defeasance.
Upon the Company's exercise under Section 9.1 hereof of the
option applicable to this Section 9.3, (i) the Company and the Subsidiary
Guarantors shall, subject to the satisfaction of the conditions set forth
in Section 9.4 hereof, be released from its obligations under the
covenants contained in Sections 4.4, 4.6, 4.8, 4.9, 4.10, 4.11, 4.12,
4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 5.1(a)(3) and 5.1(b), the
Events of Default contained in Sections 6(e) and 6(f) and Sections 6.1(g)
and 6.1(h) with respect to Significant Subsidiaries only, and any
covenant added to this Indenture subsequent to the Issue Date pursuant to
Section 10.1 hereof with respect to the outstanding Notes and (ii) the
occurrence of any event specified in Section 6.1(c) or 6.1(d) hereof,
with respect to any of Sections 4.4, 4.6, 4.8, 4.9, 4.10, 4.11, 4.12,
4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 hereof, and any
covenant added to this Indenture subsequent to the Issue Date pursuant to
Section 10.1 hereof, shall be deemed not to be or result in an Event of
Default, in each case with respect to such Notes as provided in this
Section 9.3 on and after the date on which the conditions set forth in
Section 9.4 hereof are satisfied, and the Notes shall thereafter be
deemed not "outstanding" for the purposes of any direction, waiver,
consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be
deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, "Covenant Defeasance" means that, with
respect to the outstanding Notes, the Company and the Subsidiary
Guarantors may omit to comply with and shall have no liability in respect
of any term, condition or limitation set forth in any such covenant (to
the extent so specified in the case of Section 6.1(c) or 6.1(d) hereof),
whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default
under Section 6.1 hereof, but, except as specified above, the remainder
of this Indenture, the Subsidiary Guarantees and the Notes shall be
unaffected thereby.
SECTION 9.4 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of
either Section 9.2 or 9.3 hereof to the outstanding Notes:
In order to exercise either Defeasance or Covenant Defeasance:
(a) the Company shall irrevocably have deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to the benefits of the Holders of such Notes, (i) money
in an amount, or (ii) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one Business Day
before the due date of any payment, money in an amount, or (iii) a
combination thereof, in each case 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 and
discharge the principal of (premium, if any, on) and any installment of
interest on and Special Interest, if any, on the Notes at the Maturity
thereof or Redemption Date therefor in accordance with the terms of this
Indenture and the Notes;
(b) in the case of an election under Section 9.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel confirming that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable U.S. federal income
tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders of the outstanding
Notes will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Defeasance had not
occurred;
(c) in the case of an election under Section 9.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel confirming that
the Holders of the outstanding Notes will not recognize income, gain or
loss for U.S. federal income tax purposes as a result of such Covenant
Defeasance and will be subject to U.S. federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the
proceeds of which will be used to defease the Notes pursuant to this
Article 9 concurrently with such incurrence) or insofar as Sections
6.1(g) or 6.1(h) hereof is concerned, shall have occurred at any time on
or prior to the 91st day after the date of such deposit and be continuing
on such 91st day (it being understood that this condition shall not be
deemed satisfied until after such 91st day);
(e) such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(f) such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture
Act (assuming for the purpose of this clause (f) that all Notes are in
default within the meaning of such Act);
(g) such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within the
meaning of the Investment Company Act of 1940, as amended, unless such
trust shall be registered under such Act or exempt from registration
thereunder;
(h) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that on the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(i) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company
or with the intent of defeating, hindering, delaying or defrauding any
other creditors of the Company; and
(j) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Defeasance or the Covenant
Defeasance have been complied with.
SECTION 9.5 Deposited Money and U.S. Government Obligations To Be Held
in Trust; Other Miscellaneous Provisions.
Subject to Section 9.6 hereof, all money and U.S. Government
Obligations (including the proceeds thereof) deposited with the Trustee
(or other qualifying trustee, collectively for purposes of this
Section 9.5, the "Trustee") pursuant to Section 9.4 hereof in respect of
the outstanding Notes shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any such Paying Agent as the
Trustee may determine, to the Holders of such Notes of all sums due and
to become due thereon in respect of principal, premium, if any, and
interest (including Special Interest, if any), but such money need not be
segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or U.S.
Government Obligations deposited pursuant to Section 9.4 hereof or the
principal and interest received in respect thereof.
Anything in this Article 9 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or U.S. Government Obligations held by
it as provided in Section 9.4 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in
a written certification thereof delivered to the Trustee (which may be
the opinion delivered under Section 9.4(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Defeasance or Covenant Defeasance.
SECTION 9.6 Repayment to the Company.
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,
premium, if any, Special Interest, if any, or interest on any Note and
remaining unclaimed for two years after such principal, and premium, if
any Special Interest, if any, or interest has become due and payable
shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note
shall thereafter, as a 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; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in The New York
Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such notification or
publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 9.7 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or U.S. Government Obligations in accordance with
Section 9.2 or 9.3 hereof, as the case may be, by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's Obligations
under this Indenture and the Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 9.2 or 9.3 hereof
until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 9.2 or 9.3 hereof, as the case may
be; provided, however, that, if the Company makes any payment of
principal of, premium, if any, interest, Special Interest, if any, on any
Note following the reinstatement of its Obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such
payment from the money held by the Trustee or Paying Agent.
ARTICLE 10
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 10.1 Without Consent of Holders of Notes.
Notwithstanding Section 9.2 of this Indenture, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this
Indenture or the Notes without the consent of any Holder of a Note:
(a) to evidence the succession of another Person to the Company and the
Subsidiary Guarantors and the assumption by such successor of the
covenants and Obligations of the Company under this Indenture and
contained in the Notes and of the Subsidiary Guarantors contained in this
Indenture and the Subsidiary Guarantees,
(b) to add to the covenants of the Company, for the benefit of Holders,
or to surrender any right or power conferred upon the Company or the
Subsidiary Guarantors by this Indenture,
(c) to add any additional Events of Default,
(d) to provide for uncertificated Notes in addition to or in place of
Certificated Notes,
(e) to evidence and provide for the acceptance of appointment under this
Indenture by the successor Trustee,
(f) to secure the Notes and/or the Subsidiary Guarantees,
(g) to cure any ambiguity, to correct or supplement any provision in
this Indenture which may be inconsistent with any other provision herein
or to add any other provisions with respect to matters or questions
arising under this Indenture, provided that such actions will not
adversely affect the interests of Holders in any material respect,
(h) to add or release any Subsidiary Guarantor pursuant to the terms of
this Indenture, or
(i) to comply with the requirements of the SEC to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in
Section 10.7 hereof, the Trustee shall join with the Company in the
execution of any amended or supplemental Indenture authorized or
permitted by the terms of this Indenture and to make any further
appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into such amended or
supplemental Indenture that affects its own rights, duties or immunities
under this Indenture or otherwise.
SECTION 10.2 With Consent of Holders of Notes.
Except as provided below in this Section 10.2, the Company, the
Subsidiary Guarantors and the Trustee may amend or supplement this
Indenture and the Notes may be amended or supplemented with the consent
of the Holders of at least a majority in aggregate principal amount at
Stated Maturity of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for the
Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing Default
or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or, interest on, or Special
Interest, if any, on, the Notes, except a payment default resulting from
an acceleration that has been rescinded) or compliance with any provision
of this Indenture or the Notes may be waived with the consent of the
Holders of a majority in aggregate principal amount at Stated Maturity of
the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory
to the Trustee of the consent of the Holders of Notes as aforesaid, and
upon receipt by the Trustee of the documents described in Section 10.7
hereof, the Trustee shall join with the Company and the Subsidiary
Guarantors, if any, in the execution of such amended or supplemental
Indenture unless such amended or supplemental Indenture affects the
Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not
be obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 10.2 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby
a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amended
or supplemental Indenture or waiver. Subject to Sections 6.4 and 6.7
hereof, the Holders of a majority in aggregate principal amount of the
Notes then outstanding may waive compliance in a particular instance by
the Company with any provision of this Indenture or the Notes. However,
without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder):
(a) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount thereof (or
premium, if any), or the interest thereon that would be due and payable
upon Maturity thereof, or change the place of payment where, or the coin
or currency in which, any Note 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 Stated Maturity thereof;
(b) reduce the percentage in principal amount at Stated Maturity of the
outstanding Notes, the consent of whose Holders is necessary for any such
supplemental indenture or required for any waiver of compliance with
certain provisions of this Indenture, or certain Defaults hereunder;
(c) modify the Obligations of the Company to make offers to purchase
Notes upon a Change of Control or from the proceeds of Asset Sales;
(d) subordinate in right of payment the Notes or the Subsidiary
Guarantees to any other Indebtedness;
(e) amend, supplement or otherwise modify the provisions of this
Indenture relating to Subsidiary Guarantees or
(f) make any change in Sections 6.4 or 6.7 or modify any of the
provisions of this Section 10.2 (except to increase any percentage set
forth therein or herein).
Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory
to the Trustee of the consent of the Holders of Notes as aforesaid, and
upon receipt by the Trustee of the documents described in Section 7.2
hereof, the Trustee shall join with the Company in the execution of such
amended or supplemental Indenture unless such amended or supplemental
Indenture affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 10.2 to approve the particular form of any
proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.
SECTION 10.3 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article 10, 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 Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby. After a
supplemental indenture becomes effective, the Company shall mail to
Holders a notice briefly describing such amendment. The failure to give
such notice to all Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.
SECTION 10.4 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies
with the Trust Indenture Act as then in effect.
SECTION 10.5 Revocation and Effect of Consents.
(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder
of a Note and every subsequent Holder of a Note or portion of a Note that
evidences the same debt as the consenting Holder's Note, even if notation
of the consent is not made on any Note. However, any such Holder of a
Note or subsequent Holder of a Note may revoke the consent as to its Note
if the Trustee receives written notice of revocation before the date the
waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
(b) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to give their consent
or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding subsection, those Persons who
were Holders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to give such consent or to revoke
any consent previously given or to take any such action, whether or not
such Persons continue to be Holders after such record date. No such
consent shall be valid or effective for more than 120 days after such
record date.
SECTION 10.6 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall
authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
SECTION 10.7 Trustee to Sign Supplemental Indentures.
The Trustee shall sign any supplemental Indenture authorized
pursuant to this Article 10 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the
Trustee. Neither the Company nor a Subsidiary Guarantor may sign a
supplemental Indenture until the Board of Directors of such Person
approves it. In executing any supplemental indenture, the Trustee shall
be entitled to receive indemnity reasonably satisfactory to it and to
receive and (subject to Section 7.1) shall be fully protected in relying
upon, in addition to the documents required by Section 11.4, an Officers'
Certificate and an Opinion of Counsel stating that:
(a) such supplemental indenture is authorized or permitted by this
Indenture and that all conditions precedent to the execution, delivery
and performance of such supplemental indenture have been satisfied;
(b) the Company and the Subsidiary Guarantors have all necessary
corporate power and authority to execute and deliver the supplemental
indenture and that the execution, delivery and performance of such
supplemental indenture has been duly authorized by all necessary
corporate action of the Company and the Subsidiary Guarantors;
(c) the execution, delivery and performance of the supplemental
indenture do not conflict with, or result in the breach of or constitute
a default under any of the terms, conditions or provisions of (i) this
Indenture, (ii) the charter documents and by-laws of the Company or any
Subsidiary Guarantor, or (iii) any material agreement or instrument to
which the Company or any Subsidiary Guarantor is subject and of which
such counsel is aware;
(d) to the knowledge of legal counsel writing such Opinion of Counsel,
the execution, delivery and performance of the supplemental indenture do
not conflict with, or result in the breach of any of the terms,
conditions or provisions of (i) any law or regulation applicable to the
Company or any Subsidiary Guarantor, or (ii) any material order, writ,
injunction or decree of any court or governmental instrumentality
applicable to the Company or any Subsidiary Guarantor;
(e) such supplemental indenture has been duly and validly executed and
delivered by the Company and the Subsidiary Guarantors, and this
Indenture together with such supplemental indenture constitutes a legal,
valid and binding obligations of the Company and the Subsidiary
Guarantors enforceable against the Company and the Subsidiary Guarantors,
as applicable, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting the enforcement of creditors' rights generally and general
equitable principles (whether considered in a proceeding at law or in
equity); and
(f) this Indenture together with such amendment or supplement complies
with the Trust Indenture Act.
SECTION 10.8 Payment for Consent.
Neither the Company nor any Affiliate of the Company shall,
directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to
amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by, or with another provision included
in this Indenture by operation of Sections 310 to 318, inclusive, of the
Trust Indenture Act, such imposed duties or incorporated provision shall
control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that can be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so
modified or excluded, as the case may be.
SECTION 11.2 Notices.
Any notice or communication by the Company, the Subsidiary
Guarantors or the Trustee to the others is duly given if in writing and
delivered in person or mailed by first class mail (registered or
certified, return receipt requested), telecopier or overnight air courier
guaranteeing next day delivery, to the others' address:
If to the Company or any Subsidiary Guarantor:
R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079
Attention: Chief Financial Officer
Telephone No.: 281-496-5000
Telecopier No.: 281-597-7556
If to the Trustee:
U.S. Trust Company of Texas,
National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Attention: Corporate Trust Division
Telephone No.: 214-754-1200
Telecopier No.: 214-754-1303
The Company, the Subsidiary Guarantors, or the Trustee, by
notice to the others may designate additional or different addresses for
subsequent notices or communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered
by hand, if personally delivered; when receipt acknowledged, if
telecopied; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or
by overnight air courier guaranteeing next day delivery to its address
shown on the Securities Register kept by the Registrar and shall be given
if so sent within the time prescribed. Any notice or communication shall
also be so mailed to any Person described in TIA Section 313(c), to the
extent required by the Trust Indenture Act. Failure to mail a notice or
communication to a Holder or any defect in it shall not affect its
sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the
addressee receives it; a notice or communication, however, shall not be
effective unless, in the case of the Company, the Subsidiary Guarantors
or the Trustee, actually received.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give notice by
mail to Holders, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification for
every purpose hereunder.
SECTION 11.3 Communication By Holders of Notes With Other Holders of
Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the
Notes. The Company, the Subsidiary Guarantors, the Trustee, the Registrar
and anyone else shall have the protection of TIA Section 312(c).
SECTION 11.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company, upon request, shall
furnish to the Trustee, to the extent required by this Indenture or the
Trust Indenture Act:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 11.5 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
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 such Persons as to 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 or any
Subsidiary Guarantor 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, and
may state that it is so based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an Officer or
Officers of the Company or such Subsidiary Guarantor stating that the
information with respect to such factual matters is in the possession of
the Company or such Subsidiary Guarantor, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate of
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 11.5 Statements Required in a Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall comply with
the provisions of TIA Section 314(e) and shall include:
(a) a statement that the Persons making such certificate or opinion have
read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Persons, they have made
such examination or investigation as is necessary to enable them to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Persons,
such condition or covenant has been satisfied.
SECTION 11.6 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
a specified percentage of Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor executed by such
specified percentage of Holders in person or by agents duly appointed;
and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are received by the
Trustee and, where it is hereby expressly required, by the Company and
the Subsidiary Guarantors. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders executing such instrument or instruments.
Proof of execution of any such instrument or of appointment of any such
agent shall be sufficient for any purpose of this Indenture and (subject
to Sections 7.1 and 7.2) conclusive in favor of the Trustee, the Company
and the Subsidiary Guarantors, if made in the manner provided in this
Section. Any electronic or other transmission pursuant to the
Depository's Applicable Procedures will be considered an instrument
executed by the Holders of the Notes for the purpose of this
Section 11.6.
(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 of such
execution or by a certificate of a 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 a signer acting in a
capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of 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, including the execution
of such instrument or writing without more.
(c) The ownership, principal amount and serial numbers of Notes held by
any Person, and the date of holding the same, shall be proved by the
Securities Register.
(d) If the Company shall solicit from the Holders of Notes any request,
demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to 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 Act, but the Company shall have no obligation to do so.
Such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30
days prior to the first solicitation is completed. If such a record date
is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record
date, but only the Holders of record at the close of business on such
record date shall be deemed to be Holders for the purposes of determining
whether Holders of the requisite proportion of outstanding Notes have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for that purpose the
outstanding Notes shall be computed as of such record date; provided that
no such authorization, agreement or consent by the Holders on such record
date shall be deemed effective unless it shall become pursuant to the
provisions of this Indenture not later than eleven months after the
record date.
(e) Except to the extent otherwise expressly provided in this Indenture,
any request, demand, authorization, direction, notice, consent, waiver or
other Act of the Holder of any Note shall bind every future Holder of the
same Note and the Holder of every Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted 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 Note.
(f) Without limiting the foregoing, a Holder entitled hereunder to give
or take any action with regard to any particular Note may do so with
regard to all or any part of the principal amount of such Note or by one
or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such principal
amount.
SECTION 11.7 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable
rules and set reasonable requirements for its functions; provided that no
such rule shall conflict with the terms of this Indenture or the Trust
Indenture Act.
SECTION 11.8 No Personal Liability of Directors, Officers, Employees
and Stockholders.
No director, officer, employee, incorporator or stockholder of
the Company or any Subsidiary Guarantor, as such, shall have any
liability for any obligations of the Company or the Subsidiary Guarantors
under the Notes, this Indenture, the Subsidiary Guarantees or for any
claim based on, in respect of, or by reason of, such Obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for
issuance of the Notes.
SECTION 11.9 Governing Law.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE AND THE NOTES, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 11.10 Agent for Service; Submission to Jurisdiction; Waiver
of Immunities.
By the execution and delivery of this Indenture or any
amendment or supplement hereto, each of the Company and the Subsidiary
Guarantors (i) acknowledges that it has, by separate written instrument,
designated and appointed CT Corporation System (the "Process Agent")
currently located at 1633 Broadway, New York, New York 10019, as its
authorized agent upon which process may be served in any suit, action or
proceeding with respect to, arising out of, or relating to, this
Indenture, the Subsidiary Guarantees, or the Notes or brought under U.S.
federal or state securities laws, may be instituted in any U.S. federal
or state court located in The City of New York, New York, and
acknowledges that the Process Agent has accepted such designation, (ii)
irrevocably submits to the jurisdiction of any such court in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
that it may effectively and lawfully do so, any obligation to the laying
of venue of any such suit, action or proceeding and the defense of an
inconvenient forum to the maintenance of any such suit action or
proceeding in such court, and (iii) agrees that service of process upon
the Process Agent shall be deemed in every respect effective service of
process upon the Company and the Subsidiary Guarantors in any such suit,
action or proceeding. The Company and the Subsidiary Guarantors further
agree to take any and all action, including the execution and filing of
any and all such documents and instruments as may be necessary to
continue such designation and appointment of the Process Agent in full
force and effect so long as this Indenture shall be in full force and
effect; provided that the Company and the Subsidiary Guarantors may and
shall (to the extent the Process Agent ceases to be able to be served on
the basis contemplated herein), by written notice to the Trustee,
designate such additional or alternative agents for service of process
under this Section 11.10 that (i) maintains an office located in the
Borough of Manhattan, The City of New York in the State of New York, (ii)
are either (a) counsel for the Company or (b) a corporate service company
which acts as agent for service of process for other persons in the
ordinary course of its business and for other persons in the ordinary
course of its business and (iii) agrees to act as agent for service of
process in accordance with this Section 11.10. Such notice shall identify
the name of such agent for process and the address of such agent for
process in the Borough of Manhattan, The City of New York, State of New
York. Upon the request of any Holder of a Note, the Trustee shall deliver
such information to such Holder. Notwithstanding the foregoing, there
shall, at all times, be at least one agent for service of process for the
Company and each Subsidiary Guarantor appointed and acting in accordance
with this Section 11.10.
To the extent that the Company or any Subsidiary Guarantor has
or hereafter may acquire any immunity from jurisdiction of any court or
from any legal process (whether through service of notice, attachment
prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, each of the Company
and the Subsidiary Guarantors hereby irrevocably waives such immunity in
respect of its Obligations under this Indenture, the Subsidiary
Guarantees and the Notes, to the extent permitted by law.
SECTION 11.11 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company, the Subsidiary
Guarantors or the Company's Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 11.12 Successors.
All agreements of the Company and the Subsidiary Guarantors in
this Indenture, the Notes and the Subsidiary Guarantors shall bind its
successors. All agreements of the Trustee in this Indenture shall bind
its successors.
SECTION 11.13 Severability.
In case any provision in this Indenture or in the Notes 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 11.14 Counterpart Originals.
The parties may sign any number of copies of this Indenture and
by the parties thereto in separate counterparts. Each of which when
signed shall be deemed to be an original, but all of them together
represent the same agreement.
SECTION 11.15 Table of Contents, Headings, Etc.
The Table of Contents, Cross-Reference Table and headings of
the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part of this
Indenture and shall in no way modify or restrict any of the terms or
provisions hereof.
ARTICLE 12
GUARANTEES
SECTION 12.1 Subsidiary Guarantors.
(a) For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, each of the Subsidiary Guarantors,
together with each Subsidiary of the Company which in accordance with
Sections 4.19 and 12.8(a) hereof is required in the future to guarantee
the Obligations of the Company and the Subsidiary Guarantors under the
Notes, the Subsidiary Guarantees and this Indenture upon execution of a
supplemental indenture, hereby jointly and severally and irrevocably and
unconditionally guarantees to the Trustee and to each Holder irrespective
of the validity or enforceability of this Indenture or the Notes or the
Obligations of the Company and the Subsidiary Guarantors under this
Indenture, that: (i) the principal of, premium, if any, any interest, and
Special Interest, if any, on the Notes (including, without limitation,
any interest that accrues after the filing of a proceeding of the type
described in Sections 6.1(g) and (h)) and any fees, expenses and other
amounts owing under this Indenture will be duly and punctually paid in
full when due, whether at Maturity, by acceleration, call for redemption,
upon a Change of Control Offer, Asset Sale Offer, purchase or otherwise,
and interest on the overdue principal and (to the extent permitted by
law) interest, if any, on the Notes and any other amounts due in respect
of the Notes, and all other Obligations of the Company and the Subsidiary
Guarantors, to the Holders of the Notes under this Indenture, the Notes
and the Subsidiary Guarantees, whether now or hereafter existing, will be
promptly paid in full or performed, all strictly in accordance with the
terms hereof and of the Notes; and (ii) in case of any extension of time
of payment or renewal of any Notes or any of such other Obligations, the
same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at Maturity, by
acceleration, call for redemption, upon Change of Control Offer, Asset
Sale Offer, purchase or otherwise. If payment is not made when due of any
amount so guaranteed for whatever reason, each Subsidiary Guarantor shall
be jointly and severally obligated to pay the same individually whether
or not such failure to pay has become an Event of Default which could
cause acceleration pursuant to Section 6.2. Each Subsidiary Guarantor
agrees that this is a guarantee of payment and not a guarantee of
collection. An Event of Default under this Indenture or the Notes shall
constitute an Event of Default under each Subsidiary Guarantee, and shall
entitle the Holders to accelerate the Obligations of each Subsidiary
Guarantor hereunder in the same manner and to the same extent as the
Obligations of the Company. Each Subsidiary Guarantee is intended to be
superior to or pari passu in right of payment with all Indebtedness of
the Subsidiary Guarantors and each Subsidiary Guarantor's Obligations are
independent of any Obligation of the Company or any other Subsidiary
Guarantor.
(b) Each Subsidiary Guarantor waives presentation to, demand of, payment
from and protest to the Company of any of the Obligations under this
Indenture or the Notes and also waives notice of protest for nonpayment.
Each Subsidiary Guarantor waives notice of any default under the Notes or
the Obligations. The Obligations of each Subsidiary Guarantor hereunder
shall not be affected by (i) the failure of any Holder or the Trustee to
assert any claim or demand or to enforce any right or remedy against the
Company or any other Person under this Indenture, the Notes or any other
agreement or otherwise; (ii) any extension or renewal of any thereof;
(iii) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Notes or any other agreement;
(iv) the release of any security held by any Holder or the Trustee for
the Obligations or any of them; (v) the failure of any Holder or the
Trustee to exercise any right or remedy against any other guarantor of
the Obligations; or (f) any change in the ownership of such Subsidiary
Guarantor.
(c) The Obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations of the
Company or otherwise. Without limiting the generality of the foregoing,
the Obligations of each Subsidiary Guarantor herein shall not be
discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy
under this Indenture, the Notes or any other agreement, by any waiver or
modification of any thereof, by any default, failure or delay, willful or
otherwise, in the performance of the Obligations of the Company, or by
any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of such
Subsidiary Guarantor or would otherwise operate as a discharge of such
Subsidiary Guarantor as a matter of law or equity.
(d) Each Subsidiary Guarantor further agrees that its Subsidiary
Guarantee shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of,
premium, if any, on or interest (or Special Interest, if any) on any
Obligation of the Company is rescinded or must otherwise be restored by
any Holder or the Trustee upon the bankruptcy or reorganization of the
Company or otherwise.
(e) In furtherance of the foregoing and not in limitation of any other
right which any Holder or the Trustee has at law or in equity against any
Subsidiary Guarantor by virtue hereof, upon the failure of the Company to
pay the principal of, premium, if any, on or interest (or Special
Interest, if any) on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or
to perform or comply with any other Obligation, each Subsidiary Guarantor
hereby promises to and will, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or
the Trustee an amount equal to the sum of (i) the unpaid amount of such
Obligations, (ii) accrued and unpaid interest on such Obligations (but
only to the extent not prohibited by law) and (iii) all other monetary
Obligations of the Company to the Holders and the Trustee.
(f) Until such time as the Notes and the other Obligations of the
Company guaranteed hereby have been satisfied in full, each Subsidiary
Guarantor hereby irrevocably waives any claim or other rights that it may
now or hereafter acquire against the Company or any other Subsidiary
Guarantor that arise from the existence, payment, performance or
enforcement of such Subsidiary Guarantor's Obligations under each
Subsidiary Guarantee, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification
and any right to participate in any claim or remedy of the Holders or the
Trustee against the Company or any other Subsidiary Guarantor or any
security, whether or not such claim, remedy or right arises in equity or
under contract, statute or common law, including, without limitation, the
right to take or receive from the Company or any other Subsidiary
Guarantor, directly or indirectly, in cash or other Property or by
set-off or in any other manner, payment or security on account of such
claim, remedy or right. If any amount shall be paid to such Subsidiary
Guarantor in violation of the preceding sentence at any time prior to the
later of the payments in full of the Notes and all other amounts payable
under this Indenture and each Subsidiary Guarantee upon the Maturity of
the Notes, such amount shall be held in trust for the benefit of the
Holders and the Trustee and shall forthwith be paid to the Trustee to be
credited and applied to the Notes and all other amounts payable under
each Subsidiary Guarantee, whether matured or unmatured, in accordance
with the terms of this Indenture, or to be held as security for any
Obligations or other amounts payable under any Subsidiary Guarantee
thereafter arising.
(g) Each Subsidiary Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by
this Indenture and that the waiver set forth in this Section 12.1 is
knowingly made in contemplation of such benefits. Each Subsidiary
Guarantor further agrees that, as between it, on the one hand, and the
Holders and the Trustee, on the other hand, (x) subject to this Article
12, the maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article 6 for the purposes of each Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby, and (y) in
the event of any acceleration of such Obligations guaranteed hereby as
provided in Article 6, such Obligations (whether or not due and payable)
shall further then become due and payable by the Subsidiary Guarantors
for the purposes of each Subsidiary Guarantee.
(h) A Subsidiary Guarantor that makes a distribution or payment under a
Subsidiary Guarantee shall be entitled to contribution from each other
Subsidiary Guarantor in a pro rata amount based on the Adjusted Net
Assets of each such other Subsidiary Guarantor for all payments, damages
and expenses incurred by that Subsidiary Guarantor in discharging the
Company's obligations with respect to the Notes and this Indenture or any
other Subsidiary Guarantor with respect to its Subsidiary Guarantee, so
long as the exercise of such right does not impair the rights of the
Holders of the Notes under the Subsidiary Guarantees.
(i) Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee
or any Holder in enforcing any rights under this Section.
SECTION 12.2 Limitation on Liability.
The Obligations of each Subsidiary Guarantor will be limited to
the maximum amount as will, after giving effect to all other contingent
and fixed liabilities of Subsidiary Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the Obligations of such other
Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its
contribution obligations under this Indenture, result in the Obligations
of such Subsidiary Guarantor under its Subsidiary Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal
or state law or otherwise not being void, voidable or unenforceable under
any bankruptcy, reorganization, receivership, insolvency, liquidation or
other similar legislation or legal principles under any applicable
foreign law. Each Subsidiary Guarantor that makes a payment or
distribution under a Subsidiary Guarantee shall be entitled to a
contribution from each other Subsidiary Guarantor in a pro rata amount
based on the Adjusted Net Assets of Subsidiary Guarantor.
SECTION 12.3 Execution and Delivery of Guarantees.
To further evidence its Subsidiary Guarantee set forth in
Section 12.1 hereof, each Subsidiary Guarantor hereby agrees that
notation of such Subsidiary Guarantee shall be endorsed on each Note
authenticated and delivered by the Trustee and executed by either manual
or facsimile signature of an authorized officer of such Subsidiary
Guarantor. Each Subsidiary Guarantor hereby agrees that its Subsidiary
Guarantee set forth in Section 12.1 hereof shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of
such Subsidiary Guarantee. If an officer of a Subsidiary Guarantor whose
signature is on this Indenture or a Note no longer holds that office at
the time the Trustee authenticates such Note or at any time thereafter,
such Subsidiary Guarantor's guarantee of such Note shall be valid
nevertheless. The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any
Subsidiary Guarantee set forth in this Indenture on behalf of the
Subsidiary Guarantor.
SECTION 12.4 When A Subsidiary Guarantor May Merge, Etc.
