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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 9, 1999
FILE NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NOBLE DRILLING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 73-0374541
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
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10370 RICHMOND AVENUE JAMES C. DAY
SUITE 400 CHAIRMAN AND CHIEF EXECUTIVE OFFICER
HOUSTON, TEXAS 77042 NOBLE DRILLING CORPORATION
(713) 974-3131 10370 RICHMOND AVENUE, SUITE 400
(Address, including zip code, and telephone number, HOUSTON, TEXAS 77042
including area code, of Registrant's principal (713) 974-3131
executive offices) (Name, address, including zip code, and telephone
number, including area code, of agent for service)
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With a copy to:
David L. Emmons
Thompson & Knight, P.C.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after effectiveness
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.[ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
---------------
CALCULATION OF REGISTRATION FEE(1)
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<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Price per Aggregate Offering Amount of
Securities to be Registered Registered Unit(1) Price(1) Registration Fee(2)
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<S> <C> <C> <C> <C>
Debt Securities(3)(4)...........................
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.10 per share(4).......
- -----------------------------------------------------------------------------------------------------------------------------------
Preferred Stock, par value $1.00 per share(4)(5)
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Depositary Shares(6)............................
- -----------------------------------------------------------------------------------------------------------------------------------
Warrants(7).....................................
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Total........................................... $100,000,000 100% $100,000,000 $27,800
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o). In no event will the aggregate initial
offering price of all securities issued from time to time pursuant to
this Registration Statement exceed $100,000,000. Any securities
registered hereunder may be sold separately or as units with other
securities registered hereunder.
(2) Pursuant to Rule 429 of the Securities Act of 1933, the prospectus
included herein also covers $300,000,000 of securities from a previous
registration statement (No. 333-68507), as to which a registration fee
of $83,400 was paid.
(3) Subject to note (1), there are being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt
Securities are being issued at an original issue discount, then the
offering price shall be in such greater principal amount as shall
result in an aggregate initial offering price not to exceed
$100,000,000, less the dollar amount of any securities previously
issued hereunder.
(4) Subject to note (1), there are being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from
time to time, by the Registrant. There are also being registered
hereunder an indeterminate number of shares of Common Stock as shall be
issuable upon conversion or redemption of Preferred Stock or Debt
Securities registered hereby. The Common Stock being registered
includes associated Preferred Stock purchase rights.
(5) Subject to note (1), there are being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from
time to time, by the Registrant.
(6) Subject to note (1), there are being registered hereunder an
indeterminate number of Depositary Shares to be evidenced by Depositary
Receipts issued pursuant to a Deposit Agreement. In the event the
Registrant elects to offer to the public fractional interests in shares
of Preferred Stock registered hereunder, Depositary Receipts will be
distributed to those persons purchasing such fractional interests, and
the shares of Preferred Stock will be issued to the depositary under
the Deposit Agreement.
(7) Subject to note (1), there are being registered hereunder an
indeterminate amount and number of Warrants, representing rights to
purchase Preferred Stock, Common Stock or Debt Securities registered
hereby or equity securities issued by an unaffiliated corporation or
other entity and held by the Registrant.
------------------
Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
included in this registration statement will also be used in connection with
registration statement No. 333-68507 previously filed by the Registrant on Form
S-3.
The registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the SEC, acting pursuant to said section 8(a), may
determine.
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Subject to Completion Dated February 9, 1999
Preliminary Prospectus
$400,000,000
[LOGO]
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
NOBLE DRILLING CORPORATION
-------------------
We may offer from time to time (1) unsecured debt securities consisting
of senior notes and debentures and subordinated notes and debentures and/or
other unsecured evidences of indebtedness in one or more series; (2) shares of
common stock; (3) shares of preferred stock, in one or more series, which may be
convertible into or exchangeable for common stock or debt securities; and (4)
warrants to purchase debt securities, preferred stock, common stock or other
securities.
The aggregate initial offering price of the securities that we offer
will not exceed $400,000,000. We will offer the securities in amounts, at prices
and on terms to be determined by market conditions at the time of our offerings.
We will provide the specific terms of the securities in supplements to
this Prospectus. You should read this Prospectus and the Prospectus Supplements
carefully before you invest in any of our securities. This Prospectus may not be
used to consummate sales of our securities unless it is accompanied by a
Prospectus Supplement.
-------------------
BEFORE INVESTING IN OUR SECURITIES, YOU SHOULD REVIEW THE "RISK
FACTORS" SECTION OF THIS PROSPECTUS BEGINNING ON PAGE 4.
-------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved of the securities to be issued under this Prospectus or
determined if this Prospectus is accurate or adequate. Any representation to the
contrary is a criminal offense.
-------------------
The information in this Prospectus is incomplete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted. We may not use
this Prospectus to sell securities unless we also give prospective investors a
Prospectus Supplement.
-------------------
This Prospectus is dated February , 1999
<PAGE> 4
TABLE OF CONTENTS
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PAGE
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ABOUT THIS PROSPECTUS.....................................................................................................3
WHERE YOU CAN FIND MORE INFORMATION.......................................................................................3
THE COMPANY...............................................................................................................4
RISK FACTORS..............................................................................................................4
Dependance on the Oil and Gas Industry...........................................................................4
Risks of Modification, Refurbishment and Upgrade Projects........................................................4
Early Contract Terminations and Contract Cancelation.............................................................5
A WARNING ABOUT FORWARD-LOOKING STATEMENTS................................................................................5
USE OF PROCEEDS...........................................................................................................5
RATIO OF EARNINGS TO FIXED CHARGES........................................................................................6
DESCRIPTION OF DEBT SECURITIES............................................................................................6
General..........................................................................................................6
Denominations....................................................................................................7
Subordination....................................................................................................8
Consolidation, Merger or Sale....................................................................................8
Modification of Indentures.......................................................................................8
Events of Default................................................................................................8
Covenants........................................................................................................9
Payment and Transfer.............................................................................................9
Global Securities................................................................................................9
Defeasance......................................................................................................11
Meetings........................................................................................................11
Governing Law...................................................................................................12
Notices.........................................................................................................12
DESCRIPTION OF CAPITAL STOCK.............................................................................................12
General.........................................................................................................12
Common Stock....................................................................................................12
Preferred Stock and Depositary Shares...........................................................................13
Warrants........................................................................................................18
Foreign Ownership...............................................................................................18
Preferred Stock Purchase Rights.................................................................................19
PLAN OF DISTRIBUTION.....................................................................................................19
By Agents.......................................................................................................19
By Underwriters.................................................................................................19
Direct Sales....................................................................................................19
General Information.............................................................................................19
LEGAL MATTERS............................................................................................................20
EXPERTS..................................................................................................................20
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ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission (the "SEC") utilizing a "shelf"
registration process. Under this shelf process, we may, over the next two years,
sell different types of the securities described in this Prospectus in one or
more offerings up to a total offering amount of $400,000,000. This Prospectus
provides you with a general description of the securities we may offer. Each
time we sell securities, we will provide a Prospectus Supplement that will
contain specific information about the terms of that offering and the securities
offered by us in that offering. The Prospectus Supplement may also add, update
or change information contained in this Prospectus. You should read both this
Prospectus and any Prospectus Supplement together with additional information
described under the heading WHERE YOU CAN FIND MORE INFORMATION.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. Our SEC filings are available to the public over
the Internet at the SEC's web site at http://www.sec.gov. You may also read and
copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms.
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this Prospectus, and information that we file later with
the SEC will automatically update and supersede this information. We incorporate
by reference the documents listed below and any future filings we make with the
SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934 until our offering is completed.
o Annual Report on Form 10-K for the year ended December 31,
1997;
o Quarterly Reports on Form 10-Q for the quarters ended March
31, 1998, June 30, 1998 and September 30, 1998; and
o The descriptions of our Common Stock and Preferred Stock
Purchase Rights contained in our Registration Statements filed
under Section 12 of the Securities Exchange Act of 1934.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Julie J. Robertson
Vice President-Administration and Corporate Secretary
Noble Drilling Corporation
10370 Richmond Avenue, Suite 400
Houston, Texas 77042
(713) 974-3131
You should rely only on the information incorporated by reference or
provided in this Prospectus or any Prospectus Supplement. We have not authorized
anyone else to provide you with different information. We are not making an
offer of these securities in any state where the offer is not permitted. You
should not assume that the information in this Prospectus or any Prospectus
Supplement is accurate as of any date other than the date on the front of those
documents.
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THE COMPANY
Noble Drilling Corporation provides diversified services to the oil and
gas industry worldwide, including offshore drilling services, turnkey drilling
services and engineering and production management services. Because our
drilling fleet is broadly diversified, we are able to provide drilling services
in a variety of water depths and operating conditions. We have been providing
contract oil and gas drilling services in the United States since 1921 and
internationally during various periods since 1939.
Our offshore drilling rig fleet consists of 47 units comprising nine
semisubmersibles (including three active, three submersibles in various stages
of conversion, one semisubmersible being upgraded and two hulls), three
dynamically positioned drillships, 32 independent leg cantilevered jackup rigs
and three submersibles. These rig counts include three units in which we have a
partial ownership interest through joint ventures: one semisubmersible hull,
one jackup and one drillship.
Under our EVA-4000(TM) program, we have been converting submersible
units to semisubmersible units. We have completed two such conversions, the
Noble Paul Romano and the Noble Paul Wolff, and we expect to complete and
deliver three other converted units, the Noble Jim Thompson, Noble Amos Runner
and Noble Max Smith, in 1999. In addition, we are substantially upgrading one
of our semisubmersibles. These conversion projects are part of our strategy to
increase the number of rigs in our fleet capable of drilling in deeper water.
RISK FACTORS
Investing in our securities involves a certain amount of risk. You
should carefully consider the following factors, among others, before deciding
to invest.
DEPENDENCE ON THE OIL AND GAS INDUSTRY
Our results of operations depend on the levels of activity in offshore
oil and gas exploration, development and production in markets worldwide. Both
short-term and long-term trends in oil and gas affect that activity. During the
second quarter of 1998, demand for offshore drilling rigs began to decrease. As
a result, rig utilization and dayrates have declined, starting in mid-1998
domestically and later in 1998 internationally. We believe this decline is
largely attributable to declines in oil prices that began in 1997, which prices
have remained at low levels as compared to average prices in recent years.
Oil and gas prices and market expectations of potential changes in
these prices significantly affect the level of activity in oil and gas
exploration, development and production. These market prices are extremely
volatile. Demand for drilling services depends on a variety of political and
economic factors, including worldwide demand for oil and gas, the ability of the
Organization of Petroleum Exporting Countries ("OPEC") to set and maintain
production levels and pricing, the level of production of non-OPEC countries and
the policies of the various governments regarding exploration and development of
their oil and gas reserves.
We believe that any decrease form current oil and gas prices, or
extended periods at current price levels, will further depress the level of
exploration and production activity and result in a corresponding decline in
demand for our services. The number of completed and pending transactions
consolidating oil and gas companies have resulted in, and are likely to continue
to result in, reductions in capital spending for exploration and production.
These reductions adversely affect the demand for our services. For these
reasons, we cannot predict the future level of demand for our drilling services
or future conditions in the offshore contract drilling industry.
RISKS OF MODIFICATION, REFURBISHMENT AND UPGRADE PROJECTS
We have committed and intend to continue to commit a significant amount
of our capital resources to modify, refurbish and upgrade certain of our
drilling rigs. We have completed the upgrade of two of our shallow water
submersible rigs into EVA-4000(TM) design semisubmersible rigs and are similarly
upgrading an additional three submersible rigs. In addition, we are
substantially upgrading one of our semisubmersibles. These ongoing projects are
subject to the risks of delay or cost overruns inherent in large construction
and refurbishment projects, including shipyard availability, shortages of
materials or skilled labor, unforeseen engineering problems, work stoppages,
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weather interference, unanticipated cost increases, nonavailability of necessary
equipment and inability to obtain any of the requisite permits or approvals.
Significant delays will hurt our marketing plans for such rigs and may
jeopardize the contracts or letters of intent we have negotiated for such rigs.
EARLY CONTRACT TERMINATIONS AND CONTRACT CANCELLATION
Our term drilling contracts generally contain provisions permitting
early termination by the customer without cause upon a specified advance notice
to us. In reaction to depressed market conditions, our customers may seek to
avoid or reduce their obligations under term drilling contracts. A customer may
no longer need a rig, due to a reduction in its exploration, development or
production program, or it may seek to obtain a comparable rig at a lower
dayrate.
A WARNING ABOUT FORWARD-LOOKING STATEMENTS
We make forward-looking statements in this document, and in our public
documents to which we refer, that are subject to risks and uncertainties in
addition to those set forth above. These forward-looking statements include
information about possible or assumed future results of our operations. Also,
when we use any of the words "believes," "expects," "anticipates" or similar
expressions, we are making forward-looking statements. Many possible events or
factors could affect our future financial results and performance. This could
cause our results or performance to differ materially from those we express in
our forward-looking statements. You should consider these risks when you
purchase securities. These possible events or factors include the following:
o volatility in crude oil and natural gas prices;
o heavy demand for the equipment and services that we need in
order to finish on schedule the major shipyard refurbishment
and conversion projects that are in various stages of
completion or that we plan to begin;
o potential further deterioration of our customer's demand for
our drilling services;
o risks associated with turnkey drilling operations;
o intense competition in the drilling industry;
o political and economic conditions in international markets
where we operate;
o adverse weather (such as hurricanes) and seas;
o operational risks (such as blowouts, fires and loss of
production);
o early termination provisions generally found in our drilling
contracts;
o limitations on insurance coverage; and
o requirements and potential liability imposed by governmental
regulation of the drilling industry (including environmental
regulation).
USE OF PROCEEDS
Unless we specify otherwise in the applicable Prospectus Supplement,
the net proceeds (after the payment of offering expenses and underwriting
discounts or commissions) we receive from the sale of the securities offered by
this Prospectus and any Prospectus Supplement will be used for general corporate
purposes. General corporate purposes may include any of the following:
o funding capital expenditures;
o repaying debt;
o investing in or lending money to our subsidiaries;
o providing working capital;
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o redeeming our preferred stock (currently, there is none
outstanding); or
o paying for possible acquisitions or the expansion of our
businesses.
We may temporarily invest the net proceeds we receive from any offering of
securities or use the net proceeds to repay short-term debt until we can use
them for their stated purposes.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges for each of the periods
indicated is as follows:
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Nine Months Twelve Months Ended December 31,
Ended ----------------------------------------------------------------------------------------------
September 30, 1998 1997 1996 1995 1994 1993
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<S> <C> <C> <C> <C> <C> <C>
12.1 20.6 6.0 1.4 3.1 4.1
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</TABLE>
These computations include us and our subsidiaries, and companies in
which we own 50% or less of the outstanding equity. For these ratios, "earnings"
is determined by adding "total fixed charges" (excluding interest capitalized),
income taxes, minority common stockholders equity in net income and amortization
of interest capitalized to income from continuing operations after eliminating
equity in undistributed earnings and adding back losses of companies in which at
least 20% but less than 50% equity is owned. For this purpose, "total fixed
charges" consists of (1) interest on all indebtedness and amortization of debt
discount and expense, (2) interest capitalized and (3) an interest factor
attributable to rentals.
DESCRIPTION OF DEBT SECURITIES
Any Debt Securities we offer will be our direct unsecured general
obligations. The Debt Securities will be either senior debt securities or
subordinated debt securities. The Debt Securities will be issued under one or
more separate indentures between us and Chase Bank of Texas, National
Association, as Trustee. Senior Debt Securities will be issued under a "Senior
Indenture" and Subordinated Debt Securities will be issued under a "Subordinated
Indenture". Together the Senior Indenture and the Subordinated Indenture are
called "Indentures".
We have summarized selected provisions of the Indentures below. The
summary is not complete. The forms of the Indentures have been filed as exhibits
to the registration statement and you should read the Indentures for provisions
that may be important to you. In the summary below, we have included references
to section numbers of the applicable Indentures so that you can easily locate
these provisions. Capitalized terms used in the summary have the meanings
specified in the Indentures.
GENERAL
The Debt Securities will be our direct, unsecured obligations. The
Senior Debt Securities will rank equally with all of our other senior and
unsubordinated debt. The Subordinated Debt Securities will have a junior
position to all of our Senior Debt.
We conduct a substantial part of our operations through our
subsidiaries. To the extent of such operations, holders of Debt Securities will
have a position junior to the prior claims of creditors of our subsidiaries,
including trade creditors, debtholders, secured creditors, taxing authorities
and guarantee holders, and any preferred stockholders, except to the extent that
we may ourself be a creditor with recognized claims against any subsidiary.
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Our ability to pay principal of and premium, if any, and interest on any Debt
Securities is, to a large extent, dependent upon the payment to us of dividends,
interest or other charges by our subsidiaries.
Three of our subsidiaries recently borrowed $112.25 million, $145
million and $115 million, respectively, in connection with the Noble Paul
Romano, Noble Paul Wolff and Noble Jim Thompson conversions from submersibles to
EVA-4000(TM) semisubmersibles. The outstanding indebtedness for the Noble Paul
Wolff and for the Noble Jim Thompson is guaranteed by us. The outstanding
indebtedness for the Noble Paul Romano is non-recourse to us and any of our
subsidiaries other than the subsidiary that issued the debt.
A Prospectus Supplement and a supplemental indenture relating to any
series of Debt Securities being offered will include specific terms relating to
the offering. These terms will include some or all of the following:
o The title and type of the Debt Securities;
o The total principal amount of the Debt Securities;
o The percentage of the principal amount at which the Debt
Securities will be issued and any payments due if the maturity
of the Debt Securities is accelerated;
o The dates on which the principal of the Debt Securities will
be payable;
o The interest rate which the Debt Securities will bear and the
interest payment dates for the Debt Securities;
o Any optional redemption periods;
o Any sinking fund or other provisions that would obligate us to
repurchase or otherwise redeem some or all of the Debt
Securities;
o Any provisions granting special rights to holders when a
specified event occurs;
o Any changes to or additional Events of Defaults or covenants;
o Any special tax implications of the Debt Securities, including
provisions for Original Issue Discount Securities, if offered;
and
o Any other terms of the Debt Securities.
None of the Indentures limits the amount of Debt Securities that may be
issued. Each Indenture allows Debt Securities to be issued up to the principal
amount that may be authorized by us and may be in any currency or currency unit
designated by us.
Debt Securities of a series may be issued in registered, bearer, coupon
or global form. (Sections 201 & 203.)
DENOMINATIONS
The Prospectus Supplement for each issuance of Debt Securities will
state whether the securities will be issued in registered form of $1,000 each or
multiples thereof or bearer form of $5,000 each.
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SUBORDINATION
Under the Subordinated Indenture, payment of the principal, interest
and any premium on the Subordinated Debt Securities will generally be
subordinated and junior in right of payment to the prior payment in full of all
Senior Debt. The Subordinated Indenture provides that no payment of principal,
interest and any premium on the Subordinated Debt Securities may be made in the
event:
o of any insolvency, bankruptcy or similar proceeding involving
us or our property, or
o we fail to pay the principal, interest, any premium or any
other amounts on any Senior Debt when due.
The Subordinated Indenture will not limit the amount of Senior Debt
that we may incur.
"Senior Debt" is defined to include all notes or other unsecured
evidences of indebtedness, including guarantees given by us, for money borrowed
by us, not expressed to be subordinate or junior in right of payment to any of
our other indebtedness.
CONSOLIDATION, MERGER OR SALE
Each Indenture generally permits a consolidation or merger between us
and another corporation. They also permit the sale by us of all or substantially
all of our property and assets. If this happens, the remaining or acquiring
corporation shall assume all of our responsibilities and liabilities under the
Indentures, including the payment of all amounts due on the Debt Securities and
performance of the covenants in the Indentures. However, we will consolidate or
merge with or into any other corporation or sell all or substantially all of our
assets only according to the terms and conditions of the Indentures. The
remaining or acquiring corporation will be substituted for us in the Indentures
with the same effect as if it had been an original party to the Indentures.
Thereafter, the successor corporation may exercise our rights and powers under
any Indenture, in our name or in its own name. Any act or proceeding required or
permitted to be done by our Board of Directors or any of our officers may be
done by the board or officers of the successor corporation. If we sell all or
substantially all of our assets, we shall be released from all our liabilities
and obligations under any Indenture and under the Debt Securities. (Sections 801
& 802.)
MODIFICATION OF INDENTURES
Under each Indenture our rights and obligations and the rights of the
holders may be modified with the consent of the holders of a majority in
aggregate principal amount of the outstanding Debt Securities of each series
affected by the modification. No modification of the principal or interest
payment terms, and no modification reducing the percentage required for
modifications, is effective against any holder without its consent. (Sections
901 & 902.)
EVENTS OF DEFAULT
"Event of Default" when used in an Indenture, will mean any of the
following:
o failure to pay the principal of or any premium on any Debt
Security when due;
o failure to deposit any sinking fund payment when due;
o failure to pay interest on any Debt Security for 30 days;
o failure to perform any other covenant in the Indenture that
continues for 90 days after being given written notice;
o certain events in bankruptcy, insolvency or reorganization of
Noble Drilling Corporation; or
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o any other Event of Default included in any Indenture or
supplemental indenture. (Section 501.)
An Event of Default for a particular series of Debt Securities does not
necessarily constitute an Event of Default for any other series of Debt
Securities issued under an Indenture. The Trustee may withhold notice to the
holders of Debt Securities of any default (except in the payment of principal or
interest) if it considers such withholding of notice to be in the best interests
of the holders. (Section 602.)
If an Event of Default for any series of Debt Securities occurs and
continues, the Trustee or the holders of at least 25% in aggregate principal
amount of the Debt Securities of the series may declare the entire principal of
all the Debt Securities of that series to be due and payable immediately. If
this happens, subject to certain conditions, the holders of a majority of the
aggregate principal amount of the Debt Securities of that series can void the
declaration. (Section 502.)
Other than its duties in case of a default, a Trustee is not obligated
to exercise any of its rights or powers under any Indenture at the request,
order or direction of any holders, unless the holders offer the Trustee
reasonable indemnity. (Section 601.) If they provide this reasonable
indemnification, the holders of a majority in principal amount of any series of
Debt Securities may direct the time, method and place of conducting any
proceeding or any remedy available to the Trustee, or exercising any power
conferred upon the Trustee, for any series of Debt Securities. (Section 512.)
COVENANTS
Under the Indentures, we will:
o pay the principal of, and interest and any premium on, the
Debt Securities when due;
o maintain a place of payment;
o deliver a report to the Trustee at the end of each fiscal year
reviewing our obligations under the Indentures; and
o deposit sufficient funds with any paying agent on or before
the due date for any principal, interest or premium.
PAYMENT AND TRANSFER
Principal, interest and any premium on fully registered securities will
be paid at designated places. Payment will be made by check mailed to the
persons in whose names the Debt Securities are registered on days specified in
the Indentures or any Prospectus Supplement. Debt Securities payments in other
forms will be paid at a place designated by us and specified in a Prospectus
Supplement. (Section 307.)
Fully registered securities may be transferred or exchanged at the
corporate trust office of the Trustee or at any other office or agency
maintained by us for such purposes, without the payment of any service charge
except for any tax or governmental charge. (Section 1002.)
GLOBAL SECURITIES
Certain series of the Debt Securities may be issued as permanent global
Debt Securities to be deposited with a depositary with respect to that series.
Unless otherwise indicated in the Prospectus Supplement, the following is a
summary of the depository arrangements applicable to Debt Securities issued in
permanent global form and for which The Depositary Trust Company ("DTC") acts as
depositary (the "Global Debt Securities").
Each Global Debt Security will be deposited with, or on behalf of, DTC,
as depositary, or its nominee and registered in the name of a nominee of DTC.
Except under the limited circumstances described below, Global Debt Securities
are not exchangeable for definitive certificated Debt Securities.
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Ownership of beneficial interests in a Global Debt Security is limited
to institutions that have accounts with DTC or its nominee ("participants") or
persons that may hold interests through participants. In addition, ownership of
beneficial interests by participants in a Global Debt Security will be evidenced
only by, and the transfer of that ownership interest will be effected only
through, records maintained by DTC or its nominee for a Global Debt Security.
Ownership of beneficial interests in a Global Debt Security by persons that hold
through participants will be evidenced only by, and the transfer of that
ownership interest within that participant will be effected only through,
records maintained by that participant. DTC has no knowledge of the actual
beneficial owners of the Debt Securities. Beneficial owners will not receive
written confirmation from DTC of their purchase, but beneficial owners are
expected to receive written confirmations providing details of the transaction,
as well as periodic statements of their holdings, from the participants through
which the beneficial owners entered the transaction. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. Such laws may impair the ability
to transfer beneficial interests in a Global Debt Security.
Payment of principal of, and interest on, Debt Securities represented
by a Global Debt Security registered in the name of or held by DTC or its
nominee will be made to DTC or its nominee, as the case may be, as the
registered owner and holder of the Global Debt Security representing those Debt
Securities. We have been advised by DTC that upon receipt of any payment of
principal of, or interest on, a Global Debt Security, DTC will immediately
credit accounts of participants on its book-entry registration and transfer
system with payments in amounts proportionate to their respective beneficial
interests in the principal amount of that Global Debt Security as shown in the
records of DTC. Payments by participants to owners of beneficial interests in a
Global Debt Security held through those participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered in
"street name", and will be the sole responsibility of those participants,
subject to any statutory or regulatory requirements that may be in effect from
time to time.