Each Subsidiary Guarantor may consolidate with or merge into or
sell or otherwise dispose of all or substantially all of its Property and
assets to the Company or another Subsidiary Guarantor without limitation,
except to the extent any such transaction is subject to Section 5.1
hereof. Each Subsidiary Guarantor may consolidate with or merge into or
sell all or substantially all of its Property and assets to a Person
other than the Company or another Subsidiary Guarantor (whether or not
Affiliated with the Subsidiary Guarantor), provided that (a) if the
surviving Person is not the Subsidiary Guarantor, the surviving Person
agrees to assume such Subsidiary Guarantor's Subsidiary Guarantee and all
its Obligations pursuant to this Indenture (except to the extent the
provisions of Section 12.7(a) would result in the release of such
Subsidiary Guarantee) and (b) such transaction does not (i) violate any
of the covenants described in Article 4 hereof or (ii) result in a
Default or Event of Default being in existence or continuing immediately
thereafter.
SECTION 12.5 No Waiver.
Neither a failure nor a delay on the part of either the Trustee
or the Holders in exercising any right, power or privilege under this
Article 12 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the
Trustee and the Holders herein expressly specified are cumulative and not
exclusive of any other rights, remedies or benefits which either may have
under this Article 12 at law, in equity, by statute or otherwise.
SECTION 12.6 Modification.
No modification, amendment or waiver of any provision of this
Article 12, nor the consent to any departure by any Subsidiary Guarantor
therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall
be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Subsidiary Guarantor in any case
shall entitle such Subsidiary Guarantor to any other or further notice or
demand in the same, similar or other circumstances.
SECTION 12.7 Release of Guarantor.
(a) Upon the sale or other disposition (by merger or otherwise) of a
Subsidiary Guarantor (or all or substantially all of its property and
assets) to a Person other than the Company, or another Subsidiary
Guarantor and pursuant to a transaction that is otherwise in compliance
with this Indenture (including as described in clause (b) of Section 12.4
and as described in Section 4.15 hereof), such Subsidiary Guarantor
(unless it otherwise remains a Restricted Subsidiary) shall be deemed
released from its Subsidiary Guarantee and the related Obligations set
forth in this Indenture; provided that any such termination shall occur
only to the extent that all Obligations of such Subsidiary Guarantor
under all of its guarantees of and under all of its pledges of assets or
other security interests which secure, other Indebtedness of the Company
or any other Restricted Subsidiary shall also terminate or be released
upon such sale or other disposition. Each Subsidiary Guarantor that is
designated as an Unrestricted Subsidiary in accordance with this
Indenture shall be released from its Subsidiary Guarantee and the related
Obligations set forth in this Indenture so long as it remains an
Unrestricted Subsidiary.
(b) Any Subsidiary Guarantee by a Restricted Subsidiary shall be
automatically and unconditionally released and discharged, as evidenced
by a supplemental indenture executed by the Company, the Subsidiary
Guarantors, if any, and the Trustee, upon the release or discharge of the
guarantee which resulted in the creation of such Subsidiary's Guarantee
and all other guarantees of the Obligations of any Obligor on the Notes,
except a discharge or release by, or as a result of, payment under such
guarantee.
SECTION 12.8 Execution of Supplemental Indentures for Future
Guarantors.
Any Restricted Subsidiary that guarantees any Indebtedness of
the Company or another Obligor is required pursuant to Section 12.8(a) or
4.19 hereof to become a Subsidiary Guarantor and the Company shall cause
each such Subsidiary to promptly execute and deliver to the Trustee a
supplemental indenture pursuant to which such Restricted Subsidiary shall
become a Subsidiary Guarantor under this Article 12 and shall guarantee
the Obligations of the Company under the Notes and this Indenture.
Concurrently with the execution and delivery of such supplemental
indenture, the Company shall deliver to the Trustee an Opinion of Counsel
to the effect that such supplemental indenture has been duly authorized,
executed and delivered by such Subsidiary Guarantor and that, subject to
the application of bankruptcy, insolvency, moratorium, reorganization,
fraudulent conveyance or transfer and other similar laws relating to
creditors' rights generally and to the principles of equity, whether
considered in a proceeding at law or in equity, the Subsidiary Guarantee
of such Subsidiary Guarantor is a legal, valid and binding obligation of
such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor
in accordance with its terms, and as to any such other matters as the
Trustee may reasonably request.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
R&B FALCON CORPORATION
By:
Name:
Title:
U.S. TRUST COMPANY OF TEXAS,
NATIONAL ASSOCIATION, as Trustee
By:
Name:
Title
(Face of Note) Exhibit A
[THIS GLOBAL NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
REFERRED TO ON THE REVERSE THEREOF.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO R&B FALCON CORPORATION (THE "COMPANY") OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.6 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS GLOBAL NOTE IS EXCHANGEABLE FOR A NOTE IN DEFINITIVE, FULLY
REGISTERED FORM, WITHOUT INTEREST COUPONS, IF (A) DTC NOTIFIES THE
COMPANY THAT IT IS UNWILLING OR UNABLE TO CONTINUE AS DEPOSITORY FOR THIS
GLOBAL NOTE OR IF AT ANY TIME DTC CEASES TO BE A "CLEARING AGENCY"
REGISTERED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND A
SUCCESSOR DEPOSITORY IS NOT APPOINTED BY THE COMPANY WITHIN 90 DAYS OF
SUCH NOTICE, (B) THE COMPANY EXECUTES AND DELIVERS TO THE TRUSTEE A
NOTICE THAT THIS GLOBAL NOTE SHALL BE SO TRANSFERABLE, REGISTRABLE, AND
EXCHANGEABLE, AND SUCH TRANSFER SHALL BE SO REGISTRABLE, OR (C) AN EVENT
OF DEFAULT (AS HEREINAFTER DEFINED) HAS OCCURRED AND IS CONTINUING WITH
RESPECT TO THE NOTES.]1
[THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS. ACCORDINGLY, THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED
OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE NEXT
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN,
THE HOLDER:
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), OR (B) IT IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
UNDER REGULATION D UNDER THE SECURITIES ACT (AN "IAI")),
(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT
(A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903
OR 904 OF THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) TO AN IAI THAT,
PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE WITH A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO
THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT,
(F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL
ACCEPTABLE TO THE COMPANY) OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION, AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF
THIS LEGEND.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE
THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE
TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING.]2
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES,
ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER
NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE
SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON PRIOR TO THE
EXCHANGE OF THIS NOTE FOR A REGULATION S PERMANENT GLOBAL NOTE AS
CONTEMPLATED BY THE INDENTURE.]3
____________________
1 These paragraphs should be included if the Notes are issued in global
form.
2 These paragraphs (the Private Placement Legend) should be omitted upon
the exchange of Initial Notes for Exchange Notes in the Exchange Offer
or upon the registration of Initial Notes pursuant to the Registration
Rights Agreement.
3 This should be included only if the Note is a Regulation S Temporary
Global Note.
12 1/4 % Senior Notes due 2006
R&B FALCON CORPORATION
No.
CUSIP No.
$_____________________
R&B FALCON CORPORATION promises to pay to _______________________ or
registered assigns, the principal sum of ___________________ United
States Dollars, [or such greater or lesser amount as may from time to
time be endorsed on Schedule A hereto]4 on March 15, 2006.
Interest Payment Dates: March 15 and September 15
Record Dates: March 1 and September 1
Reference is hereby made to the further provisions of this Note set forth
on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authorization hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this
Note shall not be entitled to any benefit of this Indenture or be valid
or obligatory for any purpose.
__________________________
4 This is included on Global Notes only.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed as of the date written below.
R&B FALCON CORPORATION
By:
Name:
Title:
By:
Dated:
Name:
Title:
Certificate of Authentication:
This is one of the Notes
referred to in the within-mentioned
Indenture:
U. S. TRUST COMPANY OF TEXAS,
National Association, as Trustee
By:
Authorized Signatory
(Reverse of Note)
12 1/4% Senior Note due 2006
Capitalized terms used herein shall have the meanings assigned
to them in this Indenture referred to below unless otherwise indicated.
1. Interest. R&B Falcon Corporation., a Delaware corporation
(such corporation, and its successors and assigns under the Indenture
hereinafter referred to, being called the "Company"), promises to pay
interest on the principal amount of this Note at 121/4% per annum until
Maturity and shall pay Special Interest, if any, payable pursuant to
Section __ of the Registration Rights Agreement referred to below. The
Company will pay interest, if any, and Special Interest, if any,
semi-annually in arrears on March 15 and September 15 of each year (each,
an "Interest Payment Date"), or if any such day is not a Business Day, on
the next succeeding Business Day. Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest
has been paid, from the Issue Date; provided that if there is no existing
Default in the payment of interest, and if this Note is authenticated
between a Record Date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first
Interest Payment Date shall be September 15, 1999. The Company shall pay
interest (including post-petition interest in any proceeding under any
applicable Federal, State or foreign bankruptcy law) on overdue
installments of interest ("Defaulted Interest"), and Special Interest, if
any, if any, (without regard to any applicable grace periods) from time
to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the
Notes (except Defaulted Interest) and Special Interest, if any, to the
Persons who are registered Holders of Notes at the close of business on
March 1 or September 1 immediately preceding the Interest Payment Date
(each, a "Record Date"), even if such Notes are canceled after such
Record Date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to Defaulted
Interest. The Notes will be payable as to principal, premium, interest
and Special Interest at the office or agency of the Company maintained
for such purpose within the City and State of New York, or, at the option
of the Company, payment of interest and Special Interest may be made by
check mailed to the Holders at their addresses set forth in the register
of Holders, provided that payment by wire transfer of immediately
available funds will be required with respect to principal of and
interest, premium, if any, and Special Interest, if any, on, all Global
Notes and all other Notes the Holders of which shall have provided wire
transfer instructions to the Company and the Paying Agent prior to the
applicable Record Date for such payment. Such payment shall be in such
coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, the Trustee under
the Indenture will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. In
certain situations, the Company or any of its Subsidiaries may act in any
such capacity.
4. Indenture. The Company issued the Notes under an Indenture
dated as of March 26, 1999 ("Indenture") between the Company and U.S.
Trust Company of Texas, N.A., as trustee (the "Trustee," which term
includes any successor trustee under the Indenture). The terms of the
Notes include those stated in the Indenture and those made part of the
Indenture by reference to the U.S. Trust Indenture Act of 1939, as
amended (15 U.S. Code 77aaa-77bbbb) as in effect on the date of the
Indenture. The Notes are subject to all such terms, and Holders are
referred to the Indenture and such Act for a statement of such terms. The
Notes are unsecured obligations of the Company limited to $200,000,000 in
aggregate principal amount (subject to Section 2.7 of the Indenture).
This Note is one of the Notes referred to in the Indenture.
5. Optional Redemption. (a) Under the terms of the Indenture,
the Notes will be redeemable, at the Company's option at any time in
whole or from time to time in part upon not less than 30 and not more
than 60 days' prior notice mailed by first class mail to the Holders of
the Notes, on any date prior to Maturity at a price equal to 100% of the
principal amount thereof plus accrued and unpaid interest (including
Special Interest, if any) to the Redemption Date plus the Make-Whole
Premium applicable to the Notes determined in the manner provided for in
Section 3.7 of the Indenture.
(b) Notices of redemption will be mailed by first class mail
at least 30 days but not more than 60 days before the Redemption Date to
each Holder whose Notes are to be redeemed at its registered address.
Notes in denominations larger than $1,000 may be redeemed in part but
only in integral multiples of $1,000, unless all of the Notes held by a
Holder are to be redeemed. Unless the Company defaults in making such
redemption payment, on and after the Redemption Date interest (including
Special Interest, if any) ceases to accrue on Notes or portions thereof
called for redemption.
6. Mandatory Redemption. Except as contemplated by clause 7
below, the Company shall not be required to make any mandatory
redemption, purchase or sinking fund payments with respect to the Notes
prior to the maturity date.
7. Repurchase at Option of Holder. (a) Upon the occurrence of
a Change of Control, each Holder will have the right to require the
Company to repurchase such Holder's Notes in whole or in part (the
"Change of Control Offer") at a purchase price (the "Change of Control
Purchase Price") in cash equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest thereon, if any, and Special
Interest, if any, to the Change of Control Payment Date on the terms
described in the Indenture.
Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred if (a) the ratings assigned to the Notes by the
Rating Agencies prior to the announcement are not downgraded or placed on
a negative credit watch by either such Rating Agency as a result thereof
and (b) no Default has occurred and is continuing.
Within 30 days following any Change of Control, the Company
shall send, or cause to be sent, by first class mail, postage prepaid, a
notice regarding the Change of Control Offer to each Holder of Notes. The
Holder of this Note may elect to have this Note or a portion hereof in an
authorized denomination purchased by completing the form entitled "Option
of Holder to Require Purchase" appearing below and tendering this Note
pursuant to the Change of Control Offer. Unless the Company defaults in
the payment of the Change of Control Payment with respect thereto, all
Notes or portions thereof accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest (and Special Interest, if
any) from and after the Change of Control Purchase Date.
(b) If, as of the first day of any calendar month, the
aggregate amount of Excess Proceeds exceeds 10% of consolidated total
assets of the Company, and if the excess aggregate amount of Excess
Proceeds not theretofore subject to an Excess Proceeds Offer (the "Excess
Proceeds Offer Amount"), totals as least $10,000,000, the Company must,
not later than the fifteenth Business Day of such month, make an offer
(an "Excess Proceeds Offer") to purchase from the Holders pursuant to and
subject to the conditions contained in the Indenture on a pro rata basis
an aggregate principal amount of Notes equal to such excess aggregate
amount of Excess Proceeds available on such first day of the month, at a
purchase price equal to 100% of their principal amount, plus, in each
case, any accrued interest (including Additional Amounts to the date of
purchase). The Issuer is also required, not later than the fifteenth
Business Day of such month, to make an offer to purchase the Secured
Notes, at a price equal to 100% of their principal amount, plus any
accrued interest (including "special interest" and "additional amounts")
to the date of purchase. The Excess Proceeds Offer Amounts will be
allocated on a pro rata basis between the Issuer for its "excess proceeds
offer" to the holders of the Secured Notes and the Company for its Excess
Proceeds Offer to the Holders of the Notes. Any amounts remaining after
all Notes validly tendered are purchased shall no longer constitute
Excess Proceeds.
Within 30 days of the date the excess amount of Excess Proceeds exceeds
$10,000,000, the Company shall send, or cause to be sent, by first class
mail, postage prepaid, a notice regarding the Excess Proceeds Offer to
each Holder of Notes. The Holder of this Note may elect to have this Note
or a portion hereof in an authorized denomination purchased by completing
the form entitled "Option of Holder to Elect Purchase" appearing below
and tendering this Note pursuant to the Excess Proceeds Offer. Unless the
Company defaults in the payment of the Excess Proceeds Offer Purchase
Amount with respect thereto, all Notes or portions thereof selected for
payment pursuant to the Excess Proceeds Offer will cease to accrue
interest from and after the Excess Proceeds Offer Purchase Date.
8. Denominations; Transfer and Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be registered and Notes
may be exchanged as provided in the Indenture. The Registrar and the
Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents (including in certain cases, opinions
of counsel) and the Company may require a Holder to pay any taxes and
fees required by law or permitted by the Indenture. The Company need not
exchange or register the transfer of any Note or portion of a Note
selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection of Notes
to be redeemed or during the period between a Record Date and the
corresponding Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note may
be treated as its owner for all purposes.
10. Amendment, Supplement and Waiver. With the consent of the
holders of not less than a majority in aggregate principal amount at
Stated Maturity of the outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for the Notes), the
Company, the Subsidiary Guarantors, if any, and the Trustee may enter
into one or more indentures supplemental to the Indenture for the purpose
of adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of modifying in any manner the
rights of the holders; provided that no such supplemental indenture may,
among other things, without the consent of the Holder of each outstanding
Note affected thereby, (a) change the Stated Maturity of the principal
of, or any installment of interest on, any Note, or reduce the principal
amount thereof (or premium, if any), or the interest thereon that would
be due and payable thereon, or change the place of payment where, or the
coin or currency in which, any Note 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 Stated Maturity thereof, (b) reduce the
percentage in principal amount at Stated Maturity of the outstanding
Notes, the consent of whose Holders is necessary for any such
supplemental indenture or required for any waiver of compliance with
certain provisions of the Indenture, or certain Defaults thereunder,
(c) modify the Obligations of the Company to make offers to purchase
Notes upon a Change of Control or from the proceeds of Asset Sales,
(d) subordinate in right of payment the Notes or the Subsidiary
Guarantees, if any, to any other Indebtedness, (e) amend, supplement or
otherwise modify the provisions of the Indenture relating to Subsidiary
Guarantees or (f) make any changes in Sections 6.4 or 6.7 of the
Indenture or modify any of the provisions of this clause (except to
increase any percentage set forth therein or herein).
11. Defaults and Remedies. Events of Default include in
summary form: (i) default for 30 days in the payment when due of interest
on, or Special Interest with respect to, any Notes; (ii) default in
payment when due of the principal of or premium, if any, on the Notes;
(iii) failure by the Company to comply with Sections 4.8, 4.15 or 5.1 of
the Indenture; (iv) failure by the Company for 60 days after notice to
comply with any of its other agreements in the Indenture or the Notes;
(v) Indebtedness of the Company or any Subsidiary is not paid when due
within the applicable grace period, if any, or is accelerated by the
holders thereof and, in either case, the aggregate principal amount of
such unpaid or accelerated Indebtedness exceeds $20,000,000 or more; (vi)
failure by the Company or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $20,000,000, which judgments are not
paid, discharged or stayed for a period of 30 days; (viii) certain events
of bankruptcy or insolvency with respect to the Company or any
Significant Subsidiary or group of Restricted Subsidiaries that, taken as
a whole (as of the latest audited consolidated financial statement for
the Company and its Subsidiaries), would constitute a Significant
Subsidiary; and (ix) any Subsidiary Guarantee shall for any reason cease
to be, or be asserted by the Company or any Subsidiary Guarantor, as
applicable, not to be, in full force as effect (except pursuant to the
release of any Subsidiary Guarantee in accordance with the Indenture).
Holders of the Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold
from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal, premium, if any, interest or Special Interest, if any) if it
determines that withholding notice is in their interest. Subject to
certain limitations, the Holders of a majority in aggregate principal
amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes then outstanding waive any
existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment
of interest on, or the principal of, premium, if any, on, interest on,
and, if any, on, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and
the Company is required upon becoming aware of any Default or Event of
Default, to deliver to the Trustee a statement specifying such Default or
Event of Default.
12. Defeasance Prior to Maturity or Redemption. The Company,
at its election, shall (a) be deemed to have paid and discharged its debt
on the Notes and the Indenture and Subsidiary Guarantees shall cease to
be of further effect as to all outstanding Notes (except as to (i) rights
of registration of transfer, substitution and exchange of Notes, (ii) the
Company's right of optional redemption, (iii) rights of Holders to
receive payments of principal of, premium, if any, and interest including
Special Interest on the Notes (but not the Change of Control Purchase
Price or the Asset Sale Offer Purchase Price) and any rights of the
Holders with respect to such amounts, (iv) the rights, obligations and
immunities of the Trustee under the Indenture, and (v) certain other
specified provisions in the Indenture) or (b) cease to be under any
obligation to comply with certain restrictive covenants that are
described in the Indenture, after the irrevocable deposit by the Company
with the Trustee, in trust for the benefit of the Holders, at any time
prior to the Stated Maturity of the Notes, of (i) money in an amount,
(ii) U.S. Government Obligations which through the payment of interest
and principal will provide, not later than one Business Day before the
due date of payment in respect of such Notes, money in an amount, or
(C) a combination thereof sufficient to pay and discharge the principal
of, premium, if any on, and interest (including Special Interest, if any)
on, such Notes then outstanding on the dates on which any such payments
are due in accordance with the terms of the Indenture and of such Notes.
13. Trustee Dealings with the Company. Subject to certain
limitations imposed by the Trust Indenture Act, the Trustee, in its
individual or any other capacity, may make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not the
Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder of the Company or a Subsidiary Guarantor, as
such, shall not have any liability for any obligations of the Company or
the Subsidiary Guarantors under the Notes, the Indenture, the Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of,
such Obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Notes.
15. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS NOTE, WITHOUT REGARD TO THE
CONFLICTS OF LAWS PRINCIPLES THEREOF.
16. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right
of survivorship and not as tenants in common), CUST (= Custodian), and
U/G/M/A (= Uniform Gifts to Minors Act).
18. Additional Rights of Holders of Transfer Restricted Notes.
In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transferred Restricted Notes (as defined in the
Registration Rights Agreement) shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture,
between the Company and the parties named on the signature pages thereof
(the "Registration Rights Agreement").
19. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company
has caused CUSIP numbers to be printed on the Notes and the Trustee may
use CUSIP numbers in notices of redemption as a convenience to Holders.
No representation is made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of redemption and
reliance may be placed only on the other identification numbers placed
thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079
Attention: Chief Financial Officer
Telephone No.: 281-496-5000
Telecopier No.: 281-597-7556
SUBSIDIARY GUARANTEE
Subject to the limitations set forth in the Indenture, the
Subsidiary Guarantors (as defined in the Indenture referred to in this
Note and each hereinafter referred to as a "Subsidiary Guarantor," which
term includes any successor or additional Subsidiary Guarantor under the
Indenture) have jointly and severally, irrevocably and unconditionally
guaranteed (a) the due and punctual payment of the principal (and
premium, if any) of and interest (and Special Interest, if any), on the
Notes, whether at Maturity, by acceleration, call for redemption, upon a
Change of Control Offer, Asset Sale Offer, purchase or otherwise, (b) the
due and punctual payment of interest on the overdue principal of and
interest (and Special Interest, if any), on the Notes to the extent
lawful, (c) the due and punctual performance of all other Obligations of
the Company and the Subsidiary Guarantors to the Holders under the
Indenture and the Notes and (d) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, the
same will be promptly paid in full when due or performed in accordance
with the terms of the extension or renewal, whether at Maturity, by
acceleration, call for redemption, upon a Change of Control Offer, Asset
Sale Offer, purchase or otherwise. Capitalized terms used herein shall
have the same meanings assigned to them in the Indenture unless otherwise
indicated.
Payment on each Note is guaranteed, jointly and severally, by the
Subsidiary Guarantors pursuant to Article 12 of the Indenture and
reference is made to such Indenture for the precise terms of the
Subsidiary Guarantees.
The Obligations of each Subsidiary Guarantor are limited to the
maximum amount as will, after giving effect to such maximum amount and
all other contingent and fixed liabilities of such Subsidiary Guarantor,
and after giving effect to any collections from or payments made by or on
behalf of any other Subsidiary Guarantor in respect of the Obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or
pursuant to its contribution obligations under the Indenture, result in
the Obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee not constituting a fraudulent conveyance or fraudulent transfer
under any applicable Federal, State or foreign bankruptcy law or not
otherwise being void, voidable or unenforceable under any such applicable
bankruptcy law. Each Subsidiary Guarantor that makes a payment or
distribution under a Subsidiary Guarantee shall be entitled to a
contribution from each other Subsidiary Guarantor in a pro rata amount
based on the Adjusted Net Assets of each Subsidiary Guarantor.
Certain of the Subsidiary Guarantors may be released from their
Subsidiary Guarantees upon the terms and subject to the conditions
provided in the Indenture.
The Subsidiary Guarantee shall be binding upon each Subsidiary
Guarantor listed below and its successors and assigns and shall inure to
the benefit of the Trustee and the Holders and, in the event of any
transfer or assignment of rights by any Holder or the Trustee, the rights
and privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all subject to
the terms and conditions in the Indenture.
[Remainder of page intentionally left blank.]
By:
Name:
Title:
By:
Name:
Title:
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
______________________________________________________________________
(Insert assignee's Social Security or tax I.D. no.)
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________________
to transfer this Note on the books of the Company or the agent appointed
by the Company to maintain such books. The agent appointed hereby may
substitute another to act for him.
_____________________________________________________________________
Date: ________________________
Your signature: __________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee:
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.8 or 4.15 of the Indenture, check the box below:
Section 4.8 Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.8 or Section 4.15 of the Indenture, state
the amount you elect to have purchased (must be an integral multiple of
$1,000): $__________________
Your Signature:
(Sign exactly as your name appears on the Note)
Signature Guarantee: Social Security or Tax Identification No.:
SCHEDULE A
CHANGES IN PRINCIPAL AMOUNT OF NOTE 5
The following changes in the principal amount of this Global Note have
been recorded:
Principal
Amount of Amount of Amount Signature
decrease in increase in of this of
Date of Principal Principal Global Note authorized
Transact Amount of Amount of following officer
ion this Global this Global such of Trustee
Note Note decrease
(or
increase)
___________________
5 This should only be included if the Note is issued in global format.
Exhibit B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.6(a)(i) of the Indenture)
U.S. Trust Company of Texas,
National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Telephone No.: 214-754-1200
Telecopier No.: 214-754-1303
Attention: Corporate Trust Division
Re: 12 1/4% Senior Notes due 2006 of R&B Falcon Corporation
Reference is hereby made to the Indenture, dated as of
March 26, 1999 (the "Indenture"), between R&B Falcon Corporation (the
"Company"), the Persons acting as subsidiary guarantors and named
therein, if any, (the "Subsidiary Guarantors") and U.S. Trust Company of
Texas, N.A., as trustee (the "Trustee"). Capitalized terms used but not
defined herein shall have the meanings given them in the Indenture.
This letter relates to U.S.$___________ principal amount of
Notes which are evidenced by one or more U.S. Global Notes and held with
the Depositary in the name of _____________ (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the
Notes to a Person who will take delivery thereof in the form of an equal
principal amount of Notes evidenced by one or more Regulation S Global
Notes, which amount, immediately after such transfer, is to be held with
the Depositary through Euroclear or Cedel or both.
In connection with such request and in respect of such Notes,
the Transferor hereby certifies that such transfer has been effected in
compliance with the transfer restrictions applicable to the Global Notes
and pursuant to and in accordance with Rule 903 or Rule 904 under the
United States Securities Act of 1933, as amended (the "Securities Act"),
and accordingly the Transferor hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United States
and, if the 40-day restricted period has not yet expired and the
Transferor is a dealer (as defined in Section 2(12) of the Securities
Act), or a person receiving a selling concession, fee or other
remuneration in respect of the Notes being sold (collectively,
"Dealers"), (i) neither the Transferor or any person acting on its behalf
knows that the transferee is a U.S. person and (ii) if the Transferor or
any person acting on its behalf knows that the transferee is a Dealer,
the Transferor or person acting on its behalf has sent a confirmation or
other notice to the transferee stating that the Notes may be offered or
sold during the 40-day restricted period only in accordance with the
provisions of Regulation S, pursuant to registration under the Securities
Act or pursuant to an available exemption from the registration
requirements of the Securities Act;
(2) either:
(a) at the time the buy order was originated, the transferee was outside
the United States or the Transferor and any person acting on its behalf
reasonably believed and believes that the transferee was outside the
United States; or
(b) the transaction was executed in, on or through the facilities of a
designated offshore securities market and neither the Transferor nor any
person acting on its behalf knows that the transaction was prearranged
with a buyer in the United States;
(1) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
(2) the transaction is not part of a plan or scheme to evade the
registration provisions of the Securities Act; and
(3) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depositary through
Euroclear or Cedel or both.
Upon giving effect to this request to exchange a beneficial interest in a
U.S. Global Note for a beneficial interest in a Regulation S Global Note.
The resulting beneficial interest shall be subject to the restrictions on
transfer applicable to Regulation S Global Notes pursuant to the
Indenture and the Securities Act and, if such transfer occurs prior to
the end of the 40-day restricted period associated with the initial
offering of Notes, the additional restrictions applicable to transfers of
interest in the Regulation S Temporary Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation (the "Initial Purchaser"), the Initial Purchaser
of such Notes being transferred. We acknowledge that you, the Company and
the Initial Purchaser will rely upon our confirmations, acknowledgments
and agreements set forth herein, and we agree to notify you promptly in
writing if any of our representations or warranties herein ceases to be
accurate and complete. Terms used in this certificate and not otherwise
defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: R&B Falcon Corporation
Initial Purchaser
Exhibit B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO U.S. GLOBAL NOTE
(Pursuant to Section 2.6(a)(ii) of the Indenture)
U.S. Trust Company of Texas,
National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Telephone No.: 214-754-1200
Telecopier No.: 214-754-1303
Attention: Corporate Trust Division
Re: 12 1/4% Senior Notes due 2006 of R & B Falcon Corporation
Reference is hereby made to the Indenture dated as of March 26, 1999 (the
"Indenture"), between R&B Falcon Corporation (the "Company"), the Persons
acting as subsidiary guarantors and named therein, if any, (the
"Subsidiary Guarantors") and U.S. Trust Company of Texas, N.A., as
trustee (the "Trustee"). Capitalized terms used but not defined herein
shall have the meanings given them in the Indenture.
This letter relates to $____________ principal amount of Notes which are
evidenced by one or more Regulation S Global Notes and held with the
Depositary through Euroclear or Cedel in the name of _________________
(the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Notes to a Person who will take delivery
thereof in the form of an equal principal amount of Notes evidenced by
one or more U.S. Global Notes, to be held with the Depositary.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that:
[CHECK ONE]
- - such transfer is being effected pursuant to and in accordance with
Rule 144A under the United States Securities Act of 1933, as amended (the
"Securities Act") and, accordingly, the Transferor hereby further
certifies that the Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Notes for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A;
or
- - such transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
- - the Surrendered Notes are being transferred to Institutional
Accredited Investor pursuant to an exemption under the Securities Act
other than Rule 144A, Rule 144 or Rule 904 and the Transferor further
certifies that the Transfer complies with the transfer restrictions
applicable to beneficial interests in Global Notes and Certificated Notes
bearing the Private Placement Legend and the requirements of the
exemption claimed, which certification is supported by a certificate
attached hereto executed by the Transferee in the form of Exhibit C to
the Indenture, and, if the Company should so request, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act to the effect that such
Transfer is in compliance with the Securities Act;
or
- - such transfer is being effected in an offshore transaction pursuant
to and in accordance with Rule 904 under the Securities Act;
or
- - such transfer is being effected pursuant to an effective
registration statement under the Securities Act;
or
- - such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of
the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which
the Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and such Notes are being transferred in compliance with any applicable
blue sky or securities laws of any state of the United States or any
other applicable jurisdiction.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in U.S. Global Notes,
the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to U.S. Global Notes pursuant to the Indenture and
the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Donaldson, Lufkin &
Jenrette Securities Corporation (the "Initial Purchaser"), the Initial
Purchaser of such Notes being transferred. We acknowledge that you, the
Company and the Initial Purchaser will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify
you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete. Terms used in this certificate
and not otherwise defined in the Indenture have the meanings set forth in
Regulation S under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: _______________________
cc: R&B Falcon Corporation
Initial Purchaser
Exhibit B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF CERTIFICATED NOTES
(Pursuant to Section 2.6(b) of the Indenture)
U.S. Trust Company of Texas,
National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Telephone No.: 214-754-1200
Telecopier No.: 214-754-1303
Attention: Corporate Trust Division
Re: 12 1/4% Senior Notes due 2006 of R&B Falcon Corporation
Reference is hereby made to the Indenture dated as of March 26, 1999 (the
"Indenture"), between R&B Falcon Corporation (the "Company"), the Persons
acting as subsidiary guarantors and named therein, if any (the
"Subsidiary Guarantors"), and U.S. Trust Company of Texas, N.A. as
trustee (the "Trustee"). Capitalized terms used but not defined herein
shall have the meanings given them in the Indenture.
This relates to $_________ principal amount of Notes which are evidenced
by one or more Certificated Notes in the name of ______________ (the
"Transferor"). The Transferor has requested an exchange or transfer of
such Certificated Note(s) in the form of an equal principal amount of
Notes evidenced by one or more Certificated Notes, to be delivered to the
Transferor or, in the case of a transfer of such Notes, to such Person as
the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes surrendered
to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
[CHECK ONE]
- - the Surrendered Notes are being acquired for the Transferor's own
account, without transfer;
or
- - the Surrendered Notes are being transferred to the Company;
or
- - the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, the Transferor
hereby further certifies that the Surrendered Notes are being transferred
to a Person that the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A;
or
- - the Surrendered Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
- - the Surrendered Notes are being transferred in an offshore
transaction pursuant to and in accordance with Rule 904 under the
Securities Act;
or
- - the Surrendered Notes are being transferred to Institutional
Accredited Investor pursuant to an exemption under the Securities Act
other than Rule 144A, Rule 144 or Rule 904 and the Transferor further
certifies that the Transfer complies with the transfer restrictions
applicable to beneficial interests in Global Notes and Certificated Notes
bearing the Private Placement Legend and the requirements of the
exemption claimed, which certification is supported by a certificate
attached hereto executed by the Transferee in the form of Exhibit C to
the Indenture, and, if the Company should so request, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act to the effect that such
Transfer is in compliance with the Securities Act;
or
- - the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
- - such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of
the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which
the Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky or securities laws of any state of the United States
or any other applicable jurisdiction.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation (the "Initial Purchaser"), the Initial Purchaser
of such Notes being transferred. We acknowledge that you, the Company and
the Initial Purchaser will rely upon our confirmations, acknowledgments
and agreements set forth herein, and we agree to notify you promptly in
writing if any of our representations or warranties herein ceases to be
accurate and complete. Terms used in this certificate and not otherwise
defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated: ________________________
cc: R&B Falcon Corporation
Initial Purchaser
Exhibit B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM U.S. GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE
TO CERTIFICATED NOTE
(Pursuant to Section 2.6(c) of the Indenture)
U.S. Trust Company of Texas,
National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Telephone No.: 214-754-1200
Telecopier No.: 214-754-1303
Attention: Corporate Trust Division
Re: 12 1/4% Senior Notes due 2006 of R&B Falcon Corporation
Reference is hereby made to the Indenture dated as of March 26, 1999 (the
"Indenture"), between R&B Falcon Corporation (the "Company"), the Persons
acting as subsidiary guarantors and named therein, if any, (the
"Subsidiary Guarantors") and U.S. Trust Company of Texas, N.A., as
trustee (the "Trustee"). Capitalized terms used but not defined herein
shall have the meanings given them in the Indenture.
This letter relates to $_____________ principal amount of Notes which are
evidenced by a beneficial interest in one or more U.S. Global Notes or
Regulation S Permanent Global Notes in the name of __________________
(the "Transferor"). The Transferor has requested an exchange or transfer
of such beneficial interest in the form of an equal principal amount of
Notes evidenced by one or more Certificated Notes, to be delivered to the
Transferor or, in the case of a transfer of such Notes, to such Person as
the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes surrendered
to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such surrendered Notes hereby certifies that:
[CHECK ONE]
- - the Surrendered Notes are being transferred to the beneficial owner
of such Notes;
or
- - the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, the Transferor
hereby further certifies that the Surrendered Notes are being transferred
to a Person that the Transferor reasonably believes is purchasing the
Surrendered Notes for its own account, or for one or more accounts with
respect to which such Person exercises sole investment discretion, and
such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A, in each case in a transaction meeting
the requirements of Rule 144A;
or
- - the Surrendered Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
- - such transfer is being effected in an offshore transaction pursuant
to and in accordance with Rule 904 under the Securities Act;
or
- - the Surrendered Notes are being transferred to Institutional
Accredited Investor pursuant to an exemption under the Securities Act
other than Rule 144A, Rule 144 or Rule 904 and the Transferor further
certifies that the Transfer complies with the transfer restrictions
applicable to beneficial interests in Global Notes and Certificated Notes
bearing the Private Placement Legend and the requirements of the
exemption claimed, which certification is supported by a certificate
attached hereto executed by the Transferee in the form of Exhibit C to
the Indenture, and, if the Company should so request, an Opinion of
Counsel provided by the Transferor or the Transferee (a copy of which the
Transferor has attached to this certification), in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act to the effect that such
Transfer is in compliance with the Securities Act;
or
- - the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
- - the Surrendered Notes are being transferred pursuant to an exemption
from the registration requirements of the Securities Act other than those
contemplated above, and the Transferor hereby further certifies that the
Notes are being transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance with the requirements of
the exemption claimed, which certification is supported by an Opinion of
Counsel, provided by the transferor or the transferee (a copy of which
the Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation (the "Initial Purchaser"), the Initial Purchaser
of such Notes being transferred. We acknowledge that you, the Company and
the Initial Purchaser will rely upon our confirmations, acknowledgments
and agreements set forth herein, and we agree to notify you promptly in
writing if any of our representations or warranties herein ceases to be
accurate and complete. Terms used in this certificate and not otherwise
defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: R&B Falcon Corporation
Initial Purchaser
Exhibit C
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
U.S. Trust Company of Texas,
National Association
2001 Ross Avenue, Suite 2700
Dallas, Texas 75201
Telephone No.: 214-754-1200
Telecopier No.: 214-754-1303
Attention: Corporate Trust Division
Re: 12 1/4% Senior Note due 2006 of R&B Falcon Corporation
Reference is hereby made to the Indenture, dated as of March 26, 1999
(the "Indenture"), between R&B Falcon Corporation, as issuer, and the
Persons acting as subsidiary guarantors and named therein, if any, (the
"Subsidiary Guarantors") and U.S. Trust Company of Texas, N.A., as
trustee. Capitalized terms used but not defined herein shall have the
meanings given them in the Indenture.
In connection with our proposed purchase of $________________ aggregate
principal amount of:
(a) Beneficial interests, or
(b) Certificated Notes,
we confirm that:
(i) we are an entity which is an "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act
of 1933, as amended (the "Securities Act"), or an entity in which
all of the equity owners are accredited investors within the meaning
of Rule 501(a)(1), (2), (3) or (7) under the Securities Act (an
"Institutional Accredited Investor");
(ii) any purchase of Notes by us will be for our own account or for the
account of one or more other Institutional Accredited Investors;
(iii) in the event that we purchase any Notes, we will acquire Notes
having a minimum purchase price of at least $250,000 for our own
account and for each separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing Notes;
(v) we are not acquiring Notes with a view to any distribution thereof
in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other
applicable jurisdiction; provided that the disposition of our
property and the property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Memorandum and acknowledge
that we have had access to such financial and other information, and
have been afforded the opportunity to ask such questions of
representatives of the Company and receive answers thereto, as we
deem necessary in connection with our decision to purchase Notes.
We understand that the Notes are being offered in a transaction not
involving any public offering within the meaning of the Securities Act
and that the Notes have not been registered under the Securities Act, and
we agree, on our own behalf and on behalf of each account for which we
acquire any notes, that (A) such Notes may be offered, resold, pledged or
otherwise transferred only (i) to a person whom we reasonably believe to
be a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A,
in a transaction meeting the requirements of Rule 144 under the
Securities Act, outside the United States in a transaction meeting the
requirements of Rule 904 under the Securities Act or in accordance with
another exemption from the registration requirements of the Securities
Act (and based upon an opinion of counsel if the Company so requests),
(ii) to the Company or (iii) pursuant to an effective registration
statement under the Securities Act, and, in each case, in accordance with
any applicable securities laws of any State of the United States or any
other applicable jurisdiction and (B) that we will, and each subsequent
Holder is required to, notify any subsequent purchaser from it of the
resale restrictions set forth in (A) above. We understand that the
registrar and transfer agent will not be required to accept for
registration of transfer any Notes, except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer
have been complied with. We further understand that the Notes purchased
by us will bear a legend reflecting the substance of this paragraph.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and Donaldson, Lufkin & Jenrette
Securities Corporation (the "Initial Purchaser"), the Initial Purchaser
of such Notes being transferred. We acknowledge that you, the Company and
the Initial Purchaser will rely upon our confirmations, acknowledgments
and agreements set forth herein, and we agree to notify you promptly in
writing if any of our representations or warranties herein ceases to be
accurate and complete. Terms used in this certificate and not otherwise
defined in the Indenture have the meanings set forth in Regulation S
under the Securities Act.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS
PRINCIPLES THEREOF.
[Insert Name of Purchaser]
By:
Name:
Title:
Address:
cc: R&B Falcon Corporation
Initial Purchaser
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.3; 7.8; 7.10
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.5
(b) 11.3
(c) 11.3
313(a) 7.6
(b)(1) N.A.
(b)(2) 7.6
(c) 7.6; 11.2
(d) 7.6
314(a) 4.13; 4.21; 11.2
(b) N.A.
(c)(1) 11.4, 11.5
(c)(2) 7.2; 11.4; 11.5
(c)(3) N.A.
(d) N.A.
(e) 10.5
(f) N.A.
315(a) 7.1(a)
(b) 4.21; 7.5; 11.4
(c) 7.1
(d) 7.1
(e) 6.11
316(a)(last sentence) 2.9
(a)(1)(A) 6.5
(a)(1)(B) 6.4
(a)(2) N.A.
(b) 6.7
317(a)(1) 6.3; 6.8
(a)(2) 6.9
(b) 2.4
318(a) 11.1
___________________________________
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
EXHIBIT 4.3
=========================================================================
REGISTRATION RIGHTS AGREEMENT
as of March 26, 1999
by and among
RBF FINANCE CO.
R&B FALCON CORPORATION
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
=========================================================================
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of March 26, 1999, by and among RBF Finance Co., a
Delaware corporation ("Finco"), and R&B Falcon Corporation, a Delaware
corporation (the "Company"), which will guarantee (its guarantees
hereinafter, the "Guarantees") the obligations of Finco under the Notes
(as defined herein), and Donaldson, Lufkin & Jenrette Securities
Corporation ("DLJ" or the Initial Purchaser"), who has agreed to purchase
Finco's Senior Secured Notes due 2006 and Finco's Senior Secured Notes
due 2009 (collectively, the "Restricted Notes") pursuant to the Purchase
Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
March 19, 1999 (the "Purchase Agreement"), by and among Finco, the
Company and the Initial Purchaser. In order to induce the Initial
Purchaser to purchase the Restricted Notes, Finco and the Company have
agreed to provide the registration rights set forth in this Agreement.
The execution and delivery of this Agreement is a condition to the
obligations of the Initial Purchaser set forth in Section 3 of the
Purchase Agreement. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to them in the Indenture, dated
March 26, 1999 among Finco, the Company and United States Trust Company
of New York, as Trustee, relating to the Restricted Notes and the
Exchange Notes (the "Indenture").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Affiliate: As defined in Rule 144 under the Act.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b)
the maintenance of such Exchange Offer Registration Statement
continuously effective and the keeping of the Exchange Offer open for a
period not less than the period required pursuant to Section 3(b) hereof
and (c) the delivery by the Company to the Registrar under the Indenture
of Exchange Notes in the same aggregate principal amount as the aggregate
principal amount of Restricted Notes tendered by Holders thereof pursuant
to the Exchange Offer.
Consummation Deadline: As defined in Section 3(b) hereof.
Effectiveness Deadline: As defined in Section 3(a) or 4(a) hereof,
as applicable.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Notes: Finco's Senior Secured Notes due 2006 and Senior
Secured Notes due 2009, and unless the context otherwise requires, the
Guarantees thereof, to be issued pursuant to the Indenture: (i) in the
Exchange Offer or (ii) as contemplated by Section 4 hereof.
Exchange Offer: The exchange and issuance by Finco of a principal
amount of Exchange Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal
amount of Restricted Notes that are tendered by such Holders in
connection with such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Restricted Notes to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act and pursuant
to Regulation S under the Act.
Filing Deadline: As defined in Sections 3(a) or 4(a) hereof, as
applicable.
Holders: As defined in Section 2 hereof.
Notes: The Restricted Notes and the Exchange Notes, collectively.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of Finco and
the Company relating to (a) an offering of Exchange Notes pursuant to an
Exchange Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case,
(i) that is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.
Regulation S: Regulation S promulgated under the Act.
Rule 144: Rule 144 promulgated under the Act.
Shelf Registration Statement: As defined in Section 4 hereof.
Suspension Notice: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Restricted Note, until the
earliest to occur of (a) the date on which such Restricted Note is
exchanged in the Exchange Offer for an Exchange Note which is entitled to
be resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Act, (b) the date on which such
Restricted Note has been disposed of in accordance with a Shelf
Registration Statement (and the purchasers thereof have been issued
Exchange Notes), or (c) the date on which such Restricted Note is
distributed to the public pursuant to Rule 144 under the Act (and
purchasers thereof have been issued Exchange Notes) and each Exchange
Note until the date on which such Exchange Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the
Prospectus contained therein).
Trustee: The United States Trust Company of New York.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person is a beneficial owner of Transfer
Restricted Securities in the security register of the Trustee.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by
applicable federal law (after the procedures set forth in Section 6(a)(i)
below have been complied with), Finco and the Company shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission as
soon as practicable after the Closing Date, but in no event later than 60
days after the Closing Date (such 60th day being the "Filing Deadline"),
(ii) use their respective best efforts to cause such Exchange Offer
Registration Statement to become effective at the earliest possible time,
but in no event later than 150 days after the Closing Date (such 150th
day being the "Effectiveness Deadline"), (iii) in connection with the
foregoing, (A) file all pre-effective amendments to such Exchange Offer
Registration Statement as may be necessary in order to cause it to become
effective, (B) file, if applicable, a post-effective amendment to such
Exchange Offer Registration Statement pursuant to Rule 430A under the Act
and (C) cause all necessary filings, if any, in connection with the
registration and qualification of the Exchange Notes to be made under the
Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of
such Exchange Offer Registration Statement, commence and Consummate the
Exchange Offer. The Exchange Offer shall be on the appropriate form
permitting (i) registration of the Exchange Notes to be offered in
exchange for the Restricted Notes that are Transfer Restricted Securities
and (ii) resales of Exchange Notes by Broker-Dealers that tendered into
the Exchange Offer Restricted Notes that such Broker-Dealer acquired for
its own account as a result of market making activities or other trading
activities (other than Restricted Notes acquired directly from the
Company or any of its Affiliates) as contemplated by Section 3(c) below.
(b) Finco and the Company shall use their respective best efforts
to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not
less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that
in no event shall such period be less than 30 days (or longer if required
by applicable law). Finco and the Company shall cause the Exchange Offer
to comply with all applicable federal and state securities laws. No
securities other than the Exchange Notes and Guarantees shall be included
in the Exchange Offer Registration Statement. Finco and the Company
shall use their respective best efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than
30 days thereafter (such 30th day being the "Consummation Deadline").
(c) Finco and the Company shall include a "Plan of Distribution"
section in the Prospectus contained in the Exchange Offer Registration
Statement and indicate therein that any Broker-Dealer who holds Transfer
Restricted Securities that were acquired for the account of such Broker-
Dealer as a result of market-making activities or other trading
activities (other than Restricted Notes acquired directly from the
Company or any Affiliate of the Company), may exchange such Transfer
Restricted Securities pursuant to the Exchange Offer. Such "Plan of
Distribution" section shall also contain all other information with
respect to such sales by such Broker-Dealers that the Commission may
require in order to permit such sales pursuant thereto, but such "Plan of
Distribution" shall not name any such Broker-Dealer or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer,
except to the extent required by the Commission as a result of a change
in policy, rules or regulations after the date of this Agreement. See
the Shearman & Sterling no-action letter (available July 2, 1993).
Because such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus
meeting the requirements of the Act in connection with its initial sale
of any Exchange Notes received by such Broker-Dealer in the Exchange
Offer, the Company and Finco shall permit the use of the Prospectus
contained in the Exchange Offer Registration Statement by such Broker-
Dealer to satisfy such prospectus delivery requirement. To the extent
necessary to ensure that the Prospectus contained in the Exchange Offer
Registration Statement is available for sales of Exchange Notes by Broker-
Dealers, the Company and Finco agree to use their respective best efforts
to keep the Exchange Offer Registration Statement continuously effective,
supplemented, amended and current as required by and subject to the
provisions of Section 6(a) and (c) hereof and in conformity with the
requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a
period of 180 days from the Consummation Deadline, or such shorter period
as will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company and
Finco shall provide sufficient copies of the latest version of such
Prospectus to such Broker-Dealers, promptly upon request, and in no event
later than one day after such request, at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not
permitted by applicable law (after the Company and Finco have complied
with the procedures set forth in Section 6(a)(i) below) or (ii) if any
Holder of Transfer Restricted Securities shall notify the Company within
20 Business Days following the Consummation Deadline that (A) such Holder
was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales
by such Holder or (C) such Holder is a Broker-Dealer and holds Restricted
Notes acquired directly from the Company or any of its Affiliates, then
the Company and Finco shall:
(x) cause to be filed, on or prior to 30 days after the earlier
of (i) the date on which Finco and the Company determine that the
Exchange Offer Registration Statement cannot be filed as a result of
clause (a)(i) above and (ii) the date on which the Company receives the
notice specified in clause (a)(ii) above, (such earlier date, the "Filing
Deadline"), a shelf registration statement pursuant to Rule 415 under the
Act (which may be an amendment to the Exchange Offer Registration
Statement (the "Shelf Registration Statement")), relating to all Transfer
Restricted Securities, and
(y) shall use their respective best efforts to cause such Shelf
Registration Statement to become effective on or prior to 90 days after
the Filing Deadline for the Shelf Registration Statement (such 90th day
the "Effectiveness Deadline").
If, after Finco and the Company have filed an Exchange Offer
Registration Statement that satisfies the requirements of Section 3(a)
above, Finco and the Company are required to file and make effective a
Shelf Registration Statement solely because the Exchange Offer is not
permitted under applicable federal law (i.e., clause (a)(i) above), then
the filing of the Exchange Offer Registration Statement shall be deemed
to satisfy the requirements of clause (x) above; provided that, in such
event, the Company shall remain obligated to meet the Effectiveness
Deadline set forth in clause (y).
To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the
other securities required to be registered therein pursuant to Section
6(b)(ii) hereof, the Company and Finco shall use their respective best
efforts to keep any Shelf Registration Statement required by this Section
4(a) continuously effective, supplemented, amended and current as
required by and subject to the provisions of Sections 6(b) and (c) hereof
and in conformity with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from
time to time, for a period of at least two years (as extended pursuant to
Section 6(c)(i)) following the Closing Date, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Shelf Registration Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 20 days after
receipt of a request therefor, the information specified in Item 507 or
508 of Regulation S-K, as applicable, of the Act for use in connection
with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities
shall be entitled to liquidated damages pursuant to Section 5 hereof
unless and until such Holder shall have provided all such information.
Each selling Holder agrees to promptly furnish additional information
required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. SPECIAL INTEREST
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline,
(ii) any such Registration Statement has not been declared effective by
the Commission on or prior to the applicable Effectiveness Deadline,
(iii) the Exchange Offer has not been Consummated on or prior to the
Consummation Deadline or (iv) any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter cease to
be effective or fail to be usable for its intended purpose without being
succeeded by a post-effective amendment to such Registration Statement
that cures such failure and that is itself declared effective (each such
event referred to in clauses (i) through (iv), a "Registration Default"),
then the Company and Finco hereby jointly and severally agree to pay to
each Holder of Transfer Restricted Securities affected thereby additional
interest ("Special Interest") in an amount equal to $.05 per week per
$1,000 in principal amount of Transfer Restricted Securities held by such
Holder for each week or portion thereof that the Registration Default
continues for the first 90-day period immediately following the
occurrence of such Registration Default. The amount of the Special
Interest shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured,
up to a maximum amount of special interest of $.50 per week per $1,000 in
principal amount of Transfer Restricted Securities; provided that the
Company and Finco shall in no event be required to pay special interest
for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon
filing of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (i) above,
(2) upon the effectiveness of the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement), in the case of
(ii) above, (3) upon Consummation of the Exchange Offer, in the case of
(iii) above, or (4) upon the filing of a post-effective amendment to the
Registration Statement or an additional Registration Statement that
causes the Exchange Offer Registration Statement (and/or, if applicable,
the Shelf Registration Statement) to again be declared effective or made
usable in the case of (iv) above, the Special Interest payable with
respect to the Transfer Restricted Securities as a result of such clause
(i), (ii), (iii) or (iv), as applicable, shall immediately cease.
All accrued Special Interest shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the
Indenture, on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes. Notwithstanding the fact that any securities
for which Special Interest are due cease to be Transfer Restricted
Securities, all obligations of the Company and Finco to pay Special
Interest with respect to securities shall survive until such time as such
obligations with respect to such securities shall have been satisfied in
full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, Finco and the Company shall (x) comply with all
applicable provisions of Section 6(c) below, (y) use their respective
best efforts to effect such exchange and to permit the resale of Exchange
Notes by Broker-Dealers that tendered in the Exchange Offer Restricted
Notes that such Broker-Dealer acquired for its own account as a result of
its market making activities or other trading activities (other than
Restricted Notes acquired directly from the Company or any of its
Affiliates) being sold in accordance with the intended method or methods
of distribution thereof, and (z) comply with all of the following
provisions:
(i) If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers such as
the Exchange Offer, that in the reasonable opinion of counsel to the
Company raises a substantial question as to whether the Exchange Offer
is permitted by applicable federal law, the Company and Finco hereby
agree to seek a no-action letter or other favorable decision from the
Commission allowing the Company and Finco to Consummate an Exchange
Offer for such Transfer Restricted Securities. The Company and Finco
hereby agree to pursue the issuance of such a decision to the
Commission staff level. In connection with the foregoing, the Company
and Finco hereby agree to take all such other reasonable actions as
may be requested by the Commission or otherwise required in connection
with the issuance of such decision, including without limitation (A)
participating in telephonic conferences with the Commission, (B)
delivering to the Commission staff an analysis prepared by counsel to
the Company setting forth the legal bases, if any, upon which such
counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursuing a resolution (which need not be favorable)
by the Commission staff.
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange
Offer, a written representation to the Company and Finco (which may be
contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an
Affiliate of the Company, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the Exchange Notes to be
issued in the Exchange Offer and (C) it is acquiring the Exchange
Notes in its ordinary course of business. As a condition to its
participation in the Exchange Offer, each Holder using the Exchange
Offer to participate in a distribution of the Exchange Notes shall
acknowledge and agree that, if the resales are of Exchange Notes
obtained by such Holder in exchange for Restricted Notes acquired
directly from the Company or an Affiliate thereof, it (1) could not,
under Commission policy as in effect on the date of this Agreement,
rely on the position of the Commission enunciated in Morgan Stanley
and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and
similar no-action letters (including, if applicable, any no-action
letter obtained pursuant to clause (i) above), and (2) must comply
with the registration and prospectus delivery requirements of the Act
in connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective
registration statement containing the selling security holder
information required by Item 507 or 508, as applicable, of Regulation
S-K.
(iii) If required by the Commission, prior to effectiveness of
the Exchange Offer Registration Statement, Finco and the Company shall
provide a supplemental letter to the Commission (A) stating that the
Company and Finco are registering the Exchange Offer in reliance on
the position of the Commission enunciated in Exxon Capital Holdings
Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
(available June 5, 1991) as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any no-
action letter obtained pursuant to clause (i) above, (B) including a
representation that neither Issuer nor the Company has entered into
any arrangement or understanding with any Person to distribute the
Exchange Notes to be received in the Exchange Offer and that, to the
best of Finco's and the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the Exchange Notes in
its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of
the Exchange Notes received in the Exchange Offer and (C) any other
undertaking or representation required by the Commission as set forth
in any no-action letter obtained pursuant to clause (i) above, if
applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, Finco and the Company shall (i) comply with all
the provisions of Section 6(c) below and use their respective best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof (as indicated in the information
furnished to the Company pursuant to Section 4(b) hereof), and pursuant
thereto Finco and the Company will prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate
form under the Act, which form shall be available for the sale of the
Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof and (ii) issue, upon the request of
any Holder or purchaser of Restricted Notes covered by any Shelf
Registration Statement contemplated by this Agreement, Exchange Notes
having an aggregate principal amount equal to the aggregate principal
amount of Restricted Notes sold pursuant to the Shelf Registration
Statement and surrendered to the Company for cancellation; the Company
shall register Exchange Notes on the Shelf Registration Statement for
this purpose and issue the Exchange Notes to the purchaser(s) of
securities subject to the Shelf Registration Statement in the names as
such purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement, Finco
and the Company agree to:
(i) use their respective best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain an untrue statement of material fact or omit to
state any material fact necessary to make the statements therein not
misleading or (B) not to be effective and usable for resale of
Transfer Restricted Securities during the period required by this
Agreement, Finco and the Company shall file promptly an appropriate
amendment to such Registration Statement curing such defect, and, if
Commission review is required, use their respective best efforts to
cause such amendment to be declared effective as soon as practicable.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may
be; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise the Initial Purchaser promptly and, if requested
by the Initial Purchaser, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to any applicable Registration
Statement or any post-effective amendment thereto, when the same has
become effective, (B) of any request by the Commission for amendments
to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky
laws, the Company and Finco shall use their respective best efforts to
obtain the withdrawal or lifting of such order at the earliest
possible time;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to the Initial Purchaser (and the Holders, if
requested) in connection with such exchange or sale, if any, before
filing with the Commission, copies of any Registration Statement or
any Prospectus included therein or any amendments or supplements to
any such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review
and comment of the Initial Purchaser in connection with such sale, if
any, for a period of at least five Business Days, and the Company will
not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which the Initial Purchaser shall reasonably object within five
Business Days after the receipt thereof. The Initial Purchaser shall
be deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading or fails to comply with the
applicable requirements of the Act;
(vi) in case of a Shelf Registration Statement only, make
available, at reasonable times, for inspection by the Initial
Purchaser and any attorney or accountant retained by the Initial
Purchaser, all financial and other records, pertinent corporate
documents of Finco and the Company and cause Finco's and the Company's
officers, directors and employees to supply all information reasonably
requested by the Initial Purchaser, attorney or accountant in
connection with such Registration Statement or any post-effective
amendment thereto subsequent to the filing thereof and prior to its
effectiveness; provided, however, that such persons shall first agree
in writing with Finco and the Company that any information that is
reasonably and in good faith designated by Finco or the Company in
writing as confidential by such persons unless (i) disclosure of such
information is required by court or administrative order or is
necessary to respond to inquiries of regulatory authorities, (ii)
disclosure of such information is required by law (including any
disclosure requirements pursuant to Federal securities laws in
conjunction with the filing of such Shelf Registration Statement or
use of any Prospectus), (iii) such information becomes generally
available to the public other than as a result of a disclosure or
failure to safeguard such information by such person or (iv) such
information becomes available to such person from a source other than
Finco and the Company and its subsidiaries and such source is not
bound by confidentiality agreement; provided, further, that the
foregoing investigation shall be coordinated on behalf of such Holders
by one representative designated by and on behalf of such Holders and
any such confidential information shall be available from such
representative to such Holders so long as any Holder agrees to be
bound by such confidentiality agreement;
(vii) if requested by any Holders in connection with such
exchange or sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Holders may reasonably request to
have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted
Securities and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after Finco and the
Company is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(viii) upon the request of each Holder, furnish to such Holder
in connection with such exchange or sale, without charge, at least one
copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each Holder without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may
request; Finco and the Company hereby consent to the use (in
accordance with law) of the Prospectus and any amendment or supplement
thereto by each selling Holder in connection with the offering and the
sale of the Transfer Restricted Securities covered by the Prospectus
or any amendment or supplement thereto;
(x) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such reasonable
representations and warranties and take all such other reasonable
actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to the
Shelf Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder in connection with any sale or
resale pursuant to the Shelf Registration Statement. In such
connection, Finco and the Company shall:
(A) upon request of any Holder, furnish (or in the case of
paragraphs (2) and (3), use their respective best efforts to cause
to be furnished) to each Holder or upon the effectiveness of the
Shelf Registration Statement, as the case may be:
(1) a certificate, dated such date, signed on behalf
of Finco and the Company by (x) the President or any Vice
President and (y) a principal financial or accounting officer of
the Company and Finco, confirming, as of the date thereof, the
matters set forth in Sections 6(x), 9(a) and 9(b) of the
Purchase Agreement and such other similar matters as such
Holders may reasonably request;
(2) an opinion, dated the date of effectiveness of the
Shelf Registration Statement, of counsel for Finco and the
Company covering matters similar to those set forth in Section
9(e) of the Purchase Agreement and such other matter as such
Holder may reasonably request, and in any event including a
statement to the effect that such counsel has participated in
conferences with officers and other representatives of Finco and
the Company, representatives of the independent public
accountants for Finco and the Company and have considered the
matters required to be stated therein and the statements
contained therein, although such counsel has not independently
verified the accuracy, completeness or fairness of such
statements; and that such counsel advises that, on the basis of
the foregoing (relying as to materiality to the extent such
counsel deems appropriate upon the statements of officers and
other representatives of Finco and the Company and without
independent check or verification), no facts came to such
counsel's attention that caused such counsel to believe that the
Shelf Registration Statement, at the time such Registration
Statement or any post-effective amendment thereto became
effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, or
that the Prospectus contained in such Registration Statement as
of its date contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such counsel
assumes no responsibility for, and has not independently
verified, the accuracy, completeness or fairness of the
financial statements, notes and schedules and other financial
data included in the Shelf Registration Statement contemplated
by this Agreement or the related Prospectus; and
(3) a customary comfort letter as of the date of
effectiveness of the Shelf Registration Statement from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 9(g) of the Purchase
Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any customary
conditions contained in the any agreement entered into by Finco and
the Company pursuant to this clause (xi);
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may reasonably request and do any
and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement; provided,
however, that neither the Company nor Finco shall be required to
register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the service
of process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with the Holders to
facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing
any restrictive legends; and to register such Transfer Restricted
Securities in such denominations and such names as the selling Holders
may request at least two Business Days prior to such sale of Transfer
Restricted Securities;
(xiii) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xii) above;
(xiv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with
The Depository Trust Company;
(xv) otherwise use their respective best efforts to comply with
all applicable rules and regulations of the Commission, and make
generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term
is defined in paragraph (c) of Rule 158 under the Act);
(xvi) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate
with the Trustee and the Holders to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use best efforts
to cause the Trustee to execute, all documents that may be required to
effect such changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so qualified
in a timely manner; and
(xvii) provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of the notice referred
to in Section 6(c)(iii)(C) or any notice from Finco or the Company of the
existence of any fact of the kind described in Section 6(c)(iii)(D)
hereof (in each case, a "Suspension Notice"), such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until (i) such Holder has received
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(iv) hereof, or (ii) such Holder is advised in writing by the Company
that the use of the Prospectus may be resumed, and has received copies of
any additional or supplemental filings that are incorporated by reference
in the Prospectus (in each case, the "Recommencement Date"). Each Holder
receiving a Suspension Notice hereby agrees that it will either (i)
destroy any Prospectuses, other than permanent file copies, then in such
Holder's possession which have been replaced by Finco with more recently
dated Prospectuses or (ii) deliver to Finco (at Finco's expense) all
copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities
that was current at the time of receipt of the Suspension Notice. The
time period regarding the effectiveness of such Registration Statement
set forth in Section 3 or 4 hereof, as applicable, shall be extended by a
number of days equal to the number of days in the period from and
including the date of delivery of the Suspension Notice to the date of
delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to Finco's and the Company's
performance of or compliance with this Agreement will be borne by the
Company, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing
fees and expenses; (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of
printing (including printing certificates for the Exchange Notes to be
issued in the Exchange Offer and printing of Prospectuses whether for
exchanges, sales, market making or otherwise), messenger and delivery
services and telephone; (iv) all fees and disbursements of counsel for
Finco and the Company and all reasonable fees and disbursements of
counsel for the Holders of Transfer Restricted Securities; (v) all
application and filing fees, if any, in connection with listing the
Exchange Notes on a national securities exchange or automated quotation
system pursuant to the requirements hereof; and (vi) all fees and
disbursements of independent certified public accountants of Finco and
the Company (including the expenses of any special audit and comfort
letters required by or incident to such performance).