Neither we, any Trustee nor any of our respective agents will be
responsible for any aspect of the records of DTC, any nominee or any participant
relating to, or payments made on account of, beneficial interests in a permanent
Global Debt Security or for maintaining, supervising or reviewing any of the
records of DTC, any nominee or any participant relating to such beneficial
interests.
A Global Debt Security is exchangeable for definitive Debt Securities
registered in the name of, and a transfer of a Global Debt Security may be
registered to, any person other than DTC or its nominee, only if:
o DTC notifies us that it is unwilling or unable to continue as
depositary for that Global Debt Security or at any time DTC
ceases to be registered under the Exchange Act;
o we determine in our discretion that the Global Debt Security
shall be exchangeable for definitive Debt Securities in
registered form; or
o there shall have occurred and be continuing an Event of
Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default under the Debt
Securities.
Any Global Debt Security that is exchangeable pursuant to the preceding
sentence will be exchangeable in whole for definitive Debt Securities in
registered form, of like tenor and of an equal aggregate principal amount as the
Global Debt Security, in denominations specified in the applicable Prospectus
Supplement (if other than $1,000 and integral multiples of $1,000). The
definitive Debt Securities will be registered by the registrar in the name or
names instructed by DTC. We expect that these instructions may be based upon
directions received by DTC from its participants with respect to ownership of
beneficial interests in the Global Debt Security.
Except as provided above, owners of the beneficial interests in a
Global Debt Security will not be entitled to receive physical delivery of Debt
Securities in definitive form and will not be considered the holders of Debt
Securities for any purpose under the Indentures. No Global Debt Security shall
be exchangeable except for another Global Debt Security of like denomination and
tenor to be registered in the name of DTC or its nominee. Accordingly, each
person owning a beneficial interest in a Global Debt Security must rely on the
procedures of
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DTC and, if that person is not a participant, on the procedures of the
participant through which that person owns its interest, to exercise any rights
of a holder under the Global Debt Security or the Indentures.
We understand that, under existing industry practices, in the event
that we request any action of holders, or an owner of a beneficial interest in a
Global Debt Security desires to give or take any action that a holder is
entitled to give or take under the Debt Securities or the Indentures, DTC would
authorize the participants holding the relevant beneficial interests to give or
take that action, and those participants would authorize beneficial owners
owning through those participants to give or take that action or would otherwise
act upon the instructions of beneficial owners owning through them.
DTC has advised us that DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered under the Exchange Act. DTC
was created to hold securities of its participants and to facilitate the
clearance and settlement of securities transactions among its participants in
those securities through electronic book-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTC's participants include securities brokers and dealers, banks,
trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its participants and by the New York Stock Exchange, Inc.,
the American Stock Exchange, Inc. and the National Association of Securities
Dealers, Inc. Access to DTC's book-entry system is also available to others,
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.
DEFEASANCE
We will be discharged from our obligations on the Debt Securities of
any series at any time if we deposit with the Trustee sufficient cash or
government securities to pay the principal, interest, any premium and any other
sums due to the stated maturity date or a redemption date of the Debt Securities
of the series. If this happens, the holders of the Debt Securities of the series
will not be entitled to the benefits of the Indenture except for registration of
transfer and exchange of Debt Securities and replacement of lost, stolen or
mutilated Debt Securities. (Section 401.)
Under Federal income tax law as of the date of this Prospectus, a
discharge may be treated as an exchange of the related Debt Securities. Each
holder might be required to recognize gain or loss equal to the difference
between the holder's cost or other tax basis for the Debt Securities and the
value of the holder's interest in the trust. Holders might be required to
include as income a different amount than would be includable without the
discharge. Prospective investors are urged to consult their own tax advisers as
to the consequences of a discharge, including the applicability and effect of
tax laws other than the Federal income tax law.
MEETINGS
Each Indenture contains provisions describing how meetings of the
Holders of Debt Securities of a series may be convened. A meeting may be called
at any time by the Trustee, and also, upon request, by us or the Holders of at
least 10% in principal amount of the outstanding Debt Securities of a series. A
notice of the meeting must always be given in the manner described under
"-Notices" below. Generally speaking, except for any consent that must be given
by all Holders of a series as described under "-Modification of Indentures"
above, any resolution presented at a meeting of the Holders of a series of Debt
Securities may be adopted by the affirmative vote of the Holders of a majority
in principal amount of the outstanding Debt Securities of that series, unless
the Indenture allows the action to be voted upon to be taken with the approval
of the Holders of a different specific percentage of principal amount of
outstanding Debt Securities of a series. In that case, the Holders of
outstanding Debt Securities of at least the specified percentage must vote in
favor of the action. Any resolution passed or decision taken at any meeting of
Holders of Debt Securities of any series in accordance with the applicable
Indenture will be binding on all Holders of Debt Securities of that series and
any related coupons, unless, as discussed in "-Modification of Indentures"
above, the action is only effective against Holders that have approved it. The
quorum at any meeting
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called to adopt a resolution, and at any reconvened meeting, will be Holders
holding or representing a majority in principal amount of the outstanding Debt
Securities of a series.
GOVERNING LAW
Each Indenture and the Debt Securities will be governed by and
construed in accordance with the laws of the State of New York.
NOTICES
Notices to Holders of Debt Securities will be given by mail to the
addresses of such Holders as they appear in the Security Register.
DESCRIPTION OF CAPITAL STOCK
GENERAL
As of the date of this Prospectus, we are authorized to issue up to
215,000,000 shares of stock, including up to 200,000,000 shares of Common Stock
and up to 15,000,000 shares of Preferred Stock. As of January 31, 1999, we had
131,142,198 shares of Common Stock and no shares of Preferred Stock outstanding.
As of that date, we also had approximately 1,918,554 shares of Common Stock
reserved for issuance upon exercise of options or in connection with other
awards outstanding under various employee or director incentive, compensation
and option plans. In addition, we have reserved for issuance shares of Common
Stock for our matching fund obligations under our 401(k) savings plan and
employee retirement plans.
The following summary is not complete. You should refer to the
applicable provisions of our Certificate of Incorporation, the Delaware General
Corporation Law and the documents we have incorporated by reference for a
complete statement of the terms and rights of our capital stock.
COMMON STOCK
Voting Rights. Each Holder of Common Stock is entitled to one vote per
share. Subject to the rights, if any, of the holders of any series of Preferred
Stock pursuant to applicable law or the provision of the Certificate of
Designations creating that series, all voting rights are vested in the holders
of shares of Common Stock. Holders of shares of Common Stock have noncumulative
voting rights, which means that the holders of more than 50% of the shares
voting for the election of directors can elect 100% of the directors, and the
holders of the remaining shares voting for the election of directors will not be
able to elect any directors.
Dividends. Dividends may be paid to the holders of Common Stock when,
as and if declared by the Board of Directors out of funds legally available for
their payment, subject to the rights of holders of any Preferred Stock.
Rights Upon Liquidation. In the event of our voluntary or involuntary
liquidation, dissolution or winding up, the holders of Common Stock will be
entitled to share equally in any of our assets available for distribution after
the payment in full of all debts and distributions and after the holders of all
series of outstanding Preferred Stock, if any, have received their liquidation
preferences in full.
Miscellaneous. The issued and outstanding shares of Common Stock are
fully paid and nonassessable. Holders of shares of Common Stock are not entitled
to preemptive rights. Shares of Common Stock are not convertible into shares of
any other class of capital stock. Bank One Trust Company, N.A., Oklahoma City,
Oklahoma, is the transfer agent and registrar for the Common Stock. The Common
Stock is listed on the New York Stock Exchange under the symbol "NE."
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PREFERRED STOCK AND DEPOSITARY SHARES
We may issue shares of our Preferred Stock in one or more series. We
will determine the dividend, voting, conversion and other rights of the series
being offered and the terms and conditions relating to its offering and sale at
the time of the offer and sale. We may also issue fractional shares of Preferred
Stock that will be represented by Depositary Shares and Depositary Receipts.
Description of Preferred Stock.
The Certificate of Incorporation authorizes the Board of Directors or a
committee of the Board of Directors to cause Preferred Stock to be issued in one
or more series, without stockholder action. The Board of Directors is authorized
to issue up to 15,000,000 shares of Preferred Stock, and can determine the
number of shares of each series, and the rights, preferences and limitations of
each series. We may amend the Certificate of Incorporation to increase the
number of authorized shares of Preferred Stock in a manner permitted by the
Certificate of Incorporation and the Delaware General Corporation Law. As of the
date of this Prospectus, we have no shares of Preferred Stock outstanding.
The particular terms of any series of Preferred Stock being offered by
us under this shelf registration will be described in the Prospectus Supplement
relating to that series of Preferred Stock. Those terms may include:
o the number of shares of the series of Preferred Stock being
offered;
o the title and liquidation preference per share of that series
of the Preferred Stock;
o the purchase price of the Preferred Stock;
o the dividend rate (or method for determining such rate);
o the dates on which dividends will be paid;
o whether dividends on that series of Preferred Stock will be
cumulative or non-cumulative and, if cumulative, the dates
from which dividends shall commence to accumulate;
o any redemption or sinking fund provisions applicable to that
series of Preferred Stock;
o any conversion provisions applicable to that series of
Preferred Stock;
o whether we have elected to offer Depositary Shares with
respect to that series of Preferred Stock; or
o any additional dividend, liquidation, redemption, sinking fund
and other rights and restrictions applicable to that series of
Preferred Stock.
If the terms of any series of Preferred Stock being offered differ from
the terms set forth below, those terms will also be disclosed in the Prospectus
Supplement relating to that series of Preferred Stock. The following summary is
not complete. You should refer to the Certificate of Designations relating to
the series of the Preferred Stock for the complete terms of that Preferred
Stock. That Certificate of Designations for any series of Preferred Stock will
be filed with the SEC promptly after the offering of that series of Preferred
Stock.
The Preferred Stock will, when issued, be fully paid and nonassessable.
Unless otherwise specified in the Prospectus Supplement, in the event we
liquidate, dissolve or wind-up our business, each series of Preferred Stock will
have the same rank as to dividends and distributions as each other series of the
Preferred Stock we may issue in the future. The Preferred Stock will have no
preemptive rights.
Dividend Rights. Holders of Preferred Stock of each series will be
entitled to receive, when, as and if declared by the Board of Directors, cash
dividends at the rates and on the dates set forth in the Prospectus Supplement.
Dividend rates may be fixed or variable or both. Different series of Preferred
Stock may be entitled to dividends at different dividend rates or based upon
different methods of determination. Each dividend will be payable to the holders
of record as they appear on our stock books (or, if applicable, the records of
the Depositary referred to below under "Depositary Shares") on record dates
determined by the Board of Directors. Dividends on any series of the Preferred
Stock may be cumulative or non-cumulative, as specified in the Prospectus
Supplement. If the Board of Directors fails to declare a dividend on any series
of Preferred Stock for which dividends are non-cumulative, then the right to
receive that dividend will be lost, and we will have no obligation to pay the
dividend for that dividend period, whether or not dividends are declared for any
future dividend period.
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No full dividends will be declared or paid on any series of Preferred
Stock, unless full dividends for the dividend period commencing after the
immediately preceding dividend payment date (and cumulative dividends still
owing, if any) have been or contemporaneously are declared and paid on all other
series of Preferred Stock which have the same rank as, or rank senior to, that
series of Preferred Stock. When those dividends are not paid in full, dividends
will be declared pro rata, so that the amount of dividends declared per share on
that series of Preferred Stock and on each other series of Preferred Stock
having the same rank as, or ranking senior to, that series of Preferred Stock
will in all cases bear to each other the same ratio that accrued dividends per
share on that series of Preferred Stock and the other Preferred Stock bear to
each other. In addition, generally, unless full dividends, including cumulative
dividends still owing, if any, on all outstanding shares of any series of
Preferred Stock have been paid, no dividends will be declared or paid on the
Common Stock and generally we may not redeem or purchase any Common Stock. No
interest, or sum of money in lieu of interest, will be paid in connection with
any dividend payment or payments which may be in arrears.
The amount of dividends payable for each dividend period will be
computed by annualizing the applicable dividend rate and dividing by the number
of dividend periods in a year, except that the amount of dividends payable for
the initial dividend period or any period shorter than a full dividend period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months and, for any period less than a full month, the actual number of days
elapsed in the period.
Rights Upon Liquidation. In the event we liquidate, dissolve or wind-up
our affairs, either voluntarily or involuntarily, the holders of each series of
Preferred Stock will be entitled to receive liquidating distributions in the
amount set forth in the Prospectus Supplement relating to each series of
Preferred Stock, plus an amount equal to accrued and unpaid dividends, if any,
before any distribution of assets is made to the holders of Common Stock. If the
amounts payable with respect to Preferred Stock of any series and any stock
having the same rank as that series of Preferred Stock are not paid in full, the
holders of Preferred Stock and of such other stock will share ratably in any
such distribution of assets in proportion to the full respective preferential
amounts to which they are entitled. After the holders of each series of
Preferred Stock and any stock having the same rank as the Preferred Stock are
paid in full, they will have no right or claim to any of our remaining assets.
Neither the sale of all or substantially all our property or business nor a
merger or consolidation by us with any other corporation will be considered a
dissolution, liquidation or winding up by us of our business or affairs.
Redemption. Any series of Preferred Stock may be redeemable, in whole
or in part, at our option. In addition, any series of Preferred Stock may be
subject to mandatory redemption pursuant to a sinking fund. The redemption
provisions that may apply to a series of Preferred Stock, including the
redemption dates and the redemption prices for that series, will be set forth in
the Prospectus Supplement.
If a series of Preferred Stock is subject to mandatory redemption, the
Prospectus Supplement will specify the year we can begin to redeem shares of the
Preferred Stock, the number of shares of the Preferred Stock we can redeem each
year, and the redemption price per share. We may pay the redemption price in
cash, stock or in cash that we have received specifically from the sale of our
capital stock, as specified in the Prospectus Supplement. If the redemption
price is to be paid only from the proceeds of the sale of our capital stock, the
terms of the series of Preferred Stock may also provide that, if no such capital
stock is sold or if the amount of cash received is insufficient to pay in full
the redemption price then due, the series of Preferred Stock will automatically
be converted into shares of the applicable capital stock pursuant to conversion
provisions specified in the Prospectus Supplement.
If fewer than all the outstanding shares of any series of Preferred
Stock are to be redeemed, whether by mandatory or optional redemption, the Board
of Directors will determine the method for selecting the shares to be redeemed,
which may be by lot or pro rata or by any other method determined to be
equitable. From and after the redemption date, dividends will cease to accrue on
the shares of Preferred Stock called for redemption and all rights of the
holders of those shares (except the right to receive the redemption price) will
cease.
In the event that full dividends, including accrued but unpaid
dividends, if any, have not been paid on any series of Preferred Stock, we may
not redeem that series in part and we may not purchase or acquire any shares of
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that series of Preferred Stock, except by an offer made on the same terms to all
holders of that series of Preferred Stock.
Conversion Rights. The Prospectus Supplement will state the terms, if
any, on which shares of a series of Preferred Stock are convertible into shares
of Common Stock or another series of our Preferred Stock. As described under
"-Redemption" above, under certain circumstances, Preferred Stock may be
mandatorily converted into Common Stock or another series of our Preferred
Stock.
Voting Rights. Except as indicated below or in the Prospectus
Supplement, or except as expressly required by applicable law, the holders of
Preferred Stock will not be entitled to vote. Except as indicated in the
Prospectus Supplement, in the event we issue full shares of any series of
Preferred Stock, each share will be entitled to one vote on matters on which
holders of that series of Preferred Stock are entitled to vote. However, as more
fully described below under "-Description of Depositary Shares", if we issue
Depositary Shares representing a fraction of a share of a series of Preferred
Stock, each Depositary Share will, in effect, be entitled to that fraction of a
vote, rather than a full vote. Because each full share of any series of
Preferred Stock will be entitled to one vote, the voting power of that series
will depend on the number of shares in that series, and not on the aggregate
liquidation preference or initial offering price of the shares of that series of
Preferred Stock.
Transfer Agent and Registrar. Bank One Trust Company, N.A., Oklahoma
City, Oklahoma will be the transfer agent, registrar and dividend disbursement
agent for the Preferred Stock and any Depositary Shares (see the description of
Depositary Shares below). The registrar for the Preferred Stock will send
notices to the holders of the Preferred Stock of any meetings at which such
holders will have the right to elect directors or to vote on any other matter.
Description of Depositary Shares.
General. We may, at our option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. If we do, we will
issue to the public receipts for Depositary Shares, and each of these Depositary
Shares will represent a fraction (to be set forth in the Prospectus Supplement)
of a share of a particular series of Preferred Stock.
The shares of any series of Preferred Stock underlying the Depositary
Shares will be deposited under a Deposit Agreement (the "Deposit Agreement")
between us and a bank or trust company selected by us (the "Depositary").
Subject to the terms of the Deposit Agreement, each owner of a Depositary Share
will be entitled, in proportion to the applicable fractional interest in shares
of Preferred Stock underlying that Depositary Share, to all the rights and
preferences of the Preferred Stock underlying that Depositary Share. Those
rights include dividend, voting, redemption, conversion and liquidation rights.
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement ("Depositary Receipts"). Depositary Receipts
will be issued to those persons who purchase the fractional interests in the
Preferred Stock underlying the Depositary Shares, in accordance with the terms
of the offering. Copies of the forms of Deposit Agreement and Depositary Receipt
are filed as exhibits to the registration statement. The following summary of
the Deposit Agreement, the Depositary Shares and the Depositary Receipts is not
complete. You should refer to the forms of the Deposit Agreement and Depositary
Receipts that are filed as exhibits to the registration statement.
Dividends and Other Distributions. The Depositary will distribute all
cash dividends or other cash distributions received in respect of the Preferred
Stock to the record holders of Depositary Shares relating to that Preferred
Stock in proportion to the number of Depositary Shares owned by those holders.
If there is a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
that are entitled to receive the distribution, unless the Depositary determines
that it is not feasible to make the distribution. If this occurs, the Depositary
may, with our approval, sell the property and distribute the net proceeds from
the sale to the applicable holders.
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Redemption of Depositary Shares. If a series of Preferred Stock
underlying the Depositary Shares is subject to redemption, the Depositary Shares
will be redeemed from the proceeds received by the Depositary resulting from the
redemption, in whole or in part, of that series of Preferred Stock held by the
Depositary. The redemption price per Depositary Share will be equal to the
applicable fraction of the redemption price per share payable with respect to
that series of the Preferred Stock. Whenever we redeem shares of Preferred Stock
that are held by the Depositary, the Depositary will redeem, as of the same
redemption date, the number of Depositary Shares representing the shares of
Preferred Stock so redeemed. If fewer than all the Depositary Shares are to be
redeemed, the Depositary Shares to be redeemed will be selected by lot or pro
rata as determined by the Depositary.
After the date fixed for redemption, the Depositary Shares called for
redemption will no longer be outstanding, and all rights of the holders of those
Depositary Shares will cease, except the right to receive any money, securities,
or other property upon surrender to the Depositary of the Depositary Receipts
evidencing those Depositary Shares.
Voting the Preferred Stock. Upon receipt of notice of any meeting at
which the holders of Preferred Stock are entitled to vote, the Depositary will
mail the information contained in the notice of meeting to the record holders of
the Depositary Shares underlying that Preferred Stock. Each record holder of
those Depositary Shares on the record date (which will be the same date as the
record date for the Preferred Stock) will be entitled to instruct the Depositary
as to the exercise of the voting rights pertaining to the amount of the
Preferred Stock underlying that holder's Depositary Shares. The Depositary will
try, as far as practicable, to vote the number of shares of Preferred Stock
underlying those Depositary Shares in accordance with such instructions, and we
will agree to take all action which may be deemed necessary by the Depositary in
order to enable the Depositary to do so. The Depositary will not vote the shares
of Preferred Stock to the extent it does not receive specific instructions from
the holders of Depositary Shares underlying the Preferred Stock.
Amendment and Termination of the Depositary Agreement. The form of
Depositary Receipt evidencing the Depositary Shares and any provision of the
Deposit Agreement may be amended at any time by agreement between us and the
Depositary. However, any amendment that materially and adversely alters the
rights of the holders of Depositary Shares will not be effective unless the
amendment has been approved by the holders of at least a majority of the
Depositary Shares then outstanding. The Deposit Agreement may be terminated by
us or by the Depositary only if (i) all outstanding Depositary Shares have been
redeemed or (ii) there has been a final distribution of the underlying Preferred
Stock in connection with our liquidation, dissolution or winding up and the
Preferred Stock has been distributed to the holders of Depositary Receipts.
Resignation and Removal of Depositary. The Depositary may resign at any
time by delivering a notice to us of its election to do so. We may remove the
Depositary at any time. Any such resignation or removal will take effect upon
the appointment of a successor Depositary and its acceptance of its appointment.
The successor Depositary must be appointed within 60 days after delivery of the
notice of resignation or removal.
Miscellaneous. The Depositary will forward to holders of Depository
Receipts all reports and communications from us that we deliver to the
Depositary and that we are required to furnish to the holders of the Preferred
Stock.
Neither we nor the Depositary will be liable if either of us is
prevented or delayed by law or any circumstance beyond our control in performing
our respective obligations under the Deposit Agreement. Our obligations and
those of the Depositary will be limited to the performance in good faith of our
respective duties under the Deposit Agreement. Neither we nor the Depositary
will be obligated to prosecute or defend any legal proceeding in respect of any
Depositary Shares or Preferred Stock unless satisfactory indemnity is furnished.
We and the Depositary may rely upon written advice of counsel or accountants, or
upon information provided by persons presenting Preferred Stock for deposit,
holders of Depositary Receipts or other persons believed to be competent and on
documents believed to be genuine.
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Description of Permanent Global Preferred Securities.
Certain series of the Preferred Stock or Depositary Shares may be
issued as permanent global securities to be deposited with a depositary with
respect to that series. Unless otherwise indicated in the Prospectus Supplement,
the following is a summary of the depositary arrangements applicable to
Preferred Stock or Depositary Receipts issued in permanent global form and for
which DTC acts as the depositary ("Global Preferred Securities").
Each Global Preferred Security will be deposited with, or on behalf of,
DTC or its nominee and registered in the name of a nominee of DTC. Except under
the limited circumstances described below, Global Preferred Securities are not
exchangeable for definitive certificated Preferred Stock or Depositary Receipts.
Ownership of beneficial interests in a Global Preferred Security is
limited to institutions that have accounts with DTC or its nominee
("participants") or persons that may hold interests through participants. In
addition, ownership of beneficial interests by participants in a Global
Preferred Security will be evidenced only by, and the transfer of that ownership
interest will be effected only through, records maintained by DTC or its nominee
for a Global Preferred Security. Ownership of beneficial interests in a Global
Preferred Security by persons that hold through participants will be evidenced
only by, and the transfer of that ownership interest within that participant
will be effected only through, records maintained by that participant. DTC has
no knowledge of the actual beneficial owners of the Preferred Stock or
Depositary Shares, as the case may be, represented by a Global Preferred
Security. Beneficial owners will not receive written confirmation from DTC of
their purchase, but beneficial owners are expected to receive written
confirmations providing details of the transaction, as well as periodic
statements of their holdings, from the participants through which the beneficial
owners entered the transaction. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in a Global Preferred Security.
Payments on Preferred Stock and Depositary Shares represented by a
Global Preferred Security registered in the name of or held by DTC or its
nominee will be made to DTC or its nominee, as the case may be, as the
registered owner and holder of the Global Preferred Security representing the
Preferred Stock or Depositary Shares. We have been advised by DTC that upon
receipt of any payment on a Global Preferred Security, DTC will immediately
credit accounts of participants on its book-entry registration and transfer
system with payments in amounts proportionate to their respective beneficial
interests in that Global Preferred Security as shown in the records of DTC.
Payments by participants to owners of beneficial interests in a Global Preferred
Security held through those participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name", and
will be the sole responsibility of those participants, subject to any statutory
or regulatory requirements as may be in effect from time to time.
Neither we nor any of our agents will be responsible for any aspect of
the records of DTC, any nominee or any participant relating to, or payments made
on account of beneficial interests in a Global Preferred Security or for
maintaining, supervising or reviewing any of the records of DTC, any nominee or
any participant relating to such beneficial interests.
A Global Preferred Security is exchangeable for definitive certificated
Preferred Stock or Depositary Receipts, as the case may be, registered in the
name of, and a transfer of a Global Preferred Security may be registered to, a
person other than DTC or its nominee, only if:
o DTC notifies us that it is unwilling or unable to continue as
Depositary for the Global Preferred Security or at any time
DTC ceases to be registered under the Exchange Act; or
o We determine in our discretion that the Global Preferred
Security shall be exchangeable for definitive Preferred Stock
or Depositary Receipts, as the case may be, in registered
form.
Any Global Preferred Security that is exchangeable pursuant to the
preceding sentence will be exchangeable in whole for definitive certificated
Preferred Stock or Depositary Receipts, as the case may be, registered by the
registrar in the name or names instructed by DTC. We expect that those
instructions may be based
17
<PAGE> 20
upon directions received by DTC from its participants with respect to ownership
of beneficial interests in that Global Preferred Security.
Except as provided above, owners of the beneficial interests in a
Global Preferred Security will not be entitled to receive physical delivery of
certificates representing shares of Preferred Stock or Depositary Shares, as the
case may be, and will not be considered the holders of Preferred Stock or
Depositary Shares, as the case may be. No Global Preferred Security shall be
exchangeable except for another Global Preferred Security to be registered in
the name of DTC or its nominee. Accordingly, each person owning a beneficial
interest in a Global Preferred Security must rely on the procedures of DTC and,
if that person is not a participant, on the procedures of the participant
through which that person owns its interest, to exercise any rights of a holder
of Preferred Stock or Depositary Shares, as the case may be.
We understand that, under existing industry practices, in the event
that we request any action of holders, or an owner of a beneficial interest in a
Global Preferred Security desires to give or take any action that a holder of
Preferred Stock or Depositary Shares, as the case may be, is entitled to give or
take, DTC would authorize the participants holding the relevant beneficial
interests to give or take that action and those participants would authorize
beneficial owners owning through those participants to give or take that action
or would otherwise act upon the instructions of beneficial owners owning through
them.
A brief description of DTC is set forth above under "Description of
Debt Securities-Permanent Global Debt Securities."
WARRANTS
We may issue Warrants for the purchase of Debt Securities, Preferred
Stock or Common Stock. We may issue Warrants alone or together with any other
securities. Each series of Warrants will be issued under a separate Warrant
Agreement (each a "Warrant Agreement") to be entered into between us and a
Warrant Agent ("Warrant Agent"). The Warrant Agent will act solely as our agent
in connection with the Warrant of such series and will not assume any obligation
or relationship of agency for or with holders or beneficial owners of Warrants.
Further terms of the Warrants and the applicable Warrant Agreement will be set
forth in the applicable Prospectus Supplement.
FOREIGN OWNERSHIP
The Certificate of Incorporation contains provisions that limit foreign
ownership of our capital stock. These provisions protect our ability to continue
to own our mobile offshore drilling units as U.S. flag vessels and to comply
with certain financial covenants that require us to maintain U.S. citizenship
that are contained in certain of our financing agreements.
In order to continue to enjoy the benefits of U.S. flag registry for
our vessels, we must maintain "United States citizenship" as defined in the
Shipping Act, 1916, as amended (the "Shipping Act"). A corporation is not
considered a U.S. citizen for these purposes unless, among other things, the
controlling interest of the corporation (a majority in the case of non-coastwise
trade) is owned by U.S. citizens. Under regulations adopted by the U.S. Maritime
Administration to implement the citizenship requirements, the "controlling
interest" test is applied to each class of our stock. The Common Stock and
Preferred Stock (combining all series of Preferred Stock) are considered to be
separate classes of capital stock for this purpose.
Under the provisions of the Certificate of Incorporation, (i) any
transfer, or attempted or purported transfer, of any shares of our capital stock
that would result in the ownership or control by one or more persons who is not
a U.S. citizen for purposes of the Shipping Act of an aggregate percentage of
the shares of any class of capital stock in excess of a fixed percentage (the
"Permitted Percentage") that is equal to 90% of the percentage that would
prevent us from being a U.S. citizen (currently 50%) for purposes of the
Shipping Act, will, for so long as such excess shall exist, be void and
ineffective as against us, and (ii) if at any time ownership of shares of our
capital stock (either of record or beneficial) by persons other than U.S.
citizens exceeds the Permitted Percentage, we may withhold payment of dividends
on such shares determined to be in excess of the Permitted Percentage and may
suspend voting rights attributable to such shares. The shares subject to any
such withholding of dividends or
18
<PAGE> 21
suspension of voting rights would be those foreign-owned shares that our Board
of Directors determines became so owned most recently. The Permitted Percentage
is currently 45%.
PREFERRED STOCK PURCHASE RIGHTS
We have a stockholder rights plan which was adopted in 1995 and amended
in 1997. Under this plan, one Right (a "Right") is attached to each outstanding
share of Common Stock. The Rights are exercisable only if a person or group of
affiliated or associated persons acquires beneficial ownership of 15% or more
of our outstanding Common Stock or announces a tender offer, the consummation of
which would result in ownership by a person or group of 15% or more of our
Common Stock. Each Right entitles the registered holder to purchase from us one
one-hundredth of a share of Series A Junior Participating Preferred Stock at an
exercise price of $120.00. The existence of the Rights may, under certain
circumstances, render more difficult or discourage attempts to acquire us.
PLAN OF DISTRIBUTION
We may sell the offered securities (a) through agents; (b) through
underwriters or dealers; or (c) directly to one or more purchasers.
BY AGENTS
Offered securities may be sold through agents designated by us. The
agents agree to use their reasonable best efforts to solicit purchases for the
period of their appointment.
BY UNDERWRITERS
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account. The underwriters may resell
the securities in one or more transactions, including negotiated transactions,
at a fixed public offering price or at varying prices determined at the time of
sale. The obligations of the underwriters to purchase the securities will be
subject to certain conditions. The underwriters will be obligated to purchase
all the securities of the series offered if any of the securities are purchased.
Any initial public offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.
DIRECT SALES
Offered securities may also be sold directly by us. In this case, no
underwriters or agents would be involved.
GENERAL INFORMATION
Underwriters, dealers and agents that participate in the distribution
of the offered securities may be underwriters as defined in the Securities Act
of 1933 (the "Act"), and any discounts or commissions received by them from us
and any profit on the resale of the offered securities by them may be treated as
underwriting discounts and commissions under the Act. Any underwriters or agents
will be identified and their compensation described in a Prospectus Supplement.
We may have agreements with the underwriters, dealers and agents to
indemnify them against certain civil liabilities, including liabilities under
the Act, or to contribute with respect to payments which the underwriters,
dealers or agents may be required to make.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, us or our subsidiaries in the ordinary course of their
businesses.
19
<PAGE> 22
LEGAL MATTERS
Certain legal matters in connection with the Debt Securities we are
offering pursuant to this Prospectus will be passed upon for us by our counsel,
Thompson & Knight, P.C., located at 1700 Pacific Avenue, Suite 3300, Dallas,
Texas 75201.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Annual Report on Form 10-K for the year ended December 31,
1997, have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
20
<PAGE> 23
[LOGO]
$400,000,000
DEBT SECURITIES
COMMON STOCK
PREFERRED STOCK
WARRANTS
--------------
PROSPECTUS
--------------
<PAGE> 24
P A R T II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Except for the SEC registration fee and the NASD filing fee, all
expenses are estimated. All such expenses will be paid by the Registrant.
<TABLE>
<S> <C>
SEC registration fee(1)............................................................ $ 111,200
Accounting fees and expenses....................................................... 60,000
Legal fees and expenses............................................................ 85,000
Printing expenses.................................................................. 50,000
Blue sky fees and expenses (including legal fees).................................. 10,000
Miscellaneous...................................................................... 33,800
----------------------
Total..................................................................... $ 350,000
======================
</TABLE>
- ---------------------------
(1) Pursuant to Rule 429 of the Securities Act, this prospectus covers
$300,000,000 of securities from a previous registration statement
(No. 333-68507), as to which a registration fee of $83,400 was paid,
and $100,000,000 of securities from this registration statement, as
to which a registration fee of $27,800 was paid.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant is a Delaware corporation. Under Section 145 of the
General Corporation Law of the State of Delaware, the Registrant has the power
to indemnify its directors and officers, subject to certain limitations.
Reference is made to Article VI of the Bylaws of the Registrant, which
Article is filed as part of Exhibit 4.8 hereto and provides for indemnification
of directors and officers of the Registrant under certain circumstances.
The Registrant anticipates that any underwriting agreement will include
provisions relating to the indemnification of directors, officers and
controlling persons of the Registrant against certain liabilities, including
liabilities under the Securities Act of 1933.
Pursuant to the General Corporation Law of the State of Delaware, the
Certificate of Incorporation of the Registrant, filed as Exhibits 4.1 through
4.8 hereto, limits the personal liability of the directors of the Registrant to
the Registrant or its stockholders for monetary damages for breach of fiduciary
duty under certain circumstances.
The Registrant has entered into an indemnity agreement with each of its
directors and officers to supplement the indemnification protection available
under the statute, bylaws and certificate of incorporation referred to above.
These indemnity agreements generally provide that the Registrant will indemnify
the parties thereto to the fullest extent permitted by law. The indemnity
agreements were approved and ratified by stockholders of the Registrant in 1996.
The Registrant also maintains insurance to protect itself and its
directors, officers, employees and agents against expenses, liabilities and
losses incurred by such persons in connection with their service in the
foregoing capacities.
The foregoing summaries are necessarily subject to the complete text of
the statute, bylaw, agreements, certificate of incorporation and insurance
policy referred to above and are qualified in their entirety by reference
thereto.
II-1
<PAGE> 25
ITEM 16. EXHIBITS.
The following exhibits are filed as part of this Registration
Statement:
NUMBER EXHIBIT
1.1* -- Underwriting Agreement.
4.1 -- Restated Certificate of Incorporation of the
Registrant dated August 29, 1985 (filed as Exhibit
3.7 to the Registrant's Registration Statement on
Form 10 (No. 0-13857) and incorporated herein by
reference).
4.2 -- Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant dated May 5, 1987
(filed as Exhibit 4.2 to the Registrant's
Registration Statement on Form S-3 (No. 33-67130)
and incorporated herein by reference).
4.3 -- Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant dated July 31,
1991(filed as Exhibit 3.16 to the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1991 and incorporated herein by
reference).
4.4 -- Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant dated September 15,
1994 (filed as Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the three-month
period ended March 31, 1995 and incorporated herein
by reference).
4.5 -- Certificate of Designations of Series A Junior
Participating Preferred Stock, par value $1.00 per
share, of the Registrant dated as of June 29, 1995
(filed as Exhibit 3.2 to the Registrant's Quarterly
Report on Form 10-Q for the three-month period
ended June 30, 1995 and incorporated herein by
reference).
4.6 -- Certificate of Amendment of Certificate of
Designations of Series A Junior Participating
Preferred Stock of Registrant dated September 5,
1997 (filed as Exhibit 3.6 to the Registrant's
Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by
reference).
4.7 -- Composite copy of the Bylaws of the Registrant as
currently in effect (filed as Exhibit 3.7 to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997 and incorporated
herein by reference).
4.8 -- Amendment of Articles IV and VI of the Bylaws of
the Registrant adopted January 29, 1998 (filed as
Exhibit 3.8 to the Registrant's Form 10-K/A
(Amendment No. 1) dated June 29, 1998 and
incorporated herein by reference).
4.9 -- Form of Senior Indenture (filed as Exhibit 4.9 to
the Registrant's Registration Statement on Form S-3
(No. 333-68507) and incorporated herein by
reference).
4.10 -- Form of Subordinated Indenture (filed as Exhibit
4.10 to the Registrant's Registration Statement on
Form S-3 (No. 333-68507) and incorporated herein by
reference).
4.11 -- First Supplemental Indenture dated as of May 30,
1997 to Indenture dated as of October 1, 1993
governing the 9 1/4% Senior Notes due 2003 (filed
as Exhibit 4.2 to the Registrant's Annual Report on
Form 10-K for the year ended December 31, 1997 and
incorporated herein by reference).
4.12 -- Indenture dated as of July 1, 1996 governing the
9 1/8% Senior Notes due 2006 (including form of
Note)(filed as Exhibit 4.1 to the Registrant's Form
8-K dated July 16, 1996 (date of event: July 1,
1996) and incorporated herein by reference).
II-2
<PAGE> 26
4.13 -- Credit Agreement, dated as of August 14, 1997,
among Noble Drilling Corporation, the lending
institutions listed from time to time on Annex I
thereto, Credit Lyonnais New York Branch, as
Documentation Agent and Christiania Bank Og
Kreditkasse ASA, New York Branch, as Arranger and
Administrative Agent (filed as Exhibit 4.4 to the
Registrant's Annual Report on Form 10-K for the
year ended December 31, 1997 and incorporated
herein by reference).
4.14 -- Rights Agreement dated as of June 28, 1995 between
the Registrant and Liberty Bank and Trust Company
of Oklahoma City, N.A. (filed as Exhibit 4 to the
Registrant's Form 8-K dated June 29, 1995 (date of
event: June 28, 1995) and incorporated herein by
reference).
4.15 -- Amendment No. 1 to Rights Agreement, dated
September 3, 1997, between Noble Drilling
Corporation and Liberty Bank and Trust Company of
Oklahoma City, N.A. (filed as Exhibit 4.2 to the
Registrant's Form 8-A/A (Amendment No. 1) dated
September 3, 1997 and incorporated herein by
reference).
4.16 -- Summary of Rights to Purchase Preferred Shares, as
amended as of September 3, 1997 to conform with
Amendment No. 1 to Rights Agreement, dated
September 3, 1997 (filed as Exhibit 4.3 to the
Registrant's Form 8-K dated September 3, 1997 (date
of event: September 3, 1997) and incorporated
herein by reference).
4.17 -- Note Purchase Agreement dated as of September 24,
1998, by and among Noble Drilling (Paul Romano)
Inc. and each of the note purchasers thereunder.
Each note purchaser has entered into a separate
Note Purchase Agreement, which agreements are
substantially identical in all material respects,
except for the principal amount of notes purchased.
A schedule identifying each of the note purchasers
that entered into a Note Purchase Agreement with
Noble Drilling (Paul Romano) Inc. and the principal
amount of notes to be purchased by each such note
purchaser is included as Schedule A to the Note
Purchase Agreement (filed as Exhibit 4.1 to the
Registrant's Form 10-Q for the three-month period
ended September 30, 1998 and incorporated herein by
reference).
4.18 -- Trust Indenture and Security Agreement dated as of
November 24, 1998, between Noble Drilling (Paul
Romano) Inc. and Chase Bank of Texas, National
Association, as Trustee.
4.19 -- First Naval Mortgage covering the Noble Paul Romano
dated as of November 24, 1998, made by Noble
Drilling (Paul Romano) Inc. in favor of Chase Bank
of Texas, National Association, as Indenture
Trustee.
4.20 -- Note Purchase Agreement dated as of July 1, 1998,
by and among Noble Drilling (Paul Wolff) Ltd.,
Chase Bank of Texas, National Association, as
Trustee, and each of the note purchasers
thereunder. Each note purchaser has entered into a
separate Note Purchase Agreement, which agreements
are substantially identical in all material
respects, except for the principal amount of notes
purchased. A schedule identifying each of the note
purchasers that entered into a Note Purchase
Agreement with Noble Drilling (Paul Wolff) Ltd. and
the principal amount of notes purchased by each
such note purchaser is included as Annex I to the
Note Purchase Agreement (filed as Exhibit 4.4 to
the Registrant's Form 10-Q for the three-month
period ended September 30, 1998 and incorporated
herein by reference).
4.21 -- Indenture of First Naval Mortgage, dated as of July
1, 1998, made by Noble Drilling (Paul Wolff) Ltd.
in favor of Chase Bank of Texas, National
Association, as Trustee (filed as Exhibit 4.5 to
the Registrant's Form 10-Q for the three-month
period ended September 30, 1998 and incorporated
herein by reference).
II-3
<PAGE> 27
4.22 -- Parent Guaranty, dated as of July 1, 1998, by Noble
Drilling Corporation in favor of Chase Bank of
Texas, National Association, as Trustee (filed as
Exhibit 4.6 to the Registrant's Form 10-Q for the
three-month period ended September 30, 1998 and
incorporated herein by reference).
4.23 -- Second Amendment, dated September 10, 1998, to
Credit Agreement, dated as of August 14, 1997,
among Noble Drilling Corporation, the lending
institutions listed from time to time on Annex I
thereto, Credit Lyonnais, New York Branch, as
Documentation Agent, and Christiana Bank Og
Kreditkasse ASA, New York Branch, as Administrative
Agent (filed as Exhibit 4.7 to the Registrant's
Form 10-Q for the three-month period ended
September 30, 1998 and incorporated herein by
reference).
4.24 -- Note Purchase Agreement dated as of December 21,
1998, by and among Noble Drilling (Jim Thompson)
Inc., Chase Bank of Texas, National Association, as
Trustee, and each of the note purchasers
thereunder. Each note purchaser has entered into a
separate Note Purchase Agreement, which agreements
are substantially identical in all material
respects, except for the principal amount of notes
purchased. A schedule identifying each of the note
purchasers that entered into a Note Purchase
Agreement with Noble Drilling (Jim Thompson) Inc.
and the principal amount of notes purchased by each
such note purchaser is included as Annex I to the
Note Purchase Agreement.
4.25 -- Indenture of First Naval Mortgage, dated as of
December 21, 1998, made by Noble Drilling (Jim
Thompson) Inc. in favor of Chase Bank of Texas,
National Association, as Trustee.
4.26 -- Parent Guaranty, dated as of December 21, 1998, by
Noble Drilling Corporation in favor of Chase Bank
of Texas, National Association, as Trustee.
5.1 -- Opinion of Thompson & Knight, A Professional
Corporation.
12.1 -- Statement re Computation of Ratio of Earnings to
Fixed Charges.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Thompson & Knight, A Professional
Corporation (contained in its opinion filed as
Exhibit 5.1).
24.1 -- Powers of Attorney (included on signature page).
25.1 -- Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939, as amended,
with respect to Trustee for Senior Debt Securities.
25.2 -- Form T-1 Statement of Eligibility and Qualification
under the Trust Indenture Act of 1939, as amended,
with respect to Trustee for Subordinated Debt
Securities.
* To be filed by amendment or by Form 8-K.
ITEM 17. UNDERTAKINGS.
(b) Filings incorporating subsequent Exchange Act documents by
reference.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's Annual Report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(h) Acceleration of effectiveness.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(i) Rule 430A.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
II-4
<PAGE> 28
contained in a form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part
of this Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 29
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on the 9th day of February,
1999.
NOBLE DRILLING CORPORATION
By: /s/ James C. Day
------------------------------------
James C. Day
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
constitutes and appoints James C. Day, Robert D. Campbell and Byron L. Welliver,
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities to sign on his behalf individually and in each capacity stated below
any amendment, including post-effective amendments, to this Registration
Statement, and to file the same, with all exhibits thereto and other documents
in connection therewith with the SEC, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents and either of them, or their substitutes, may lawfully do or cause to be
done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ James C. Day Chairman and Chief Executive February 9, 1999
- ---------------------------------------------- Officer and Director
James C. Day (Principal Executive Officer)
/s/ Byron L. Welliver Senior Vice President - Finance, February 9, 1999
- ---------------------------------------------- Treasurer and Controller (Principal
Byron L. Welliver Financial and Accounting Officer)
/s/ Robert D. Campbell President and Director February 9, 1999
- ----------------------------------------------
Robert D. Campbell
/s/ Michael A. Cawley Director February 9, 1999
- ----------------------------------------------
Michael A. Cawley
/s/ Lawrence J. Chazen Director February 9, 1999
- ----------------------------------------------
Lawrence J. Chazen
/s/ Tommy C. Craighead Director February 9, 1999
- ----------------------------------------------
Tommy C. Craighead
</TABLE>
II-6
<PAGE> 30
<TABLE>
<S> <C> <C>
/s/ William J. Dore Director February 9, 1999
- ----------------------------------------------
William J. Dore
Director
- ----------------------------------------------
James L. Fishel
/s/ Marc E. Leland Director February 9, 1999
- ----------------------------------------------
Marc E. Leland
/s/ William A. Sears Director February 9, 1999
- ----------------------------------------------
William A. Sears
</TABLE>
II-7
<PAGE> 31
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
1.1* -- Underwriting Agreement.
4.1 -- Restated Certificate of Incorporation of the Registrant dated August 29, 1985
(filed as Exhibit 3.7 to the Registrant's Registration Statement on Form 10 (No.
0-13857) and incorporated herein by reference).
4.2 -- Certificate of Amendment of Restated Certificate of Incorporation of the
Registrant dated May 5, 1987 (filed as Exhibit 4.2 to the Registrant's
Registration Statement on Form S-3 (No. 33-67130) and incorporated herein by
reference).
4.3 -- Certificate of Amendment of Restated Certificate of Incorporation of the
Registrant dated July 31, 1991(filed as Exhibit 3.16 to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1991 and incorporated herein
by reference).
4.4 -- Certificate of Amendment of Restated Certificate of Incorporation of the
Registrant dated September 15, 1994 (filed as Exhibit 3.1 to the Registrant's
Quarterly Report on Form 10-Q for the three-month period ended March 31, 1995 and
incorporated herein by reference).
4.5 -- Certificate of Designations of Series A Junior Participating Preferred Stock, par
value $1.00 per share, of the Registrant dated as of June 29, 1995 (filed as
Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for the three-month
period ended June 30, 1995 and incorporated herein by reference).
4.6 -- Certificate of Amendment of Certificate of Designations of Series A Junior
Participating Preferred Stock of Registrant dated September 5, 1997 (filed as
Exhibit 3.6 to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference).
4.7 -- Composite copy of the Bylaws of the Registrant as currently in effect (filed as
Exhibit 3.7 to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference).
4.8 -- Amendment of Articles IV and VI of the Bylaws of the Registrant adopted January
29, 1998 (filed as Exhibit 3.8 to the Registrant's Form 10-K/A (Amendment No. 1)
dated June 29, 1998 and incorporated herein by reference).
4.9 -- Form of Senior Indenture (filed as Exhibit 4.9 to the Registrant's Registration
Statement on Form S-3 (No. 333-68507) and incorporated herein by reference).
4.10 -- Form of Subordinated Indenture (filed as Exhibit 4.10 to the Registrant's
Registration Statement on Form S-3 (No. 333-68507) and incorporated herein by
reference).
.
4.11 -- First Supplemental Indenture dated as of May 30, 1997 to Indenture dated as of
October 1, 1993 governing the 9 1/4% Senior Notes due 2003 (filed as Exhibit 4.2
to the Registrant's Annual Report on Form 10-K for the year ended December 31,
1997 and incorporated herein by reference).
4.12 -- Indenture dated as of July 1, 1996 governing the 9 1/8% Senior Notes due 2006
(including form of Note)(filed as Exhibit 4.1 to the Registrant's Form 8-K dated
July 16, 1996 (date of event: July 1, 1996) and incorporated herein by
reference).
</TABLE>
<PAGE> 32
<TABLE>
<S> <C>
4.13 -- Credit Agreement, dated as of August 14, 1997, among Noble Drilling Corporation,
the lending institutions listed from time to time on Annex I thereto, Credit
Lyonnais New York Branch, as Documentation Agent and Christiania Bank Og
Kreditkasse ASA, New York Branch, as Arranger and Administrative Agent (filed as
Exhibit 4.4 to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference).
4.14 -- Rights Agreement dated as of June 28, 1995 between the Registrant and Liberty
Bank and Trust Company of Oklahoma City, N.A. (filed as Exhibit 4 to the
Registrant's Form 8-K dated June 29, 1995 (date of event: June 28, 1995) and
incorporated herein by reference).
4.15 -- Amendment No. 1 to Rights Agreement, dated September 3, 1997, between Noble
Drilling Corporation and Liberty Bank and Trust Company of Oklahoma City, N.A.
(filed as Exhibit 4.2 to the Registrant's Form 8-A/A (Amendment No. 1) dated
September 3, 1997 and incorporated herein by reference).
4.16 -- Summary of Rights to Purchase Preferred Shares, as amended as of September 3,
1997 to conform with Amendment No. 1 to Rights Agreement, dated September 3, 1997
(filed as Exhibit 4.3 to the Registrant's Form 8-K dated September 3, 1997 (date
of event: September 3, 1997) and incorporated herein by reference).
4.17 -- Note Purchase Agreement dated as of September 24, 1998, by and among Noble
Drilling (Paul Romano) Inc. and each of the note purchasers thereunder. Each note
purchaser has entered into a separate Note Purchase Agreement, which agreements
are substantially identical in all material respects, except for the principal
amount of notes purchased. A schedule identifying each of the note purchasers
that entered into a Note Purchase Agreement with Noble Drilling (Paul Romano)
Inc. and the principal amount of notes to be purchased by each such note
purchaser is included as Schedule A to the Note Purchase Agreement (filed as
Exhibit 4.1 to the Registrant's Form 10-Q for the three-month period ended
September 30, 1998 and incorporated herein by reference).
4.18 -- Trust Indenture and Security Agreement dated as of November 24, 1998, between Noble
Drilling (Paul Romano) Inc. and Chase Bank of Texas, National Association, as
Trustee.
4.19 -- First Naval Mortgage covering the Noble Paul Romano dated as of November 24, 1998,
made by Noble Drilling (Paul Romano) Inc. in favor of Chase Bank of Texas, National
Association, as Indenture Trustee.