The Company will, in any event, bear its and Finco's internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), and its
external expenses (including without limitation, legal expenses, the
expenses of any annual audit and the fees and expenses of any Person,
including special experts, retained by Finco or the Company).
(b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer
Registration Statement and the Shelf Registration Statement), the Company
will reimburse the Initial Purchaser and the Holders of Transfer
Restricted Securities who are tendering Restricted Notes in the Exchange
Offer and/or selling or reselling Restricted Notes or Exchange Notes
pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements of not more than
one counsel, who shall be Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
unless another firm shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit
such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) Finco and the Company agree, jointly and severally, to
indemnify and hold harmless each Holder, its directors, officers and each
Person, if any, who controls such Holder (within the meaning of Section
15 of the Act or Section 20 of the Exchange Act), from and against any
and all losses, claims, damages, liabilities, judgments, (including
without limitation, any reasonable legal or other expenses incurred in
connection with investigating or defending any matter, including any
action that could give rise to any such losses, claims, damages,
liabilities or judgments) caused by any untrue statement or alleged
untrue statement of a material fact contained in any Registration
Statement, preliminary prospectus or Prospectus (or any amendment or
supplement thereto) provided by Finco and the Company to any Holder or
any prospective purchaser of Exchange Notes or registered Restricted
Notes, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by an untrue statement or
omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the
Company by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and
Finco, and their respective directors and officers, and each person, if
any, who controls (within the meaning of Section 15 of the Act or Section
20 of the Exchange Act) the Company or Finco to the same extent as the
foregoing indemnity from the Company and Finco set forth in section (a)
above, but only with reference to information relating to such Holder
furnished in writing to the Company by such Holder expressly for use in
any Registration Statement. In no event shall any Holder, its directors,
officers or any Person who controls such Holder be liable or responsible
for any amount in excess of the amount by which the total amount received
by such Holder with respect to its sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such
Holder for such Transfer Restricted Securities and (ii) the amount of any
damages that such Holder, its directors, officers or any Person who
controls such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "indemnifying
person") in writing and the indemnifying party shall assume the defense
of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and
expenses of such counsel, as incurred (except that in the case of any
action in respect of which indemnity may be sought pursuant to both
Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the
expense of the Holder). Any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such
counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense of such action or employ counsel reasonably
satisfactory to the indemnified party or (iii) the named parties to any
such action (including any impleaded parties) include both the
indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on
behalf of the indemnified party). In any such case, the indemnifying
party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such
fees and expenses shall be reimbursed as they are incurred. Such firm
shall be designated in writing by a majority of the Holders, in the case
of the parties indemnified pursuant to Section 8(a), and by the Company
and Finco, in the case of parties indemnified pursuant to Section 8(b).
The indemnifying party shall indemnify and hold harmless the indemnified
party from and against any and all losses, claims, damages, liabilities
and judgments by reason of any settlement of any action (i) effected with
its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case
where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party
shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to
the entry of judgment with respect to, any pending or threatened action
in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder
by the indemnified party, unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of
such action and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any
losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or
judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company and Finco, on the one hand, and
the Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 8(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(d)(i)
above but also the relative fault of the Company and Finco, on the one
hand, and of the Holder, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and Finco, on the one
hand, and of the Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company and/or
Finco, on the one hand, or by the Holder, on the other hand, and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and judgments referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section
8(a), any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim.
The Company, Finco and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation (even if the Holders were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section
8, no Holder, its directors, its officers or any Person, if any, who
controls such Holder shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the total received by such
Holder with respect to the sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such
Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute pursuant to this Section 8(d) are sev
eral in proportion to the respective principal amount of Transfer
Restricted Securities held by each Holder hereunder and not joint.
(e) The Company and Finco agree that the indemnity and contribution
provisions of this Section 8 shall apply to any Broker-Dealers who is
deemed to be an Affiliate of the Company or Finco to the same extent, on
the same conditions, as it applies to Holders.
SECTION 9. RULE 144A AND RULE 144
Finco and the Company agree with each Holder, for so long as any
Transfer Restricted Securities remain outstanding and during any period
in which Finco and/or the Company (i) is not subject to Section 13 or
15(d) of the Exchange Act, to make available, upon request of any Holder,
to such Holder or beneficial owner of Transfer Restricted Securities in
connection with any sale thereof and any prospective purchaser of such
Transfer Restricted Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Act in order
to permit resales of such Transfer Restricted Securities pursuant to Rule
144A, subject to Section 4.6 of the Indenture, and (ii) is subject to
Section 13 or 15 (d) of the Exchange Act, to make all filings required
thereby in a timely manner in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144, subject to Section 2.6 of the
Indenture.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and Finco acknowledge and agree that
any failure by the Company and/or Finco to comply with their respective
obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchaser or the Holders for which
there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of any
such failure, the Initial Purchaser or any Holder may obtain such relief
as may be required to specifically enforce the Company's and Finco's
obligations under Sections 3 and 4 hereof. The Company and Finco further
agree to waive the defense in any action for specific performance that a
remedy at law would be adequate.
(b) No Inconsistent Agreements. Neither the Company nor Finco
will, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. The rights granted to the Holders hereunder do not in
any way conflict with and are not inconsistent with the rights granted to
the holders of the Company's or Finco's securities under any agreement in
effect on the date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the
case of Section 5 hereof and this Section 10(c)(i), Finco has obtained
the written consent of Holders of all outstanding Transfer Restricted
Securities and (ii) in the case of all other provisions hereof, Finco has
obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities (excluding Transfer
Restricted Securities held by the Company or its Affiliates).
Notwithstanding the foregoing, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of Holders whose
Transfer Restricted Securities are being tendered pursuant to the
Exchange Offer, and that does not affect directly or indirectly the
rights of other Holders whose Transfer Restricted Securities are not
being tendered pursuant to such Exchange Offer, may be given by the
Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities subject to such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between Finco and the
Company, on the one hand, and the Initial Purchaser, on the other hand,
and shall have the right to enforce such agreements directly to the
extent they may deem such enforcement necessary or advisable to protect
its rights or the rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-
class mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
(ii) if to Finco:
RBF Finance Co.
901 Threadneedle
Houston, Texas 77079-2982
Fax No.: (281) 496-0285
With a copy to:
Gardere Wynne Sewell & Riggs, L.L.P.
1000 Louisiana, Suite 3400
Houston, Texas 77002-5007
Fax No.: (713) 276-5555
Attention: Frank Putman
(iii) if to the Company:
R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079
Fax No.: (281) 496-0285
Attention: General Counsel
With a copy to:
Gardere Wynne Sewell & Riggs, L.L.P.
1000 Louisiana, Suite 3400
Houston, Texas 77002-5007
Attention: Frank Putman
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if telecopied; and on the next
business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of
Transfer Restricted Securities in violation of the terms hereof or of the
Purchase Agreement or the Indenture. If any transferee of any Holder
shall acquire Transfer Restricted Securities in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall
be held subject to all of the terms of this Agreement, and by taking and
holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase
Agreement, and such Person shall be entitled to receive the benefits
hereof.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected or
impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights
granted with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
RBF FINANCE CO.
By:
Name:
Title:
R&B FALCON CORPORATION
By:
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
Name:
Title:
- -------------------------------------------------------------------------
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Louise Guarneri (Compliance Department)
Fax: (212) 892-7272
From: RBF Finance Co.
R&B Falcon Corporation
Date: _________, 1999
For your information only (NO ACTION REQUIRED):
Today, ______, 1999, we filed [an A/B Exchange Registration
Statement/a Shelf Registration Statement] with the Securities and
Exchange Commission. We currently expect this registration statement
to be declared effective within __ business days of the date hereof.
EXHIBIT 4.4
=========================================================================
REGISTRATION RIGHTS AGREEMENT
as of March 26, 1999
by and among
R&B FALCON CORPORATION
and
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
=========================================================================
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of March 26, 1999, by and between R&B Falcon Corporation,
a Delaware corporation (the "Company"), and Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ" or the Initial Purchaser"), who has agreed
to purchase the Company's Senior Notes due 2006 (the "Restricted Notes")
pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated
March 19, 1999 (the "Purchase Agreement"), by and between the Company and
the Initial Purchaser. In order to induce the Initial Purchaser to
purchase the Restricted Notes, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and
delivery of this Agreement is a condition to the obligations of the
Initial Purchaser set forth in Section 3 of the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Indenture, dated March 26, 1999 among the
Company and U.S. Trust Company of Texas, National Association, as
Trustee, relating to the Restricted Notes and the Exchange Notes (the
"Indenture").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall
have the following meanings:
Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
Affiliate: As defined in Rule 144 under the Act.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Certificated Securities: As defined in the Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Exchange Notes to be issued in the Exchange Offer, (b)
the maintenance of such Exchange Offer Registration Statement
continuously effective and the keeping of the Exchange Offer open for a
period not less than the period required pursuant to Section 3(b) hereof
and (c) the delivery by the Company to the Registrar under the Indenture
of Exchange Notes in the same aggregate principal amount as the aggregate
principal amount of Restricted Notes tendered by Holders thereof pursuant
to the Exchange Offer.
Consummation Deadline: As defined in Section 3(b) hereof.
Effectiveness Deadline: As defined in Section 3(a) or 4(a) hereof,
as applicable.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
Exchange Notes: The Company's Senior Notes due 2006 to be issued
pursuant to the Indenture: (i) in the Exchange Offer or (ii) as
contemplated by Section 4 hereof.
Exchange Offer: The exchange and issuance by the Company of a
principal amount of Exchange Notes (which shall be registered pursuant to
the Exchange Offer Registration Statement) equal to the outstanding
principal amount of Restricted Notes that are tendered by such Holders in
connection with such exchange and issuance.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Restricted Notes to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act and pursuant
to Regulation S under the Act.
Filing Deadline: As defined in Sections 3(a) or 4(a) hereof, as
applicable.
Holders: As defined in Section 2 hereof.
Notes: The Restricted Notes and the Exchange Notes, collectively.
Prospectus: The prospectus included in a Registration Statement at
the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Exchange Notes pursuant to an Exchange
Offer or (b) the registration for resale of Transfer Restricted
Securities pursuant to the Shelf Registration Statement, in each case,
(i) that is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.
Regulation S: Regulation S promulgated under the Act.
Rule 144: Rule 144 promulgated under the Act.
Shelf Registration Statement: As defined in Section 4 hereof.
Suspension Notice: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Restricted Note, until the
earliest to occur of (a) the date on which such Restricted Note is
exchanged in the Exchange Offer for an Exchange Note which is entitled to
be resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Act, (b) the date on which such
Restricted Note has been disposed of in accordance with a Shelf
Registration Statement (and the purchasers thereof have been issued
Exchange Notes), or (c) the date on which such Restricted Note is
distributed to the public pursuant to Rule 144 under the Act (and
purchasers thereof have been issued Exchange Notes) and each Exchange
Note until the date on which such Exchange Note is disposed of by a
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including the delivery of the
Prospectus contained therein).
Trustee: The U.S. Trust Company of Texas, National Association.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted Securities
(each, a "Holder") whenever such Person is a beneficial owner of Transfer
Restricted Securities in the security register of the Trustee.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by
applicable federal law (after the procedures set forth in Section 6(a)(i)
below have been complied with), the Company shall (i) cause the Exchange
Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date, but in no event later than 60 days
after the Closing Date (such 60th day being the "Filing Deadline"), (ii)
use its best efforts to cause such Exchange Offer Registration Statement
to become effective at the earliest possible time, but in no event later
than 150 days after the Closing Date (such 150th day being the
"Effectiveness Deadline"), (iii) in connection with the foregoing, (A)
file all pre-effective amendments to such Exchange Offer Registration
Statement as may be necessary in order to cause it to become effective,
(B) file, if applicable, a post-effective amendment to such Exchange
Offer Registration Statement pursuant to Rule 430A under the Act and (C)
cause all necessary filings, if any, in connection with the registration
and qualification of the Exchange Notes to be made under the Blue Sky
laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer
Registration Statement, commence and Consummate the Exchange Offer. The
Exchange Offer shall be on the appropriate form permitting (i)
registration of the Exchange Notes to be offered in exchange for the
Restricted Notes that are Transfer Restricted Securities and (ii) resales
of Exchange Notes by Broker-Dealers that tendered into the Exchange Offer
Restricted Notes that such Broker-Dealer acquired for its own account as
a result of market making activities or other trading activities (other
than Restricted Notes acquired directly from the Company or any of its
Affiliates) as contemplated by Section 3(c) below.
(b) The Company shall use its best efforts to cause the Exchange
Offer Registration Statement to be effective continuously, and shall keep
the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate
the Exchange Offer; provided, however, that in no event shall such period
be less than 30 days (or longer if required by applicable law). The
Company shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. No securities other than the Exchange
Notes and Guarantees shall be included in the Exchange Offer Registration
Statement. The Company shall use its best efforts to cause the Exchange
Offer to be Consummated on the earliest practicable date after the
Exchange Offer Registration Statement has become effective, but in no
event later than 30 days thereafter (such 30th day being the
"Consummation Deadline").
(c) The Company shall include a "Plan of Distribution" section in
the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Broker-Dealer who holds Transfer Restricted
Securities that were acquired for the account of such Broker-Dealer as a
result of market-making activities or other trading activities (other
than Restricted Notes acquired directly from the Company or any Affiliate
of the Company), may exchange such Transfer Restricted Securities
pursuant to the Exchange Offer. Such "Plan of Distribution" section
shall also contain all other information with respect to such sales by
such Broker-Dealers that the Commission may require in order to permit
such sales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required
by the Commission as a result of a change in policy, rules or regulations
after the date of this Agreement. See the Shearman & Sterling no-action
letter (available July 2, 1993).
Because such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Act and must, therefore, deliver a prospectus
meeting the requirements of the Act in connection with its initial sale
of any Exchange Notes received by such Broker-Dealer in the Exchange
Offer, the Company shall permit the use of the Prospectus contained in
the Exchange Offer Registration Statement by such Broker-Dealer to
satisfy such prospectus delivery requirement. To the extent necessary to
ensure that the Prospectus contained in the Exchange Offer Registration
Statement is available for sales of Exchange Notes by Broker-Dealers, the
Company agrees to use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented, amended and
current as required by and subject to the provisions of Section 6(a) and
(c) hereof and in conformity with the requirements of this Agreement, the
Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of 180 days from the
Consummation Deadline, or such shorter period as will terminate when all
Transfer Restricted Securities covered by such Registration Statement
have been sold pursuant thereto. The Company shall provide sufficient
copies of the latest version of such Prospectus to such Broker-Dealers,
promptly upon request, and in no event later than one day after such
request, at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not
permitted by applicable law (after the Company has complied with the
procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of
Transfer Restricted Securities shall notify the Company within 20
Business Days following the Consummation Deadline that (A) such Holder
was prohibited by law or Commission policy from participating in the
Exchange Offer or (B) such Holder may not resell the Exchange Notes
acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales
by such Holder or (C) such Holder is a Broker-Dealer and holds Restricted
Notes acquired directly from the Company or any of its Affiliates, then
the Company shall:
(x) cause to be filed, on or prior to 30 days after the earlier
of (i) the date on which the Company determines that the Exchange Offer
Registration Statement cannot be filed as a result of clause (a)(i) above
and (ii) the date on which the Company receives the notice specified in
clause (a)(ii) above, (such earlier date, the "Filing Deadline"), a shelf
registration statement pursuant to Rule 415 under the Act (which may be
an amendment to the Exchange Offer Registration Statement (the "Shelf
Registration Statement")), relating to all Transfer Restricted
Securities, and
(y) shall use its best efforts to cause such Shelf Registration
Statement to become effective on or prior to 90 days after the Filing
Deadline for the Shelf Registration Statement (such 90th day the
"Effectiveness Deadline").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the
Company is required to file and make effective a Shelf Registration
Statement solely because the Exchange Offer is not permitted under
applicable federal law (i.e., clause (a)(i) above), then the filing of
the Exchange Offer Registration Statement shall be deemed to satisfy the
requirements of clause (x) above; provided that, in such event, the
Company shall remain obligated to meet the Effectiveness Deadline set
forth in clause (y).
To the extent necessary to ensure that the Shelf Registration
Statement is available for sales of Transfer Restricted Securities by the
Holders thereof entitled to the benefit of this Section 4(a) and the
other securities required to be registered therein pursuant to Section
6(b)(ii) hereof, the Company shall use its best efforts to keep any Shelf
Registration Statement required by this Section 4(a) continuously
effective, supplemented, amended and current as required by and subject
to the provisions of Sections 6(b) and (c) hereof and in conformity with
the requirements of this Agreement, the Act and the policies, rules and
regulations of the Commission as announced from time to time, for a
period of at least two years (as extended pursuant to Section 6(c)(i))
following the Closing Date, or such shorter period as will terminate when
all Transfer Restricted Securities covered by such Shelf Registration
Statement have been sold pursuant thereto.
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any
Shelf Registration Statement pursuant to this Agreement unless and until
such Holder furnishes to the Company in writing, within 20 days after
receipt of a request therefor, the information specified in Item 507 or
508 of Regulation S-K, as applicable, of the Act for use in connection
with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities
shall be entitled to liquidated damages pursuant to Section 5 hereof
unless and until such Holder shall have provided all such information.
Each selling Holder agrees to promptly furnish additional information
required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. SPECIAL INTEREST
If (i) any Registration Statement required by this Agreement is not
filed with the Commission on or prior to the applicable Filing Deadline,
(ii) any such Registration Statement has not been declared effective by
the Commission on or prior to the applicable Effectiveness Deadline,
(iii) the Exchange Offer has not been Consummated on or prior to the
Consummation Deadline or (iv) any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter cease to
be effective or fail to be usable for its intended purpose without being
succeeded by a post-effective amendment to such Registration Statement
that cures such failure and that is itself declared effective (each such
event referred to in clauses (i) through (iv), a "Registration Default"),
then the Company hereby agrees to pay to each Holder of Transfer
Restricted Securities affected thereby additional interest ("Special
Interest") in an amount equal to $.05 per week per $1,000 in principal
amount of Transfer Restricted Securities held by such Holder for each
week or portion thereof that the Registration Default continues for the
first 90-day period immediately following the occurrence of such
Registration Default. The amount of the Special Interest shall increase
by an additional $.05 per week per $1,000 in principal amount of Transfer
Restricted Securities with respect to each subsequent 90-day period until
all Registration Defaults have been cured, up to a maximum amount of
special interest of $.50 per week per $1,000 in principal amount of
Transfer Restricted Securities; provided that the Company shall in no
event be required to pay special interest for more than one Registration
Default at any given time. Notwithstanding anything to the contrary set
forth herein, (1) upon filing of the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement), in
the case of (i) above, (2) upon the effectiveness of the Exchange Offer
Registration Statement (and/or, if applicable, the Shelf Registration
Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to
again be declared effective or made usable in the case of (iv) above, the
Special Interest payable with respect to the Transfer Restricted
Securities as a result of such clause (i), (ii), (iii) or (iv), as
applicable, shall immediately cease.
All accrued Special Interest shall be paid to the Holders entitled
thereto, in the manner provided for the payment of interest in the
Indenture, on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes. Notwithstanding the fact that any securities
for which Special Interest are due cease to be Transfer Restricted
Securities, all obligations of the Company to pay Special Interest with
respect to securities shall survive until such time as such obligations
with respect to such securities shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company shall (x) comply with all applicable
provisions of Section 6(c) below, (y) use its best efforts to effect such
exchange and to permit the resale of Exchange Notes by Broker-Dealers
that tendered in the Exchange Offer Restricted Notes that such Broker-
Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Restricted Notes
acquired directly from the Company or any of its Affiliates) being sold
in accordance with the intended method or methods of distribution
thereof, and (z) comply with all of the following provisions:
(i) If, following the date hereof there has been announced a
change in Commission policy with respect to exchange offers such as
the Exchange Offer, that in the reasonable opinion of counsel to the
Company raises a substantial question as to whether the Exchange Offer
is permitted by applicable federal law, the Company hereby agrees to
seek a no-action letter or other favorable decision from the
Commission allowing the Company to Consummate an Exchange Offer for
such Transfer Restricted Securities. The Company hereby agrees to
pursue the issuance of such a decision to the Commission staff level.
In connection with the foregoing, the Company hereby agrees to take
all such other reasonable actions as may be requested by the
Commission or otherwise required in connection with the issuance of
such decision, including without limitation (A) participating in
telephonic conferences with the Commission, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company
setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (C)
diligently pursuing a resolution (which need not be favorable) by the
Commission staff.
(ii) As a condition to its participation in the Exchange Offer,
each Holder of Transfer Restricted Securities (including, without
limitation, any Holder who is a Broker Dealer) shall furnish, upon the
request of the Company, prior to the Consummation of the Exchange
Offer, a written representation to the Company (which may be contained
in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an Affiliate
of the Company, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in
the Exchange Offer and (C) it is acquiring the Exchange Notes in its
ordinary course of business. As a condition to its participation in
the Exchange Offer, each Holder using the Exchange Offer to
participate in a distribution of the Exchange Notes shall acknowledge
and agree that, if the resales are of Exchange Notes obtained by such
Holder in exchange for Restricted Notes acquired directly from the
Company or an Affiliate thereof, it (1) could not, under Commission
policy as in effect on the date of this Agreement, rely on the
position of the Commission enunciated in Morgan Stanley and Co., Inc.
(available June 5, 1991) and Exxon Capital Holdings Corporation
(available May 13, 1988), as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with a
secondary resale transaction and that such a secondary resale
transaction must be covered by an effective registration statement
containing the selling security holder information required by Item
507 or 508, as applicable, of Regulation S-K.
(iii) If required by the Commission, prior to effectiveness of
the Exchange Offer Registration Statement, the Company shall provide a
supplemental letter to the Commission (A) stating that the Company is
registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available
May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991)
as interpreted in the Commission's letter to Shearman & Sterling dated
July 2, 1993, and, if applicable, any no-action letter obtained
pursuant to clause (i) above, (B) including a representation that
neither Issuer nor the Company has entered into any arrangement or
understanding with any Person to distribute the Exchange Notes to be
received in the Exchange Offer and that, to the best of the Company's
information and belief, each Holder participating in the Exchange
Offer is acquiring the Exchange Notes in its ordinary course of
business and has no arrangement or understanding with any Person to
participate in the distribution of the Exchange Notes received in the
Exchange Offer and (C) any other undertaking or representation
required by the Commission as set forth in any no-action letter
obtained pursuant to clause (i) above, if applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company shall (i) comply with all the
provisions of Section 6(c) below and use its best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities
being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the
Company pursuant to Section 4(b) hereof), and pursuant thereto the
Company will prepare and file with the Commission a Registration
Statement relating to the registration on any appropriate form under the
Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods
of distribution thereof within the time periods and otherwise in
accordance with the provisions hereof and (ii) issue, upon the request of
any Holder or purchaser of Restricted Notes covered by any Shelf
Registration Statement contemplated by this Agreement, Exchange Notes
having an aggregate principal amount equal to the aggregate principal
amount of Restricted Notes sold pursuant to the Shelf Registration
Statement and surrendered to the Company for cancellation; the Company
shall register Exchange Notes on the Shelf Registration Statement for
this purpose and issue the Exchange Notes to the purchaser(s) of
securities subject to the Shelf Registration Statement in the names as
such purchaser(s) shall designate.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the
Company agrees to:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
for the period specified in Section 3 or 4 of this Agreement, as
applicable. Upon the occurrence of any event that would cause any
such Registration Statement or the Prospectus contained therein (A) to
contain an untrue statement of material fact or omit to state any
material fact necessary to make the statements therein not misleading
or (B) not to be effective and usable for resale of Transfer
Restricted Securities during the period required by this Agreement,
the Company shall file promptly an appropriate amendment to such
Registration Statement curing such defect, and, if Commission review
is required, use its best efforts to cause such amendment to be
declared effective as soon as practicable.