4.20 -- Note Purchase Agreement dated as of July 1, 1998, by and among Noble Drilling
(Paul Wolff) Ltd., Chase Bank of Texas, National Association, as Trustee, and
each of the note purchasers thereunder. Each note purchaser has entered into a
separate Note Purchase Agreement, which agreements are substantially identical in
all material respects, except for the principal amount of notes purchased. A
schedule identifying each of the note purchasers that entered into a Note
Purchase Agreement with Noble Drilling (Paul Wolff) Ltd. and the principal amount
of notes purchased by each such note purchaser is included as Annex I to the Note
Purchase Agreement (filed as Exhibit 4.4 to the Registrant's Form 10-Q for the
three-month period ended September 30, 1998 and incorporated herein by
reference).
4.21 -- Indenture of First Naval Mortgage, dated as of July 1, 1998, made by Noble
Drilling (Paul Wolff) Ltd. in favor of Chase Bank of Texas, National Association,
as Trustee (filed as Exhibit 4.5 to the Registrant's Form 10-Q for the
three-month period ended September 30, 1998 and incorporated herein by
reference).
</TABLE>
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<TABLE>
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4.22 -- Parent Guaranty, dated as of July 1, 1998, by Noble Drilling Corporation in favor
of Chase Bank of Texas, National Association, as Trustee (filed as Exhibit 4.6 to
the Registrant's Form 10-Q for the three-month period ended September 30, 1998
and incorporated herein by reference).
4.23 -- Second Amendment, dated September 10, 1998, to Credit Agreement, dated as of
August 14, 1997, among Noble Drilling Corporation, the lending institutions
listed from time to time on Annex I thereto, Credit Lyonnais, New York Branch, as
Documentation Agent, and Christiana Bank Og Kreditkasse ASA, New York Branch, as
Administrative Agent (filed as Exhibit 4.7 to the Registrant's Form 10-Q for the
three-month period ended September 30, 1998 and incorporated herein by
reference).
4.24 -- Note Purchase Agreement dated as of December 21, 1998, by and among Noble
Drilling (Jim Thompson) Inc., Chase Bank of Texas, National Association, as
Trustee, and each of the note purchasers thereunder. Each note purchaser has
entered into a separate Note Purchase Agreement, which agreements are
substantially identical in all material respects, except for the principal amount
of notes purchased. A schedule identifying each of the note purchasers that
entered into a Note Purchase Agreement with Noble Drilling (Jim Thompson) Inc.
and the principal amount of notes purchased by each such note purchaser is
included as Annex I to the Note Purchase Agreement.
4.25 -- Indenture of First Naval Mortgage, dated as of December 21, 1998, made by Noble
Drilling (Jim Thompson) Inc. in favor of Chase Bank of Texas, National
Association, as Trustee.
4.26 -- Parent Guaranty, dated as of December 21, 1998, by Noble Drilling Corporation in
favor of Chase Bank of Texas, National Association, as Trustee.
5.1 -- Opinion of Thompson & Knight, A Professional Corporation.
12.1 -- Statement re Computation of Ratio of Earnings to Fixed Charges.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Thompson & Knight, A Professional Corporation (contained in its
opinion filed as Exhibit 5.1).
24.1 -- Powers of Attorney (included on signature page).
25.1 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939, as amended, with respect to Trustee for Senior Debt Securities.
25.2 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture
Act of 1939, as amended, with respect to Trustee for Subordinated Debt
Securities.
</TABLE>
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* To be filed by amendment or by Form 8-K.
<PAGE> 1
EXHIBIT 4.18
NOBLE DRILLING (PAUL ROMANO) INC.
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TRUST INDENTURE
AND SECURITY AGREEMENT
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Dated as of November 24, 1998
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TABLE OF CONTENTS
<TABLE>
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ARTICLE 1. DEFINED TERMS.................................................................3
1.1 Special................................................................................3
ARTICLE 2. FORM, EXECUTION, ISSUE AND DELIVERY OF NOTES.................................13
2.1 Issue of Notes........................................................................13
2.2 Authentication of Notes; Denominations of Notes and Form..............................14
2.3 Registration of Notes.................................................................14
2.4 Exchange of Notes.....................................................................15
2.5 Transfer of Notes.....................................................................15
2.6 General Rules.........................................................................16
2.7 Valid Obligations.....................................................................17
2.8 Execution and Delivery................................................................17
2.9 Replacement of Notes..................................................................17
ARTICLE 3. PAYMENTS AND DISTRIBUTION THEREOF............................................17
3.1 Payment by Issuer.....................................................................17
3.2 Delivery Expenses.....................................................................18
3.3 Issue Taxes...........................................................................18
3.4 Required Payments of Notes without Premium............................................18
3.5 Optional Prepayment of the Notes with Make-Whole Amount...............................19
3.6 Required Prepayments of Notes.........................................................20
3.7 Surrender of Notes on Prepayment......................................................20
3.8 Provision for Applicable Make-Whole Amount, Yield Protection Amount
and Breakage Amount...................................................................20
Breakage Amount................................................................................23
ARTICLE 4. RECEIPT, DISTRIBUTION AND APPLICATION OF TRUST
ESTATE.......................................................................24
4.1 Application of Shell Contract Revenues When No Indenture Event of Default
is Continuing..................................................................................24
4.2 (a) Payments in Case of an Early Termination.....................................24
(b) Payments in Case of an Event of Loss..................................................26
(c) Payments in Case of a Partial Event of Loss...........................................26
4.3 Payments During Continuance of an Indenture Event of Default..........................27
4.4 Amounts Held by Trustee...............................................................28
4.5 Allocation of Payments................................................................28
4.6 Method of Payment to Holders..........................................................29
4.7 Method of Payment to Issuer...........................................................29
4.8 Payments for which No Application is Otherwise Provided...............................29
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ARTICLE 5. EVIDENCE OF ACTS OF NOTE HOLDERS.............................................29
5.1 Execution by Note Holders or Agents...................................................29
5.2 Future Holders Bound..................................................................30
ARTICLE 6. INDENTURE DEFAULTS - REMEDIES................................................30
6.1 Indenture Events of Default...........................................................30
6.2 Acceleration of Notes.................................................................32
6.3 Annulment of Acceleration of Notes....................................................33
6.4 Default Remedies......................................................................33
6.5 Other Enforcement Rights..............................................................36
6.6 Effect of Sale, etc...................................................................38
6.7 Restoration of Rights and Remedies....................................................38
6.8 Application of Sale Proceeds and Deficiency...........................................38
6.9 Cumulative Remedies...................................................................39
6.10 Limitations on Suits..................................................................39
6.11 Suits for Principal and Interest......................................................39
6.12 Waiver by the Issuer..................................................................40
ARTICLE 7. AFFIRMATIVE COVENANTS........................................................41
7.1 Financial Statements..................................................................41
7.2 Litigation............................................................................43
7.3 Maintenance, Etc......................................................................44
7.4 Environmental Matters.................................................................46
7.5 Further Assurances....................................................................46
7.6 Performance of Obligations............................................................47
7.7 ERISA Information and Compliance......................................................47
7.8 Debt Service Reserve Fund.............................................................47
7.9 Maintenance of Agency.................................................................48
7.10 Additional Assurances.................................................................48
7.11 Year 2000 Compliance..................................................................49
7.12 Change in Location of Collateral or Issuer............................................49
7.13 Change in Issuer's Name...............................................................49
7.14 Corporate Independence................................................................49
7.15 Working Capital Fund..................................................................50
ARTICLE 8. NEGATIVE COVENANTS...........................................................50
8.1 Debt..................................................................................51
8.2 Liens.................................................................................51
8.3 Investments, Loans and Advances.......................................................51
8.4 Dividends, Distributions and Redemptions..............................................51
8.5 Sales and Leasebacks..................................................................51
8.6 Nature of Business....................................................................51
8.7 Limitation on Leases..................................................................52
8.8 Mergers, Etc..........................................................................52
8.9 Proceeds of Notes.....................................................................52
8.10 ERISA Compliance......................................................................52
</TABLE>
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8.11 Sale or Discount of Receivables.......................................................53
8.12 Sale of Drilling Rig..................................................................53
8.13 Environmental Matters.................................................................53
8.14 Transactions with Affiliates..........................................................54
8.15 Subsidiaries..........................................................................54
8.16 Location of Issuer....................................................................54
8.17 Acquisition of Notes..................................................................54
8.18 Non-Petition Covenant.................................................................54
ARTICLE 9. THE TRUSTEES.................................................................54
9.1 Certain Duties and Responsibilities of Trustees.......................................54
9.2 Trustees' Compensation and Indemnification............................................56
9.3 Certain Rights of Trustees............................................................56
9.4 Showings Deemed Necessary by a Trustee................................................58
9.5 Status of Monies Received.............................................................58
9.6 Resignation of Trustees...............................................................58
9.7 Removal of Trustees...................................................................58
9.8 Successor Trustee.....................................................................58
9.9 Appointment of Successor Trustees.....................................................59
9.10 Merger or Consolidation of Trustee....................................................59
9.11 Acceptance of Appointment by Successor Trustee........................................59
9.12 Conveyance upon Request of Successor Trustee..........................................59
9.13 Co-Trustees and Additional Trustees...................................................60
9.14 Trustee's Representations and Warranties..............................................60
9.15 Non-Petition Covenant.................................................................61
ARTICLE 10. SUPPLEMENTAL INDENTURES, WAIVERS.............................................61
10.1 Supplemental Indentures Without Note Holders' Consent.................................61
10.2 Waivers and Consents by Note Holders; Supplemental Indentures with
Consent........................................................................................62
10.3 Notice of Supplemental Indenture......................................................63
10.4 Solicitation of Note Holders..........................................................63
10.5 Opinion of Counsel Conclusive as to Supplemental Indentures...........................63
10.6 Effect of Supplemental Indentures.....................................................64
10.7 New Notes.............................................................................64
ARTICLE 11. UNCLAIMED MONIES.............................................................64
11.1 Satisfaction and Discharge of Agreement...............................................64
11.2 Return of Unclaimed Monies............................................................65
ARTICLE 12. MISCELLANEOUS................................................................65
12.1 Successors and Assigns................................................................65
12.2 Partial Invalidity....................................................................65
12.3 Communications........................................................................65
12.4 GOVERNING LAW; SUBMISSION TO JURISDICTION.............................................66
12.5 Limitation on Interest................................................................68
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12.6 Counterparts..........................................................................69
12.7 Headings, etc.; Gender................................................................69
12.8 Amendments............................................................................69
12.9 Benefits of Agreement Restricted to Parties and Note Holders..........................69
12.10 Waiver of Notice......................................................................70
12.11 Intentionally Omitted.................................................................70
12.12 Additional Financing Statement Filings................................................70
12.13 Directly or Indirectly................................................................70
12.14 Exhibits, Annexes and Sections........................................................70
12.15 Officers' Certificate and Opinions of Counsel; Statements to be Contained
Therein........................................................................................70
12.16 Payment of Expenses, Indemnities, etc.................................................71
12.17 NO ORAL AGREEMENTS....................................................................74
12.18 EXCULPATION PROVISIONS................................................................74
12.19 Trustees Not Engaging in a Trade or Business..........................................75
Annex A-1 -- Form of Series A Note
Annex A-2 -- Form of Series B Note
Annex B -- Series A Note Payment Schedule
Annex C -- Form of Intercompany Subordinated Note
Annex D -- Surveys and Inspections
Schedule 7.3 -- Insurance
Schedule 9.2 -- Trustee Fees
</TABLE>
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TRUST INDENTURE AND SECURITY AGREEMENT
TRUST INDENTURE AND SECURITY AGREEMENT dated as of November 24, 1998,
between NOBLE DRILLING (PAUL ROMANO) INC., a Delaware corporation (the
"Issuer"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking
association (the "Trustee"; the Trustee and each other Person accepting trusts
created hereby being individually referred to as a "Trustee" and collectively as
the "Trustees").
RECITALS:
WHEREAS, the defined terms used in this Indenture shall have the
respective meanings set forth in Section 1.1 unless elsewhere defined or the
context shall otherwise require;
WHEREAS, the Issuer is authorized by law, and deems it necessary to
borrow money for its proper legal purposes and to mortgage, assign and pledge
its Property to secure the payment thereof and to that end, in the exercise of
said authority, has duly authorized the execution and delivery of this Indenture
providing for the issue of secured promissory notes of the Issuer hereunder;
WHEREAS, the Issuer has duly authorized the issuance of (i) its
drilling vessel secured notes limited in aggregate original principal amount to
Ninety-Five Million, Four Hundred Twelve Thousand, Five Hundred Dollars
($95,412,500) to be known as its Series A Senior Secured Notes, and (ii) its
drilling vessel secured notes limited in aggregate original principal amount to
Sixteen Million, Eight Hundred Thirty-Seven Thousand, Five Hundred Dollars
($16,837,500), to be known as its Series B Senior Secured Notes on the terms
herein provided;
WHEREAS, the Notes and the Trustee's Certificate of Authentication
thereon are to be substantially in the forms set forth in Annexes A-1 and A-2;
and
WHEREAS, all acts and proceedings required by law and by the
Certificate of Incorporation and Bylaws of the Issuer necessary to make the
Notes, when executed by the Issuer and authenticated and delivered by the
Trustee, the legal, valid and binding obligations of the Issuer, and all acts
and proceedings required by law and by the Certificate of Incorporation and
Bylaws of the Issuer necessary to constitute this Indenture a legal, valid and
binding agreement for the uses and purposes herein set forth, in accordance with
its terms, have been done and taken; and the Issuer has duly authorized,
executed and delivered this Indenture;
GRANTING CLAUSE:
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the prompt
and complete payment of the principal of, and interest and any applicable
Make-Whole Amount on, all of the Notes issued and delivered and Outstanding, the
payment of all other sums owing hereunder and under all other Credit Documents
and the performance of the covenants contained herein and in all other Credit
Documents, and in consideration of the premises and of the covenants contained
herein, the purchase of the Notes by the Purchasers, and the sum of One Dollar
($1.00) paid by the Trustee to the Issuer at or before the delivery hereof, the
receipt and sufficiency whereof are hereby
<PAGE> 7
acknowledged, the Issuer has hereby granted, bargained, sold, conveyed,
assigned, transferred, mortgaged, affected, pledged, set over, confirmed,
granted a continuing security interest in, and hypothecated and does hereby
grant, bargain, sell, convey, assign, transfer, mortgage, affect, pledge, set
over, confirm, grant a continuing security interest to the Trustee and to any
co-trustee or separate trustee hereafter acting pursuant to this Indenture, and
to their respective successors and assigns in trust forever, all of its right,
title and interest in, to and under the following described Properties (all of
such Properties, including without limitation all properties hereafter
specifically subjected to the lien of this Indenture by any indenture supplement
hereto, being hereinafter collectively referred to as the "Trust Estate"):
(a) All equipment, inventory, fixtures and other goods in all
forms, wherever located and whether now or hereafter existing, which
are owned by the Issuer or in which the Issuer otherwise has any rights
and all parts thereof, all accessions thereto, all replacements or
substitutions therefor, all accounts now or hereafter arising in
connection therewith, and all chattel paper, documents and General
Intangibles covering or relating thereto (any and all such equipment,
inventory, fixtures, other goods, parts, accessions, replacements,
substitutions, accounts, chattel paper, documents and General
Intangibles being herein collectively called the "Pledged Equipment");
(b) All accounts, general intangibles (excluding the Shell
Contract), chattel paper and documents, now owned or hereafter
acquired;
(c) The Operating Services Agreement, the Asset Transfer
Agreement and the Capital Funding Agreement (when and if executed and
delivered);
(d) All Properties subjected to the Lien of this Indenture by
each supplemental indenture entered into and delivered pursuant to
Article 10;
(e) All insurance proceeds, condemnation proceeds and the
accounts, issues, profits, products, revenues and other income of and
from the Shell Contract and the other Properties subjected or required
to be subjected to the Lien of this Indenture and all the estate,
right, title and interest of every nature whatsoever of the Issuer in
and to the same and every part thereof;
(f) The Collection Account, the Debt Service Reserve Fund, the
Working Capital Account and all other monies now or hereafter paid or
deposited or required to be paid or deposited to or with the Trustee
pursuant to Section 4.1 or 4.3 hereof or any other term hereof or any
term of the other Credit Documents and held or required to be held by
any Trustee hereunder;
(g) Any and all other Properties and any and all other rights,
interests and privileges granted to any Trustee in accordance with the
provisions hereof and pursuant to or in connection with the provisions
of the other Credit Documents, including but not limited to the First
Naval Mortgage; and
(h) All proceeds of the foregoing.
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It is expressly contemplated that additional property may from
time to time be pledged, assigned or granted to the Trustee as
additional security for the Outstanding Notes, and the term "Trust
Estate" as used herein shall be deemed for all purposes hereof to
include all such additional property, together with all other property
of the types described above related thereto, and all proceeds and
replacements of the same.
TO HAVE AND TO HOLD, all and singular, the Trust Estate for the uses
and purposes and subject to the terms and provisions set forth in this Indenture
unto the Trustees and their respective successors in trust, and to their
respective assigns forever.
IN TRUST NEVERTHELESS, under and subject to the terms and conditions
herein set forth and for the equal and proportionate, unless otherwise stated
herein, benefit and security of the holders from time to time of the Outstanding
Notes and for the enforcement of the prompt and complete payment when due of all
sums due in connection with the Outstanding Notes, this Indenture and each of
the other Credit Documents and for the performance and observance by the Issuer
of the covenants, obligations and conditions to be performed and observed by the
Issuer and all other parties, other than the Trustees and the holders of
Outstanding Notes, to this Indenture and each of the other Credit Documents;
PROVIDED, HOWEVER, that these presents are upon the condition that if
the Issuer, its successors or assigns, shall satisfy the conditions set forth in
Section 11.1 for a release of the Trust Estate in full, then this Indenture, and
the estates and rights assigned in the other Credit Documents, shall cease,
determine and be void; otherwise they shall remain and be in full force and
effect;
IT IS HEREBY FURTHER COVENANTED AND AGREED that all of the Notes are to
be issued, authenticated and delivered and that the Trust Estate is to be held
and applied by the Trustees, subject to the further covenants, agreements,
conditions, uses and trust hereafter set forth. The Issuer for itself and its
successors and permitted assigns does hereby covenant and agree with the
Trustees and their respective successors in trust for the benefit of all present
and future holders of the Outstanding Notes, or any of them, as follows:
ARTICLE 1. DEFINED TERMS.
1.1 Special Definitions. For purposes of this Indenture, the following
terms shall have the respective meanings (i) set forth below, (ii) set forth in
the Section or other part of this Indenture following such term or (iii)
provided for in the section or other part of such other Credit Document as may
be referred to immediately following such term (such definitions to be equally
applicable to both the singular and plural forms of the terms defined):
Affiliate -- at any time, and with respect to any Person, any
other Person that at such time directly or indirectly through one or
more intermediaries Controls, or is Controlled by, or is under common
Control with, such first Person. As used in this definition, "CONTROL"
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an
"Affiliate" is a reference to an Affiliate of the Issuer.
-3-
<PAGE> 9
Asset Purchase Agreement -- the Asset Purchase Agreement with
respect to the Series B Notes, dated as of December 15, 1998, among
Victory Receivables Corporation, BTM Capital Corporation, Bankers Trust
Company, the agent, and the banks party thereto, as from time to time
amended, supplemented or modified.
Asset Transfer Agreement -- the Asset Transfer Agreement of
even date herewith from the Parent to the Issuer covering the Drilling
Rig and the Shell Contract.
Assignment of Drilling Contract Revenue -- has the meaning set
out in Schedule B to the Note Purchase Agreements.
Breakage Amount -- the amount determined pursuant to Section
3.8(c).
Breakage Party -- has the meaning set out in Section 3.8(c).
BTM, Ltd. -- The Bank of Tokyo - Mitsubishi, Ltd., New York
Branch.
BTMTC -- Bank of Tokyo - Mitsubishi Trust Company.
Business Day -- a day other than a Saturday, a Sunday or a day
on which banks are required or allowed by law (other than a general
banking moratorium or holiday for a period exceeding four (4)
consecutive days) to be closed in one or both of the State of Texas and
New York.
Capital Funding Agreement -- has the meaning set out in
Schedule B to the Note Purchase Agreements.
Closing Date -- the date of the initial issuance of the Notes.
Code -- the Internal Revenue Code of 1986, as amended from
time to time.
Collateral -- the Trust Estate, and any and all other
collateral held by any one or more of the Trustees to secure the Notes
or any other obligations created pursuant to the Credit Documents,
including without limitation the Credit Documents and all collateral
covered thereby.
Collection Account -- has the meaning set out in Section 4.1.
Consolidated -- the consolidation of any Person with its
properly consolidated subsidiaries, in accordance with GAAP.
Contested in Good Faith -- actively contested in good faith by
appropriate actions or proceedings provided that (i) adequate book
reserves have been established with respect thereto as required by
GAAP, (ii) the applicable Person's title to, and its right to use, any
of its material Property is not materially adversely affected thereby
and (iii) the action to be
-4-
<PAGE> 10
taken will not result in any risk of imposition of civil or criminal
penalties on the Trustee or the holders of the Notes or substantial
danger of sale, forfeiture or loss of the Drilling Rig.
CP Conduit -- Victory Receivables Corporation or any other
commercial paper conduit administered by BTMTC (either as agent or as
sub-agent) which is an owner and holder of a Series B Note.
Credit Documents -- this Indenture, the Note Purchase
Agreements, the Notes, the Performance Agreement, the Assignment of
Drilling Contract Revenue, the Operating Services Agreement, the Asset
Transfer Agreement, the Capital Funding Agreement, if any, the First
Naval Mortgage, the SDDI Acknowledgment and Consent, and any and all
other agreements or instruments now or hereafter executed and delivered
by the Company or the Parent in connection with or a security for the
payment and performance of the Notes.
Credit Support Party -- BTM, Ltd., BTMTC, BTM Capital
Corporation, The Norinchukin Bank, New York Branch, Victory Credit
Enhancer LLC and any other financial institutions providing funding,
liquidity, credit or asset purchase support with respect to sourcing
the funds for the Series B Notes.
Debt -- for any Person the sum of the following (without
duplication): (i) all obligations of such Person for borrowed money or
evidenced by bonds, debentures, notes or other similar instruments
(including principal, interest, fees and charges); (ii) all obligations
of such Person (whether contingent or otherwise) in respect of bankers'
acceptances, letters of credit, surety or other bonds and similar
instruments; (iii) all obligations of such Person to pay the deferred
purchase price of Property or services (other than for borrowed money);
(iv) all obligations under leases which shall have been, or should have
been, in accordance with GAAP, recorded as capital leases in respect of
which such Person is liable (whether contingent or otherwise); (v) all
obligations under leases which require such Person or its Affiliate to
make payments over the term of such lease, including payments at
termination, which are substantially equal to at least eighty percent
(80%) of the purchase price of the Property subject to such lease plus
interest at an imputed rate of interest; (vi) all Debt (as described in
the other clauses of this definition) and other obligations of others
secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Person; (vii) all Debt (as described in the other
clauses of this definition) and other obligations of others guaranteed
by such Person or in which such Person otherwise assures a creditor
against loss of the debtor or obligations of others; (viii) all
obligations or undertakings of such Person to maintain or cause to be
maintained the financial position or covenants of others or to purchase
the Debt or Property of others; (ix) obligations to deliver goods or
services in consideration of advance payments; (x) obligations to pay
for goods or services whether or not such goods or services are
actually received or utilized by such Person; (xi) any capital stock of
such Person in which such Person has a mandatory obligation to redeem
such stock; and (xii) all obligations of such Person under Hedging
Agreements.
Debt Service Reserve Fund -- has the meaning set out in
Section 7.8.
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<PAGE> 11
Default Rate -- 2% per annum above the prematurity interest
rate set forth in the Series B Notes; except to the extent a "Default
Rate" is called for in the Series A Notes when such rate shall be 2%
per annum above the prematurity interest rate set forth in the Series A
Notes.
Definitive Notes -- Series A Notes in the form of Exhibit A-1
attached hereto and Series B Notes in the form of Exhibit A-2 attached
hereto.
Drilling Order -- has the meaning attributed thereto in
Schedule B to the Note Purchase Agreements.
Drilling Rig -- the drilling vessel and all equipment
appurtenant thereto known as the "Noble Paul Romano" being the vessel
and all equipment and other properties set out and described in the
First Naval Mortgage.
Environmental Laws -- any and all Governmental Requirements
pertaining to health, safety or the environment or the regulation of
hazardous substances or pollutants in effect in any and all
jurisdictions in which the Issuer is conducting or at any time has
conducted business, or where any Property of the Issuer is located,
including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environ mental,
Response, Compensation, and Liability Act of 1980 ("CERCLA"), as
amended, the Federal Water Pollution Control Act, as amended, the
Occupational Safety and Health Act of 1970, as amended, the Resource
Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as
amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials Transportation Act, as amended, and
any other international, federal, local or state environmental
conservation or protection laws. The terms "oil" and "discharge" shall
have the meanings specified in OPA, the terms "hazardous substance" and
"release" (or "threatened release") have the meanings specified in
CERCLA, except that "hazardous substance" shall also include petroleum
and any fraction thereof, and the terms "solid waste" and "disposal"
(or "disposed") have the meanings specified in RCRA; provided, however,
that (i) in the event either OPA, CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning
shall apply subsequent to the effective date of such amendment and (ii)
to the extent the laws of the state in which any Property of the Issuer
is located establish a meaning for "oil," "discharge," "hazardous
substance," "release," "solid waste" or "disposal" which is broader
than that specified in either OPA, CERCLA or RCRA, such broader meaning
shall apply.