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the applicable Registration Statement as
may be necessary to keep such Registration Statement effective for the
applicable period set forth in Section 3 or 4 hereof, as the case may
be; cause the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner; and comply with the
provisions of the Act with respect to the disposition of all
securities covered by such Registration Statement during the
applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise the Initial Purchaser promptly and, if requested
by the Initial Purchaser, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to any applicable Registration
Statement or any post-effective amendment thereto, when the same has
become effective, (B) of any request by the Commission for amendments
to the Registration Statement or amendments or supplements to the
Prospectus or for additional information relating thereto, (C) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of
the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the
preceding purposes, (D) of the existence of any fact or the happening
of any event that makes any statement of a material fact made in the
Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or
that requires the making of any additions to or changes in the
Registration Statement in order to make the statements therein not
misleading, or that requires the making of any additions to or changes
in the Prospectus in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, or any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky
laws, the Company shall use its best efforts to obtain the withdrawal
or lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to the Initial Purchaser (and the Holders, if
requested) in connection with such exchange or sale, if any, before
filing with the Commission, copies of any Registration Statement or
any Prospectus included therein or any amendments or supplements to
any such Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such
Registration Statement), which documents will be subject to the review
and comment of the Initial Purchaser in connection with such sale, if
any, for a period of at least five Business Days, and the Company will
not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or
Prospectus (including all such documents incorporated by reference) to
which the Initial Purchaser shall reasonably object within five
Business Days after the receipt thereof. The Initial Purchaser shall
be deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement, as
applicable, as proposed to be filed, contains an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading or fails to comply with the
applicable requirements of the Act;
(vi) in case of a Shelf Registration Statement only, make
available, at reasonable times, for inspection by the Initial
Purchaser and any attorney or accountant retained by the Initial
Purchaser, all financial and other records, pertinent corporate
documents of the Company and cause the Company's officers, directors
and employees to supply all information reasonably requested by the
Initial Purchaser, attorney or accountant in connection with such
Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness;
provided, however, that such persons shall first agree in writing with
the Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential by such persons
unless (i) disclosure of such information is required by court or
administrative order or is necessary to respond to inquiries of
regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to
Federal securities laws in conjunction with the filing of such Shelf
Registration Statement or use of any Prospectus), (iii) such
information becomes generally available to the public other than as a
result of a disclosure or failure to safeguard such information by
such person or (iv) such information becomes available to such person
from a source other than the Company and its subsidiaries and such
source is not bound by confidentiality agreement; provided, further,
that the foregoing investigation shall be coordinated on behalf of
such Holders by one representative designated by and on behalf of such
Holders and any such confidential information shall be available from
such representative to such Holders so long as any Holder agrees to be
bound by such confidentiality agreement;
(vii) if requested by any Holders in connection with such
exchange or sale, promptly include in any Registration Statement or
Prospectus, pursuant to a supplement or post-effective amendment if
necessary, such information as such Holders may reasonably request to
have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted
Securities and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Company
is notified of the matters to be included in such Prospectus
supplement or post-effective amendment;
(viii) upon the request of each Holder, furnish to such Holder
in connection with such exchange or sale, without charge, at least one
copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents
incorporated by reference therein and all exhibits (including exhibits
incorporated therein by reference);
(ix) deliver to each Holder without charge, as many copies of
the Prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may
request; the Company hereby consents to the use (in accordance with
law) of the Prospectus and any amendment or supplement thereto by each
selling Holder in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(x) upon the request of any Holder, enter into such agreements
(including underwriting agreements) and make such reasonable
representations and warranties and take all such other reasonable
actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to the
Shelf Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder in connection with any sale or
resale pursuant to the Shelf Registration Statement. In such
connection, the Company shall:
(A) upon request of any Holder, furnish (or in the case of
paragraphs (2) and (3), use its best efforts to cause to be
furnished) to each Holder or upon the effectiveness of the Shelf
Registration Statement, as the case may be:
(1) a certificate, dated such date, signed on behalf
of the Company by (x) the President or any Vice President and
(y) a principal financial or accounting officer of the Company,
confirming, as of the date thereof, the matters set forth in
Sections 6(x), 9(a) and 9(b) of the Purchase Agreement and such
other similar matters as such Holders may reasonably request;
(2) an opinion dated the date of effectiveness of the
Shelf Registration Statement, of counsel for the Company
covering matters similar to those set forth in Section 9(e) of
the Purchase Agreement and such other matter as such Holder may
reasonably request, and in any event including a statement to
the effect that such counsel has participated in conferences
with officers and other representatives of the Company,
representatives of the independent public accountants for the
Company and have considered the matters required to be stated
therein and the statements contained therein, although such
counsel has not independently verified the accuracy,
completeness or fairness of such statements; and that such
counsel advises that, on the basis of the foregoing (relying as
to materiality to the extent such counsel deems appropriate upon
the statements of officers and other representatives of the
Company and without independent check or verification), no facts
came to such counsel's attention that caused such counsel to
believe that the Shelf Registration Statement, at the time such
Registration Statement or any post-effective amendment thereto
became effective contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such
Registration Statement as of its date contained an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has not
independently verified, the accuracy, completeness or fairness
of the financial statements, notes and schedules and other
financial data included in the Shelf Registration Statement
contemplated by this Agreement or the related Prospectus; and
(3) a customary comfort letter as of the date of
effectiveness of the Shelf Registration Statement from the
Company's independent accountants, in the customary form and
covering matters of the type customarily covered in comfort
letters to underwriters in connection with underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 9(g) of the Purchase
Agreement; and
(B) deliver such other documents and certificates as may be
reasonably requested by the selling Holders to evidence compliance
with the matters covered in clause (A) above and with any customary
conditions contained in the any agreement entered into by the
Company pursuant to this clause (xi);
(xi) prior to any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions as the selling Holders may reasonably request and do any
and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted
Securities covered by the applicable Registration Statement; provided,
however, that the Company shall not be required to register or qualify
as a foreign corporation where it is not now so qualified or to take
any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so
subject;
(xii) in connection with any sale of Transfer Restricted
Securities that will result in such securities no longer being
Transfer Restricted Securities, cooperate with the Holders to
facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing
any restrictive legends; and to register such Transfer Restricted
Securities in such denominations and such names as the selling Holders
may request at least two Business Days prior to such sale of Transfer
Restricted Securities;
(xiii) use its best efforts to cause the disposition of the
Transfer Restricted Securities covered by the Registration Statement
to be registered with or approved by such other governmental agencies
or authorities as may be necessary to enable the seller or sellers
thereof to consummate the disposition of such Transfer Restricted
Securities, subject to the proviso contained in clause (xii) above;
(xiv) provide a CUSIP number for all Transfer Restricted
Securities not later than the effective date of a Registration
Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with printed certificates for the Transfer
Restricted Securities which are in a form eligible for deposit with
The Depository Trust Company;
(xv) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders with regard to any applicable
Registration Statement, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need
not be audited) covering a twelve-month period beginning after the
effective date of the Registration Statement (as such term is defined
in paragraph (c) of Rule 158 under the Act);
(xvi) cause the Indenture to be qualified under the TIA not
later than the effective date of the first Registration Statement
required by this Agreement and, in connection therewith, cooperate
with the Trustee and the Holders to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to
be so qualified in a timely manner; and
(xvii) provide promptly to each Holder, upon request, each
document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition of
a Transfer Restricted Security that, upon receipt of the notice referred
to in Section 6(c)(iii)(C) or any notice from the Company of the
existence of any fact of the kind described in Section 6(c)(iii)(D)
hereof (in each case, a "Suspension Notice"), such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until (i) such Holder has received
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(iv) hereof, or (ii) such Holder is advised in writing by the Company
that the use of the Prospectus may be resumed, and has received copies of
any additional or supplemental filings that are incorporated by reference
in the Prospectus (in each case, the "Recommencement Date"). Each Holder
receiving a Suspension Notice hereby agrees that it will either (i)
destroy any Prospectuses, other than permanent file copies, then in such
Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the
Company's expense) all copies, other than permanent file copies, then in
such Holder's possession of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of the
Suspension Notice. The time period regarding the effectiveness of such
Registration Statement set forth in Section 3 or 4 hereof, as applicable,
shall be extended by a number of days equal to the number of days in the
period from and including the date of delivery of the Suspension Notice
to the date of delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or
compliance with this Agreement will be borne by the Company, regardless
of whether a Registration Statement becomes effective, including without
limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the Exchange Notes to be issued in the Exchange
Offer and printing of Prospectuses whether for exchanges, sales, market
making or otherwise), messenger and delivery services and telephone; (iv)
all fees and disbursements of counsel for the Company and all reasonable
fees and disbursements of counsel for the Holders of Transfer Restricted
Securities; (v) all application and filing fees, if any, in connection
with listing the Exchange Notes on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi)
all fees and disbursements of independent certified public accountants of
the Company (including the expenses of any special audit and comfort
letters required by or incident to such performance).
The Company will, in any event, bear its internal expenses
(including, without limitation, all salaries and expenses of its officers
and employees performing legal or accounting duties), and its external
expenses (including without limitation, legal expenses, the expenses of
any annual audit and the fees and expenses of any Person, including
special experts, retained by the Company).
(b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer
Registration Statement and the Shelf Registration Statement), the Company
will reimburse the Initial Purchaser and the Holders of Transfer
Restricted Securities who are tendering Restricted Notes in the Exchange
Offer and/or selling or reselling Restricted Notes or Exchange Notes
pursuant to the "Plan of Distribution" contained in the Exchange Offer
Registration Statement or the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements of not more than
one counsel, who shall be Akin, Gump, Strauss, Hauer & Feld, L.L.P.,
unless another firm shall be chosen by the Holders of a majority in
principal amount of the Transfer Restricted Securities for whose benefit
such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company agrees to indemnify and hold harmless each
Holder, its directors, officers and each Person, if any, who controls
such Holder (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act), from and against any and all losses, claims, damages,
liabilities, judgments, (including without limitation, any reasonable
legal or other expenses incurred in connection with investigating or
defending any matter, including any action that could give rise to any
such losses, claims, damages, liabilities or judgments) caused by any
untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement, preliminary prospectus or Prospectus (or
any amendment or supplement thereto) provided by the Company to any
Holder or any prospective purchaser of Exchange Notes or registered
Restricted Notes, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is
based upon information relating to any of the Holders furnished in
writing to the Company by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company,
and its respective directors and officers, and each person, if any, who
controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) the Company to the same extent as the foregoing
indemnity from the Company set forth in section (a) above, but only with
reference to information relating to such Holder furnished in writing to
the Company by such Holder expressly for use in any Registration
Statement. In no event shall any Holder, its directors, officers or any
Person who controls such Holder be liable or responsible for any amount
in excess of the amount by which the total amount received by such Holder
with respect to its sale of Transfer Restricted Securities pursuant to a
Registration Statement exceeds (i) the amount paid by such Holder for
such Transfer Restricted Securities and (ii) the amount of any damages
that such Holder, its directors, officers or any Person who controls such
Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify
the person against whom such indemnity may be sought (the "indemnifying
person") in writing and the indemnifying party shall assume the defense
of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and
expenses of such counsel, as incurred (except that in the case of any
action in respect of which indemnity may be sought pursuant to both
Sections 8(a) and 8(b), a Holder shall not be required to assume the
defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the
expense of the Holder). Any indemnified party shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless (i) the employment of such
counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to
assume the defense of such action or employ counsel reasonably
satisfactory to the indemnified party or (iii) the named parties to any
such action (including any impleaded parties) include both the
indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more
legal defenses available to it which are different from or additional to
those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on
behalf of the indemnified party). In any such case, the indemnifying
party shall not, in connection with any one action or separate but
substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
fees and expenses of more than one separate firm of attorneys (in
addition to any local counsel) for all indemnified parties and all such
fees and expenses shall be reimbursed as they are incurred. Such firm
shall be designated in writing by a majority of the Holders, in the case
of the parties indemnified pursuant to Section 8(a), and by the Company,
in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified
party from and against any and all losses, claims, damages, liabilities
and judgments by reason of any settlement of any action (i) effected with
its written consent or (ii) effected without its written consent if the
settlement is entered into more than twenty business days after the
indemnifying party shall have received a request from the indemnified
party for reimbursement for the fees and expenses of counsel (in any case
where such fees and expenses are at the expense of the indemnifying
party) and, prior to the date of such settlement, the indemnifying party
shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement or compromise of, or consent to
the entry of judgment with respect to, any pending or threatened action
in respect of which the indemnified party is or could have been a party
and indemnity or contribution may be or could have been sought hereunder
by the indemnified party, unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability on claims that are or could have been the subject matter of
such action and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in this
Section 8 is unavailable to an indemnified party in respect of any
losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages, liabilities or
judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the
Holders, on the other hand, from their sale of Transfer Restricted
Securities or (ii) if the allocation provided by clause 8(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(d)(i)
above but also the relative fault of the Company, on the one hand, and of
the Holder, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The
relative fault of the Company, on the one hand, and of the Holder, on the
other hand, shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by the Holder,
on the other hand, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and judgments referred to above
shall be deemed to include, subject to the limitations set forth in the
second paragraph of Section 8(a), any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or
defending any action or claim.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined
by pro rata allocation (even if the Holders were treated as one entity
for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immedi
ately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages, liabilities or
judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any matter, including any
action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section
8, no Holder, its directors, its officers or any Person, if any, who
controls such Holder shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the total received by such
Holder with respect to the sale of Transfer Restricted Securities
pursuant to a Registration Statement exceeds (i) the amount paid by such
Holder for such Transfer Restricted Securities and (ii) the amount of any
damages which such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Holders' obligations to contribute pursuant to this Section 8(d) are sev
eral in proportion to the respective principal amount of Transfer
Restricted Securities held by each Holder hereunder and not joint.
(e) The Company agrees that the indemnity and contribution provisions
of this Section 8 shall apply to any Broker-Dealers who is deemed to be
an Affiliate of the Company to the same extent, on the same conditions,
as it applies to Holders.
SECTION 9. RULE 144A AND RULE 144
The Company agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding and during any period in which
the Company (i) is not subject to Section 13 or 15(d) of the Exchange
Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Transfer Restricted Securities in connection with any
sale thereof and any prospective purchaser of such Transfer Restricted
Securities designated by such Holder or beneficial owner, the information
required by Rule 144A(d)(4) under the Act in order to permit resales of
such Transfer Restricted Securities pursuant to Rule 144A, subject to
Section 4.6 of the Indenture, and (ii) is subject to Section 13 or 15 (d)
of the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144, subject to Section 2.6 of the Indenture.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company acknowledges and agrees that any
failure by the Company to comply with its obligations under Sections 3
and 4 hereof may result in material irreparable injury to the Initial
Purchaser or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries
precisely and that, in the event of any such failure, the Initial
Purchaser or any Holder may obtain such relief as may be required to
specifically enforce the Company's obligations under Sections 3 and 4
hereof. The Company further agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not, on or
after the date of this Agreement, enter into any agreement with respect
to its securities that is inconsistent with the rights granted to the
Holders in this Agreement or otherwise conflicts with the provisions
hereof. The rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to the
holders of the Company's securities under any agreement in effect on the
date hereof.
(c) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the
case of Section 5 hereof and this Section 10(c)(i), the Company has
obtained the written consent of Holders of all outstanding Transfer
Restricted Securities and (ii) in the case of all other provisions
hereof, the Company has obtained the written consent of Holders of a
majority of the outstanding principal amount of Transfer Restricted
Securities (excluding Transfer Restricted Securities held by the Company
or its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the
rights of Holders whose Transfer Restricted Securities are being tendered
pursuant to the Exchange Offer, and that does not affect directly or
indirectly the rights of other Holders whose Transfer Restricted
Securities are not being tendered pursuant to such Exchange Offer, may be
given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities subject to such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company, on
the one hand, and the Initial Purchaser, on the other hand, and shall
have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the
rights of Holders hereunder.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-
class mail (registered or certified, return receipt requested), telex,
telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of
the Registrar under the Indenture, with a copy to the Registrar under
the Indenture; and
(ii) if to the Company:
R&B Falcon Corporation
901 Threadneedle
Houston, Texas 77079
Fax No.: (281) 496-0285
Attention: General Counsel
With a copy to:
Gardere Wynne Sewell & Riggs, L.L.P.
1000 Louisiana, Suite 3400
Houston, Texas 77002-5007
Fax No.: (713) 276-5555
Attn: Frank Putman
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if telecopied; and on the next
business day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders; provided, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of
Transfer Restricted Securities in violation of the terms hereof or of the
Purchase Agreement or the Indenture. If any transferee of any Holder
shall acquire Transfer Restricted Securities in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall
be held subject to all of the terms of this Agreement, and by taking and
holding such Transfer Restricted Securities such Person shall be
conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement, including the restrictions on
resale set forth in this Agreement and, if applicable, the Purchase
Agreement, and such Person shall be entitled to receive the benefits
hereof.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect
and of the remaining provisions contained herein shall not be affected or
impaired thereby.
(k) Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein with respect to the registration rights
granted with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the
parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
R&B FALCON CORPORATION
By:
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By:
Name:
Title:
- -------------------------------------------------------------------------
EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Louise Guarneri (Compliance Department)
Fax: (212) 892-7272
From: R&B Falcon Corporation
Date: _________, 1999
For your information only (NO ACTION REQUIRED):
Today, ______, 1999, we filed [an A/B Exchange Registration
Statement/a Shelf Registration Statement] with the Securities and
Exchange Commission. We currently expect this registration statement
to be declared effective within __ business days of the date hereof.
EXHIBIT 10.1
[HARVEY WARD]
=========================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
=========================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS 1
1.1.Certain Defined Terms 1
1.2.Other Defined Terms 5
1.3.Accounting Terms 5
1.4.Other Definitional Provisions 5
SECTION 2.LOAN COMMITMENT AND LOAN 5
2.1.Termination of Loan Commitment 6
2.2.Termination of Loan Commitment 7
2.3.Interest on the Loans 7
2.4.Redemptions 8
2.5.Excess Proceeds Offers 10
2.6.Use of Proceeds 11
2.7.Commitment Fee 11
SECTION 3.CONDITIONS 12
3.1.Conditions to Initial Advances on the Loan 12
3.2.Conditions to Subsequent Advance on the Loan 13
SECTION 4.REPRESENTATIONS AND WARRANTIES 14
4.1.Organization and Good Standing; Capitalization 14
4.2.Authorization and Power 14
4.3.No Conflicts or Consents 14
4.4.Enforceable Obligations 15
4.5.Properties; Liens 15
4.6.No Default 15
4.7.Use of Proceeds; Margin Stock, etc 15
4.8.Survival of Representations and Warranties 16
SECTION 5.COVENANTS 16
5.1.Indenture Covenants 16
5.2.Reports of Defaults, Etc 16
5.3.Payments in U.S. Dollars 16
5.4.Performance and Enforcement Under the Loan Documents 16
5.5.Liens 16
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary 17
SECTION 6.EVENTS OF DEFAULT 17
6.1.Failure To Make Payments When Due 17
6.2.Default Under The Indenture 17
6.3.Other Loan Agreement 17
6.4.Breach of Certain Covenants 17
6.5.Breach of Warranty 17
6.6.Other Defaults Under Agreement or Loan Documents 17
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc 17
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc 18
SECTION 7.MISCELLANEOUS 19
7.1.Pledges and Assignments of Loan and Note 19
7.2.Expenses 19
7.3.Indemnity 19
7.4.Additional Amounts 20
7.5.Taxes and Other Taxes 21
7.6.Amendments and Waivers 22
7.7.Independence of Covenants 22
7.8.Notices 23
7.9.Survival of Warranties and Certain Agreements 23
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative 23
7.11.Severability 23
7.12.Headings 23
7.13.Applicable Law 23
7.14.Successors and Assigns; Subsequent Holders of Notes 23
7.15.Counterparts; Effectiveness 24
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial 24
7.17.Waiver of Stay, Extension or Usury Laws 24
7.18.Usury Savings Clause 25
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
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This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States
Trust Company of New York as Trustee (the "Trustee"), pursuant to
which the Lender will issue in two series up to $400,000,000
aggregate principal amount of its 11% Senior Secured Notes due 2006
(the "7-year Secured Notes") and up to $400,000,000 aggregate
principal amount of its 11 3/8% Senior Secured Notes due 2009 (the
"10-year Secured Notes;" the 7-year Secured Notes and the 10-year
Secured Notes being hereinafter collectively called the "Secured
Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize
the proceeds of the Secured Notes to make loans to the Company,
each for the purpose of either (i) financing all or a portion of
the cost of acquiring, constructing, altering, improving or
repairing a drilling rig or drillship (a "Rig") or improvements
used or to be used in connection with such a Rig, or (ii) financing
all or any part of the purchase price of the Rig or improvements
used or to be used in connection with such Rig, which indebtedness
is incurred prior to or within one year after the date of the
completion of construction, alteration, improvement or repair or
the commencement of commercial operations thereof; and
WHEREAS, the Company desires that the Lender extend senior
secured credit facilities to the Company for such purposes herein;
and
WHEREAS, the Indenture provides that the Lender will enter
into a Senior Secured Note Security and Pledge Agreement of even
date herewith (the "Issuer Security Agreement") between the Lender,
the Trustee and United States Trust Company of New York as
Collateral Agent (in such capacity, the "Collateral Agent"),
pursuant to which the Lender will pledge and grant a security in
the loans made with the proceeds of the Secured Notes which are or
will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as
of March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person or any duly authorized committee
of that Board.
"Board Resolution" means a duly adopted resolution of the
Board of Directors of the Company in full force and effect at the
time of determination and certified as such by the Secretary or
Assistant Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and
any day which is a legal holiday under the laws of New York, New
York or is a day on which banking institutions therein located are
authorized or required by law or other governmental action to
close.
"Cash Equivalents" means (i) U.S. Governmental Obligations
with a maturity of four years or less; (ii) commercial paper issued
by any corporation if such commercial paper has credit ratings of
at least "A-1" from S&P or at least "P-1" by Moody's;
(iii) certificates of deposit, bankers' acceptances, time deposits,
Eurocurrency Deposits and similar types of Investments routinely
offered by commercial banks with final maturities of one year or
less issued by commercial banks having combined capital and surplus
in excess of $100,000,000; and (iv) shares in money market mutual
or similar funds having assets in excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on
which the initial advance of the Loan is made and the conditions
set forth in Section 3.1 are satisfied or waived in accordance with
Section 7.7.
"Collateral" means the Mortgaged Rig and any other property
subject to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Collateral Agent" has the meaning assigned to such term in
the recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any
indenture, mortgage, deed of trust, contract, undertaking,
agreement or other instrument to which that Person is a party or by
which it or any of its properties is bound or to which it or any of
its properties is subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Event of Default" means each of the events set forth in
Section 6.
"indemnified liabilities" has the meaning ascribed to such
term in Section 7.3.
"Indemnitees" has the meaning ascribed to such term in
Section 7.3.
"Indenture" has the meaning ascribed to such term in the
recitals of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or
decrees of any state, commonwealth, nation, territory, possession,
province, county, parish, town, township, village, municipality or
Tribunal, and "Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the
introduction of this Agreement and shall include any assignee of
the Loan or the Note or Loan Commitment to the extent of such
assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in
the nature thereof, and any agreement to give any security
interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender
pursuant to Section 2.1.
"Loan Documents" means this Agreement, the Note and the
Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or
prospects of the Company and its Restricted Subsidiaries, taken as
a whole, or (ii) the impairment of the ability of the Company or
any of its Restricted Subsidiaries to perform, or the impairment of
the ability of Lender to enforce, any material right or remedy
under the Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due
and payable as provided in this Agreement whether at Stated
Maturity, upon redemption, by declaration of acceleration or
otherwise.
"Mortgage" means a mortgage substantially in the form of
Exhibit IV covering the Mortgaged Rig.
"Mortgaged Rig" means the Harvey Ward.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the
Company from time to time owed to the Lender under the Loan
Documents, whether for principal, reimbursements, interest
(including post-petition interest), fees, expenses, indemnities or
otherwise, and whether primary, secondary, direct, indirect,
contingent, fixed or otherwise (including obligations of
performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the
Secretary of the Company.
"Officers' Certificate" means, as applied to any corporation,
a certificate executed on behalf of such corporation by two
officers; provided, however, that every Officers' Certificate with
respect to the compliance with a condition precedent to the making
of the Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officers' Certificate
have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement
that, in the opinion of the signers, they have made or have caused
to be made such examination or investigation as is necessary to
enable them to express an informed opinion as to whether or not
such condition has been complied with, and (iii) a statement as to
whether, in the opinion of the signers, such condition has been
complied with.
"Other Loan" means a loan made pursuant to an Other Loan
Agreement by the Lender with the proceeds of the Secured Notes
which is secured by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the
Lender, the Company and the Trustee pursuant to which the Lender
will utilize the proceeds of the Secured Notes to make an Other
Loan for the purposes specified in the second recital of this
Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in
Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor,
New York, New York 10036 or such other office in the State of New
York as the Lender may designate to the Company and the Trustee
from time to time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated
March 19, 1999 among the Lender, the Company and the Initial
Purchaser relating to the Secured Notes.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or
participation in any profit sharing agreement or arrangement,
bonds, debentures, options, warrants, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or
participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase
or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$2,000,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties,
from time to time or at any time imposed by any Law or any
Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$2,000,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable
by the Company pursuant hereto and other fees, costs and expenses
payable by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and
sale of the Secured Notes, (ii) the incurrence of the Loan
hereunder on the Closing Date, (iii) the incurrence of the Other
Loans under the Other Loan Agreements, (iv) any other transaction
on the Closing Date contemplated in relation to the foregoing and
(v) the payment of fees and expenses in connection with the
foregoing.
"Tranches" means collectively the 7-year Tranche and the
10-year Tranche.
"Tribunal" means any governmental, any arbitration panel, any
court or any governmental department, commission, board, bureau,
agency, authority or instrumentality of the United States or any
state, province, commonwealth, nation, territory, possession,
county, parish, town, township, village or municipality, whether
now or hereafter constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the
introduction of this Agreement and shall include any successor
Trustee appointed pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender
for the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $4,000,000 in the
aggregate (the "Loan") consisting of $2,000,000 of 7-year Tranche
advances and $2,000,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under
this Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time)
on the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan. The Company shall pay on or before
10:00 a.m. on the date of the final Maturity of the 7-year Tranche of
the Loan all of the principal amount of the 7-year Tranche remaining
outstanding, which amount will be $2,000,000 principal amount of the
Loan, reduced by any previous prepayments of principal made on the
7-year Tranche of the Loan to the extent that such payments have been
allocated pursuant to the provisions of Section 2.3 hereof and the
Indenture to the 7-year Secured Notes, together with accrued and
unpaid interest, fees and a pro rata portion of the amount of the
Special Interest and Additional Amounts, if any, due on the 7-year
Secured Notes. The Company shall pay on or before 10:00 a.m. on the
date of the final Maturity of the 10-year Tranche all of the principal
amount of the 10-year Tranche then remaining outstanding, reduced by
any previous prepayments of principal made on the 10-year Tranche of
the Loan to the extent that such payments have been allocated pursuant
to the provisions of Section 2.3 hereof and the Indenture to the 10-
year Secured Notes, together with accrued and unpaid interest fees and
a pro rata portion of the amount of the Special Interest and
Additional Amounts, if any, due on the 10-year Secured Notes. Such
payments shall be made directly to the Trustee for deposit in the
Issuer Escrow Account established pursuant to the Issuer Escrow
Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder
shall terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear
interest on the unpaid principal amount thereof from the date made
through Maturity for the 7-year Tranche (whether by prepayment,
acceleration or otherwise) at a rate equal to 11% per annum plus 2
basis points per annum and the 10-year Tranche of the Loan shall
bear interest on the unpaid principal amount thereof from the date
made through Maturity for the 10-year Tranche (whether by prepayment,
acceleration or otherwise) at a rate equal to 11 3/8% per annum plus
2 basis points per annum.
B. Special Interest. The Lender and the Company have entered into
a Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any
other provision herein, in no event will the combined sum of
interest (cash or otherwise) on the Loan exceed the maximum amount
permitted by applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig
or the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i) Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and
of the Other Loans, in whole or in part, to provide funds for
such redemption. Any prepayments by the Company on the Loan
and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on this
Loan and the Other Loans on a pro rata basis. All payments on
the Loan and the Other Loans pursuant hereto shall be made
directly to the Trustee for deposit into the Issuer Escrow
Account.
(ii) Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of
any prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing
Date by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in
the form of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and
to make the Loan, the Company represents and warrants to the Lender
that, at the time of execution hereof and after consummation of the
making of the Loan and the Transactions, the following statements
are true, correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is
a corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power
and requisite authority, and has taken all corporate action necessary,
to consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
(A) The execution and delivery of the Loan Agreement, the
Notes, the Mortgage, the other Loan Documents and each other
document to be executed and delivered in connection with the
Transactions, the consummation of each of the transactions herein
or therein contemplated, the compliance with each of the terms and
previsions hereof or thereof, and the issuance, delivery and
performance of the Notes, this Agreement, the Mortgage and the
Indenture, do not and will not (i) violate any provision of any law
or any governmental rule or regulation applicable to the Company,
its Certificate of Incorporation or Bylaws or any order, judgment
or decree of any court or other agency of government binding on it,
(ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual
Obligation of the Company which could reasonably be expected to
result in a Material Adverse Effect, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or
assets of the Company (other than any Liens created under this
Agreement and the Other Loan Agreements), (iv) require any approval
of stockholders or any approval or consent of any Person under any
Contractual Obligation of the Company except for such approvals or
consents which will be obtained on or before the Closing Date and
disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate
result in a Material Adverse Effect.