ERISA -- the Employee Retirement Income Security Act of 1974,
as amended from time to time.
ERISA Affiliate -- has the meaning set out in Schedule B to
the Note Purchase Agreements.
ERISA Event -- (i) a "reportable event" described in Section
4043 (c)(5), (c)(6), (c)(11) or (c)(13) of ERISA and the regulations
issued thereunder, (ii) the filing of a notice
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of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under section 4041 of ERISA, (iii) the institution of
proceedings by the Pension Benefit Guaranty Corporation ("PBGC") under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan or (iv) the partial or complete
withdrawal of Issuer or any ERISA Affiliate from a Multiemployer Plan.
Event of Loss -- has the meaning set out in the First Naval
Mortgage.
Excepted Liens -- (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being Contested
In Good Faith; (ii) Liens in connection with workmen's compensation,
unemployment insurance or other social security, old age pension or
public liability obligations not yet due or which are being Contested
In Good Faith; (iii) operators', vendors', carriers', warehousemen's,
repairmen's, mechanics', workmen's, materialmen's, construction,
shipyard liens (during repair or upgrade periods) or other like Liens
arising by operation of law in the ordinary course of business or
statutory landlord's liens, each of which is in respect of obligations
that have not been outstanding more than 60 days (so long as no action
has been taken to file or enforce such Liens within said 60 day period)
or which are being Contested In Good Faith; (iv) deposits of cash or
securities to secure the performance of bids, trade contracts, leases,
statutory obligations and other obligations of a like nature incurred
in the ordinary course of business; and (v) Liens permitted by the
Credit Documents.
Exchange Act -- has the meaning set forth in Schedule B to the
Note Purchase Agreements.
First Naval Mortgage -- has the meaning set forth in Schedule
B to the Note Purchase Agreements.
GAAP -- those generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting
Standards Board (or any generally recognized successor) as in effect
from time to time.
General Intangibles -- all general intangibles related to any
property that is part of the Trust Estate, including, without
limitation, all (i) letters of credit, bonds, guaranties, purchase or
sales agreements and other contractual rights other than the Shell
Contract, rights to performance, and claims for damages, refunds
(including tax refunds) or other monies due or to become due; (ii)
orders, franchises, permits, certificates, licenses, consents,
exemptions, variances, authorizations or other approvals by any
governmental agency or court; (iii) consulting, engineering and
technological information and specifications, design data, patent
rights, trade secrets, literary rights, copyrights, trademarks, labels,
trade names and other intellectual property; (iv) business records,
computer tapes and computer software; (v) goodwill; and (vi) all other
intangible personal property, whether similar or dissimilar to the
other property that is part of the Trust Estate other than the Shell
Contract.
Governmental Authority -- the country, the state, county, city
and political subdivisions in which any Person or such Person's
Property is located or which exercises
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jurisdiction over any such Person or such Person's Property, and any
court, agency, department, commission, board, body, bureau or
instrumentality of any of them including monetary authorities which
exercises jurisdiction over any such Person or such Person's Property.
Unless otherwise specified, all references to Governmental Authority
herein shall mean a Governmental Authority having jurisdiction over,
where applicable, the Issuer, the Parent or any of their Property or
the Trustees or any Note Holder.
Governmental Requirements -- any law, statute, code,
ordinance, order, determination, rule, regulation, publication,
judgment, decree, injunction, franchise, permit, registration, consent,
approval, certificate, license, authorization or other directive or
requirement (whether or not having the force of law), including,
without limitation, Environmental Laws, energy regulations and
occupational, safety and health standards or controls, of any
Governmental Authority.
Hedging Agreements -- any commodity, interest rate or currency
swap, cap, floor, collar, forward agreement or other exchange or
protection agreements or any option with respect to any such
transaction.
Indemnified Parties -- has the meaning set out in Section
12.16(b).
Indemnity Matters -- any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), orders,
claims, demands and causes of action made or threatened against a
Person and, in connection therewith, all settlements, judgments,
losses, liabilities, obligations, damages, penalties, fines (including,
without limitation, consequential damages) or reasonable costs and
expenses of any kind or nature whatsoever incurred by such Person
whether caused by the sole or concurrent negligence (but not gross
negligence or willful misconduct) of such Person seeking
indemnification.
Indenture -- this Trust Indenture and Security Agreement as
originally executed or as it may from time to time be supplemented or
amended in accordance with the provisions hereof.
Indenture Default -- an event or condition the occurrence of
which would, with the lapse of time or the giving of notice or both,
become an Indenture Event of Default.
Indenture Event of Default -- has the meaning set out in
Section 6.1.
Independent Director -- has the meaning set out in the
Certificate of Incorporation of the Issuer, as amended, as it existed
on September 22, 1998.
Institutional Investor -- has the meaning set out in Schedule
B to the Note Purchase Agreements.
Issuer -- has the meaning set out in the first paragraph of
this Indenture.
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Investment Grade -- a rating equal to or higher than "BBB-" by
Standard & Poor's Rating Services, a division of The McGraw Hill
Companies, Inc. or any successor thereto or equal to or higher than
"Baa3" by Moody's Investors Service, Inc. or any successor thereto or a
comparable rating by another nationally recognized statistical rating
organization, which rating and organization are approved by the
Majority Holders.
Lien -- any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property,
whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest or lien arising
from a mortgage, encumbrance, pledge, conditional sale or other title
retention agreement, trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases and other title exceptions and
encumbrances (including, with respect to stock, stockholder agreements,
voting trust agreements, buy back agreements and all similar
agreements) affecting the Property. For the purposes of this Indenture,
a Person shall be deemed to be the owner of any Property which it has
acquired or holds subject to a conditional sale agreement, financing
lease or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes,
and such retention or vesting shall constitute a Lien.
Liquidity Agreements -- General Liquidity Agreement No. 1,
dated as of October 19, 1998, among Victory Receivables Corporation,
Bankers Trust Company, as administrator and collateral agent, BTM,
Ltd., as agent, The Norinchukin Bank, New York Branch, and the banks
parties thereto, as from time to time amended, supplemented or
modified, and the Liquidity Agreement, dated as of December 15, 1998,
among V Victory Receivables Corporation, Bankers Trust Company, as
administrator and collateral agent, BTM, Ltd., as agent, and the banks
parties thereto, as from time to time amended, supplemented or
modified.
Liquidity Documents -- the Victory Credit Agreement, the
Liquidity Agreements and the Asset Purchase Agreement.
Loss Payment Date -- the date that the Company shall receive
the proceeds of any insurance payment or settlement or any condemnation
award or other payment in relation to an Event of Loss.
MPPAA -- Multiemployer Pension Plan Amendments Act of 1980, as
amended.
Majority Holders -- at any time, holders of more than
fifty-one percent (51%) in aggregate principal amount of all Notes then
Outstanding (exclusive of any Notes held by the Issuer or any Affiliate
of the Issuer).
Make-Whole Amount -- has the meaning set out in Section 3.8.
Material -- has the meaning set out in Schedule B to the Note
Purchase Agreements.
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Material Adverse Effect -- has the meaning set out in Schedule
B to the Note Purchase Agreements.
Maturity Date -- has the meaning set out in Schedule B to the
Note Purchase Agreements.
Multiemployer Plan -- has the meaning set out in Schedule B to
the Note Purchase Agreements.
Noble Corp. -- Noble Drilling Corporation, a Delaware
corporation.
Note Holder -- the owner and holder of a Note registered with
the Issuer as provided in Section 2.3.
Note Purchase Agreements -- the separate Note Purchase
Agreements dated as of September 24, 1998, between the Issuer and each
of the Purchasers in respect of the Notes.
Notes -- any or all of the Series A Notes and Series B Notes.
Operating Services Agreement -- has the meaning set forth in
Schedule B to the Note Purchase Agreements.
Opinion of Counsel -- an opinion of outside counsel (which may
from time to time serve as counsel for the Issuer, for the Trustee or
for a Note Holder) reasonably acceptable to the Trustee, which opinion
is in scope, form and substance reasonably satisfactory to the Trustee
and the Trustee's counsel.
outer Continental Shelf -- shall have the meaning assigned to
such term in 43 U.S.C. ss.1331.
Outstanding -- when used with reference to Notes shall mean,
as of any particular time, all Notes authenticated and delivered by the
Trustee under this Indenture, except:
(a) Notes theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Notes for the payment or prepayment of which
moneys in the necessary amount shall have been deposited in
trust with the Trustee; provided that if such Notes are to be
prepaid prior to the maturity thereof, notice of such
prepayment shall have been given as provided in Section 3.5 of
this Indenture, or provision satisfactory to the Trustee shall
have been made for giving such notice; and
(c) Notes in lieu of or in substitution for which
other Notes shall have been delivered pursuant to the terms of
Section 2.4, 2.5 or 2.9 of this Indenture.
Parent -- Noble Drilling (U.S.) Inc., a Delaware corporation.
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Payment Date -- the twentieth (20th) day of each month of each
year beginning in the calendar month following the Closing Date, and
continuing through the Maturity Date.
Pension Plans -- employee pension benefit plans (as defined in
Section 3 of ERISA) to which from time to time the Issuer is required
to contribute.
Performance Agreement -- has the meaning set forth in Schedule
B to the Note Purchase Agreements.
Permitted Investments -- (a) direct obligations of the United
States of America (including obligations issued or held in book-entry
form on the books of the Department of the Treasury of the United
States of America and certificates or other instruments evidencing
ownership interests in such direct obligations of the United States of
America such as CATS, TIGRS, Treasury Receipts and Stripped Treasury
Coupons) which mature within one (1) year after the acquisition
thereof; (b) obligations for which the timely payment of the principal
thereof are fully guaranteed by the United States of America or the
Federal Deposit Insurance Corporation, which mature within one (1) year
after the acquisition thereof; (c) certificates of deposit of, or time
deposits in, any bank (including any Trustee) or trust company
organized under the laws of the United States of America or any state
thereof whose unsecured obligations are accorded one of the two highest
ratings by Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. or Moody's Investors Service, Inc. and which have
capital and unimpaired surplus of at least Five Hundred Million Dollars
($500,000,000), maturing within ninety (90) days after the acquisition
thereof; (d) readily marketable commercial paper of corporations doing
business in and incorporated under the laws of the United States of
America or any State thereof given on the date of the investment a
credit rating of at least P-1 by Moody's Investor Services, Inc., or
A-1 by Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc. in each case due within 90 days after the date of
the making of the investment; and (e) investments in a money-market
fund (including any fund for which the Trustee or any Affiliate of the
Trustee serves as adviser or sponsor or otherwise receives compensation
with respect to such fund) rated AAAm or better by Standard & Poor's
Ratings Services, a division of The McGraw Hill Companies, Inc. or Aaa
by Moody's Investors Services, Inc. (or equivalent categories that may
be established by such rating services).
Person -- an individual, partnership, corporation, limited
liability company, trust, unincorporated association or organization,
government, governmental agency or governmental subdivision.
Plans -- employee benefit plans (as defined in Section 3(3) of
ERISA) sponsored, maintained or contributed to by the Issuer or an
ERISA Affiliate.
Pledged Equipment -- has the meaning set forth in Paragraph
(a) of the Granting Clause.
Property -- any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
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Purchasers -- each Person named in Schedule A to the Note
Purchase Agreements.
QPAM -- a "qualified professional asset manager" under Part V
of the QPAM Exemption.
QPAM Exemption -- has the meaning set out in Schedule B to the
Note Purchase Agreements.
Regulatory Change -- means, relative to any Credit Support
Party: any change in (or the adoption, implementation, change in phase
in or commencement of effectiveness of) any (i) United States federal
or state law or foreign law applicable to such Credit Support Party;
(ii) regulation, interpretation, directive, requirement or request
(whether or not having the force of law) applicable to such Credit
Support Party of any court, government authority charged with the
interpretation or administration of any law referred to in clause (i)
above or of any fiscal, monetary or other authority having jurisdiction
over such Credit Support Party; (iii) GAAP or regulatory accounting
principles applicable to such Credit Support Party; or (iv) any change
in the application to such Credit Support Party of any existing law,
regulation, interpretation, directive, requirement, request or
accounting principles referred to in clause (i), (ii) or (iii) above.
Required Holders -- at any time, holders of more than
fifty-one percent (51%) in aggregate principal amount of all of the
Series A Notes then Outstanding and fifty-one percent (51%) in
aggregate principal amount of all Series B Notes then Outstanding (in
each case, exclusive of any Notes held by the Issuer or any Affiliate
of the Issuer).
Responsible Officer -- with respect to any corporation, the
chairman or a vice chairman of the board (if an officer), the
president, the chief executive officer, the chief financial officer,
the chief operating officer, executive vice president, senior vice
president, second vice president or any other vice president, the
controller, the treasurer, any assistant treasurer or the secretary;
and with respect to any Trustee which is a corporation or banking
association, any vice president, corporate trust officer or other
officer, in each case employed within the corporate trust department of
such Trustee.
SDDI -- has the meaning set out in Schedule B to the Note
Purchase Agreements.
SDDI Acknowledgment and Consent - has the meaning set out in
Schedule B to the Note Purchase Agreements.
Security -- has the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
Series A Notes -- has the meaning set out in Section 2.1(a).
Series B Notes -- has the meaning set out in Section 2.1(b).
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Shell Contract -- has the meaning set out in Schedule B to the
Note Purchase Agreements.
Shortfall -- has the meaning set out in Section 7.8.
Subsidiary -- has the meaning set out in Schedule B to the
Note Purchase Agreements.
Transaction Document -- has the meaning set out in Section
3.8(b).
Trust Estate -- has the meaning set out in the Granting Clause
hereof.
Trustee -- has the meaning set out in the first paragraph of
this Indenture.
Trustee Security Document -- has the meaning set out in
Section 10.2.
UCC -- has the meaning set out in Section 6.4.
Victory Credit Agreement -- the Credit Agreement, dated as of
October 19, 1998, among Victory Receivables Corporation, Bankers Trust
Company, as program administrator, and Victory Credit Enhancer LLC, as
from time to time amended, supplemented or modified.
Voting Stock -- capital stock of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors
(or Persons performing similar functions).
Working Capital Fund -- has the meaning set out in Section
7.15.
Written Request -- with respect to any Person a written order
or request signed in the name of such Person by a Responsible Officer
of such Person (if a corporation) or a general or managing partner (if
a partnership) or the manager if a limited liability company or the
individual (if an individual).
Year 2000 Problem -- the risk that computer hardware or
software applications or other data processing capacities used by the
Issuer may be unable to recognize and perform properly date-sensitive
functions involving certain dates before and any date after December
31, 1999.
Yield Protection Amount -- has the meaning set out in Section
3.8(b).
ARTICLE 2. FORM, EXECUTION, ISSUE AND DELIVERY OF NOTES.
2.1 Issue of Notes.
(a) The Issuer has authorized the issue and sale of
Ninety-Five Million, Four Hundred and Twelve Thousand, Five Hundred
Dollars ($95,412,500) aggregate original
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principal amount of its 6.33% Series A Senior Secured Notes due
December 20, 2003 (such notes and all notes given in substitution or
exchange therefore are herein collectively called the "Series A
Notes"). The Series A Notes shall be issuable as fully registered Notes
in the form set out in Annex A-1 to this Indenture.
(b) The Issuer has also authorized the issue and sale of
Sixteen Million, Eight Hundred Thirty-Seven Thousand, Five Hundred
Dollars ($16,837,500) aggregate original principal amount of its 6.09%
Series B Senior Secured Notes due December 20, 2003 (such notes and all
notes given in substitution or exchange therefor are herein
collectively called the "Series B Notes"). The Series B Notes shall be
issuable as fully registered Notes in the
form set out in Annex A-2 of this Indenture.
2.2 Authentication of Notes; Denominations of Notes and Form.
(a) Authentication. The Notes shall be of the tenor and
purport above recited, and the maturity date of each series of Notes
shall be determined, on or prior to the initial issuance of such
series, in the manner contemplated by the Note Purchase Agreements.
Only such of the Notes as shall bear thereon a certificate in form
substantially as set forth in the form of Trustee's Certificate of
Authentication contained in Annex A-1 or Annex B-2, as the case may be,
executed by the Trustee, shall be valid or become obligatory for any
purpose or entitle the holder thereof to any right or benefit under
this Indenture, and the Certificate of Authentication by the Trustee
upon any such Note executed on behalf of the Issuer as aforesaid shall
be conclusive evidence that the Note so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture. Subject to the provisions of Section
2.9 respecting Notes issued in replacement of lost or stolen Notes, the
aggregate principal amount of all Notes which may be issued and
outstanding under this Indenture at any time shall not exceed One
Hundred Twelve Million, Two Hundred Fifty Thousand Dollars
($112,250,000) less the aggregate amount of prepayments of principal
made on the Notes up to such time.
(b) Denominations. The Notes shall be issued in minimum
denominations of Five Hundred Thousand Dollars ($500,000); provided,
however, that if it is necessary to enable the registration of transfer
by a holder of its entire holding of Notes, a Note may be in a
denomination which is less than Five Hundred Thousand Dollars
($500,000).
(c) Form. All Notes shall be issued in the form of Definitive
Notes, duly executed by the Company and authenticated by the Trustee as
hereinabove provided.
2.3 Registration of Notes. All Notes issuable under this Indenture
shall be registered Notes. The Issuer shall cause to be kept at its agency,
maintained pursuant to Section 7.9, a register for the registration and transfer
of Notes. The name and address of each holder of record of one or more Notes,
each registration of transfer thereof and the name and address of each
transferee of one or more Notes shall be registered in such register. The Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes of this Indenture, and the Issuer and
the Trustee shall not be affected by any notice or knowledge to the contrary.
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2.4 Exchange of Notes. Upon surrender of any Note at the agency of the
Issuer maintained pursuant to Section 7.9, the Issuer, at the request of the
holder thereof, will execute and deliver, at the Issuer's expense (except as
provided in Section 2.6 below), and the Trustee will authenticate, one or more
new Notes payable to such holder in exchange therefor, of like tenor for a like
aggregate principal amount in authorized denominations.
2.5 Transfer of Notes.
(a) General. Any Note may be transferred at the agency of the
Issuer maintained pursuant to Section 7.9, by surrendering such Note
for cancellation, accompanied by a written instrument of transfer in a
form reasonably satisfactory to the Issuer and the Trustee (which must
specify the taxpayer identification number of the transferee), duly
executed by the holder of such Note or by its attorney duly authorized
in writing. Thereupon the Issuer, at its expense, shall issue in the
name of the transferee or transferees, and arrange for the
authentication by the Trustee of (and the Trustee shall authenticate)
and deliver in exchange therefor, a new Note or Notes, of a like tenor
for a like aggregate principal amount, in authorized denominations.
(b) Legends. Each Note shall bear a legend in substantially
the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED
HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. THE HOLDER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE ISSUER IS NOT REQUIRED TO REGISTER
THE NOTES UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EITHER CASE, IN ACCORDANCE WITH
THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION."
(c) Subsequent Transferee Representations. Any transferee, by
its acceptance of a Note registered in its name (or the name of its
nominee), shall be deemed to have made the representations set forth in
Sections 6.1 and 6.2 of the Note Purchase Agreements, provided,
however, that, such transferee will not be deemed to have made the
representation set forth in Section 6.2(c), (d) or (g) unless such
transferee shall have made the disclosures referred to therein to the
Issuer at least five Business Days prior to its acceptance of such Note
and shall have received prior to such acceptance of such Note a
certificate from the Issuer stating that (1) the Issuer is neither a
"party in interest" (as defined in Section 3(14) of ERISA) nor a
"disqualified person" (as defined in Section 4975(e)(2) of the Code),
with respect to any plan identified pursuant to Section 6.2(c) or (g)
or (2) with respect to any plan identified pursuant to Section 6.2(d)
neither the Issuer nor any "affiliate" (as defined in Section V(e) of
the QPAM Exemption) has at such time, or has exercised during the
immediately preceding one year, the authority to appoint or terminate
the QPAM as manager of the assets of any
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plan identified in writing pursuant to Section 6.2(d) or to negotiate
the terms of said QPAM's management agreement on behalf of any such
identified plan, and provided, further, that, such transferee will not
be deemed to have made the representation set forth in Section 6.2(b),
(c) or (d) unless the applicable Prohibited Transaction Class Exemption
referred to therein remains in effect at that time or another similar
Prohibited Transaction Class Exemption is then available. The Issuer
shall exercise reasonable due diligence as is necessary to respond to
any such disclosure, provided that, if the Issuer shall not respond
within five Business Days following receipt of any such disclosure, it
shall be deemed to have made the statement set forth in either clause
(1) or (2), as applicable, of this Section 2.5(c). If the Issuer shall
respond within five Business Days following receipt of any such
prospective transferee disclosure and shall state that the Issuer is
unable to make the statement set forth in either clause (1) or (2), as
applicable, of this Section 2.5(c) (which statement shall include a
description of the basis for its determination), the Trustee shall not
be permitted (and the Issuer shall not be required) to register the
transfer to such prospective transferee of the Note.
2.6 General Rules.
(a) All transfers, exchanges or replacements of Notes pursuant
to Section 2.4, Section 2.5 or Section 2.9 shall be made without
expense to the holder of the Notes, except that any stamp taxes or
other governmental charges required to be paid with respect to the same
shall be paid by the Note Holder requesting such transfer, exchange or
replacement as a condition precedent to the exercise of such privilege,
unless an Indenture Event of Default has occurred and is continuing, in
which case Issuer shall be liable for such stamp taxes or other
governmental charges. All Notes surrendered for transfer, exchange or
replacement shall be canceled and destroyed by the Trustee. Each new
Note delivered pursuant to Section 2.4 or Section 2.5 shall be dated
and bear interest from the most recent date to which interest has been
paid on the surrendered Note or Notes, or dated the date of the
surrendered Note or Notes if no interest has been paid thereon. The
Trustee shall make a notation on each new Note delivered pursuant to
Section 2.4, Section 2.5 or Section 2.9 of the amount of all payments
of principal previously made on the old Note or Notes with respect to
which such new Note is issued. The Issuer may deposit fully executed
but unauthenticated Notes with the Trustee, which shall hold such Notes
(as agent of the Issuer) for subsequent authentication and issuance and
delivery by the Issuer pursuant to this Article 2. The Issuer shall not
be required to register the transfer, exchange or replacement of,
pursuant to this Article 2, (i) any Note during the five (5) days
preceding the due date of any payment thereon or (ii) any Note after
the Issuer shall have given notice pursuant to Article 3 of this
Indenture of the prepayment thereof and prior to the prepayment date
specified in such notice.
(b) With respect to the CP Conduit as a Purchaser, each holder
of a Note, by its acceptance of said Note, hereby agrees that until the
368th day following the maturity of the last maturing commercial paper
note to be issued by the CP Conduit in connection with its funding of
its investment in the Notes, no holder of a Note will institute, nor
will said holder join with others in instituting, any involuntary
bankruptcy or analogous proceeding against the CP Conduit under any
bankruptcy, reorganization, receivership or similar law, domestic or
foreign, as now or hereafter in effect.
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2.7 Valid Obligations. All Notes executed, authenticated and delivered
in exchange for, upon transfer of, or in replacement of, other Notes as provided
in this Indenture shall be the valid obligations of the Issuer, evidencing the
same debt as such other Notes, and shall be entitled to the benefits of this
Indenture to the same extent as the Notes in exchange for or upon transfer or
replacement of which they were executed and delivered.
2.8 Execution and Delivery. The Notes may be typewritten, printed or
lithographed or produced by any other means acceptable to the Trustee, and shall
be signed on behalf of the Issuer by the manual signature of one of the
Responsible Officers under its corporate seal (which may be printed, engraved or
otherwise reproduced thereon or affixed thereto) and attested by the manual
signature of the Secretary or one of the Assistant Secretaries of the Issuer. In
the case that any of the officers who shall have signed or sealed any of the
Notes shall cease to be such officer or officers of the Issuer before the Notes
so signed or sealed shall have been delivered by or on behalf of the Issuer,
such Notes may nevertheless be delivered and issued and, upon such delivery and
issue, shall be binding upon the Issuer as though those who signed or sealed the
same had continued to be such officer or officers.
2.9 Replacement of Notes. Upon receipt by the Issuer and the Trustee of
evidence reasonably satisfactory to each of them of the ownership of and the
loss, theft, destruction or mutilation of any Note and
(a) in the case of loss, theft or destruction, (i) if the
holder is a Purchaser, its nominee or other nationally recognized bank,
insurance company, benefit society or other institutional investor,
upon receipt of an unsecured indemnity agreement signed by the holder
of the Note in form reasonably satisfactory to the Issuer and the
Trustee to save each of them harmless, or (ii) otherwise, upon receipt
of such security or indemnity as may be reasonably required by the
Issuer or the Trustee to save each of them harmless, or
(b) in the case of mutilation, upon surrender and cancellation
thereof, the Issuer, at its own expense, will execute and deliver in
lieu thereof, and arrange for the authentication by the Trustee of (and
the Trustee will authenticate), a new Note of like tenor, dated and
bearing interest from the date to which interest has been paid on such
lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest has been paid
thereon.
ARTICLE 3. PAYMENTS AND DISTRIBUTION THEREOF.
3.1 Payment by Issuer. Anything in this Indenture or in the Notes to
the contrary notwithstanding, but subject to the provisions of Section 12.5
hereof, the Issuer will pay all amounts payable with respect to the Notes held
by each Purchaser or other registered holder of Notes (without any presentment
of any such Notes and without any notation of such payment being made thereon)
in lawful money of the United States of America to the Trustee for payment on
behalf of the Issuer as provided in this Article 3 and in Article 4. In any case
where the date of maturity of principal of, and interest and any applicable
Make-Whole Amount, Yield Protection Amount or Breakage Amount on, the Notes or
the date fixed for any prepayment (in whole or in part) of the Notes will not be
a Business Day, then payment of such principal of, and interest and any
applicable Make-Whole
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Amount, Yield Protection Amount or Breakage Amount on, the Notes need not be
made on such date but may be made on the next succeeding Business Day with the
same force and effect as if made on the date of maturity or the date fixed for
such prepayment. Each holder of a Note, by its acceptance of such Note, agrees
that (i) the Trustee, in its individual capacity, shall not be liable to the
holder of any Note for any amounts payable under any Note or this Indenture, and
(ii) the Trustee, in its individual capacity, shall not have any liability under
this Indenture, except as provided herein.
3.2 Delivery Expenses. If any holder of a Note shall surrender any Note
to the Issuer or to the Trustee pursuant to this Indenture, the Issuer will pay
the cost of delivering to or from such holder's home office from or to the
agency of the Issuer maintained pursuant to Section 7.9, as the case may be,
insured to such holder's satisfaction, the surrendered Note and any Note issued
in substitution or replacement for the surrendered Note.
3.3 Issue Taxes. The Issuer will pay all taxes, assessments and charges
in connection with the issuance and sale of the Notes by the Issuer and in
connection with any modification of the Notes and will save each holder of any
Note harmless without limitation as to time against any and all liabilities with
respect to all such taxes. The obligations of the Issuer under this Section 3.3
shall survive the payment or prepayment of the Notes and the termination of this
Indenture.
3.4 Required Payments of Notes without Premium.
(a) Scheduled Required Prepayments for Series A Notes. In
addition to paying the entire outstanding principal amount of, and the
interest due on, the Series A Notes on the Maturity Date, the Issuer
agrees to prepay, and there shall become due and payable, principal
amounts of the Series A Notes (per $1,000,000 of original principal
amount) (together with accrued interest owing thereon) on the Payment
Dates (the first of which shall be on the twentieth (20th) day of the
calendar month following the Closing Date) as set out on Annex B
hereto.
(b) Prepayment at Par. Each such prepayment of principal made
pursuant to Section 3.4(a) shall be at 100% of the principal amount
prepaid, together with interest accrued thereon to the date of
prepayment.
(c) Prepayment Schedules. Each Series A Note shall have
attached thereto a prepayment schedule showing the amounts of principal
of such Note required to be prepaid pursuant to Section 3.4(a) and the
respective due dates of such amounts. The Trustee shall make a notation
on the prepayment schedule attached to each new Series A Note delivered
pursuant to Section 2.4, Section 2.5 or Section 2.9 of the amount of
all prepayments of principal previously made on the old Series A Note
or Notes with respect to which such new
Series A Note is issued; provided that the failure of Trustee to make
any such notation shall not affect the obligations of the Issuer
hereunder or under such Series A Note.
(d) Required Prepayments Unaffected by Optional Prepayments.
The Issuer's exercise of any prepayment option contained in Section 3.5
shall be applied against the principal amount due at the Maturity Date
and the prepayment installments, if any,
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in the inverse order of maturity, and shall not reduce the Issuer's
obligation to make any earlier prepayment as provided in Section
3.4(a).
(e) Series B Notes. In addition to paying the entire
outstanding principal amount of, and the interest due on, the Series B
Notes on the Maturity Date, the Issuer agrees to pay, and there shall
become due and payable, unpaid accrued interest on Series B Notes on
the Payment Dates.
3.5 Optional Prepayment of the Notes with Make-Whole Amount. None of
the Notes may be prepaid except as required or permitted by Section 3.4, this
Section 3.5, Section 3.6 or Section 6.2. The Issuer may prepay the Notes in
accordance with this Section 3.5 on any Payment Date.
(a) The Issuer may, upon notice as provided in Section 3.5(b),
prepay all of the Notes in whole or in part, in multiples of One
Million Dollars ($1,000,000), together with all interest accrued on the
amount so prepaid plus the Make-Whole Amount, if any, determined for
the prepayment date with respect to such principal amount.
(b) The Issuer will give (or cause to be given) notice of any
optional prepayment of the Notes to the Trustee and to each holder of
the Notes not less than thirty (30) days nor more than sixty (60) days
before the date fixed for prepayment, specifying (i) such date, (ii)
the Section of this Indenture under which such prepayment is to be
made, (iii) the principal amount of such holder's Notes to be prepaid
on such date, in the case of partial prepayments, and (iv) the interest
to be paid on the prepayment date with respect to such principal amount
being prepaid and shall be accompanied by a certificate of a
Responsible Officer as to the estimated Make-Whole Amount, if any, due
in connection with such prepayment (calculated as if the date of such
notice were the date of the prepayment), setting forth the details of
such computation. Two Business Days prior to such prepayment, the
Issuer shall deliver to the Trustee and each holder of Notes a
certificate of a Responsible Officer specifying in reasonable detail
the calculation of such Make-Whole Amount as of the specified
prepayment date. Notice of prepayment having been so given, the
aggregate principal amount of the Notes specified in such notice,
together with the Make-Whole Amount, if any, and accrued interest on
such principal amount shall become due and payable on the specified
prepayment date.
(c) Upon any partial prepayment of the Notes, the principal
amount so prepaid shall be allocated to all Notes at the time
Outstanding in proportion to the respective outstanding principal
amounts thereof, with adjustments to avoid fractions of one dollar
($1).
3.6 Required Prepayments of Notes. The Notes shall be prepaid in full,
together with accrued interest thereon to the date of prepayment and (with
respect to clause 3.6(a) only) the Breakage Amount, if any, and (with respect to
clause 3.6(b) only) the Make-Whole Amount, if any, determined for the prepayment
date with respect to the principal amount plus all other amounts payable
hereunder to the holders of the Notes and the Trustee:
(a) Upon the occurrence of an Event of Loss; or
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(b) Upon the early termination of the Shell Contract as
provided in Section 17E of the Drilling Order.
The Issuer will give (or cause to be given) notice of such prepayment
under clause (a) or (b) of this Section 3.6 to the Trustee and the holders of
the Notes promptly (and in any event within one (1) Business Day) after the
occurrence of an Event of Loss or the early termination of the Shell Contract
under Section 17E of the Drilling Order, as the case may be, and shall specify
the date for such prepayment, which date shall not be less than 30 days nor more
than 45 days after the date of such notice, together with the other information
specified in Section 3.5(b). In the event the Trustee and the Note Holders have
not received the aforesaid notice, such prepayment shall be due and payable 30
days after the occurrence of the event listed in (a) or (b) above.
3.7 Surrender of Notes on Prepayment. Following any prepayment of any
Note pursuant to Section 3.5 or Section 3.6, such Note shall, prior to any
transfer thereof, be (a) made available to the Trustee for notation on the
prepayment schedule attached to such Note of the amount of principal so prepaid
or, (b) at the option of the holder thereof and in lieu of the alternative in
the foregoing clause (a) of this sentence, held by the holder of such Note who
shall make a notation on such schedule of the amount of principal so prepaid. In
case the entire principal amount of any Note is prepaid or paid, such Note shall
be surrendered promptly at the agency of the Issuer maintained pursuant to
Section 7.9, for cancellation, upon Written Request therefor by the Issuer, and
shall not be reissued, and no Note shall be issued in lieu of the prepaid or
paid principal amount of any Note.
3.8 Provision for Applicable Make-Whole Amount, Yield Protection
Amount and Breakage Amount.
(a) Applicable Make-Whole Amount. The Issuer acknowledges that the
right of each holder of a Note to maintain a rate of return based upon the full
term of the Notes and the scheduled prepayments under Section 3.4 is a valuable
right, and that the provisions for payment of the Make-Whole Amount by the
Issuer in the event that (a) the Notes are otherwise prepaid, or (b) the
maturity of the Notes is accelerated, are intended to provide reasonable
compensation for the deprivation of such right under such circumstances.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 3.5 or
3.6(b) or has become or is declared to be immediately due and payable
pursuant to Section 6.2, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount
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factor (applied on the same periodic basis as that on which interest on
the Notes is payable) equal to the Reinvestment Yield with respect to
such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, .32% (with respect to the Series A Notes) and
.32% (with respect to the Series B Notes) over the yield to maturity
implied by (i) the yields reported, as of 10:00 A.M. (New York City
time) on the second Business Day preceding the Settlement Date with
respect to such Called Principal, on the display designated as "Page
678" on the Telerate Access Service (or such other display as may
replace Page 678 on Telerate Access Service) for actively traded U.S.
Treasury securities having a maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date, or (ii) if
such yields are not reported as of such time or the yields reported as
of such time are not ascertainable, the Treasury Constant Maturity
Series Yields reported, for the latest day for which such yields have
been so reported as of the second Business Day preceding the Settlement
Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the duration closest to and
greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Sections 3.5, 3.6(b) or 6.2.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 3.5 or 3.6(b) or has become or is declared to be
immediately due and payable pursuant to Section 6.2, as the context
requires.
(b) Yield Protection Amount. If any Regulatory Change occurring after
the date hereof:
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(i) shall subject any Credit Support Party to any tax, duty or
other charge with respect to any Series B Note (or its participation
therein), or any of its obligations or right to acquire or hold any
Series B Note or to provide funding, liquidity, credit or asset
purchase support to the CP Conduit in respect of any of the foregoing
(or with respect to its participation in any of the foregoing), or
shall change the basis of taxation of payments to the Credit Support
Party of the principal or interest on any Series B Note (or its
participation in any of the foregoing) or any other amounts due
hereunder or under any funding, liquidity, or credit support agreement
it may have with the CP Conduit (collectively, a "Transaction
Document") or its obligations or rights, if any, to acquire or
participate in any Series B Note or to provide funding, liquidity,
credit or asset purchase support to the CP Conduit in respect of any of
the foregoing (or with respect to its participation in any of the
foregoing) (except for changes in the rate of tax on or determined by
reference to the overall net income of such Credit Support Party
imposed by the United States of America); or
(ii) shall impose upon any Credit Support Party, modify or
deem applicable any reserve, special deposit or similar requirement
against assets of any Credit Support Party, deposits or obligations
with or for the account of any Credit Support Party or with or for the
account of any Affiliate (or entity deemed by the Federal Reserve Board
to be an Affiliate) of any Credit Support Party, or credit extended by
any Credit Support Party; or
(iii) shall change the amount of capital maintained or
required or requested or directed to be maintained by any Credit
Support Party; or
(iv) shall impose any other condition affecting any Series B
Note (or its participation therein) or any of its obligations or right
to acquire or hold any Series B Note or to provide funding, liquidity,
credit or asset purchase support to the CP Conduit in respect of any of
the foregoing (or with respect to its participation in any of the
foregoing);
and the result of any of the foregoing is or would be
(I) to increase the cost to (or impose a cost on) (I) a Credit
Support Party funding or acquiring or holding any Series B Note, or
loans or other extensions of credit under any Transaction Document or
any obligation or commitment of such Credit Support Party with respect
to any of the foregoing, or (II) a Credit Support Party for continuing
its relationship with the CP Conduit,
(II) to reduce the amount of any sum received or receivable by
a Credit Support Party as successor in interest to the CP Conduit as a
Series B Note Holder under this Indenture, or under any Transaction
Document (or its participation in any of the foregoing), or
(III) to reduce the rate of return on the capital of such a
Credit Support Party as a consequence of its obligations under the
Transaction Documents (or its participation therein) to a level below
that which such Credit Support Party could otherwise have achieved,
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in each such case by an amount reasonably deemed by such Credit Support Party to
be material, then prior to the next scheduled Payment Date, and in any case
within 30 days after demand by such Credit Support Party (which demand shall be
accompanied by a statement setting forth in reasonable detail the basis of such
demand), the Issuer shall pay directly to the Trustee for the benefit of such
Credit Support Party such additional amount or amounts as will compensate such
Credit Support Party for such additional or increased cost or such reduction
(the "Yield Protection Amount"). The Trustee will deposit such amounts in the
Collection Account for distribution in accordance with Article 4.
In determining any amount provided for or referred to in this Section
3.8(b), a Credit Support Party may use any reasonable averaging and attribution
method that it (in its sole discretion) shall deem applicable. Any Credit
Support Party when making a claim under this Section 3.8(b) shall submit to the
Issuer and the Trustee a statement as to such increased cost or reduced return
(including calculation thereof in reasonable detail), which statement shall, in
the absence of error, be conclusive and binding upon the Issuer. No Credit
Support Party shall be entitled to recover any Yield Protection Amount under
this Section 3.8(b), incurred or accrued more than 180 days prior to the notice
described in this Section 3.8(b), unless (i) the Regulatory Change giving rise
to such Yield Protection Amount is retroactive in its application to said Credit
Support Party, or (ii) said Credit Support Party lacked knowledge of the
Regulatory Change.
(c) Breakage Amount. Within 30 days after demand by the CP Conduit or
any Credit Support Party as successor in interest to the CP Conduit as a Series
B Note Holder (a "Breakage Party") (which demand shall be accompanied by a
statement in reasonable detail setting forth the basis for such demand) the
Issuer shall pay directly to the Trustee for the benefit of such Breakage Party,
such amount or amounts as shall compensate such Breakage Party for any loss,
cost or expense incurred by such Breakage Party in connection with any Hedging
Agreements, as a result of any payment of principal of any Series B Note being
received by reason of an Event of Loss. By its purchase of the Series B Notes,
the Breakage Party agrees to pay directly to the Trustee, for the benefit of the
Issuer, such amount or amounts that it may receive as breakage payments in
connection with any Hedging Agreements, as a result of any payment of principal
on any Series B Note being received by reason of an Event of Loss. The
determination by any such Breakage Party of any such loss, expense or amount
shall be presumed correct, absent manifest error. The Trustee will deposit such
amounts in the Collection Account for distribution in accordance with Article 4.
ARTICLE 4. RECEIPT, DISTRIBUTION AND APPLICATION OF TRUST ESTATE.
4.1 Application of Shell Contract Revenues When No Indenture Event of
Default is Continuing.
The Trustee shall establish an account styled "Noble/Paul Romano Cash
Collateral Account" (the "Collection Account") subject to the Trustee's sole
dominion and control. Each payment to the Trustee under any Credit Document and
all payments under the Drilling Order, other than payment pursuant to Section
17E of the Drilling Order, shall be deposited with the Trustee in the Collection
Account and held in trust by it as part of the Trust Estate and, so long as no
Indenture Event of Default shall have occurred and be continuing, applied on the
next succeeding Payment Date as follows:
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first, the amount required to reimburse any Trustee for any
unpaid fees for its services under this Indenture and to reimburse any
Trustee for any reasonable expenses (including reasonable external
attorneys' fees) not previously reimbursed;
second, the accrued unpaid interest due and payable to the
Note Holders on any of the Notes, allocated among the Notes pursuant to
Section 4.5 and distributed to the Note Holders thereof;
third, the required prepayments of principal due and payable
on the Series A Notes on such Payment Date, allocated among such Notes
pursuant to Section 4.5 and distributed to the Note Holders thereof;
fourth, the amount required to reimburse an Indemnified Party
or other Person entitled to reimbursement under Section 12.16 hereof
(except to the extent already provided for in the "first" provision
above);
fifth, to deposit with the Trustee any amounts previously
withdrawn from the Debt Service Reserve Fund which have not been
replenished;
sixth, the amount required to pay any Yield Protection Amount
due to any Credit Support Party; and
seventh, the balance, if any, of such payment remaining shall
be distributed to the Issuer or its assigns.
4.2 (a) Payments in Case of an Early Termination. Each payment made by
SDDI pursuant to an early termination of the Drilling Order in accordance with
the provisions of Section 17E of the Drilling Order (an "Early Termination"),
together with the net proceeds received by the Trustee upon foreclosure or
conveyance in lieu of foreclosure of the Drilling Rig following an Early
Termination, shall be deposited with the Trustee in the Collection Account and
held in trust by it and applied when received as follows:
first, so much of such payment as shall be required to
reimburse any Trustee for any unpaid fees for its services under this
Indenture or to reimburse any Trustee for any reasonable expenses or
indemnity amount (including reasonable external attorneys' fees) or
other losses incurred by them (to the extent reimbursable hereunder and
not previously reimbursed) shall be distributed to each such Trustee
ratably, without priority of one over the other, in the proportion that
the amount of the expenses or other loss incurred by such Trustee bears
to the aggregate amount of such losses or expenses incurred by all such
Trustees;
second, so much of such payment remaining as shall be required
to prepay the aggregate unpaid principal amount of all Series A Notes
then Outstanding, plus accrued but unpaid interest thereon to the date
of distribution including interest on past due principal and, to the
extent permitted by applicable law, on past due interest (but excluding
any Make-Whole Amount) shall be distributed to the holders of the
Outstanding Series A Notes;
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third, so much of such payment remaining as shall be required
to prepay the aggregate unpaid principal amount of all Series B Notes
then Outstanding, plus accrued but unpaid interest thereon to date of
distribution including interest on past due principal and, to the
extent permitted by applicable law, on past due interest (but excluding
any Make-Whole Amount) shall be distributed to the holders of the
Outstanding Series B Notes;
fourth, so much of such payment remaining as shall be required
to pay any applicable Make-Whole Amount due by virtue of prepayment of
the Series A Notes shall be distributed to the holders of the Series A
Notes;
fifth, so much of such payment remaining as shall be required
to pay any applicable Make-Whole Amount due by virtue of prepayment of
the Series B Notes shall be distributed to the holders of the Series B
Notes; and
sixth, so much of such payment remaining as shall be required
to reimburse any holders of Outstanding Notes or any Indemnified Party
(other than any Trustee) for any reasonable expenses or indemnity
amount (including reasonable external attorneys' fees) or other losses
incurred by them (to the extent reimbursable hereunder and not
previously reimbursed) shall be distributed to each holder and
Indemnified Party ratably, without priority of one over the other, in
the proportion that the amount of the expenses or other loss incurred
by such holder or Indemnified Party bears to the aggregate amount of
such losses or expenses incurred by all such holders and Indemnified
Parties;
seventh, so much of such payments remaining as shall be
required to reimburse or pay any other fee or expense to any Person
required hereunder or under any other Credit Document, in the
proportion that the amount of the fee or expense required to be paid
hereunder for any Person bears to the aggregate amount of such fees or
expenses incurred for all such Persons; and
eighth, so much of such payments remaining as shall be
required to pay any applicable Yield Protection Amount shall be
distributed to any Credit Support Party;
ninth, the balance, if any, of such payment remaining shall be
distributed to the Issuer or its assigns.
(b) Payments in Case of an Event of Loss. All payments received by the
Trustee as proceeds of insurance, condemnation, confiscation or otherwise by
reason by an Event of Loss shall be deposited with the Trustee in the Collection
Account and held in trust by it and applied when received in the same manner as
provided in Section 4.3 below, provided, however, the Make-Whole Amount payments
shall not be due.
(c) Payments in Case of a Partial Event of Loss. In the event of any
accident, occurrence or event resulting in damage to the Drilling Rig that does
not constitute an Event of Loss (a "Partial Loss"), and so long as there is no
Indenture Event of Default that has occurred and is continuing, then the
following provisions shall apply and all proceeds of insurance by reason of such
Partial Loss shall be payable to the Trustee as loss payee and shall be applied
upon direction by the Trustee as follows:
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(i) To the Issuer to reimburse the Issuer for the actual costs
incurred by the Issuer in connection with the repairs, upon receipt by
the Trustee of the following:
(a) For progress payments, a certificate signed
by a Responsible Officer of the Issuer
certifying that all work for which
reimbursement is requested has been
completed as required by Section 7.3 hereof,
in a good and workmanlike manner, the Issuer
has expended funds in the full amount of all
insurance deductibles and has obtained lien
waivers with respect to any liens in excess
of $100,000 individually or $2,500,000 in
the aggregate that could attach with respect
to such work, with such certificate to
include an itemization of the costs incurred
by the Issuer in connection with the
repairs. For all progress payments prior to
completion of all required repairs the
Trustee shall withhold an amount equal to
10% of the completed repair cost to be
disbursed upon final payment as provided
under clause (b) below.
(b) For final payment (which will include the
hold back amount called for in clause (a)
above), (A) a certificate signed by a
Responsible Officer that all repairs have
been completed as required by Section 7.3,
in a good and workmanlike manner, has
obtained final lien waivers with respect to
liens in excess of $100,000 individually or
$2,500,000 in the aggregate that could
attach with respect to such work, with the
certificate to include an itemization of the
costs incurred by the Issuer in connection
with the repairs; and (B) so long as the
Shell Contract is in full force and effect,
an International Association of Drilling
Contractors Tour Sheet executed by the
Issuer and SDDI indicating that full day
rate payments under the Shell Contract are
accruing currently or, if the Shell Contract
is terminated, a written report in form and
substance satisfactory to the Required
Holders prepared by a third party
engineer/surveyor or loss adjustor selected
by the Trustee with the consent of the
Required Holders, and compensated by the
Issuer, certifying that all repairs have
been completed as required by Section 7.3
hereof in good and workmanlike manner and
final lien waivers obtained.
(ii) Any insurance proceeds not paid pursuant to clause (i)
above shall be paid pursuant to Section 4.1 or 4.3, as appropriate.
4.3 Payments During Continuance of an Indenture Event of Default. All
monies held or realized hereunder or in connection herewith in the Collection
Account, Debt Service Reserve Fund, proceeds of insurance, or otherwise (other
than Early Termination payments provided for in Section 4.2(a)) by the Trustee
after an Indenture Event of Default shall have occurred and be
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continuing or after the acceleration of the Notes pursuant to Sections 6.2(a) or
(b) (including any amounts realized by the Trustee from the exercise of any
remedies pursuant to Article 6), as well as all payments or amounts then held or
thereafter received by the Trustee as part of the Trust Estate while any such
Indenture Event of Default shall be continuing, shall be applied by the Trustee
as follows:
first, so much of such monies, payments or amounts as shall be
required to reimburse any Trustee for its default administration
services and the costs and expenses of foreclosure or suit, if any, and
the retaking, holding, preparing for sale or other disposition of the
Collateral and, to the extent permitted by applicable law, the
reasonable external attorneys' fees and legal expenses incurred by any
Trustee;
second, so much of such monies, payments or amounts remaining
as shall be required to reimburse the holders of the Outstanding Notes
for all theretofore unreimbursed payments paid by the then existing or
prior holders of Outstanding Notes pursuant to any indemnity furnished
to any Trustee shall be distributed to such holders ratably, without
priority of one over the other, in the proportion that the amount of
each such unreimbursed payment of each such holder of a Note bears to
the aggregate amount of all such unreimbursed payments by all such
holders of Outstanding Notes;
third, so much of such monies, payments or amounts remaining
as shall be required to pay the unpaid principal balance of all of the
Outstanding Notes, plus all accrued and unpaid interest on such
principal, plus any applicable Make-Whole Amount shall be distributed
to the appropriate holders of such Notes without priority of one such
holder over another in the proportion that the amount then owed to such
holder bears to the aggregate amount of all such obligations which are
then due and payable;
fourth, so much of such monies, payments or amounts remaining
as shall be required to reimburse any holders of the Outstanding Notes
or any Indemnified Party for any expenses or other indemnity amount
(including reasonable external attorneys' fees) or other losses
incurred by them (to the extent reimbursable hereunder and not
previously reimbursed) shall be distributed to each such holder or
Indemnified Party, ratably, without priority of one over the other, in
the proportion that the amount of the expenses or other loss incurred
by such holder or Indemnified Party bears to the aggregate amount of
such losses or expenses incurred by all such holders or Indemnified
Party;
fifth, so much of such monies, payments or amounts remaining
as shall be required to pay any other obligations of the Issuer
hereunder (other than the obligation of the Issuer under Section
6.4(c)) or under any other Credit Document to the holders of the
Outstanding Notes which are then due and payable, shall be distributed
to such holders ratably without priority of one such holder over
another in the proportion that the amount then owed to such holder
bears to the aggregate amount of all such obligations which are then
due and payable;
sixth, so much of such monies, payments or amounts remaining
as shall be required to pay the Series B Note Holders or any Credit
Support Party any Yield Protection Amount and/or Breakage Amount due;
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seventh, so much of such monies, payments or amounts remaining
as shall be required to pay the obligations of the Issuer under Section
6.4(c) to the holders of the Outstanding Series B Notes shall be
distributed to such holders ratably without priority of one over the
other in the proportion that the amount then owed to such holder bears
to the aggregate amount of all such obligations; and
eighth, the balance, if any, of such monies, payments or
amounts shall be distributed to the Issuer or its assigns.