(B) No consent, approval, authorization or order of any
Tribunal or other Person is required in connection with the
execution and delivery by the Company of this Agreement, the Loan
Documents or any other document or instrument to be delivered in
connection with the Transactions or the consummation of the
transactions contemplated hereby or thereby, other than any such
consent, approval, authorization or order which has been obtained
and remains in full force and effect or which has been waived in
writing by the Lender or the failure of which to obtain would not,
singly or in the aggregated, have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes,
the Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title
to the Mortgaged Rig and the Other Mortgaged Rigs to the extent specified
in the Other Loan Agreements. Except as permitted by this Agreement,
the Mortgaged Rig is so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan
will be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage, (ii) the Liens of the Subsidiary's Mortgage and Security
Agreement are perfected and enforceable, and (iii) such Subsidiary
executes a Subsidiary Guarantee pursuant to the Indenture.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of
Default") shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.6 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described
in the foregoing Section 6.7 or 6.8, all of the unpaid principal
amount of and accrued interest on the Loan and all other
outstanding Obligations shall automatically become immediately due
and payable, without presentment, demand, protest, waiver of notice
of intent to accelerate and waiver of notice of such acceleration
or notice of any other kind or other requirements of any kind, all
of which are hereby expressly waived by the Company, and
Obligations and the Loan Commitment of the Lender hereunder shall
thereupon terminate, and (ii) upon the occurrence of any other
Event of Default, the Lender shall, upon written notice of the
Lender, to the Company, upon written notice of the Trustee or the
Collateral Agent to the Company and the Lender, or upon written
notice of a Holder or Holders of the Secured Note or Notes, to the
Company, the Lender, the Collateral Agent and the Trustee, declare
all of the unpaid principal amount of and accrued interest on the
Loan and all other outstanding Obligations to be, and the same
shall forthwith become, due and payable, and the obligations and
Loan Commitments of the Lender hereunder shall thereupon terminate;
provided, however, that upon the occurrence of an Event of Default
described in Section 6.4 of this Agreement or an "event of default"
under Section 6.4 of any Other Loan Agreement, the Lender shall not
declare the Obligations hereunder to be due and payable for a
period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 7.6,
then the Lender shall, upon receipt of the written notice from the
Collateral Agent and the Trustee of such remedy or waiver, by
written notice to the Company rescind and annul the acceleration
and its consequences; but such action shall not affect any
subsequent Default, Event of Default or Potential Event of Default
or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any
payment under or with respect to the Secured Notes is due and
payable, if the Lender, the Company or the Subsidiary Guarantors,
as applicable, will be obligated to pay Additional Amounts with
respect to such payment, the Lender, the Company or the Subsidiary
Guarantors, as applicable, will deliver to the Trustee an officer's
certificate stating the fact that such Additional Amounts will be
payable and the amounts will be payable and the amounts so payable
and will set forth such other information necessary to enable the
Trustee to pay such Additional Amounts to Holders on the payment
date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination
of the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination
or waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is
not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of the Lender or the holder of the Notes
or the Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER
THAN THE MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written
above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
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Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan
evidenced hereby was made and is to be repaid. Capitalized terms used
herein without definition shall have the meanings set forth in the
Loan Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999,
as the same may at any time be amended, modified or supplemented and
in effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of
this Note or the Loan Agreement shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day
and year and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the __________________
of R&B Falcon Corporation, a Delaware corporation ( the "Company"),
and that as such he is authorized to execute this Notice of
Borrowing on behalf of the Company. With reference to that certain
Loan Agreement dated as of _______________, 1999 (as same may be
amended, modified, increased, supplemented and/or restated from time
to time, the "Agreement") entered into by and between the Company
and RBF Finance Co., and any other future holder of any Note issued
pursuant to the Agreement ("Lender"), the undersigned further
certifies, represents and warrants on behalf of the Company that all
of the foregoing statements are true and correct (each capitalized
term used herein having the same meaning given to it in the
Agreement unless otherwise specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly authorized,
executed and delivered the Mortgage; (ii) the Mortgage constitutes a
legally binding obligation of the Company enforceable against the
Company in accordance with its terms (except as (i) the enforceability
thereof may be limited bankruptcy, insolvency or other similar laws
affecting creditors' rights, generally, and (ii) the enforceability
thereof may be limited by right of acceleration and the availability
of enforceable remedies may be limited by equitable principles of
general applicability, and subject to such other exceptions,
limitations or qualifications that are usual and customary for such
opinions) and (iii) the Mortgage constitutes a valid and perfected
first mortgage lien on the Mortgaged Rig.
EXHIBIT 10.2
[PEREGRINE II]
=========================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
=========================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS
1.1.Certain Defined Terms
1.2.Other Defined Terms
1.3.Accounting Terms
1.4.Other Definitional Provisions
SECTION 2.LOAN COMMITMENT AND LOAN
2.1.Termination of Loan Commitment
2.2.Termination of Loan Commitment
2.3.Interest on the Loans
2.4.Redemptions
2.5.Excess Proceeds Offers
2.6.Use of Proceeds
2.7.Commitment Fee
SECTION 3.CONDITIONS
3.1.Conditions to Initial Advances on the Loan
3.2.Conditions to Subsequent Advance on the Loan
SECTION 4.REPRESENTATIONS AND WARRANTIES
4.1.Organization and Good Standing; Capitalization
4.2.Authorization and Power
4.3.No Conflicts or Consents
4.4.Enforceable Obligations
4.5.Properties; Liens
4.6.No Default
4.7.Use of Proceeds; Margin Stock, etc
4.8.Survival of Representations and Warranties
SECTION 5.COVENANTS
5.1.Indenture Covenants
5.2.Reports of Defaults, Etc
5.3.Payments in U.S. Dollars
5.4.Performance and Enforcement Under the Loan Documents
5.5.Liens
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary
SECTION 6.EVENTS OF DEFAULT
6.1.Failure To Make Payments When Due
6.2.Default Under The Indenture
6.3.Other Loan Agreement
6.4.Breach of Certain Covenants
6.5.Breach of Warranty
6.6.Other Defaults Under Agreement or Loan Documents
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc
SECTION 7.MISCELLANEOUS
7.1.Pledges and Assignments of Loan and Note
7.2.Expenses
7.3.Indemnity
7.4.Additional Amounts
7.5.Taxes and Other Taxes
7.6.Amendments and Waivers
7.7.Independence of Covenants
7.8.Notices
7.9.Survival of Warranties and Certain Agreements
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative
7.11.Severability
7.12.Headings
7.13.Applicable Law
7.14.Successors and Assigns; Subsequent Holders of Notes
7.15.Counterparts; Effectiveness
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial
7.17.Waiver of Stay, Extension or Usury Laws
7.18.Usury Savings Clause
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE
BORROWER
IV FORM OF MORTGAGE
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This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes;" the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior
secured credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board
of Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of New York, New York or
is a day on which banking institutions therein located are authorized
or required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on
which the initial advance of the Loan is made and the conditions set
forth in Section 3.1 are satisfied or waived in accordance with
Section 7.7.
"Collateral" means the Mortgaged Rig and any other property
subject to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Event of Default" means each of the events set forth in
Section 6.
"indemnified liabilities" has the meaning ascribed to such term
in Section 7.3.
"Indemnitees" has the meaning ascribed to such term in
Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the
introduction of this Agreement and shall include any assignee of the
Loan or the Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note and the Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect
upon the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit
IV covering the Mortgaged Rig.
"Mortgaged Rig" means the Peregrine II.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the
Company from time to time owed to the Lender under the Loan Documents,
whether for principal, reimbursements, interest (including
post-petition interest), fees, expenses, indemnities or otherwise, and
whether primary, secondary, direct, indirect, contingent, fixed or
otherwise (including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan
Agreement by the Lender with the proceeds of the Secured Notes which
is secured by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender,
the Company and the Trustee pursuant to which the Lender will utilize
the proceeds of the Secured Notes to make an Other Loan for the
purposes specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in
Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit sharing agreement or arrangement, bonds, debentures,
options, warrants, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$14,250,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$14,250,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and
sale of the Secured Notes, (ii) the incurrence of the Loan hereunder
on the Closing Date, (iii) the incurrence of the Other Loans under the
Other Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any
court or any governmental department, commission, board, bureau,
agency, authority or instrumentality of the United States or any
state, province, commonwealth, nation, territory, possession, county,
parish, town, township, village or municipality, whether now or
hereafter constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the
introduction of this Agreement and shall include any successor Trustee
appointed pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $28,500,000 in the
aggregate (the "Loan") consisting of $14,250,000 of 7-year Tranche
advances and $14,250,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under
this Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time)
on the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan. The Company shall pay on or before 10:00
a.m. on the date of the final Maturity of the 7-year Tranche of the
Loan all of the principal amount of the 7-year Tranche remaining
outstanding, which amount will be $14,250,000 principal amount of the
Loan, reduced by any previous prepayments of principal made on the
7-year Tranche of the Loan to the extent that such payments have been
allocated pursuant to the provisions of Section 2.3 hereof and the
Indenture to the 7-year Secured Notes, together with accrued and
unpaid interest, fees and a pro rata portion of the amount of the
Special Interest and Additional Amounts, if any, due on the 7-year
Secured Notes. The Company shall pay on or before 10:00 a.m. on the
date of the final Maturity of the 10-year Tranche all of the principal
amount of the 10-year Tranche then remaining outstanding, reduced by
any previous prepayments of principal made on the 10-year Tranche of
the Loan to the extent that such payments have been allocated pursuant
to the provisions of Section 2.3 hereof and the Indenture to the 10-
year Secured Notes, together with accrued and unpaid interest fees and
a pro rata portion of the amount of the Special Interest and
Additional Amounts, if any, due on the 10-year Secured Notes. Such
payments shall be made directly to the Trustee for deposit in the
Issuer Escrow Account established pursuant to the Issuer Escrow
Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder
shall terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any other
provision herein, in no event will the combined sum of interest (cash
or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig
or the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and of
the Other Loans, in whole or in part, to provide funds for such
redemption. Any prepayments by the Company on the Loan and the
Other Loans required to be made to provide funds for the Lender
to make such a redemption shall be made on this Loan and the
Other Loans on a pro rata basis. All payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
(ii)Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section
3.10 thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of
any prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv)signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v)executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi)an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in the
form of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
A. The execution and delivery of the Loan Agreement, the Notes, the
Mortgage, the other Loan Documents and each other document to be
executed and delivered in connection with the Transactions, the
consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and previsions
hereof or thereof, and the issuance, delivery and performance of the
Notes, this Agreement, the Mortgage and the Indenture, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Company, its Certificate of Incorporation
or Bylaws or any order, judgment or decree of any court or other
agency of government binding on it, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of the Company which could
reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Company (other than any Liens
created under this Agreement and the Other Loan Agreements), (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
B. No consent, approval, authorization or order of any Tribunal or
other Person is required in connection with the execution and delivery
by the Company of this Agreement, the Loan Documents or any other
document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the Mortgaged Rig and the Other Mortgaged Rigs to the extent specified
in the Other Loan Agreements. Except as permitted by this Agreement,
the Mortgaged Rig is so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage, (ii) the Liens of the Subsidiary's Mortgage and Security
Agreement are perfected and enforceable, and (iii) such Subsidiary
executes a Subsidiary Guarantee pursuant to the Indenture.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of
Default") shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.6 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of the Lender or the holder of the Notes
or the Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly
authorized officers of the undersigned as of the date first written
above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
- ------------------------------------------------------------------------
Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan
evidenced hereby was made and is to be repaid. Capitalized terms used
herein without definition shall have the meanings set forth in the
Loan Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999,
as the same may at any time be amended, modified or supplemented and
in effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of
this Note or the Loan Agreement shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day
and year and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the __________________
of R&B Falcon Corporation, a Delaware corporation ( the "Company"),
and that as such he is authorized to execute this Notice of Borrowing
on behalf of the Company. With reference to that certain Loan
Agreement dated as of _______________, 1999 (as same may be amended,
modified, increased, supplemented and/or restated from time to time,
the "Agreement") entered into by and between the Company and RBF
Finance Co., and any other future holder of any Note issued pursuant
to the Agreement ("Lender"), the undersigned further certifies,
represents and warrants on behalf of the Company that all of the
foregoing statements are true and correct (each capitalized term used
herein having the same meaning given to it in the Agreement unless
otherwise specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly
authorized, executed and delivered the Mortgage; (ii) the Mortgage
constitutes a legally binding obligation of the Company enforceable
against the Company in accordance with its terms (except as (i) the
enforceability thereof may be limited bankruptcy, insolvency or other
similar laws affecting creditors' rights, generally, and (ii) the
enforceability thereof may be limited by right of acceleration and the
availability of enforceable remedies may be limited by equitable
principles of general applicability, and subject to such other
exceptions, limitations or qualifications that are usual and customary
for such opinions) and (iii) the Mortgage constitutes a valid and
perfected first mortgage lien on the Mortgaged Rig.
EXHIBIT 10.3
[PEREGRINE I]
=========================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
=========================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS
1.1.Certain Defined Terms
1.2.Other Defined Terms
1.3.Accounting Terms
1.4.Other Definitional Provisions
SECTION 2.LOAN COMMITMENT AND LOAN
2.1.Termination of Loan Commitment
2.2.Termination of Loan Commitment
2.3.Interest on the Loans
2.4.Redemptions
2.5.Excess Proceeds Offers
2.6.Use of Proceeds
2.7.Commitment Fee
SECTION 3.CONDITIONS
3.1.Conditions to Initial Advances on the Loan
3.2.Conditions to Subsequent Advance on the Loan
SECTION 4.REPRESENTATIONS AND WARRANTIES
4.1.Organization and Good Standing; Capitalization
4.2.Authorization and Power
4.3.No Conflicts or Consents
4.4.Enforceable Obligations
4.5.Properties; Liens
4.6.No Default
4.7.Use of Proceeds; Margin Stock, etc
4.8.Survival of Representations and Warranties
SECTION 5.COVENANTS
5.1.Indenture Covenants
5.2.Reports of Defaults, Etc
5.3.Payments in U.S. Dollars
5.4.Performance and Enforcement Under the Loan Documents
5.5.Liens
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary
SECTION 6.EVENTS OF DEFAULT
6.1.Failure To Make Payments When Due
6.2.Default Under The Indenture
6.3.Other Loan Agreement
6.4.Breach of Certain Covenants
6.5.Breach of Warranty
6.6.Other Defaults Under Agreement or Loan Documents
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc
SECTION 7.MISCELLANEOUS
7.1.Pledges and Assignments of Loan and Note
7.2.Expenses
7.3.Indemnity
7.4.Additional Amounts
7.5.Taxes and Other Taxes
7.6.Amendments and Waivers
7.7.Independence of Covenants
7.8.Notices
7.9.Survival of Warranties and Certain Agreements
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative
7.11.Severability
7.12.Headings
7.13.Applicable Law
7.14.Successors and Assigns; Subsequent Holders of Notes
7.15.Counterparts; Effectiveness
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial
7.17.Waiver of Stay, Extension or Usury Laws
7.18.Usury Savings Clause
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
- ------------------------------------------------------------------------
This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes;" the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of New York, New York or
is a day on which banking institutions therein located are authorized
or required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means the Mortgaged Rig and any other property
subject to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Event of Default" means each of the events set forth in
Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in
Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note and the Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit
IV covering the Mortgaged Rig.
"Mortgaged Rig" means the Peregrine I
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender,
the Company and the Trustee pursuant to which the Lender will utilize
the proceeds of the Secured Notes to make an Other Loan for the
purposes specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in
Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit sharing agreement or arrangement, bonds, debentures,
options, warrants, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$8,000,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$8,000,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and
sale of the Secured Notes, (ii) the incurrence of the Loan hereunder
on the Closing Date, (iii) the incurrence of the Other Loans under the
Other Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any
court or any governmental department, commission, board, bureau,
agency, authority or instrumentality of the United States or any
state, province, commonwealth, nation, territory, possession, county,
parish, town, township, village or municipality, whether now or
hereafter constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the
introduction of this Agreement and shall include any successor Trustee
appointed pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $16,000,000 in the
aggregate (the "Loan") consisting of $8,000,000 of 7-year Tranche
advances and $8,000,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under this
Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time) on
the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan. The Company shall pay on or before 10:00
a.m. on the date of the final Maturity of the 7-year Tranche of the
Loan all of the principal amount of the 7-year Tranche remaining
outstanding, which amount will be $8,000,000 principal amount of the
Loan, reduced by any previous prepayments of principal made on the
7-year Tranche of the Loan to the extent that such payments have been
allocated pursuant to the provisions of Section 2.3 hereof and the
Indenture to the 7-year Secured Notes, together with accrued and
unpaid interest, fees and a pro rata portion of the amount of the
Special Interest and Additional Amounts, if any, due on the 7-year
Secured Notes. The Company shall pay on or before 10:00 a.m. on the
date of the final Maturity of the 10-year Tranche all of the principal
amount of the 10-year Tranche then remaining outstanding, reduced by
any previous prepayments of principal made on the 10-year Tranche of
the Loan to the extent that such payments have been allocated pursuant
to the provisions of Section 2.3 hereof and the Indenture to the 10-
year Secured Notes, together with accrued and unpaid interest fees and
a pro rata portion of the amount of the Special Interest and
Additional Amounts, if any, due on the 10-year Secured Notes. Such
payments shall be made directly to the Trustee for deposit in the
Issuer Escrow Account established pursuant to the Issuer Escrow
Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder shall
terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any
other provision herein, in no event will the combined sum of interest
(cash or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig or
the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and of
the Other Loans, in whole or in part, to provide funds for such
redemption. Any prepayments by the Company on the Loan and the
Other Loans required to be made to provide funds for the Lender
to make such a redemption shall be made on this Loan and the
Other Loans on a pro rata basis. All payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
(ii)Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of any
prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv)signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v)executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi)an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii)originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in the form
of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H.The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A.The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
(A) The execution and delivery of the Loan Agreement, the Notes,
the Mortgage, the other Loan Documents and each other document to be
executed and delivered in connection with the Transactions, the
consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and previsions
hereof or thereof, and the issuance, delivery and performance of the
Notes, this Agreement, the Mortgage and the Indenture, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Company, its Certificate of Incorporation
or Bylaws or any order, judgment or decree of any court or other
agency of government binding on it, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of the Company which could
reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Company (other than any Liens
created under this Agreement and the Other Loan Agreements), (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
(B) No consent, approval, authorization or order of any Tribunal
or other Person is required in connection with the execution and
delivery by the Company of this Agreement, the Loan Documents or any
other document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the Mortgaged Rig and the Other Mortgaged Rigs to the extent specified
in the Other Loan Agreements. Except as permitted by this Agreement,
the Mortgaged Rig is so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Senior Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage, (ii) the Liens of the Subsidiary's Mortgage and Security
Agreement are perfected and enforceable, and (iii) such Subsidiary
executes a Subsidiary Guarantee pursuant to the Indenture.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.6 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.6 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied, telexed or sent by
mail and shall be deemed to have been given when delivered in person,
upon receipt of telecopy or telex against receipt of answer back or
four Business Days after depositing it in the mail, registered or
certified, with postage prepaid and properly addressed; provided,
however, that notices shall not be effective until received. For the
purposes hereof, the addresses of the parties hereto (unless notice of
a change thereof is delivered as provided in this Section 7.8) shall
be set forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
- -----------------------------------------------------------------------
Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan
evidenced hereby was made and is to be repaid. Capitalized terms used
herein without definition shall have the meanings set forth in the
Loan Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999, as
the same may at any time be amended, modified or supplemented and in
effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this
Note or the Loan Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
and interest on this Note at the place, at the respective times, and
in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day
and year and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the ___________
__________________ of R&B Falcon Corporation, a Delaware corporation (
the "Company"), and that as such he is authorized to execute this
Notice of Borrowing on behalf of the Company. With reference to that
certain Loan Agreement dated as of _______________, 1999 (as same may
be amended, modified, increased, supplemented and/or restated from
time to time, the "Agreement") entered into by and between the Company
and RBF Finance Co., and any other future holder of any Note issued
pursuant to the Agreement ("Lender"), the undersigned further
certifies, represents and warrants on behalf of the Company that all
of the foregoing statements are true and correct (each capitalized
term used herein having the same meaning given to it in the Agreement
unless otherwise specified):
(a) The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b) As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c) Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d) The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly
authorized, executed and delivered the Mortgage; (ii) the Mortgage
constitutes a legally binding obligation of the Company enforceable
against the Company in accordance with its terms (except as (i) the
enforceability thereof may be limited bankruptcy, insolvency or other
similar laws affecting creditors' rights, generally, and (ii) the
enforceability thereof may be limited by right of acceleration and the
availability of enforceable remedies may be limited by equitable
principles of general applicability, and subject to such other
exceptions, limitations or qualifications that are usual and customary
for such opinions) and (iii) the Mortgage constitutes a valid and
perfected first mortgage lien on the Mortgaged Rig.
EXHIBIT 10.4
[DEEPWATER IV]
=========================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
=========================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS 1
1.1.Certain Defined Terms 1
1.2.Other Defined Terms 5
1.3.Accounting Terms 5
1.4.Other Definitional Provisions 5
SECTION 2.LOAN COMMITMENT AND LOAN 6
2.1.Termination of Loan Commitment 7
2.2.Termination of Loan Commitment 7
2.3.Interest on the Loans 7
2.4.Redemptions 8
2.5.Excess Proceeds Offers 10
2.6.Use of Proceeds 11
2.7.Commitment Fee 12
SECTION 3.CONDITIONS 12
3.1.Conditions to Initial Advances on the Loan 12
3.2.Conditions to Subsequent Advance on the Loan 14
SECTION 4.REPRESENTATIONS AND WARRANTIES 14
4.1.Organization and Good Standing; Capitalization 14
4.2.Authorization and Power 15
4.3.No Conflicts or Consents 15
4.4.Enforceable Obligations 15
4.5.Properties; Liens 16
4.6.No Default 16
4.7.Use of Proceeds; Margin Stock, etc 16
4.8.Survival of Representations and Warranties 16
SECTION 5.COVENANTS 16
5.1.Indenture Covenants 16
5.2.Reports of Defaults, Etc 16
5.3.Payments in U.S. Dollars 17
5.4.Performance and Enforcement Under the Loan Documents 17
5.5.Liens 17
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary 17
5.7.Filing of Mortgage 17
SECTION 6.EVENTS OF DEFAULT 17
6.1.Failure To Make Payments When Due 17
6.2.Default Under The Indenture 18
6.3.Other Loan Agreement 18
6.4.Breach of Certain Covenants 18
6.5.Breach of Warranty 18
6.6.Other Defaults Under Agreement or Loan Documents 18
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc 18
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc 18
SECTION 7.MISCELLANEOUS 19
7.1.Pledges and Assignments of Loan and Note 19
7.2.Expenses 20
7.3.Indemnity 20
7.4.Additional Amounts 21
7.5.Taxes and Other Taxes 22
7.6.Amendments and Waivers 23
7.7.Independence of Covenants 23
7.8.Notices 23
7.9.Survival of Warranties and Certain Agreements 23
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative 23
7.11.Severability 24
7.12.Headings 24
7.13.Applicable Law 24
7.14.Successors and Assigns; Subsequent Holders of Notes 24
7.15.Counterparts; Effectiveness 24
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial 24
7.17.Waiver of Stay, Extension or Usury Laws 25
7.18.Usury Savings Clause 25
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
V FORM OF SECURITY AGREEMENT
- -------------------------------------------------------------------------
This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes;" the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of New York, New York or is a
day on which banking institutions therein located are authorized or
required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means all collateral described in and pledged under
the Security Agreement and the Mortgaged Rig and any other property
subject to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the introduction
to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Event of Default" means each of the events set forth in Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note, the Mortgage, and
the Security Agreement.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit IV
covering the Mortgaged Rig.
"Mortgaged Rig" means the Deepwater IV.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender, the
Company and the Trustee pursuant to which the Lender will utilize the
proceeds of the Secured Notes to make an Other Loan for the purposes
specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"Security Agreement" shall mean a Security Agreement substantially
in the form of Exhibit V among the Company, the Lender, and the
Collateral Agent, as the same may be amended, modified or supplemented
in accordance with the terms thereof and hereof.
"7-year Tranche" means advances on the Loan aggregating up to
$94,450,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$94,450,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and sale
of the Secured Notes, (ii) the incurrence of the Loan hereunder on the
Closing Date, (iii) the incurrence of the Other Loans under the Other
Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any court
or any governmental department, commission, board, bureau, agency,
authority or instrumentality of the United States or any state,
province, commonwealth, nation, territory, possession, county, parish,
town, township, village or municipality, whether now or hereafter
constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the introduction
of this Agreement and shall include any successor Trustee appointed
pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $188,900,000 in the
aggregate (the "Loan") consisting of $94,450,000 of 7-year Tranche
advances and $94,450,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under
this Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time)
on the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan.
(i)Upon filing of the Mortgage for the Mortgaged Rig, the Company and
the Lender agree that aggregate additional advances of $166,900,000
will be made under this Agreement, consisting of $83,450,000 of the
7-year Tranche and $83,450,000 of the 10-year Tranche, by the exchange
of borrowings under the other Loan Agreements, relating to the
Mortgaged Rigs Deepwater Millennium, Peregrine IV, Peregrine VII,
Falcon 100 and Falrig 82.
(ii)The Company shall pay on or before 10:00 a.m. on the date of the
final Maturity of the 7-year Tranche of the Loan all of the principal
amount of the 7-year Tranche remaining outstanding, together with
accrued and unpaid interest, fees and a pro rata portion of the amount
of the Special Interest and Additional Amounts, if any, due on the
7-year Secured Notes. The Company shall pay on or before 10:00 a.m.
on the date of the final Maturity of the 10-year Tranche all of the
principal amount of the 10-year Tranche then remaining outstanding,
together with accrued and unpaid interest fees and a pro rata portion
of the amount of the Special Interest and Additional Amounts, if any,
due on the 10-year Secured Notes. Such payments shall be made
directly to the Trustee for deposit in the Issuer Escrow Account
established pursuant to the Issuer Escrow Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder
shall terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) March 31, 2001, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or
any other provision herein, in no event will the combined sum of
interest (cash or otherwise) on the Loan exceed the maximum amount
permitted by applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig
or the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and
of the Other Loans, in whole or in part, to provide funds for
such redemption. Any prepayments by the Company on the Loan and
the Other Loans required to be made to provide funds for the
Lender to make such a redemption shall be made on this Loan and
the Other Loans on a pro rata basis. All payments on the Loan
and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
(ii)Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of any
prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Security Agreements, the Mortgage, each of the other
Loan Documents, the Indenture and any other documents, instruments and
certificates required to be executed by the Company in connection
herewith and therewith and approving and authorizing the execution,
delivery and payment of the Loan, each certified as of the Closing
Date by its Secretary or one of its Assistant Secretaries as being in
full force and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Security
Agreement, in the form of Exhibit V hereto, the Lien of which has been
perfected in all appropriate jurisdictions; provided, however, that
Liens on equipment purchased by the Company for the Mortgaged Rig that
has not yet been Mortgaged do not have to be perfected until required
by the Trustee, but only after the later to occur of one year after
the date of this Agreement or the completion date for the Mortgaged
Rig as scheduled on the date of this Agreement.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the Security
Agreement, the other the Loan Documents, Indenture and each other
document and instrument to be delivered in connection with the
Transactions executed or to be executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
A. The execution and delivery of the Loan Agreement, the Notes, the
Mortgage, the Security Agreement, the other Loan Documents and each
other document to be executed and delivered in connection with the
Transactions, the consummation of each of the transactions herein or
therein contemplated, the compliance with each of the terms and
previsions hereof or thereof, and the issuance, delivery and
performance of the Notes, this Agreement, the Mortgage, the Security
Agreement and the Indenture, do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable
to the Company, its Certificate of Incorporation or Bylaws or any
order, judgment or decree of any court or other agency of government
binding on it, (ii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any
Contractual Obligation of the Company which could reasonably be
expected to result in a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the
properties or assets of the Company (other than any Liens created
under this Agreement and the Other Loan Agreements), (iv) require any
approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
B. No consent, approval, authorization or order of any Tribunal or
other Person is required in connection with the execution and delivery
by the Company of this Agreement, the Loan Documents or any other
document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the Security Agreement, the other Loan Documents, and each
other document or instrument to be delivered in connection therewith
has been duly authorized; each of this Agreement, the Notes, the
Mortgage, the Security Agreement, the Other Loan Documents and each
other document or instrument to be delivered in connection therewith
to be executed and delivered on or prior to the Closing Date has been
duly executed and delivered by the Company and each of this Agreement,
the Notes, the Mortgage, the Security Agreement, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage,
the Security Agreement and the other Loan Documents to be executed and
delivered after the Closing Date will be, upon such execution and
delivery, the legal, valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally or by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the contract for the construction of the Mortgaged Rig and the
equipment purchased and paid for by the Company to be installed or
used thereon and the Other Mortgaged Rigs to the extent specified in
the Other Loan Agreements. Except as described in Schedule 4.5, the
Company owns, and such contract and equipment are owned, free and
clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage and a Security Agreement, (ii) the Liens of the Subsidiary's
Mortgage and Security Agreement are perfected and enforceable, and
(iii) such Subsidiary executes a Subsidiary Guarantee pursuant to the
Indenture.
5.7 Filing of Mortgage. Promptly upon completion of the Mortgaged Rig,
the Company shall grant a valid and perfected first Lien on the
Mortgaged Rig pursuant to a Mortgage in the form of Exhibit IV
attached hereto.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.7 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Security Agreement, the Lender's agreement to make the
Loan or the use or intended use of any of the proceeds of the Loan
hereunder or the Transactions (the "indemnified liabilities");
provided, however, that the Company shall have no obligation to an
Indemnitee hereunder with respect to indemnified liabilities (i) to
the extent such is finally judicially determined to have resulted
solely from (A) the gross negligence or willful misconduct of that
Indemnitee or (B) the failure of such Indemnitee to perform its
obligations under any Loan Document or (C) such Indemnitee's violation
of law or (ii) in connection with the obligations of any Indemnitee
under any Loan Document. To the extend that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence
may be unenforceable because it is violative of any law or public
policy, the Company shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage, the Security Agreement or any Other Loan Document or consent
to any departure by the Company therefrom, shall in any event be
effective without the prior written concurrence of the Company, the
Lender, the Collateral Agent and the Trustee, and, upon the request of
the Lender, the Collateral Agent or the Trustee, the receipt of a
written opinion of counsel of the Company addressed to the Lender, the
Collateral Agent and the Trustee to the effect that such amendment,
modification, termination, waiver or consent does not violate or
conflict with any of the terms and provisions of the Indenture or any
Contractual Obligations of the Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
- -------------------------------------------------------------------------
Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of the
Loan Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Loan
Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999, as
the same may at any time be amended, modified or supplemented and in
effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this
Note or the Loan Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
and interest on this Note at the place, at the respective times, and
in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
and delivered by its duly authorized officer, as of the day and year
and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
- -----------------------------------------------------------------------
EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the ________
__________________ of R&B Falcon Corporation, a Delaware corporation (
the "Company"), and that as such he is authorized to execute this
Notice of Borrowing on behalf of the Company. With reference to that
certain Loan Agreement dated as of _______________, 1999 (as same may
be amended, modified, increased, supplemented and/or restated from
time to time, the "Agreement") entered into by and between the Company
and RBF Finance Co., and any other future holder of any Note issued
pursuant to the Agreement ("Lender"), the undersigned further
certifies, represents and warrants on behalf of the Company that all
of the foregoing statements are true and correct (each capitalized
term used herein having the same meaning given to it in the Agreement
unless otherwise specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly
authorized, executed and delivered the Mortgage; (ii) the Mortgage
constitutes a legally binding obligation of the Company enforceable
against the Company in accordance with its terms (except as (i) the
enforceability thereof may be limited bankruptcy, insolvency or other
similar laws affecting creditors' rights, generally, and (ii) the
enforceability thereof may be limited by right of acceleration and the
availability of enforceable remedies may be limited by equitable
principles of general applicability, and subject to such other
exceptions, limitations or qualifications that are usual and customary
for such opinions) and (iii) the Mortgage constitutes a valid and
perfected first mortgage lien on the Mortgaged Rig.
- -------------------------------------------------------------------------
SCHEDULE 4.5
Title/Lien Exceptions
1.Statutory or inchoate liens for amounts not more than 30 days past
due or that are being contested in good faith.
EXHIBIT 10.5
[FALRIG 82]
=========================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
=========================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS 1
1.1.Certain Defined Terms 1
1.2.Other Defined Terms 5
1.3.Accounting Terms 5
1.4.Other Definitional Provisions 5
SECTION 2.LOAN COMMITMENT AND LOAN 5
2.1.Termination of Loan Commitment 7
2.2.Termination of Loan Commitment 7
2.3.Interest on the Loans 7
2.4.Redemptions 8
2.5.Excess Proceeds Offers 10
2.6.Use of Proceeds 12
2.7.Commitment Fee 12
SECTION 3.CONDITIONS 12
3.1.Conditions to Initial Advances on the Loan 12
3.2.Conditions to Subsequent Advance on the Loan 14
SECTION 4.REPRESENTATIONS AND WARRANTIES 14
4.1.Organization and Good Standing; Capitalization 15
4.2.Authorization and Power 15
4.3.No Conflicts or Consents 15
4.4.Enforceable Obligations 15
4.5.Properties; Liens 16
4.6.No Default 16
4.7.Use of Proceeds; Margin Stock, etc 16
4.8.Survival of Representations and Warranties 16
SECTION 5.COVENANTS 16
5.1.Indenture Covenants 16
5.2.Reports of Defaults, Etc 16
5.3.Payments in U.S. Dollars 17
5.4.Performance and Enforcement Under the Loan Documents 17
5.5.Liens 17
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary 17
SECTION 6.EVENTS OF DEFAULT 17
6.1.Failure To Make Payments When Due 17
6.2.Default Under The Indenture 17
6.3.Other Loan Agreement 17
6.4.Breach of Certain Covenants 18
6.5.Breach of Warranty 18
6.6.Other Defaults Under Agreement or Loan Documents 18
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc 18
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc 18
SECTION 7.MISCELLANEOUS 19
7.1.Pledges and Assignments of Loan and Note 19
7.2.Expenses 20
7.3.Indemnity 20
7.4.Additional Amounts 20
7.5.Taxes and Other Taxes 22
7.6.Amendments and Waivers 23
7.7.Independence of Covenants 23
7.8.Notices 23
7.9.Survival of Warranties and Certain Agreements 23
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative 23
7.11.Severability 24
7.12.Headings 24
7.13.Applicable Law 24
7.14.Successors and Assigns; Subsequent Holders of Notes 24
7.15.Counterparts; Effectiveness 24
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial 24
7.17.Waiver of Stay, Extension or Usury Laws 25
7.18.Usury Savings Clause 25
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
- --------------------------------------------------------------------------
This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes;" the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of New York, New York or
is a day on which banking institutions therein located are authorized
or required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means the Mortgaged Rig and any other property
subject to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Event of Default" means each of the events set forth in
Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in
Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note and the Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit
IV covering the Mortgaged Rig.
"Mortgaged Rig" means the Falrig 82.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender,
the Company and the Trustee pursuant to which the Lender will utilize
the proceeds of the Secured Notes to make an Other Loan for the
purposes specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in
Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit sharing agreement or arrangement, bonds, debentures,
options, warrants, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$5,400,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$5,400,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and
sale of the Secured Notes, (ii) the incurrence of the Loan hereunder
on the Closing Date, (iii) the incurrence of the Other Loans under the
Other Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any
court or any governmental department, commission, board, bureau,
agency, authority or instrumentality of the United States or any
state, province, commonwealth, nation, territory, possession, county,
parish, town, township, village or municipality, whether now or
hereafter constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the
introduction of this Agreement and shall include any successor Trustee
appointed pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $10,800,000 in the
aggregate (the "Loan") consisting of $5,400,000 of 7-year Tranche
advances and $5,400,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under
this Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time)
on the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on
the Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan.
(i) One of the Other Loan Agreements relates to the Mortgaged Rig
Deepwater IV, which Mortgaged Rig is presently under construction
pursuant to a construction contract and which has an expected
completion date during the third calendar quarter of 2000. Upon
completion of the Mortgaged Rig Deepwater IV, the Company is required
to grant a Lien on such Mortgaged Rig pursuant to a Mortgage. Upon
the filing of the Mortgage for the Mortgaged Rig Deepwater IV, the
Company and the Lender agree that $2,050,000 of the 7-year Tranche and
$2,050,000 of the 10-year Tranche will be exchanged for additional
advances under the Other Loan Agreement relating to the Mortgaged Rig
Deepwater IV in an aggregate principal amount of $4,100,000.
(ii) The Company shall pay on or before 10:00 a.m. on the date of the
final Maturity of the 7-year Tranche of the Loan all of the principal
amount of the 7-year Tranche remaining outstanding, which amount will
be $5,400,000 principal amount of the Loan, reduced by any previous
prepayments of principal made on the 7-year Tranche of the Loan to the
extent that such payments have been allocated pursuant to the
provisions of Section 2.3 hereof and the Indenture to the 7-year
Secured Notes, together with accrued and unpaid interest, fees and a
pro rata portion of the amount of the Special Interest and Additional
Amounts, if any, due on the 7-year Secured Notes. The Company shall
pay on or before 10:00 a.m. on the date of the final Maturity of the
10-year Tranche all of the principal amount of the 10-year Tranche
then remaining outstanding, reduced by any previous prepayments of
principal made on the 10-year Tranche of the Loan to the extent that
such payments have been allocated pursuant to the provisions of
Section 2.3 hereof and the Indenture to the 10-year Secured Notes,
together with accrued and unpaid interest fees and a pro rata portion
of the amount of the Special Interest and Additional Amounts, if any,
due on the 10-year Secured Notes. Such payments shall be made
directly to the Trustee for deposit in the Issuer Escrow Account
established pursuant to the Issuer Escrow Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder
shall terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any
other provision herein, in no event will the combined sum of interest
(cash or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig or
the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and
of the Other Loans, in whole or in part, to provide funds for
such redemption. Any prepayments by the Company on the Loan and
the Other Loans required to be made to provide funds for the
Lender to make such a redemption shall be made on this Loan and
the Other Loans on a pro rata basis. All payments on the Loan
and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
(ii) Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer (an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of
any prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A.Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B.Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in
the form of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
A. The execution and delivery of the Loan Agreement, the Notes,
the Mortgage, the other Loan Documents and each other document to be
executed and delivered in connection with the Transactions, the
consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and previsions
hereof or thereof, and the issuance, delivery and performance of the
Notes, this Agreement, the Mortgage and the Indenture, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Company, its Certificate of Incorporation
or Bylaws or any order, judgment or decree of any court or other
agency of government binding on it, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of the Company which could
reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Company (other than any Liens
created under this Agreement and the Other Loan Agreements), (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
B. No consent, approval, authorization or order of any Tribunal or
other Person is required in connection with the execution and delivery
by the Company of this Agreement, the Loan Documents or any other
document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the Mortgaged Rig and the Other Mortgaged Rigs to the extent specified
in such Other Loan Agreements. Except as permitted by this Agreement,
the Mortgaged Rig is so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage, (ii) the Liens of the Subsidiary's Mortgage and Security
Agreement are perfected and enforceable, and (iii) such Subsidiary
executes a Subsidiary Guarantee pursuant to the Indenture.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.6 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
- ------------------------------------------------------------------------
Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan
evidenced hereby was made and is to be repaid. Capitalized terms used
herein without definition shall have the meanings set forth in the
Loan Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999, as
the same may at any time be amended, modified or supplemented and in
effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this
Note or the Loan Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
and interest on this Note at the place, at the respective times, and
in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day
and year and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the ___________
__________________ of R&B Falcon Corporation, a Delaware corporation
(the "Company"), and that as such he is authorized to execute this
Notice of Borrowing on behalf of the Company. With reference to that
certain Loan Agreement dated as of _______________, 1999 (as same may
be amended, modified, increased, supplemented and/or restated from
time to time, the "Agreement") entered into by and between the Company
and RBF Finance Co., and any other future holder of any Note issued
pursuant to the Agreement ("Lender"), the undersigned further
certifies, represents and warrants on behalf of the Company that all
of the foregoing statements are true and correct (each capitalized
term used herein having the same meaning given to it in the Agreement
unless otherwise specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
- ------------------------------------------------------------------------
EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly
authorized, executed and delivered the Mortgage; (ii) the Mortgage
constitutes a legally binding obligation of the Company enforceable
against the Company in accordance with its terms (except as (i) the
enforceability thereof may be limited bankruptcy, insolvency or other
similar laws affecting creditors' rights, generally, and (ii) the
enforceability thereof may be limited by right of acceleration and the
availability of enforceable remedies may be limited by equitable
principles of general applicability, and subject to such other
exceptions, limitations or qualifications that are usual and customary
for such opinions) and (iii) the Mortgage constitutes a valid and
perfected first mortgage lien on the Mortgaged Rig.
EXHIBIT 10.6
[PEREGRINE IV]
====================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
====================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS
1.1.Certain Defined Terms
1.2.Other Defined Terms
1.3.Accounting Terms
1.4.Other Definitional Provisions
SECTION 2.LOAN COMMITMENT AND LOAN
2.1.Termination of Loan Commitment
2.2.Termination of Loan Commitment
2.3.Interest on the Loans
2.4.Redemptions
2.5.Excess Proceeds Offers
2.6.Use of Proceeds
2.7.Commitment Fee
SECTION 3.CONDITIONS
3.1.Conditions to Initial Advances on the Loan
3.2.Conditions to Subsequent Advance on the Loan
SECTION 4.REPRESENTATIONS AND WARRANTIES
4.1.Organization and Good Standing; Capitalization
4.2.Authorization and Power
4.3.No Conflicts or Consents
4.4.Enforceable Obligations
4.5.Properties; Liens
4.6.No Default
4.7.Use of Proceeds; Margin Stock, etc
4.8.Survival of Representations and Warranties
SECTION 5.COVENANTS
5.1.Indenture Covenants
5.2.Reports of Defaults, Etc
5.3.Payments in U.S. Dollars
5.4.Performance and Enforcement Under the Loan Documents
5.5.Liens
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary
5.7.Security Interest and Lien on Equipment
SECTION 6.EVENTS OF DEFAULT
6.1.Failure To Make Payments When Due
6.2.Default Under The Indenture
6.3.Other Loan Agreement
6.4.Breach of Certain Covenants
6.5.Breach of Warranty
6.6.Other Defaults Under Agreement or Loan Documents
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc
SECTION 7.MISCELLANEOUS
7.1.Pledges and Assignments of Loan and Note
7.2.Expenses
7.3.Indemnity
7.4.Additional Amounts
7.5.Taxes and Other Taxes
7.6.Amendments and Waivers
7.7.Independence of Covenants
7.8.Notices
7.9.Survival of Warranties and Certain Agreements
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative
7.11.Severability
7.12.Headings
7.13.Applicable Law
7.14.Successors and Assigns; Subsequent Holders of Notes
7.15.Counterparts; Effectiveness
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial
7.17.Waiver of Stay, Extension or Usury Laws
7.18.Usury Savings Clause
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
V SCHEDULE OF EQUIPMENT
- -------------------------------------------------------------------
This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes; the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of New York, New York or is a
day on which banking institutions therein located are authorized or
required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means the Mortgaged Rig and any other property subject
to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the introduction
to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Equipment" means all items of equipment of the Borrower used in
connection with the Mortgaged Rig, whether currently owned or
hereafter acquired, and whether on board the Mortgaged Rig or not,
including but not limited to the items set forth on Schedule V
attached hereto.
"Event of Default" means each of the events set forth in Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note and the Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit IV
covering the Mortgaged Rig.
"Mortgaged Rig" means the Peregrine IV.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender, the
Company and the Trustee pursuant to which the Lender will utilize the
proceeds of the Secured Notes to make an Other Loan for the purposes
specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$83,000,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$83,000,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and sale
of the Secured Notes, (ii) the incurrence of the Loan hereunder on the
Closing Date, (iii) the incurrence of the Other Loans under the Other
Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any court
or any governmental department, commission, board, bureau, agency,
authority or instrumentality of the United States or any state,
province, commonwealth, nation, territory, possession, county, parish,
town, township, village or municipality, whether now or hereafter
constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the introduction
of this Agreement and shall include any successor Trustee appointed
pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $166,000,000 in the
aggregate (the "Loan") consisting of $83,000,000 of 7-year Tranche
advances and $83,000,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under
this Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time) on
the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan.
(i) One of the Other Loan Agreements relates to the Mortgaged Rig
Deepwater IV, which Mortgaged Rig is presently under construction
pursuant to a construction contract and which has an expected
completion date during the third calendar quarter of 2000. Upon
completion of the Mortgaged Rig Deepwater IV, the Company is required
to grant a Lien on such Mortgaged Rig pursuant to a Mortgage. Upon
the filing of the Mortgage for the Mortgaged Rig Deepwater IV, the
Company and the Lender agree that the $14,850,000 of the 7-year
Tranche and $14,850,000 of the 10-year Tranche will be exchanged for
additional advances under the Other Loan Agreement relating to the
Mortgaged Rig Deepwater IV in an aggregate principal amount of
$29,700,000.
(ii) The Company shall pay on or before 10:00 a.m. on the date of the
final Maturity of the 7-year Tranche of the Loan all of the principal
amount of the 7-year Tranche remaining outstanding, which amount will
be $83,000,000 principal amount of the Loan, reduced by any previous
prepayments of principal made on the 7-year Tranche of the Loan to the
extent that such payments have been allocated pursuant to the
provisions of Section 2.3 hereof and the Indenture to the 7-year
Secured Notes, together with accrued and unpaid interest, fees and a
pro rata portion of the amount of the Special Interest and Additional
Amounts, if any, due on the 7-year Secured Notes. The Company shall
pay on or before 10:00 a.m. on the date of the final Maturity of the
10-year Tranche all of the principal amount of the 10-year Tranche
then remaining outstanding, reduced by any previous prepayments of
principal made on the 10-year Tranche of the Loan to the extent that
such payments have been allocated pursuant to the provisions of
Section 2.3 hereof and the Indenture to the 10-year Secured Notes,
together with accrued and unpaid interest fees and a pro rata portion
of the amount of the Special Interest and Additional Amounts, if any,
due on the 10-year Secured Notes. Such payments shall be made
directly to the Trustee for deposit in the Issuer Escrow Account
established pursuant to the Issuer Escrow Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder shall
terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any other
provision herein, in no event will the combined sum of interest (cash
or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig or
the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i) Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and
of the Other Loans, in whole or in part, to provide funds for
such redemption. Any prepayments by the Company on the Loan and
the Other Loans required to be made to provide funds for the
Lender to make such a redemption shall be made on this Loan and
the Other Loans on a pro rata basis. All payments on the Loan
and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
(ii) Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of any
prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in the
form of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions and the Lien provided in Section 5.7 shall have been
perfected in all appropriate United States jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
A. The execution and delivery of the Loan Agreement, the Notes, the
Mortgage, the other Loan Documents and each other document to be
executed and delivered in connection with the Transactions, the
consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and previsions
hereof or thereof, and the issuance, delivery and performance of the
Notes, this Agreement, the Mortgage and the Indenture, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Company, its Certificate of Incorporation
or Bylaws or any order, judgment or decree of any court or other
agency of government binding on it, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of the Company which could
reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Company (other than any Liens
created under this Agreement and the Other Loan Agreements), (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
B. No consent, approval, authorization or order of any Tribunal or
other Person is required in connection with the execution and delivery
by the Company of this Agreement, the Loan Documents or any other
document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the Mortgaged Rig, the equipment purchased and paid for by the Company
to be installed or used thereon and the Other Mortgaged Rigs to the
extent specified in the Other Loan Agreements. Except as specified in
Schedule 4.5 or as permitted by this Agreement, the Mortgaged Rig and
such equipment are so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage, (ii) the Liens of the Subsidiary's Mortgage are perfected
and enforceable, and (iii) such Subsidiary executes a Subsidiary
Guarantee pursuant to the Indenture.
5.7 Security Interest and Lien on Equipment. The Borrower hereby
grants a security interest and Lien in favor of the Lender and unto
the Lender's successors and assigns for the benefit of the Lender's
own proper use and benefit, as security for the Obligations now or in
the future, in and to the Equipment and the Mortgaged Rig.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.7 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.6 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title:Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
- -----------------------------------------------------------------------
Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of the
Loan Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Loan
Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999, as
the same may at any time be amended, modified or supplemented and in
effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this
Note or the Loan Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
and interest on this Note at the place, at the respective times, and
in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
and delivered by its duly authorized officer, as of the day and year
and at the place first above written.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the ________________
__________________ of R&B Falcon Corporation, a Delaware corporation (
the "Company"), and that as such he is authorized to execute this
Notice of Borrowing on behalf of the Company. With reference to that
certain Loan Agreement dated as of _______________, 1999 (as same may
be amended, modified, increased, supplemented and/or restated from
time to time, the "Agreement") entered into by and between the Company
and RBF Finance Co., and any other future holder of any Note issued
pursuant to the Agreement ("Lender"), the undersigned further
certifies, represents and warrants on behalf of the Company that all
of the foregoing statements are true and correct (each capitalized
term used herein having the same meaning given to it in the Agreement
unless otherwise specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly
authorized, executed and delivered the Mortgage; (ii) the Mortgage
constitutes a legally binding obligation of the Company enforceable
against the Company in accordance with its terms (except as (i) the
enforceability thereof may be limited bankruptcy, insolvency or other
similar laws affecting creditors' rights, generally, and (ii) the
enforceability thereof may be limited by right of acceleration and the
availability of enforceable remedies may be limited by equitable
principles of general applicability, and subject to such other
exceptions, limitations or qualifications that are usual and customary
for such opinions) and (iii) the Mortgage constitutes a valid and
perfected first mortgage lien on the Mortgaged Rig.
- ----------------------------------------------------------------------
SCHEDULE 4.5
Title/Lien Exceptions
1. Statutory or inchoate liens for amounts not more than 30 days past
due or that are being contested in good faith.
EXHIBIT 10.7
[PEREGRINE VII]
====================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
=====================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS 1
1.1.Certain Defined Terms 1
1.2.Other Defined Terms 5
1.3.Accounting Terms 5
1.4.Other Definitional Provisions 5
SECTION 2.LOAN COMMITMENT AND LOAN 5
2.1.Termination of Loan Commitment 7
2.2.Termination of Loan Commitment 7
2.3.Interest on the Loans 7
2.4.Redemptions 8
2.5.Excess Proceeds Offers 10
2.6.Use of Proceeds 12
2.7.Commitment Fee 12
SECTION 3.CONDITIONS 12
3.1.Conditions to Initial Advances on the Loan 12
3.2.Conditions to Subsequent Advance on the Loan 14
SECTION 4.REPRESENTATIONS AND WARRANTIES 14
4.1.Organization and Good Standing; Capitalization 15
4.2.Authorization and Power 15
4.3.No Conflicts or Consents 15
4.4.Enforceable Obligations 15
4.5.Properties; Liens 16
4.6.No Default 16
4.7.Use of Proceeds; Margin Stock, etc 16
4.8.Survival of Representations and Warranties 16
SECTION 5.COVENANTS 16
5.1.Indenture Covenants 16
5.2.Reports of Defaults, Etc 17
5.3.Payments in U.S. Dollars 17
5.4.Performance and Enforcement Under the Loan Documents 17
5.5.Liens 17
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary 17
5.7.Security Interest and Lien on Equipment 17
SECTION 6.EVENTS OF DEFAULT 17
6.1.Failure To Make Payments When Due 18
6.2.Default Under The Indenture 18
6.3.Other Loan Agreement 18
6.4.Breach of Certain Covenants 18
6.5.Breach of Warranty 18
6.6.Other Defaults Under Agreement or Loan Documents 18
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc 18
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc 18
SECTION 7.MISCELLANEOUS 20
7.1.Pledges and Assignments of Loan and Note 20
7.2.Expenses 20
7.3.Indemnity 20
7.4.Additional Amounts 21
7.5.Taxes and Other Taxes 22
7.6.Amendments and Waivers 23
7.7.Independence of Covenants 23
7.8.Notices 23
7.9.Survival of Warranties and Certain Agreements 23
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative 24
7.11.Severability 24
7.12.Headings 24
7.13.Applicable Law 24
7.14.Successors and Assigns; Subsequent Holders of Notes 24
7.15.Counterparts; Effectiveness 24
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial 24
7.17.Waiver of Stay, Extension or Usury Laws 25
7.18.Usury Savings Clause 25
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
V SCHEDULE OF EQUIPMENT
- ------------------------------------------------------------------------
This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes; the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of New York, New York or is a
day on which banking institutions therein located are authorized or
required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means the Mortgaged Rig and any other property subject
to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the introduction
to this Agreement.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit III annexed hereto delivered to the Lender by the
Company pursuant to Section 5.1.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Equipment" means all items of equipment of the Borrower used in
connection with the Mortgaged Rig, whether currently owned or
hereafter acquired, and whether on board the Mortgaged Rig or not,
including but not limited to the items set forth on Schedule V
attached hereto.
"Event of Default" means each of the events set forth in
Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note and the Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit IV
covering the Mortgaged Rig.
"Mortgaged Rig" means the Peregrine VII.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender, the
Company and the Trustee pursuant to which the Lender will utilize the
proceeds of the Secured Notes to make an Other Loan for the purposes
specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$112,800,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$112,800,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and sale
of the Secured Notes, (ii) the incurrence of the Loan hereunder on the
Closing Date, (iii) the incurrence of the Other Loans under the Other
Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any court
or any governmental department, commission, board, bureau, agency,
authority or instrumentality of the United States or any state,
province, commonwealth, nation, territory, possession, county, parish,
town, township, village or municipality, whether now or hereafter
constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the introduction
of this Agreement and shall include any successor Trustee appointed
pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $225,600,000 in the
aggregate (the "Loan") consisting of $112,800,000 of 7-year Tranche
advances and $112,800,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under this
Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time) on
the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan.
(i) One of the Other Loan Agreements relates to the Mortgaged Rig
Deepwater IV, which Mortgaged Rig is presently under construction
pursuant to a construction contract and which has an expected
completion date during the third calendar quarter of 2000. Upon
completion of the Mortgaged Rig Deepwater IV, the Company is required
to grant a Lien on such Mortgaged Rig pursuant to a Mortgage. Upon
the filing of the Mortgage for the Mortgaged Rig Deepwater IV, the
Company and the Lender agree that the $29,200,000 of the 7-year
Tranche and $29,200,000 of the 10-year Tranche will be exchanged for
additional advances under the Other Loan Agreement relating to the
Mortgaged Rig Deepwater IV in an aggregate principal amount of
$58,400,000.
(ii) The Company shall pay on or before 10:00 a.m. on the date of the
final Maturity of the 7-year Tranche of the Loan all of the principal
amount of the 7-year Tranche remaining outstanding, which amount will
be $112,800,000 principal amount of the Loan, reduced by any previous
prepayments of principal made on the 7-year Tranche of the Loan to the
extent that such payments have been allocated pursuant to the
provisions of Section 2.3 hereof and the Indenture to the 7-year
Secured Notes, together with accrued and unpaid interest, fees and a
pro rata portion of the amount of the Special Interest and Additional
Amounts, if any, due on the 7-year Secured Notes. The Company shall
pay on or before 10:00 a.m. on the date of the final Maturity of the
10-year Tranche all of the principal amount of the 10-year Tranche
then remaining outstanding, reduced by any previous prepayments of
principal made on the 10-year Tranche of the Loan to the extent that
such payments have been allocated pursuant to the provisions of
Section 2.3 hereof and the Indenture to the 10-year Secured Notes,
together with accrued and unpaid interest fees and a pro rata portion
of the amount of the Special Interest and Additional Amounts, if any,
due on the 10-year Secured Notes. Such payments shall be made
directly to the Trustee for deposit in the Issuer Escrow Account
established pursuant to the Issuer Escrow Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder shall
terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any
other provision herein, in no event will the combined sum of interest
(cash or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig or
the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and
of the Other Loans, in whole or in part, to provide funds for
such redemption. Any prepayments by the Company on the Loan and
the Other Loans required to be made to provide funds for the
Lender to make such a redemption shall be made on this Loan and
the Other Loans on a pro rata basis. All payments on the Loan
and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
(ii) Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of any
prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in the
form of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions, and the Lien provided in Section 5.7 shall have been
perfected in all appropriate United States jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
A. The execution and delivery of the Loan Agreement, the Notes, the
Mortgage, the other Loan Documents and each other document to be
executed and delivered in connection with the Transactions, the
consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and previsions
hereof or thereof, and the issuance, delivery and performance of the
Notes, this Agreement, the Mortgage and the Indenture, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Company, its Certificate of Incorporation
or Bylaws or any order, judgment or decree of any court or other
agency of government binding on it, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of the Company which could
reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Company (other than any Liens
created under this Agreement and the Other Loan Agreements), (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
B. No consent, approval, authorization or order of any Tribunal or
other Person is required in connection with the execution and delivery
by the Company of this Agreement, the Loan Documents or any other
document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the Mortgaged Rig, the equipment purchased and paid for by the Company
to be installed or used thereon and the Other Mortgaged Rigs to the
extent specified in such Other Loan Agreements. Except as specified
in Schedule 4.5 or as permitted by this Agreement, the Mortgaged Rig
and such equipment are so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage and a Security Agreement, (iii) the Liens of the Subsidiary's
Mortgage and Security Agreement are perfected and enforceable, and
(iv) such Subsidiary executes a Subsidiary Guarantee pursuant to the
Indenture.
5.7 Security Interest and Lien on Equipment. The Borrower hereby
grants a security interest and Lien in favor of the Lender and unto
the Lender's successors and assigns for the benefit of the Lender's
own proper use and benefit, as security for the Obligations now or in
the future, in and to the Equipment and the Mortgaged Rig.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.7 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, its
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
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Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of the
Loan Agreement, to which reference is hereby made for a more complete
statement of the terms and conditions under which the Loan evidenced
hereby was made and is to be repaid. Capitalized terms used herein
without definition shall have the meanings set forth in the Loan
Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999, as
the same may at any time be amended, modified or supplemented and in
effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of this
Note or the Loan Agreement shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
and interest on this Note at the place, at the respective times, and
in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
and delivered by its duly authorized officer, as of the day and year
and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the ________________
__________________ of R&B Falcon Corporation, a Delaware corporation (
the "Company"), and that as such he is authorized to execute this
Notice of Borrowing on behalf of the Company. With reference to that
certain Loan Agreement dated as of _______________, 1999 (as same may
be amended, modified, increased, supplemented and/or restated from
time to time, the "Agreement") entered into by and between the Company
and RBF Finance Co., and any other future holder of any Note issued
pursuant to the Agreement ("Lender"), the undersigned further
certifies, represents and warrants on behalf of the Company that all
of the foregoing statements are true and correct (each capitalized
term used herein having the same meaning given to it in the Agreement
unless otherwise specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly
authorized, executed and delivered the Mortgage; (ii) the Mortgage
constitutes a legally binding obligation of the Company enforceable
against the Company in accordance with its terms (except as (i) the
enforceability thereof may be limited bankruptcy, insolvency or other
similar laws affecting creditors' rights, generally, and (ii) the
enforceability thereof may be limited by right of acceleration and the
availability of enforceable remedies may be limited by equitable
principles of general applicability, and subject to such other
exceptions, limitations or qualifications that are usual and customary
for such opinions) and (iii) the Mortgage constitutes a valid and
perfected first mortgage lien on the Mortgaged Rig.
- ----------------------------------------------------------------------
SCHEDULE 4.5
Title/Lien Exceptions
1.Statutory or inchoate liens for amounts not more than 30 days past
due or that are being contested in good faith.