4.4 Amounts Held by Trustee. Any amounts held by the Trustee in the
Debt Service Reserve Fund, Working Capital Fund, or pursuant to any other
provision hereof or any provision of any other Credit Document providing for
amounts to be held by the Trustee which are not distributed pursuant to the
other provisions of this Article 4 shall be invested by the Trustee from time to
time in Permitted Investments selected by the Issuer. Unless otherwise expressly
provided in this Indenture, any income realized as a result of any such
Permitted Investment, net of the Trustee's reasonable fees and expenses in
making such Permitted Investment, shall be held and applied by the Trustee in
the same manner as the principal amount of such Permitted Investment is to be
applied and any losses, net of earnings and such reasonable fees and expenses,
shall be charged against the principal amount invested. The Trustee shall not be
liable for any loss resulting from any investment required to be made by it
under this Indenture other than by reason of its willful misconduct or gross
negligence, and any such investment may be sold (without regard to its maturity)
by the Trustee without instructions whenever the Trustee reasonably believes
that such sale is necessary to make a distribution required by this Indenture.
4.5 Allocation of Payments. Each payment applied to the Outstanding
Notes pursuant to Articles 3 or 4 shall be allocated among the appropriate
Outstanding Notes in proportion to the respective outstanding principal amounts
thereof, with adjustments to avoid fractions of one dollar ($1). All payments of
principal of the Notes as and when called for hereunder, except those required
pursuant to Section 3.4, shall be applied against the principal amount due at
maturity and then against the last maturing prepayment installments of
principal, if any, provided for in Section 3.4.
4.6 Method of Payment to Holders. The principal of, Yield Protection
Amount, Breakage Amount and any Make-Whole Amount and interest on, each Note and
all other amounts payable to the holders of the Notes pursuant to this Indenture
will be payable at the office of the Trustee which has been designated as the
agency of the Issuer in Section 7.9, in United States dollars in immediately
available funds, prior to 9:00 a.m. Central time, on the due date thereof.
Notwithstanding the foregoing or any provision in any Note to the contrary, the
Trustee will pay, if so requested in writing by a holder of an Outstanding Note,
all amounts payable by the Trustee hereunder to such holder, by wire transfer of
immediately available funds to an account maintained by such holder with any
other bank located in the United States. The Trustee acknowledges that the
payment instructions given in Schedule A to the Note Purchase Agreements
constitute the written notice required by the preceding sentence to make all
payments on the Notes as provided therein. The Trustee shall institute the
transfer of such funds prior to 11:00 a.m. Central time on such due date in
accordance with this section if it has received funds prior to 9:00 a.m. Central
time. If the Trustee fails to so institute the transfer of such funds and such
funds are not received prior to the end of such due date, the Issuer agrees to
compensate the Note Holders for the loss of the use of such funds.
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4.7 Method of Payment to Issuer. Any amounts distributed hereunder by
the Trustee to the Issuer shall be paid to the Issuer or as Issuer may otherwise
direct by wire transfer of immediately available funds of the type received by
the Trustee at such office and to such account or accounts of such entity or
entities as shall be designated by notice from the Issuer to the Trustee from
time to time.
4.8 Payments for which No Application is Otherwise Provided. Any
payments received by the Trustee for which no provision as to the application
thereof is made elsewhere in this Indenture or in any other Credit Document,
shall be distributed by the Trustee (a) to the extent received or realized at
any time prior to the payment in full of all obligations secured by this
Indenture, in the order of priority specified in Section 4.1, 4.2 or 4.3, as
appropriate, and (b) to the extent received or realized at any time after
payment in full of all such obligations: first, to any continuing amount of the
type provided in clause "first", "second" and "fourth" of Section 4.3 and
second, to the Issuer or as the Issuer may request.
ARTICLE 5. EVIDENCE OF ACTS OF NOTE HOLDERS.
5.1 Execution by Note Holders or Agents. Any request, consent, demand,
authorization, direction, notice, waiver or other action provided by this
Indenture to be given or taken by holders of the Notes may be embodied in and
evidenced by one or more instruments of substantially similar tenor and may be
signed or executed by such holders in person or by agent or agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Issuer.
5.2 Future Holders Bound. Any request, consent, demand, authorization,
direction, notice, waiver or other action of the holder of any Note shall bind
every future holder of the same Note and the holder of every Note issued upon
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done or suffered to be done by the Trustee or the Issuer in
pursuance of such action irrespective of whether or not any notation in regard
thereto is made upon such Note.
ARTICLE 6. INDENTURE DEFAULTS - REMEDIES
6.1 Indenture Events of Default. One or more of the following events
shall constitute an "Indenture Event of Default":
(a) the Issuer shall default in the payment or prepayment when
due of any principal of, or interest, or any applicable Make-Whole
Amount, Yield Protection Amount, or Breakage Amount on any Note, or any
fees or other amount payable by it hereunder or under any other Credit
Document and such default, other than a default of a payment or
prepayment of principal or applicable Make-Whole Amount and Breakage
Amount (which shall have no cure period), shall continue unremedied for
a period of five (5) Business Days; or
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(b) any representation, warranty or certification at any time
made or deemed made herein or in any other Credit Document by the
Issuer or the Parent, or any certificate furnished to any Purchaser or
other holder of any Note or the Trustee pursuant to the provisions
hereof or any other Credit Document, shall prove to have been false or
misleading as of the time made or furnished in any material respect; or
(c) the Issuer shall default in the performance of any of its
obligations under Sections 7.3(d)(ii), 7.12 and 7.14, Article 8 or any
other Article of this Indenture other than under Article 7 (with the
exception of Sections 7.3(d)(ii), 7.12 and 7.14) or in any obligation
to maintain insurance as required by this Agreement or the First Naval
Mortgage; or the Issuer shall default in the performance of any of its
obligations under Article 7 (with the exception of Sections 7.3(d)(ii),
7.12 and 7.14) or any other Credit Document (other than the payment of
amounts due which shall be governed by Section 6.1(a)), and such
default shall continue unremedied (or unwaived) by Issuer or Parent for
a period of thirty (30) days (or, in the case of the Shell Contract (i)
such additional time, not to exceed thirty (30) additional days, if
Issuer or Parent has promptly commenced and is diligently pursuing a
cure or (ii) such shorter period of time as is required to effect a
cure under the Shell Contract for a default under the Shell Contract)
after the earlier to occur of (x) notice thereof to the Issuer by the
Trustee or any Note Holder and (y) the date when a Responsible Officer
of the Issuer has actual knowledge of the existence of such default; or
(d) the Issuer shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
(e) the Issuer shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Federal Bankruptcy
Code (as now or hereafter in effect), (iv) file a petition seeking to
take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, liquidation or composition or readjustment
of debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vi) take any
corporate action for the purpose of effecting any of the foregoing; or
(f) a proceeding or case shall be commenced, without the
application or consent of the Issuer, in any court of competent
jurisdiction, seeking (i) its liquidation, reorganization, dissolution
or winding-up, or the composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the
like of the Issuer of all or any substantial part of its assets, or
(iii) similar relief in respect of the Issuer under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect,
for a period of sixty (60) days; or (iv) an order for relief against
the Issuer shall be entered in an involuntary case under the Federal
Bankruptcy Code; or
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(g) a judgment or judgments for the payment of money in excess
of $500,000 in the aggregate shall be rendered by a court against the
Issuer and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not be
procured, within thirty (30) days from the date of entry thereof and
the Issuer shall not, within said period of thirty (30) days, or such
longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; or
(h) any of the Credit Documents after delivery thereof shall
for any reason, except to the extent permitted by the terms thereof,
cease to be in full force and effect and valid, binding and enforceable
in accordance with their terms, or cease to create a valid and
perfected Lien of the priority required thereby on any of the
collateral purported to be covered thereby, or the Issuer or the Parent
shall so state in writing; or
(i) the Issuer discontinues its usual business; or
(j) Parent, SDDI or Shell Oil Company takes, suffers or
permits to exist any of the events or conditions referred to in
paragraphs (d), (e), or (f) hereof; or
(k) an Event of Default shall occur under, and as defined in,
the Performance Agreement or the Capital Funding Agreement (after
delivery thereof pursuant to the terms of Section 7.8 hereof) or the
Parent shall default in the performance of any of its covenants under
the Operating Services Agreement, and such default shall continue
unremedied for a period of five (5) Business Days in the case of the
Operating Services Agreement after the earlier to occur of (i) notice
thereof to the Parent by the Trustee or any holder of a Note, or (ii)
the Issuer otherwise becoming aware of such default); or
(l) the Shell Contract shall for any reason (other than an
early termination event as provided in Section 17E of the Drilling
Order) terminate or cease to be in full force and effect or SDDI (or
any other permitted assignee in accordance with the Shell Contract)
ceases to be a party to the Shell Contract; or
(m) the Issuer shall cease to be a 100% owned Subsidiary of
the Parent or the Parent shall cease to be a 100% owned Subsidiary of
Noble Corp.; or
(n) The Issuer shall fail to permanently record the First
Naval Mortgage at the Public Registry Office of the Republic of Panama
within ninety (90) days after the date of its execution.
6.2 Acceleration of Notes.
(a) Acceleration by Trustee. If an Indenture Event of Default exists
under any of Subsections 6.1(d), (e) or (f), the Notes then Outstanding shall
automatically become forthwith due and payable. If any other Indenture Event of
Default exists, the Trustee upon written request of the Majority Holders, shall
declare the entire principal of and all interest accrued on all the Notes then
Outstanding and the applicable Make-Whole Amount, if any, to be, and such Notes
shall thereupon
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become, forthwith due and payable together with all interest accrued thereon and
the applicable Make-Whole Amount, if any. In either such case, the Outstanding
Notes shall become due and payable without any presentment, demand, protest,
notice of protest, notice of acceleration or intention to accelerate or any
other notice or declaration of any kind, all of which are hereby expressly
waived by the Issuer, and the Issuer will forthwith pay to all holders of the
Notes then Outstanding the entire principal of and interest accrued on their
respective Notes (but specifically excluding unearned interest) and, to the
extent permitted by applicable law and for the reasons set forth in the first
sentence of Section 3.8, the applicable Make-Whole Amount, if any, for the then
entire outstanding principal of the Notes as of the date of such declaration or
automatic acceleration.
(b) Acceleration by Individual Holder. Subject to the provisions of
Section 6.3, during the existence of an Indenture Event of Default described in
Section 6.1(a) or 6.1(c) (to the extent the 6.1(c) Event of Default is with
respect to the obligation to maintain or repair the Drilling Rig or to maintain
insurance as required by this Indenture or the First Naval Mortgage or to the
obligations set forth in Sections 7.12 or 8.19) and irrespective of whether the
Trustee shall have declared all the Notes to be due and payable pursuant to
Section 6.2(a), any holder of an Outstanding Note which has not consented to a
waiver with respect to such Indenture Event of Default described in Section
6.1(a) or 6.1(c) may, at its option, by notice in writing to the Issuer and the
Trustee, declare the entire principal of, and all interest accrued on, such
holder's Notes then Outstanding and the applicable Make-Whole Amount, if any, to
be, and such holder's Notes shall thereupon become, forthwith due and payable
together with all interest accrued thereon and the applicable Make-Whole Amount,
if any, without any presentment, demand, protest, notice of protest, notice of
acceleration or intention to accelerate or any other notice or declaration of
any kind, all of which are hereby expressly waived by the Issuer, and the Issuer
shall forthwith pay to such holder the entire principal of and interest accrued
on its Notes (but specifically excluding unearned interest) and, to the extent
permitted by applicable law and for the reasons set forth in the first sentence
of Section 3.8, the amount of the applicable Make-Whole Amount, if any, for the
then entire outstanding principal of such Notes as of the date of such
declaration by such holder. Such Notes shall be surrendered by the holder
thereof upon such full payment thereof with a Written Request for such surrender
by, and at the sole cost and expense of, the Issuer.
(c) Nonwaiver and Expenses. No course of dealing on the part of any
holder of the Notes or on the part of any Trustee nor any delay or failure on
the part of any holder of the Notes or on the part of any Trustee to exercise
any right shall operate as a waiver of such right or otherwise prejudice such
holder's rights, powers and remedies. If the Issuer fails to pay when due the
principal of, or interest, any applicable Make-Whole Amount, or Yield Protection
Amount, or Breakage Amount on any Note, or fails to comply with any other
provision of this Indenture, the Issuer will pay to the holders of the Notes and
to each Trustee, to the extent permitted by law, such further amounts as shall
be sufficient to cover such costs and expenses, including but not limited to
reasonable external attorneys' fees, as may be incurred by such holder or by
such Trustee, or both, in collecting any sums due on the Notes or in otherwise
enforcing any of their rights.
6.3 Annulment of Acceleration of Notes. If (i) a declaration is made
pursuant to Section 6.2(a) by the Trustee, then, and in every such case, the
Majority Holders may, by written instrument filed with the Issuer and the
Trustee, rescind and annul such declaration, and the consequences thereof or
(ii) a declaration is made pursuant to Section 6.2(b) by a holder of any of
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the Notes, then, such holder may, by written instrument filed with the Issuer
and the Trustee, rescind and annul such declaration, and the consequences
thereof; provided, that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due on or pursuant to the Notes or this Indenture;
(b) all arrears of interest upon all the Notes and all other
sums payable under the Notes and under this Indenture, except any
principal of, or interest or any applicable Make-Whole Amount on, the
Notes which has become due and payable solely by reason of such
declaration under Section 6.2(a) or Section 6.2(b), shall have been
duly paid;
(c) each and every other Indenture Default and Indenture Event
of Default shall have been waived pursuant to Section 10.2 or otherwise
made good or cured;
and, provided further, that no such rescission and annulment shall (i) extend to
or affect any subsequent Indenture Default or Indenture Event of Default or (ii)
impair any right consequent thereon.
6.4 Default Remedies.
(a) If an Indenture Event of Default exists, each Trustee may exercise
(i) all of the rights and remedies granted to such Trustee hereunder and/or
under each of the other Credit Documents, and (ii) all of the rights and
remedies of a secured party on default under the Uniform Commercial Code in
effect in the State of New York or in effect in any other jurisdiction, the laws
of which are applicable to the Collateral (the "UCC"). Any Trustee may take
possession of all or any part of the Properties covered or intended to be
covered by the Lien created by this Indenture or by any other Credit Document,
and such Trustee may exclude the Issuer and all Persons claiming under the
Issuer wholly or partly therefrom. Without limiting the foregoing, if any
Indenture Event of Default exists, any Trustee may from time to time in its
discretion, without notice (except as expressly provided in this Section 6.4) do
any of the following:
(i) subject to compliance with any mandatory legal
requirements, take immediate possession of the Collateral, and
require the Issuer to, and the Issuer hereby agrees that it
will at its expense and upon request of any Trustee forthwith,
assemble all or part of the Collateral as reasonably directed
by such Trustee and make it available to such Trustee at a
place or places to be designated by such Trustee which are
reasonably convenient to both parties. In any event, Issuer
shall bear the risk of accidental loss or damage to or
diminution in value of the Collateral, and Trustee shall have
no liability whatsoever for failure to obtain or maintain
insurance, nor to determine whether any insurance ever in
force is adequate as to amount or as to the risk insured.
(ii) either with or without taking possession and
either before or after taking possession, and without
instituting any legal proceedings whatsoever, subject to
compliance with any mandatory legal requirements, dispose of
by public or private
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proceedings conducted at its office, on the premises of the
Issuer, at any site where any Collateral is located, or
elsewhere, all or any part of the Collateral, as a unit or in
parts and separately or in combination with any other
Collateral, and by way of one or more contracts (it being
agreed that the sale of any part of the Collateral shall not
exhaust the Trustee's power of sale, but sales may be made
from time to time, and at any time, until all of the
Collateral has been sold or until the obligations secured by
this Indenture have been paid and performed in full), and at
any such sale it shall not be necessary to move any of the
Collateral to any location of sale, or to assemble, prepare in
any manner or exhibit any of the Collateral (the Issuer hereby
acknowledging that the Collateral is not of a type for which
moving, assembling, preparation in any manner or exhibition is
necessary for a commercially reasonable sale);
(iii) buy the Collateral, or any part thereof, at any
public sale;
(iv) buy the Collateral, or any part thereof, at any
private sale if the Collateral is of a type customarily sold
in a recognized market or is of a type which is the subject of
widely distributed standard price quotations;
(v) at its discretion, retain the Collateral in
satisfaction of the obligations secured by this Indenture
whenever the circumstances are such that any Trustee is
entitled to do so under the UCC or otherwise (but under no
circumstances will any Trustee be deemed to have elected to
retain the Collateral in satisfaction of such obligations
unless it shall have sent written notice of such election to
the Issuer);
(vi) Take possession of all books and records of
Issuer pertaining to the Collateral. Each Trustee shall have
the authority (subject to compliance with any mandatory legal
requirements) to enter upon any real property or improvements
thereon in order to obtain any such books or records, or any
Collateral located thereon, and remove the same therefrom
without liability;
(vii) Apply proceeds of the disposition of the
Collateral to the obligations hereby secured in the manner set
forth in the Trust Indenture and permitted by the UCC or
otherwise permitted by law or in equity. Such application may
include, without limitation, the reasonable expenses of
retaking, holding, preparing for sale or other disposition,
and the reasonable external attorneys' fees and legal expenses
incurred by each Trustee;
(viii) Appoint any Person as agent to perform any act
or acts necessary or incident to any sale or transfer by each
Trustee of the Collateral. Additionally, any sale or transfer
hereunder may be conducted by an auctioneer or any officer or
agent of each Trustee;
(ix) Receive, change the address for delivery, open
and dispose of mail addressed to Issuer, and to execute,
assign and endorse negotiable and other instruments for the
payment of money, documents of title or other evidences of
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payment, shipment or storage for any form of Collateral on
behalf of and in the name of Issuer;
(x) Notify or require Issuer to notify account
debtors that the accounts have been assigned to each Trustee
and direct such account debtors to make payments on the
accounts directly to each Trustee. To the extent each Trustee
does not so elect, Issuer shall continue to collect the
accounts. Each Trustee or its designee shall also have the
right, in its own name or in the name of Issuer, to do any of
the following: (A) to demand, collect, receipt for, settle,
compromise any amounts due, give acquittance for, prosecute or
defend any action which may be in relation to any monies due
or to become due by virtue of, the accounts; (B) to sell,
transfer or assign or otherwise deal in the accounts or the
proceeds thereof or the related goods, as fully and
effectively as if each Trustee were the absolute owner
thereof; (C) to extend the time of payment of any of the
accounts, to grant waivers and make any allowance or other
adjustment with reference thereto; (D) to endorse the name of
Issuer on notes, checks or other evidences of payments on
Collateral that may come into possession of each Trustee; (E)
to take control of cash and other proceeds of any Collateral;
(F) to sign the name of Issuer on any invoice or bill of
lading relating to any Collateral, or any drafts against
account debtors or other Persons making payment with respect
to Collateral; (G) to send a request for verification of
accounts to any account debtor; and (H) to do all other acts
and things necessary to carry out the intent of this
Indenture; and
(xi) Exercise all other rights and remedies permitted
by law or in equity.
(b) The Issuer agrees that, to the extent notice of sale shall
be required by law, at least ten (10) Business Days' notice to the
Issuer of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable
notification. The Trustee shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Trustee
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(c) In addition to the foregoing, in the event the Series B
Notes are not paid and satisfied in full at maturity thereof and
payment and satisfaction thereof is effected through realization upon
the Collateral pursuant to this Article 6, the Series B Note Holders
shall be entitled to additional compensation from the proceeds of such
realization of the Collateral pursuant to Section 4.3 of $3,000,000 to
compensate the Series B Note Holders for the additional risk, time and
expense.
6.5 Other Enforcement Rights.
(a) Each Trustee may, but unless first requested so to do by
the Majority Holders and furnished with reasonable indemnity
satisfactory to it pursuant to Section 9.3(f) hereof shall not (subject
to the provisions of Section 9.1) be under any obligation to, proceed
to protect and enforce this Indenture, the Notes and each other Credit
Document by suit or suits
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or proceedings in equity, at law or in bankruptcy, and whether for the
specific performance of any covenant or agreement herein or therein
provided, or for foreclosure thereunder, or for the appointment of a
receiver or receivers for the foreclosure thereunder, or for the
appointment of a receiver or receivers for the Trust Estate or other
Collateral or any part thereof, for the recovery of judgment for the
obligations hereby secured or for the enforcement of any other proper,
legal or equitable remedy available under applicable law.
(b) In case an Indenture Event of Default has occurred and is
continuing and there shall be pending any case or proceedings for the
bankruptcy or for the reorganization or arrangement of the Issuer, the
Parent or SDDI, under the federal bankruptcy laws or any other
applicable law or in connection with the insolvency of the Issuer, the
Parent or SDDI, or in case a custodian, receiver or trustee shall have
been appointed for the Issuer, the Parent or SDDI, or in case of any
other proceedings in respect of the Issuer, the Parent or SDDI, the
Trustee may file such proof of claim and other papers or documents as
may be necessary or advisable in order to have the claims of any
Trustee and of the Note Holders allowed in any judicial proceedings
relative to the Issuer, the Parent or SDDI, and, irrespective of
whether the principal of all of the Notes shall then be due and payable
as therein expressed, by proceedings for the prepayment thereof, by
declaration or otherwise, the Trustee shall be entitled and empowered
to file and prove a claim for the whole amount of principal, applicable
Make-Whole Amount (if any) and interest owing and unpaid in respect of
the Notes, and any other sum or sums owing thereon or pursuant thereto
or pursuant hereto, and to collect and receive any or other Property
payable or deliverable on any such claim, and to distribute the same as
provided in Section 4.3; and any receiver, custodian, assignee or
trustee in bankruptcy, trustee or debtor in reorganization or trustee
or debtor in any proceedings for the adoption of an arrangement is
hereby authorized by each holder of any Note, by the acceptance of the
Note or Notes held by it, to make such payments to the Trustee, and, in
the event that the Trustee shall consent to the making of such payments
directly to the Note Holders, to pay to each of the Trustees any amount
due it for compensation and expenses, including reasonable external
counsel fees, incurred by it up to the date of such distribution;
provided, however, that nothing herein contained shall be deemed to
authorize or empower the Trustee to consent to accept or adopt, on
behalf of any holder of the Notes, any plan of reorganization or
readjustment of the Issuer affecting the Notes or the rights of any
holder thereof, or to authorize or empower the Trustee to vote in
respect of the claim of any holder in any such proceedings.
(c) The Issuer hereby irrevocably appoints the Trustee as the
Issuer's attorney-in-fact and proxy, with full authority in the place
and stead of the Issuer and in the name of the Issuer or otherwise,
from time to time during the continuance of an Indenture Event of
Default in the Trustee's discretion, to take any action and to execute
any instrument which the Trustee may deem necessary or advisable to
accomplish the purposes of this Indenture, including, without
limitation: (a) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for monies due and to become
due under or in respect of any of the Collateral; and (b) to file any
claims or take any action or institute any proceedings which the
Trustee may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce the rights of the Trustee with
respect to any of the Collateral. Without limiting the generality of
the foregoing and whether
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or not an Indenture Event of Default shall have occurred and be
continuing, the Trustee shall have the right to receive, collect and
endorse all checks made payable to the Issuer or the Issuer's order
representing payments under the Shell Contract or any payment on
account of any of the Collateral and to give full discharge therefor.
(d) If the Issuer or the Parent fails to perform any act or to
take any action which hereunder or under any other Credit Document to
which it is a party, the Issuer or the Parent is required to perform or
take, or to pay any money which hereunder or under any other Credit
Document the Issuer or the Parent is required to pay, the Trustee, in
the Issuer's or the Parent's name or in its own name, may (but shall
not be obligated to) following notice to the Issuer or Parent perform
or cause to be performed such act or take such action or pay such
money, and any expenses so incurred by the Trustee, and any money so
paid by the Trustee, shall be a demand obligation owing by the Issuer
and shall bear interest from the date of making such payment until paid
at the Default Rate and shall be secured by this Indenture and by any
other instrument securing the obligations secured hereby. Upon making
any such payment, the Trustee shall be subrogated to all of the rights
of the Person receiving such payment, which rights will be held by the
Trustee to secure the obligations secured hereby.
(e) Anything in this Indenture to the contrary
notwithstanding, the Majority Holders shall have the right, at any
time, by an instrument or instruments in writing, executed and
delivered to any Trustee and providing for indemnity satisfactory to it
pursuant to Section 9.3(f), to direct the method and place of
conducting all proceedings to be taken in connection with the
enforcement of the terms and conditions of this Indenture; provided,
however, that such direction shall not be otherwise than in accordance
with the provisions of law and of this Indenture.
6.6 Effect of Sale, etc.
(a) Any sale or sales pursuant to the provisions hereof or of
any other Credit Document, whether under the power of sale granted
hereby or thereby or pursuant to any legal proceedings, shall operate
to divest the Issuer of all right, title, interest, claim and demand
whatsoever, either at law or in equity, of, in and to the Trust Estate
or other Collateral, or any part thereof, so sold, and any Property so
sold shall be free and clear of any and all rights of redemption by,
through or under the Issuer. At any such sale, the holder of any Note
may bid for and purchase the Property sold and may make payment
therefor as set forth below, and any Note Holder so purchasing any such
Property, upon compliance with the terms of sale may hold, retain and
dispose of such Property without further accountability.
(b) The receipt by any Trustee, or by any Person authorized
under any judicial proceedings to make any such sale, of the proceeds
of any such sale shall be a sufficient discharge to any purchaser of
the Trust Estate or other Collateral, or of any part thereof, sold as
aforesaid; and no such purchaser shall be bound to see to the
application of such proceeds, or be bound to inquire as to the
authorization, necessity or propriety of any such sale. In the event
that, at any such sale, any holder of Outstanding Notes is the
successful purchaser, it may, in paying the purchase price, turn in any
of its Notes in lieu of cash in the amount which shall, upon
distribution of the net proceeds of such sale, be payable thereon, and
if the cash
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amounts so payable thereon shall be less than the amount due therein, said Notes
shall be returned to the holders thereof after a notation of each partial
prepayment shall have been made thereon.
6.7 Restoration of Rights and Remedies. If any Trustee shall have
instituted any proceeding to enforce any right or remedy under this Indenture or
under any other Credit Document and such proceeding shall have been discontinued
or abandoned for any reason, or shall have been determined adversely to such
Trustee, then and in every such case such Trustee, the Issuer and the holders of
the Notes shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder or under any
other Credit Document, and thereafter all rights and remedies of such Trustee
shall continue as though no such proceeding had been instituted.
6.8 Application of Sale Proceeds and Deficiency. The proceeds of any
exercise of rights with respect to the Trust Estate or any other Collateral, or
any part thereof, and the proceeds and the avails or any remedy hereunder shall
be paid to and applied as described in Section 4.3. In the event that at any
time and from time to time the payments under the Shell Contract then collected
by the Trustee and the proceeds of any sale, collection or realization of or
upon Collateral by the Trustee are insufficient to pay all the obligations
secured by this Indenture, the Issuer shall be liable for the deficiency,
together with interest thereon as provided in the governing Credit Documents or
(if no interest is so provided) at such other rate as shall be fixed by
applicable law, together with the costs of collection and the reasonable fees
and disbursements of any external attorneys employed by the Trustee or any
holder of an Outstanding Note to collect such deficiency.
6.9 Cumulative Remedies. No delay or omission of any Trustee or of the
holder of any Note to exercise any right or power hereunder or under any other
Credit Document arising from any Indenture Default or Indenture Event of Default
or failure of performance on the part of the Issuer shall exhaust or impair any
such right or power or prevent its exercise during the continuance of such
Indenture Default or Indenture Event of Default. No waiver by any Trustee, or
the holder of any Note, of any such Indenture Default or Indenture Event of
Default, whether such waiver be full or partial, shall extend to or be taken to
affect any subsequent default, or to impair the rights resulting therefrom
except as may be otherwise expressly provided herein. No remedy hereunder or
under any other Credit Document is intended to be exclusive of any other remedy
but each and every remedy shall be cumulative and in addition to any and every
other remedy given hereunder or under any other Credit Document or otherwise
existing; nor shall the giving, taking or enforcement of any other or additional
security, Collateral or guaranty for the payment of the obligations secured
under this Indenture operate to prejudice, waive or affect the security of this
Indenture or any other Credit Document or any rights, powers or remedies
hereunder or under any other Credit Document, nor shall any Trustee or any
holder of any Note be required to first look to, enforce or exhaust such other
or additional security, Collateral or guaranties. All covenants, conditions,
provisions, warranties, guaranties, indemnities and other undertakings of the
Issuer contained in this Indenture, or in any document referred to herein or in
any agreement supplementary hereto or in any other Credit Documents shall be
deemed cumulative to and not in derogation or substitution of any of the terms,
covenants, conditions, or agreements of the Issuer herein contained. To the
extent of overlap of any security interest or lien granted hereunder or under
any other Credit Document on any particular
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Collateral, the Trustee may elect to exercise rights and remedies under either
or, if appropriate, both of such security interests or liens.
6.10 Limitations on Suits. Except as provided in Section 6.2(b), no
holder of any Note issued hereunder shall have the right to institute any suit,
action or proceeding at law or in equity, for the execution of any trust or
power granted to the Trustees under this Indenture or any other Credit Document
or for any other remedy under or upon this Indenture or any other Credit
Document, unless (a) the Majority Holders shall have made Written Request upon
the applicable Trustee to exercise the powers hereinbefore granted or to
institute such action, suit or proceeding in its own name; (b) such holder or
said holders shall have offered to such applicable Trustee the indemnity
reasonably satisfactory to it as provided under Section 9.3(f); and (c) such
applicable Trustee shall have refused or failed to comply with such Written
Request for a period of thirty (30) days after such Written Request shall have
been received by it. Such notification, request, offer of indemnity and refusal
or failure are hereby declared, in every case, to be conditions precedent to the
exercise by any holder of a Note of any remedy hereunder; it being understood
and intended that no one or more holders of Notes shall have any right in any
manner whatever by its or their action to enforce any right under this Indenture
or any other Credit Document, except in the manner herein provided, and that all
judicial proceedings to enforce any provision of this Indenture or any other
Credit Document shall be instituted, had and maintained in the manner herein or
any other Credit Document provided and for the equal and proportionate benefit
of all holders of the Outstanding Notes.
6.11 Suits for Principal and Interest. Nothing contained in Section
6.10 or in any other provision of this Indenture or in the Notes shall affect or
impair the obligation of the Issuer, which is absolute and unconditional, to pay
(or cause to be paid from the Trust Estate or other Collateral as in Article 4
provided) the principal of, any applicable Make-Whole Amount and interest on,
the Notes to the holders thereof on the dates when due, respectively, and at the
place specified in Section 4.6, or affect or impair the right of action, which
is also absolute and unconditional, of such holders to institute suit to enforce
such payment by virtue of the contract embodied in the Notes.
6.12 Waiver by the Issuer.
(a) In granting to the Trustee the power to enforce its rights
hereunder without prior judicial process or judicial hearing, the
Issuer expressly waives, renounces and knowingly relinquishes (to the
extent it may lawfully do so) any legal right which might otherwise
require the Trustee to enforce its rights by judicial process. In so
providing for non-judicial remedies, the Issuer recognizes and concedes
that such remedies are consistent with the usage of trade, are
responsive to commercial necessity, and are the result of a bargain at
arm's length. Nothing herein is intended to prevent the Trustee or the
Issuer from resorting to judicial process.
(b) The Issuer by becoming a party to any Credit Document (to
the extent that it may lawfully do so) hereby covenants that it will
not at any time insist upon or plead, or in any manner claim or take
the benefit or advantage of, any stay (except in connection with a
pending appeal of a judgment in a legal proceeding), valuation,
appraisal, redemption or extension law now or at any time hereafter in
force which, but for this waiver, might be applicable to any sale made
under any judgment, order or decree based on any of the Notes
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or this Indenture or any other Credit Document; and the Issuer by
becoming a party to any Credit Document (to the extent it may lawfully
do so) hereby expressly waives and relinquishes all benefit and
advantage of any and all such laws and hereby covenants that it will
not hinder, delay or impede the execution of any power herein granted
and delegated to any Trustee, but that it will suffer and permit the
execution of every such power as though no such law or laws had been
made or enacted.
(c) The Issuer waives any right to require the Trustee or the
holders of the Outstanding Notes to proceed against any other Person,
or to exhaust any Collateral or other security for the obligations
secured hereby, or to have any other Person joined with the Issuer in
any suit arising out of such obligations or the Credit Documents, or to
pursue any other remedy in the Trustee's or such holders' power. The
Issuer further waives any and all notice of acceptance of this
Indenture by any other Person directly or indirectly liable for such
obligations from time to time. The Issuer further waives any defense
arising by reason of any disability or other defense of any other
Person or by reason of the cessation from any cause whatsoever of the
liability of any other Person liable for the obligations secured
hereby. Until all of such obligations shall have been paid in full, the
Issuer shall have no right to subrogation and the Issuer waives the
right to enforce any remedy which the Trustee or the holders of the
Outstanding Notes have or may hereafter have against any other Person
liable for such obligations, and the Issuer waives any benefit of any
right to participate in any security whatsoever now or hereafter held
by the Trustee or the holders of the Outstanding Notes. The Issuer
authorizes the Trustee and the holders of the Outstanding Notes,
without notice or demand and without any reservation of rights against
the Issuer and without affecting the Issuer's liability hereunder or on
the obligations secured hereby, from time to time to (a) take or hold
any Property other than the Collateral from any other Person as
security for such obligations, and exchange, enforce, waive and release
any or all of such Property, (b) apply such Property and direct the
order or manner of sale thereof as the Trustee and the Majority Holders
may in their discretion determine, and (c) renew, extend for any
period, accelerate, modify, compromise, settle or release any of the
obligations of any other Person in respect of the obligations secured
hereby or other security for such obligations.
ARTICLE 7. AFFIRMATIVE COVENANTS.
The Issuer covenants and agrees that, so long as any of the commitments
are in effect and until payment in full of all Notes issued hereunder, all
interest thereon and all other amounts payable by the Issuer hereunder:
7.1 Financial Statements. The Issuer shall deliver, or shall cause to
be delivered, to the Trustee and each Note Holder:
(a) As soon as available and in any event within 120 days
after the end of each fiscal year of the Issuer the audited statements
of operations, stockholders' equity and cash flow, of the Issuer for
such fiscal year, and the related balance sheet of the Issuer as at the
end of such fiscal year, and setting forth in each case in comparative
form the corresponding figures for the preceding fiscal year, and
accompanied by (i) the related opinion of Price waterhouseCoopers, or
such other independent public accountants of recognized national
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standing acceptable to the Majority Holders, which opinion shall state
that said financial statements fairly present the financial condition
and results of operations of the Issuer as at the end of, and for, such
fiscal year, that such financial statements have been prepared in
accordance with GAAP, except for such changes in such principles with
which the independent public accountants shall have concurred and
footnoted and such opinion shall not contain a "going concern" or scope
or like qualification or exception and that the examination of such
accountants in connection with such financial statements has been
conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other auditing
procedures as said accountants deemed necessary in the circumstances
and (ii) a certificate of such accountants stating that in making the
examination necessary for their opinion, they obtained no knowledge,
except as specifically stated, of any Indenture Default or Indenture
Event of Default.
(b) As soon as available and in any event within 120 days
after the end of each fiscal year of Noble Corp., the audited
consolidated statements of operations, stockholders' equity, and cash
flow, of Noble Corp. and its consolidated subsidiaries for such fiscal
year, and the related balance sheet of Noble Corp. and its consolidated
subsidiaries as at the end of such fiscal year, and setting forth in
each case in comparative form the corresponding figures for the
preceding fiscal year, and accompanied by the related opinion of Price
waterhouseCoopers, or such other independent public accountants of
recognized national standing acceptable to the Majority Holders, which
opinion shall state that said financial statements fairly present the
consolidated financial condition and results of operations of Noble
Corp. and its consolidated subsidiaries as at the end of, and for, such
fiscal year, that such financial statements have been prepared in
accordance with GAAP, except for such changes in such principles with
which the independent public accountants shall have concurred and
footnoted and such opinion shall not contain a "going concern" or scope
or like qualification or exception and that the examination of such
accountants in connection with such financial statements has been
conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other auditing
procedures as said accountants deemed necessary in the circumstances.
(c) As soon as available and in any event within 120 days
after the end of each fiscal year of the Parent, the unaudited
consolidated statements of operations, of the Parent and its
consolidated subsidiaries for such fiscal year and the related
consolidated balance sheets of the Parent and its consolidated
subsidiaries as at the end of such fiscal year, and setting forth in
each case in comparative form, the corresponding figures for the
preceding fiscal year, and accompanied by the certificate of a
Responsible Officer, which certificate shall state that said financial
statements fairly present the consolidated financial condition and
results of operations of the Parent and its consolidated subsidiaries
as at the end of, and for, such fiscal year and that such financial
statements have been prepared in accordance with GAAP (exclusive of
footnotes), as at the end of, and for, such period.
(d) As soon as available and in any event within 60 days after
the end of each of the first three fiscal quarterly periods of each
fiscal year of the Issuer the unaudited statements of operations and
cash flows of the Issuer for such period and for the period from the
beginning of the respective fiscal year to the end of such period, and
the related balance sheets
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as at the end of such period, and setting forth in each case in
comparative form the corresponding figures for the corresponding period
in the preceding fiscal year, accompanied by the certificate of a
Responsible Officer, which certificate shall state that said financial
statements fairly present the consolidated financial condition and
results of operations of the Issuer in accordance with GAAP, as at the
end of, and for, such period (subject to normal year-end audit
adjustments) and further stating whether there existed as of the date
of such financial statements and whether, to the best of such officer's
knowledge, there exists on the date of the certificate or existed at
any time during the period covered by such financial statements any
Indenture Default or Indenture Event of Default and, if any such
condition or event exists on the date of the certificate, specifying
the nature and period of existence thereof and the action the Issuer is
taking and proposes to take with respect thereto.
(e) As soon as available and in any event within 60 days after
the end of each of the first three fiscal quarterly periods of each
fiscal year of the Parent, the unaudited consolidated statements of
operations of the Parent and its consolidated subsidiaries for such
period and for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated balance
sheets as at the end of such period, and setting forth in each case, in
comparative form the corresponding figures for the corresponding period
in the preceding fiscal year, accompanied by the certificate of a
Responsible Officer, which certificate shall state that said financial
statements fairly present the consolidated financial condition and
results of operations of the Parent and its consolidated subsidiaries
in accordance with GAAP, as at the end of, and for, such period
(subject to normal year-end audit adjustments).
(f) As soon as available and in any event within 60 days after
the end of each of the first three fiscal quarterly periods of each
fiscal year of Noble Corp. the unaudited consolidated statements of
operations and cash flows of Noble Corp. and its consolidated
subsidiaries for such period and for the period from the beginning of
the respective fiscal year to the end of such period, and the related
consolidated balance sheets as at the end of such period and setting
forth in each case in comparative form the corresponding figures for
the corresponding period in the preceding fiscal year.
(g) Within the period provided in paragraph (a) above, a
certificate of a Responsible Officer of the Issuer stating whether
there existed as of the date of such financial statements and whether,
to the best of such officer's knowledge, there exists on the date of
the certificate or existed at any time during the period covered by
such financial statements any Indenture Default or Indenture Event of
Default and, if any such condition or event exists on the date of the
certificate, specifying the nature and period of existence thereof and
the action the Issuer is taking and proposes to take with respect
thereto.
(h) Promptly and in any event within three (3) Business Days
after the Issuer knows that any Indenture Default or Indenture Event of
Default or any Material Adverse Effect has occurred, a notice of such
Indenture Default or Indenture Event of Default or Material Adverse
Effect, and promptly and in any event within three (3) Business Days
after the Issuer knows of any material default under the Shell Contract
or the Operating
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Services Agreement a notice of such default, in each case, describing
the same in reasonable detail and the action the Issuer proposes to
take with respect thereto.
(i) Promptly upon its becoming available, each financial
statement, report, notice or proxy statement sent by the Issuer, the
Parent or Noble Corp. to stockholders generally and each regular or
periodic report and any registration statement, prospectus or written
communication (other than transmittal letters) in respect thereof filed
by the Issuer, the Parent or Noble Corp. with or received by the
Issuer, the Parent or Noble Corp. in connection therewith from any
securities exchange or the SEC or any successor agency.
(j) From time to time such other information regarding the
business, affairs or financial condition of the Issuer, the Parent or
information from Noble Corp. reasonably related to the Issuer or the
Parent (including, without limitation, any Plan or Multiemployer Plan
and any reports or other information required to be filed under ERISA)
as any Purchaser or other Note Holder or the Trustee may reasonably
request.
7.2 Litigation. The Issuer shall promptly give to the Trustee and each
registered Note Holder notice of any litigation or proceeding against or
adversely affecting the Issuer or the Parent in which the amount involved is not
covered in full by insurance or in which the Issuer has received notice from any
insurer reserving its rights or contesting coverage under any policy (subject to
normal and customary deductibles and for which the insurer has not assumed the
defense), or in which injunctive or similar relief is sought and which could
reasonably be expected to result in a Material Adverse Effect. The Issuer will
promptly notify the Trustee and each registered Note Holder of all claims,
judgments, Liens or other encumbrances affecting any Property of the Issuer if
the aggregate value of such claims, judgments, Liens or other encumbrances
affecting such Property shall exceed $500,000.
7.3 Maintenance, Etc.
(a) The Issuer shall: (i) preserve and maintain its corporate
existence and all of its material rights, privileges, licenses and
franchises; (ii) keep proper books of record and account in which full,
true and correct entries will be made of all dealings or transactions
of, or in relation to its business and activities in accordance with
GAAP consistently applied; (iii) comply with all Governmental
Requirements if failure to comply with such requirements will have a
Material Adverse Effect; (iv) pay and discharge all taxes, assessments
and governmental charges or levies imposed on it or on its income or
profits or on any of its Property, all trade accounts payable in
accordance with usual and customary business terms and all claims for
work, labor or materials prior to the date on which any Lien (other
than Liens for obligations that have not been outstanding more than 60
days, unless action has been taken to file or enforce such Liens) or
penalties attach thereto, except for any such tax, assessment, charge,
levy, account payable or claim, the payment of which is being Contested
In Good Faith; (v) permit any holder of the Notes or its representative
to visit and inspect, under the Issuer's guidance, any of the
properties of the Issuer, to examine all of its books of account,
records, reports and other papers, to make copies and extracts
therefrom and to discuss its affairs, finances and accounts with its
officers, employees, and independent public accountants (and by this
provision the Issuer authorizes said accountants to discuss with any
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holder of the Notes the finances and affairs of the Issuer) all at such
reasonable time, upon reasonable notice and as often as may be
reasonably requested; provided that the Issuer shall not be required to
pay or reimburse any Note Holder for expenses which such holder may
incur in connection with any such visitation or inspection, except that
if such visitation or inspection is made during any period when an
Indenture Default or an Indenture Event of Default shall have occurred
and be continuing, the Issuer agrees to reimburse such holder for all
such expenses promptly upon demand, and (vi) keep, or cause to be kept,
insured by financially sound and reputable insurers all Property of a
character usually insured by Persons engaged in the same or similar
business similarly situated against loss or damage of the kinds and in
the amounts customarily insured against by such Persons and carry such
other insurance as is usually carried by such Persons and as required
by each of the Shell Contract and the First Naval Mortgage including,
without limitation, the insurance described on Schedule 7.3 hereto.
(b) Contemporaneously with the delivery of the financial
statements required by Section 7.1 to be delivered for each year, the
Issuer will furnish or cause to be furnished to the Trustee a
certificate of insurance coverage from each insurer in form and
substance satisfactory to the Trustee and the Required Holders.
(c) The Issuer will maintain the Drilling Rig and all
equipment used in connection therewith in a good running order, repair
and first class condition and in compliance with the Shell Contract and
all Governmental Requirements and within the class designation as on
the Closing Date and with all equipment capable of operation within the
tolerances designated on the Closing Date and at all times registered
as a vessel under the laws of Panama and otherwise operate its
Properties or cause such Properties to be operated in United States
territorial waters in the Gulf of Mexico or in the Gulf of Mexico on or
above the outer Continental Shelf of the United States and as set forth
in Section 1 of the Drilling Order and in accordance with the Shell
Contract and the practices of the industry and in compliance with all
other applicable contracts and agreements and otherwise in a careful
efficient manner and in compliance in all material respects with all
Governmental Requirements.
The Issuers' maintenance obligations hereunder shall include,
without limitation, causing the surveys and inspections referred to in
Annex D hereto to be timely conducted and satisfactorily passed with
the 5 year surveys and inspections conducted and passed prior to the
Maturity Date.
In the event of any damage to the Drilling Rig from any
casualty having a repair cost in excess of $250,000, the Issuer shall
give prompt written notice thereof to the Trustee, which notice shall
set forth in reasonable detail the nature and extent of the damage, an
estimate of the cost of repairs and an estimate of the length of time
necessary to repair such damage. Such notice shall also state whether
the Issuer considers such damage to constitute an Event of Loss, which
statement shall not, however, be determinative. With respect to any
casualty damage, regardless of whether insurance proceeds are
available, the Issuer shall promptly and diligently repair the Drilling
Rig or cause the Drilling Rig to be repaired to the same condition as
it was before such damage and in compliance with the foregoing
requirements of this Section 7.3(c), free and clear of all liens and
encumbrances other than
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Excepted Liens. At the request of the Trustee, all contracts for any
such repairs shall be assigned to the Trustee as part of the Trust
Estate as security for Issuer's obligations hereunder. Such assignment
may be effected by a blanket assignment and by specific assignments
with respect to third party contracts in excess of $100,000. In the
event of any damage that constitutes an Event of Loss, then the Issuer
shall be relieved of the foregoing repair obligations upon repayment in
full of all principal, interest and all other amounts payable under the
Notes and the other Credit Documents in compliance with the provisions
of Section 3.6 hereof.
(d)(i) The Issuer will maintain the Shell Contract and the
Operating Services Agreement in full force and effect and comply with
all terms and provisions thereof and enforce the compliance of SDDI and
the Parent in accordance with their respective terms except for
immaterial variances and immaterial waivers. In furtherance of the
foregoing, Issuer shall: (A) pursue all reasonable efforts with respect
to collecting dayrate payments due under the Shell Contract in
accordance with prudent business practices, and (B) collect all dayrate
payments due under the Shell Contract not later than sixty days after
the date due, unless on such due date and continuing through and until
the date on which such dayrate payment is made, the Debt Service
Reserve Fund shall equal two (2) months worth of payments required on
the Notes or, if the Capital Funding Agreement is then in effect, no
amount shall have been drawn thereunder and not reinstated.
(ii) The Operating Services Agreement will not be amended or
modified without the approval of the Required Holders. The maintenance,
repair and insurance requirement provisions of the Shell Contract will
not be amended or modified without the approval of the Required Holders
and the Shell Contract will not otherwise be amended or modified
without the approval of the Required Holders if such other amendment or
modification will reduce or impair the rentals or other payments of
SDDI thereunder, including, without limitation, the termination
payments called for in Section 17E of the Drilling Order, or will
change the payment terms or the term of the Shell Contract, or will
increase the material obligations of the contractor thereunder or will
otherwise materially impair the value, operational capabilities and
useful life of the Drilling Rig or the Shell Contract. Without the
consent of all of the Note Holders, the Issuer will not consent to the
assignment by SDDI (except to permitted assignees in accordance with
the Shell Contract) of the Shell Contract.
(e) Promptly after the submission to SDDI of each monthly
billing under the Shell Contract, the Issuer shall supply the Trustee
with a copy thereof, which billing shall clearly set out the amount of
the billing and the due date thereof.
7.4 Environmental Matters.
(a) The Issuer will operate the Property in compliance with
Environmental Laws such that any noncompliance will not have a Material
Adverse Effect, and will establish and implement such procedures as may
be reasonably necessary to continuously determine and assure that any
failure of the following does not have a Material Adverse Effect: (i)
all Property of the Issuer and the operations conducted thereon and
other activities of the Issuer
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are in compliance with and do not violate the requirements of any
Environmental Laws, (ii) no oil, hazardous substances or solid wastes
are disposed of, discharged or otherwise released except in compliance
with Environmental Laws, (iii) no hazardous substance will be released
in a quantity equal to or exceeding that quantity which requires
reporting pursuant to Section 103 of CERCLA, and (iv) no oil, oil and
gas exploration and production wastes or hazardous substance is
discharged or released so as to pose an imminent and substantial
endangerment to public health or welfare or the environment which will
result in damages recoverable under the OPA.
(b) The Issuer will promptly notify the Trustee and the
registered Note Holders in writing of any threatened action,
investigation or inquiry by any Governmental Authority of which the
Issuer has knowledge in connection with any Environmental Laws,
excluding routine testing and corrective action.
7.5 Further Assurances. The Issuer will cure promptly any defects in
the creation and issuance of the Notes and the execution and delivery of the
Credit Documents and this Indenture. The Issuer at its expense will promptly
execute and deliver to the Trustee upon request all such other documents,
agreements and instruments to comply with or accomplish the covenants and
agreements of the Issuer in the Credit Documents and this Indenture, or to
further evidence and more fully describe the Collateral intended as security for
the Notes, or to correct any omissions in the Credit Documents, or to state more
fully the security obligations set out herein or in any of the Credit Documents,
or to perfect, protect or preserve any Liens created pursuant to any of the
Credit Documents, or to make any recordings, to file any notices or obtain any
consents, all as may be necessary or appropriate in connection therewith. To
facilitate assembling the Collateral upon the occurrence of an Indenture Event
of Default and making it available to the Indenture Trustee at a place to be
designated by the Indenture Trustee which is reasonably convenient, the Issuer
has agreed to, among other things, move the Drilling Rig under certain
conditions as specified in Section 3.3(c) of the First Naval Mortgage. In
addition and in connection therewith, the