EXHIBIT 10.8
[FALCON 100]
=========================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
=========================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS 1
1.1.Certain Defined Terms 1
1.2.Other Defined Terms 5
1.3.Accounting Terms 5
1.4.Other Definitional Provisions 5
SECTION 2.LOAN COMMITMENT AND LOAN 5
2.1.Termination of Loan Commitment 7
2.2.Termination of Loan Commitment 7
2.3.Interest on the Loans 7
2.4.Redemptions 8
2.5.Excess Proceeds Offers 10
2.6.Use of Proceeds 12
2.7.Commitment Fee 12
SECTION 3.CONDITIONS 12
3.1.Conditions to Initial Advances on the Loan 12
3.2.Conditions to Subsequent Advance on the Loan 14
SECTION 4.REPRESENTATIONS AND WARRANTIES 14
4.1.Organization and Good Standing; Capitalization 15
4.2.Authorization and Power 15
4.3.No Conflicts or Consents 15
4.4.Enforceable Obligations 15
4.5.Properties; Liens 16
4.6.No Default 16
4.7.Use of Proceeds; Margin Stock, etc 16
4.8.Survival of Representations and Warranties 16
SECTION 5.COVENANTS 16
5.1.Indenture Covenants 16
5.2.Reports of Defaults, Etc 17
5.3.Payments in U.S. Dollars 17
5.4.Performance and Enforcement Under the Loan Documents 17
5.5.Liens 17
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary 17
5.7.Security Interest and Lien on Equipment 17
SECTION 6.EVENTS OF DEFAULT 18
6.1.Failure To Make Payments When Due 18
6.2.Default Under The Indenture 18
6.3.Other Loan Agreement 18
6.4.Breach of Certain Covenants 18
6.5.Breach of Warranty 18
6.6.Other Defaults Under Agreement or Loan Documents 18
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc 18
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc 19
SECTION 7.MISCELLANEOUS 20
7.1.Pledges and Assignments of Loan and Note 20
7.2.Expenses 20
7.3.Indemnity 20
7.4.Additional Amounts 21
7.5.Taxes and Other Taxes 22
7.6.Amendments and Waivers 23
7.7.Independence of Covenants 23
7.8.Notices 23
7.9.Survival of Warranties and Certain Agreements 23
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative 24
7.11.Severability 24
7.12.Headings 24
7.13.Applicable Law 24
7.14.Successors and Assigns; Subsequent Holders of Notes 24
7.15.Counterparts; Effectiveness 24
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial 25
7.17.Waiver of Stay, Extension or Usury Laws 25
7.18.Usury Savings Clause 25
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
V SCHEDULE OF EQUIPMENT
- ------------------------------------------------------------------------
This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes;" the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of New York, New York or
is a day on which banking institutions therein located are authorized
or required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means the Mortgaged Rig and any other property
subject to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Equipment" means all items of equipment of the Borrower used in
connection with the Mortgaged Rig, whether currently owned or
hereafter acquired, and whether on board the Mortgaged Rig or not,
including but not limited to the items set forth on Schedule V
attached hereto.
"Event of Default" means each of the events set forth in
Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in
Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note and the Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit
IV covering the Mortgaged Rig.
"Mortgaged Rig" means the Falcon 100.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender,
the Company and the Trustee pursuant to which the Lender will utilize
the proceeds of the Secured Notes to make an Other Loan for the
purposes specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in
Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit sharing agreement or arrangement, bonds, debentures,
options, warrants, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$52,650,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$52,650,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and
sale of the Secured Notes, (ii) the incurrence of the Loan hereunder
on the Closing Date, (iii) the incurrence of the Other Loans under the
Other Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any
court or any governmental department, commission, board, bureau,
agency, authority or instrumentality of the United States or any
state, province, commonwealth, nation, territory, possession, county,
parish, town, township, village or municipality, whether now or
hereafter constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the
introduction of this Agreement and shall include any successor Trustee
appointed pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $105,300,000 in the
aggregate (the "Loan") consisting of $52,650,000 of 7-year Tranche
advances and $52,650,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under
this Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time) on
the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan.
(i)One of the Other Loan Agreements relates to the Mortgaged Rig
Deepwater IV, which Mortgaged Rig is presently under construction
pursuant to a construction contract and which has an expected
completion date during the third calendar quarter of 2000. Upon
completion of the Mortgaged Rig Deepwater IV, the Company is required
to grant a Lien on such Mortgaged Rig pursuant to a Mortgage. Upon
the filing of the Mortgage for the Mortgaged Rig Deepwater IV, the
Company and the Lender agree that the $16,000,000 of the 7-year
Tranche and $16,000,000 of the 10-year Tranche will be exchanged for
additional advances under the Other Loan Agreement relating to the
Mortgaged Rig Deepwater IV in an aggregate principal amount of
$32,000,000.
(ii)The Company shall pay on or before 10:00 a.m. on the date of the
final Maturity of the 7-year Tranche of the Loan all of the principal
amount of the 7-year Tranche remaining outstanding, which amount will
be $52,650,000 principal amount of the Loan, reduced by any previous
prepayments of principal made on the 7-year Tranche of the Loan to the
extent that such payments have been allocated pursuant to the
provisions of Section 2.3 hereof and the Indenture to the 7-year
Secured Notes, together with accrued and unpaid interest, fees and a
pro rata portion of the amount of the Special Interest and Additional
Amounts, if any, due on the 7-year Secured Notes. The Company shall
pay on or before 10:00 a.m. on the date of the final Maturity of the
10-year Tranche all of the principal amount of the 10-year Tranche
then remaining outstanding, reduced by any previous prepayments of
principal made on the 10-year Tranche of the Loan to the extent that
such payments have been allocated pursuant to the provisions of
Section 2.3 hereof and the Indenture to the 10-year Secured Notes,
together with accrued and unpaid interest fees and a pro rata portion
of the amount of the Special Interest and Additional Amounts, if any,
due on the 10-year Secured Notes. Such payments shall be made
directly to the Trustee for deposit in the Issuer Escrow Account
established pursuant to the Issuer Escrow Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder shall
terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any
other provision herein, in no event will the combined sum of interest
(cash or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig or
the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and of
the Other Loans, in whole or in part, to provide funds for such
redemption. Any prepayments by the Company on the Loan and the
Other Loans required to be made to provide funds for the Lender to
make such a redemption shall be made on this Loan and the Other
Loans on a pro rata basis. All payments on the Loan and the Other
Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
(ii)Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of any
prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in
the form of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions, and the Lien provided in Section 5.7 shall have been
perfected in all appropriate United States jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
(A) The execution and delivery of the Loan Agreement, the Notes,
the Mortgage, the other Loan Documents and each other document to be
executed and delivered in connection with the Transactions, the
consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and previsions
hereof or thereof, and the issuance, delivery and performance of the
Notes, this Agreement, the Mortgage and the Indenture, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Company, its Certificate of Incorporation
or Bylaws or any order, judgment or decree of any court or other
agency of government binding on it, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of the Company which could
reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Company (other than any Liens
created under this Agreement and the Other Loan Agreements), (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
(B) No consent, approval, authorization or order of any
Tribunal or other Person is required in connection with the execution
and delivery by the Company of this Agreement, the Loan Documents or
any other document or instrument to be delivered in connection with
the Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the Mortgaged Rig, the equipment purchased and paid for by the Company
to be installed or used thereon and the Other Mortgaged Rigs to the
extent specified in such Other Loan Agreement. Except as specified in
Schedule 4.5 or as permitted by this Agreement, the Mortgaged Rig and
such equipment are so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage and a Security Agreement, (ii) the Liens of the Subsidiary's
Mortgage and Security Agreement are perfected and enforceable, and
(iii) such Subsidiary executes a Subsidiary Guarantee pursuant to the
Indenture.
5.7 Security Interest and Lien on Equipment. The Borrower hereby
grants a security interest and Lien in favor of the Lender and unto
the Lender's successors and assigns for the benefit of the Lender's
own proper use and benefit, as security for the Obligations now or in
the future, in and to the Equipment and the Mortgaged Rig.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.7 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
- -----------------------------------------------------------------------
Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan
evidenced hereby was made and is to be repaid. Capitalized terms used
herein without definition shall have the meanings set forth in the
Loan Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999,
as the same may at any time be amended, modified or supplemented and
in effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of
this Note or the Loan Agreement shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day
and year and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the __________________ of
R&B Falcon Corporation, a Delaware corporation ( the "Company"), and
that as such he is authorized to execute this Notice of Borrowing on
behalf of the Company. With reference to that certain Loan Agreement
dated as of _______________, 1999 (as same may be amended, modified,
increased, supplemented and/or restated from time to time, the
"Agreement") entered into by and between the Company and RBF Finance
Co., and any other future holder of any Note issued pursuant to the
Agreement ("Lender"), the undersigned further certifies, represents
and warrants on behalf of the Company that all of the foregoing
statements are true and correct (each capitalized term used herein
having the same meaning given to it in the Agreement unless otherwise
specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly authorized,
executed and delivered the Mortgage; (ii) the Mortgage constitutes a
legally binding obligation of the Company enforceable against the
Company in accordance with its terms (except as (i) the enforceability
thereof may be limited bankruptcy, insolvency or other similar laws
affecting creditors' rights, generally, and (ii) the enforceability
thereof may be limited by right of acceleration and the availability
of enforceable remedies may be limited by equitable principles of
general applicability, and subject to such other exceptions,
limitations or qualifications that are usual and customary for such
opinions) and (iii) the Mortgage constitutes a valid and perfected
first mortgage lien on the Mortgaged Rig.
- ----------------------------------------------------------------------
SCHEDULE 4.5
Title/Lien Exceptions
1.Statutory or inchoate liens for amounts not more than 30 days past
due or that are being contested in good faith.
EXHIBIT 10.9
[W.D. KENT]
==========================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
========================================================================
TABLE OF CONTENTS
Page
SECTION 1.SECTION 1.DEFINITIONS
1.1.Certain Defined Terms
1.2.Other Defined Terms
1.3.Accounting Terms
1.4.Other Definitional Provisions
SECTION 2.LOAN COMMITMENT AND LOAN
2.1.Termination of Loan Commitment
2.2.Termination of Loan Commitment
2.3.Interest on the Loans
2.4.Redemptions
2.5.Excess Proceeds Offers
2.6.Use of Proceeds
2.7.Commitment Fee
SECTION 3.CONDITIONS
3.1.Conditions to Initial Advances on the Loan
3.2.Conditions to Subsequent Advance on the Loan
SECTION 4.REPRESENTATIONS AND WARRANTIES
4.1.Organization and Good Standing; Capitalization
4.2.Authorization and Power
4.3.No Conflicts or Consents
4.4.Enforceable Obligations
4.5.Properties; Liens
4.6.No Default
4.7.Use of Proceeds; Margin Stock, etc
4.8.Survival of Representations and Warranties
SECTION 5.COVENANTS
5.1.Indenture Covenants
5.2.Reports of Defaults, Etc
5.3.Payments in U.S. Dollars
5.4.Performance and Enforcement Under the Loan Documents
5.5.Liens
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary
SECTION 6.EVENTS OF DEFAULT
6.1.Failure To Make Payments When Due
6.2.Default Under The Indenture
6.3.Other Loan Agreement
6.4.Breach of Certain Covenants
6.5.Breach of Warranty
6.6.Other Defaults Under Agreement or Loan Documents
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc
SECTION 7.MISCELLANEOUS
7.1.Pledges and Assignments of Loan and Note
7.2.Expenses
7.3.Indemnity
7.4.Additional Amounts
7.5.Taxes and Other Taxes
7.6.Amendments and Waivers
7.7.Independence of Covenants
7.8.Notices
7.9.Survival of Warranties and Certain Agreements
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative
7.11.Severability
7.12.Headings
7.13.Applicable Law
7.14.Successors and Assigns; Subsequent Holders of Notes
7.15.Counterparts; Effectiveness
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial
7.17.Waiver of Stay, Extension or Usury Laws
7.18.Usury Savings Clause
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
- --------------------------------------------------------------------------
This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes;" the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of New York, New York or is a
day on which banking institutions therein located are authorized or
required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means the Mortgaged Rig and any other property subject
to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the introduction
to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Event of Default" means each of the events set forth in Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note and the Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit IV
covering the Mortgaged Rig.
"Mortgaged Rig" means the W.D. Kent.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender, the
Company and the Trustee pursuant to which the Lender will utilize the
proceeds of the Secured Notes to make an Other Loan for the purposes
specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$5,950,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$5,950,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and sale
of the Secured Notes, (ii) the incurrence of the Loan hereunder on the
Closing Date, (iii) the incurrence of the Other Loans under the Other
Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any court
or any governmental department, commission, board, bureau, agency,
authority or instrumentality of the United States or any state,
province, commonwealth, nation, territory, possession, county, parish,
town, township, village or municipality, whether now or hereafter
constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the introduction
of this Agreement and shall include any successor Trustee appointed
pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $11,900,000 in the
aggregate (the "Loan") consisting of $5,950,000 of 7-year Tranche
advances and $5,950,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under this
Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time) on
the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan. The Company shall pay on or before 10:00
a.m. on the date of the final Maturity of the 7-year Tranche of the
Loan all of the principal amount of the 7-year Tranche remaining
outstanding, which amount will be $5,950,000 principal amount of the
Loan, reduced by any previous prepayments of principal made on the
7-year Tranche of the Loan to the extent that such payments have been
allocated pursuant to the provisions of Section 2.3 hereof and the
Indenture to the 7-year Secured Notes, together with accrued and
unpaid interest, fees and a pro rata portion of the amount of the
Special Interest and Additional Amounts, if any, due on the 7-year
Secured Notes. The Company shall pay on or before 10:00 a.m. on the
date of the final Maturity of the 10-year Tranche all of the principal
amount of the 10-year Tranche then remaining outstanding, reduced by
any previous prepayments of principal made on the 10-year Tranche of
the Loan to the extent that such payments have been allocated pursuant
to the provisions of Section 2.3 hereof and the Indenture to the 10-
year Secured Notes, together with accrued and unpaid interest fees and
a pro rata portion of the amount of the Special Interest and
Additional Amounts, if any, due on the 10-year Secured Notes. Such
payments shall be made directly to the Trustee for deposit in the
Issuer Escrow Account established pursuant to the Issuer Escrow
Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder shall
terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, [if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any
other provision herein, in no event will the combined sum of interest
(cash or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig or
the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and of
the Other Loans, in whole or in part, to provide funds for such
redemption. Any prepayments by the Company on the Loan and the
Other Loans required to be made to provide funds for the Lender to
make such a redemption shall be made on this Loan and the Other
Loans on a pro rata basis. All payments on the Loan and the Other
Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
(ii)Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer (an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of any
prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in
the form of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
A. The execution and delivery of the Loan Agreement, the Notes,
the Mortgage, the other Loan Documents and each other document to be
executed and delivered in connection with the Transactions, the
consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and previsions
hereof or thereof, and the issuance, delivery and performance of the
Notes, this Agreement, the Mortgage and the Indenture, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Company, its Certificate of Incorporation
or Bylaws or any order, judgment or decree of any court or other
agency of government binding on it, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of the Company which could
reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Company (other than any Liens
created under this Agreement and the Other Loan Agreements), (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
B. No consent, approval, authorization or order of any Tribunal or
other Person is required in connection with the execution and delivery
by the Company of this Agreement, the Loan Documents or any other
document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the Mortgaged Rig and the Other Mortgaged Rigs to the extent specified
in the Other Loan Agreements. Except as permitted by this Agreement,
the Mortgaged Rig is so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage, (ii) the Liens of the Subsidiary's Mortgage and Security
Agreement are perfected and enforceable, and (iii) such Subsidiary
executes a Subsidiary Guarantee pursuant to the Indenture.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.6 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.7, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
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Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan
evidenced hereby was made and is to be repaid. Capitalized terms used
herein without definition shall have the meanings set forth in the
Loan Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999,
as the same may at any time be amended, modified or supplemented and
in effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of
this Note or the Loan Agreement shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day
and year and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the __________________ of
R&B Falcon Corporation, a Delaware corporation ( the "Company"), and
that as such he is authorized to execute this Notice of Borrowing on
behalf of the Company. With reference to that certain Loan Agreement
dated as of _______________, 1999 (as same may be amended, modified,
increased, supplemented and/or restated from time to time, the
"Agreement") entered into by and between the Company and RBF Finance
Co., and any other future holder of any Note issued pursuant to the
Agreement ("Lender"), the undersigned further certifies, represents
and warrants on behalf of the Company that all of the foregoing
statements are true and correct (each capitalized term used herein
having the same meaning given to it in the Agreement unless otherwise
specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly authorized,
executed and delivered the Mortgage; (ii) the Mortgage constitutes a
legally binding obligation of the Company enforceable against the
Company in accordance with its terms (except as (i) the enforceability
thereof may be limited bankruptcy, insolvency or other similar laws
affecting creditors' rights, generally, and (ii) the enforceability
thereof may be limited by right of acceleration and the availability
of enforceable remedies may be limited by equitable principles of
general applicability, and subject to such other exceptions,
limitations or qualifications that are usual and customary for such
opinions) and (iii) the Mortgage constitutes a valid and perfected
first mortgage lien on the Mortgaged Rig.
EXHIBIT 10.10
[DEEPWATER MILLENNIUM]
=========================================================================
SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
=======================================================================
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS 1
1.1.Certain Defined Terms 1
1.2.Other Defined Terms 5
1.3.Accounting Terms 5
1.4.Other Definitional Provisions 5
SECTION 2.LOAN COMMITMENT AND LOAN 6
2.1.Termination of Loan Commitment 7
2.2.Termination of Loan Commitment 7
2.3.Interest on the Loans 7
2.4.Redemptions 8
2.5.Excess Proceeds Offers 10
2.6.Use of Proceeds 11
2.7.Commitment Fee 12
SECTION 3.CONDITIONS 12
3.1.Conditions to Initial Advances on the Loan 12
3.2.Conditions to Subsequent Advance on the Loan 14
SECTION 4.REPRESENTATIONS AND WARRANTIES 14
4.1.Organization and Good Standing; Capitalization 14
4.2.Authorization and Power 15
4.3.No Conflicts or Consents 15
4.4.Enforceable Obligations 15
4.5.Properties; Liens 16
4.6.No Default 16
4.7.Use of Proceeds; Margin Stock, etc 16
4.8.Survival of Representations and Warranties 16
SECTION 5.COVENANTS 16
5.1.Indenture Covenants 16
5.2.Reports of Defaults, Etc 16
5.3.Payments in U.S. Dollars 17
5.4.Performance and Enforcement Under the Loan Documents 17
5.5.Liens 17
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary 17
5.7.Filing of Mortgage 17
SECTION 6.EVENTS OF DEFAULT 17
6.1.Failure To Make Payments When Due 17
6.2.Default Under The Indenture 18
6.3.Other Loan Agreement 18
6.4.Breach of Certain Covenants 18
6.5.Breach of Warranty 18
6.6.Other Defaults Under Agreement or Loan Documents 18
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc 18
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc 18
SECTION 7.MISCELLANEOUS 19
7.1.Pledges and Assignments of Loan and Note 19
7.2.Expenses 20
7.3.Indemnity 20
7.4.Additional Amounts 21
7.5.Taxes and Other Taxes 22
7.6.Amendments and Waivers 23
7.7.Independence of Covenants 23
7.8.Notices 23
7.9.Survival of Warranties and Certain Agreements 23
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative 23
7.11.Severability 24
7.12.Headings 24
7.13.Applicable Law 24
7.14.Successors and Assigns; Subsequent Holders of Notes 24
7.15.Counterparts; Effectiveness 24
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial 24
7.17.Waiver of Stay, Extension or Usury Laws 25
7.18.Usury Savings Clause 25
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & WYNNE - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
V FORM OF SECURITY AGREEMENT
- --------------------------------------------------------------------------
This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes;" the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of New York, New York or is a
day on which banking institutions therein located are authorized or
required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means all collateral described in and pledged under
the Security Agreement and the Company Escrow Agreement, the Mortgaged
Rig and any other property subject to the Lien created under a
Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the introduction
to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Event of Default" means each of the events set forth in Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note, the Mortgage, the
Company Escrow Agreement and the Security Agreement.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit IV
covering the Mortgaged Rig.
"Mortgaged Rig" means the Deepwater Millennium.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender, the
Company and the Trustee pursuant to which the Lender will utilize the
proceeds of the Secured Notes to make an Other Loan for the purposes
specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at 114 West 47th Street, 25th Floor, New
York, New York 10036 or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit sharing agreement or arrangement, bonds, debentures, options,
warrants, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"Security Agreement" shall mean a Security Agreement substantially
in the form of Exhibit V among the Company, the Lender, and the
Collateral Agent, as the same may be amended, modified or supplemented
in accordance with the terms thereof and hereof.
"7-year Tranche" means advances on the Loan aggregating up to
$104,950,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$104,950,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and sale
of the Secured Notes, (ii) the incurrence of the Loan hereunder on the
Closing Date, (iii) the incurrence of the Other Loans under the Other
Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any court
or any governmental department, commission, board, bureau, agency,
authority or instrumentality of the United States or any state,
province, commonwealth, nation, territory, possession, county, parish,
town, township, village or municipality, whether now or hereafter
constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the introduction
of this Agreement and shall include any successor Trustee appointed
pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $209,900,000 in the
aggregate (the "Loan") consisting of $104,950,000 of 7-year Tranche
advances and $104,950,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under this
Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time) on
the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan.
(i)One of the Other Loan Agreements relates to the Mortgaged Rig
Deepwater IV, which Mortgaged Rig is presently under construction
pursuant to a construction contract and which has an expected
completion date during the third calendar quarter of 2000. Upon
completion of the Mortgaged Rig Deepwater IV, the Company is required
to grant a Lien on such Mortgaged Rig pursuant to a Mortgage. Upon
the filing of the Mortgage for the Mortgaged Rig Deepwater IV, the
Company and the Lender agree that the $21,350,000 of the 7-year
Tranche and $21,350,000 of the 10-year Tranche will be exchanged for
additional advances under the Other Loan Agreement relating to the
Mortgaged Rig Deepwater IV in an aggregate principal amount of
$42,700,000.
(ii)The Company shall pay on or before 10:00 a.m. on the date of the
final Maturity of the 7-year Tranche of the Loan all of the principal
amount of the 7-year Tranche remaining outstanding, together with
accrued and unpaid interest, fees and a pro rata portion of the amount
of the Special Interest and Additional Amounts, if any, due on the
7-year Secured Notes. The Company shall pay on or before 10:00 a.m.
on the date of the final Maturity of the 10-year Tranche all of the
principal amount of the 10-year Tranche then remaining outstanding,
together with accrued and unpaid interest fees and a pro rata portion
of the amount of the Special Interest and Additional Amounts, if any,
due on the 10-year Secured Notes. Such payments shall be made
directly to the Trustee for deposit in the Issuer Escrow Account
established pursuant to the Issuer Escrow Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder shall
terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with Donaldson, Lufkin & Jenrette Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any
other provision herein, in no event will the combined sum of interest
(cash or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig or
the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and of
the Other Loans, in whole or in part, to provide funds for such
redemption. Any prepayments by the Company on the Loan and the
Other Loans required to be made to provide funds for the Lender to
make such a redemption shall be made on this Loan and the Other
Loans on a pro rata basis. All payments on the Loan and the Other
Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
(ii)Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of any
prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i)a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Security Agreements, the Mortgage, each of the other
Loan Documents, the Indenture and any other documents, instruments and
certificates required to be executed by the Company in connection
herewith and therewith and approving and authorizing the execution,
delivery and payment of the Loan, each certified as of the Closing
Date by its Secretary or one of its Assistant Secretaries as being in
full force and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & Wynne, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Security
Agreement, in the form of Exhibit V hereto, the Lien of which has been
perfected in all appropriate jurisdictions; provided, however, that
Liens on equipment purchased by the Company for the Mortgaged Rig that
has not yet been Mortgaged do not have to be perfected until required
by the Trustee, but only after the later to occur of one year after
the date of this Agreement or the completion date for the Mortgaged
Rig as scheduled on the date of this Agreement.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the Security
Agreement, the other the Loan Documents, Indenture and each other
document and instrument to be delivered in connection with the
Transactions executed or to be executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
A. The execution and delivery of the Loan Agreement, the Notes, the
Mortgage, the Security Agreement, the other Loan Documents and each
other document to be executed and delivered in connection with the
Transactions, the consummation of each of the transactions herein or
therein contemplated, the compliance with each of the terms and
previsions hereof or thereof, and the issuance, delivery and
performance of the Notes, this Agreement, the Mortgage, the Security
Agreement and the Indenture, do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable
to the Company, its Certificate of Incorporation or Bylaws or any
order, judgment or decree of any court or other agency of government
binding on it, (ii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any
Contractual Obligation of the Company which could reasonably be
expected to result in a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the
properties or assets of the Company (other than any Liens created
under this Agreement and the Other Loan Agreements), (iv) require any
approval of stockholders or any approval or consent of any Person
under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
B. No consent, approval, authorization or order of any Tribunal or
other Person is required in connection with the execution and delivery
by the Company of this Agreement, the Loan Documents or any other
document or instrument to be delivered in connection with the
Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the Security Agreement, the other Loan Documents, and each
other document or instrument to be delivered in connection therewith
has been duly authorized; each of this Agreement, the Notes, the
Mortgage, the Security Agreement, the Other Loan Documents and each
other document or instrument to be delivered in connection therewith
to be executed and delivered on or prior to the Closing Date has been
duly executed and delivered by the Company and each of this Agreement,
the Notes, the Mortgage, the Security Agreement, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage,
the Security Agreement and the other Loan Documents to be executed and
delivered after the Closing Date will be, upon such execution and
delivery, the legal, valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the
enforcement of creditors' rights generally or by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the contract for the construction of the Mortgaged Rig and the
equipment purchased and paid for by the Company to be installed or
used thereon and the Other Mortgaged Rigs to the extent specified in
such Other Loan Agreement. Except as described in Schedule 4.5 or as
permitted by this Agreement, the Company owns, and such contract and
equipment are owned, free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage and a Security Agreement, (ii) the Liens of the Subsidiary's
Mortgage and Security Agreement are perfected and enforceable, and
(iii) such Subsidiary executes a Subsidiary Guarantee pursuant to the
Indenture.
5.7 Filing of Mortgage. Promptly upon completion of the Mortgaged Rig,
the Company shall grant a valid and perfected first Lien on the
Mortgaged Rig pursuant to a Mortgage in the form of Exhibit IV
attached hereto.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.7 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Security Agreement, the Lender's agreement to make the
Loan or the use or intended use of any of the proceeds of the Loan
hereunder or the Transactions (the "indemnified liabilities");
provided, however, that the Company shall have no obligation to an
Indemnitee hereunder with respect to indemnified liabilities (i) to
the extent such is finally judicially determined to have resulted
solely from (A) the gross negligence or willful misconduct of that
Indemnitee or (B) the failure of such Indemnitee to perform its
obligations under any Loan Document or (C) such Indemnitee's violation
of law or (ii) in connection with the obligations of any Indemnitee
under any Loan Document. To the extend that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence
may be unenforceable because it is violative of any law or public
policy, the Company shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the
Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
Marshall Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage, the Security Agreement or any Other Loan Document or consent
to any departure by the Company therefrom, shall in any event be
effective without the prior written concurrence of the Company, the
Lender, the Collateral Agent and the Trustee, and, upon the request of
the Lender, the Collateral Agent or the Trustee, the receipt of a
written opinion of counsel of the Company addressed to the Lender, the
Collateral Agent and the Trustee to the effect that such amendment,
modification, termination, waiver or consent does not violate or
conflict with any of the terms and provisions of the Indenture or any
Contractual Obligations of the Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan 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, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents 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 Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
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 Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: Robert Fulton
Title: Executive Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 496-0285
LENDER:
RBF FINANCE CO.
By:
Name: Leighton Moss
Title: Vice President
Notice Address:
901 Threadneedle
Houston, TX 77079-2982
Telephone: (281) 496-5000
Telecopy: (281) 597-7556
- --------------------------------------------------------------------
Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan
evidenced hereby was made and is to be repaid. Capitalized terms used
herein without definition shall have the meanings set forth in the
Loan Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999,
as the same may at any time be amended, modified or supplemented and
in effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at 114 West 47th Street, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of
this Note or the Loan Agreement shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day
and year and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
- ----------------------------------------------------------------------
EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the __________________
of R&B Falcon Corporation, a Delaware corporation ( the "Company"),
and that as such he is authorized to execute this Notice of Borrowing
on behalf of the Company. With reference to that certain Loan
Agreement dated as of _______________, 1999 (as same may be amended,
modified, increased, supplemented and/or restated from time to time,
the "Agreement") entered into by and between the Company and RBF
Finance Co., and any other future holder of any Note issued pursuant
to the Agreement ("Lender"), the undersigned further certifies,
represents and warrants on behalf of the Company that all of the
foregoing statements are true and correct (each capitalized term used
herein having the same meaning given to it in the Agreement unless
otherwise specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
- --------------------------------------------------------------------
SCHEDULE 4.5
Title/Lien Exceptions
1. Statutory or inchoate liens for amounts not more than 30 days past
due or that are being contested in good faith.
Exhibit 15
R&B Falcon Corporation
We are aware that R&B Falcon Corporation has incorporated by
reference in its Registration Statements No. 333-43475, 333-56821, 333-
63471, 333-67755, 333-67757, 333-68101 and 333-77263 its Form 10-Q for
the quarter ended March 31, 1999, which includes our report dated
April 28, 1999 covering the unaudited interim financial information
contained therein. Pursuant to Regulation C of the Securities Act of
1933, that report is not considered a part of the registration
statement prepared or certified by our firm or a report prepared or
certified by our firm within the meaning of Sections 7 and 11 of the
Act.
/s/Arthur Andersen LLP
Houston, Texas
May 14, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of R&B Falcon Corporation for the three months ended March
31, 1999 and 1998 as restated to reflect the recontinuance of the oil and gas
operations for the three months ended March 31, 1998 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-START> JAN-01-1999 JAN-01-1998
<PERIOD-END> MAR-31-1999 MAR-31-1998
<CASH> 579 118
<SECURITIES> 0 0
<RECEIVABLES> 243 244
<ALLOWANCES> 12 8
<INVENTORY> 40 18
<CURRENT-ASSETS> 895 388
<PP&E> 3,780 2,249
<DEPRECIATION> 551 446
<TOTAL-ASSETS> 4,442 2,226
<CURRENT-LIABILITIES> 256 299
<BONDS> 0 0
0 0
0 0
<COMMON> 2 2
<OTHER-SE> 1,251 820
<TOTAL-LIABILITY-AND-EQUITY> 4,442 2,226
<SALES> 0 0
<TOTAL-REVENUES> 244 279
<CGS> 0 0
<TOTAL-COSTS> 211 163
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 28 13
<INCOME-PRETAX> 9 105
<INCOME-TAX> 3 41
<INCOME-CONTINUING> 3 62
<DISCONTINUED> 0 8
<EXTRAORDINARY> (2) 0
<CHANGES> 0 0
<NET-INCOME> 2 70
<EPS-PRIMARY> .01 .42
<EPS-DILUTED> .01 .42
</TABLE>
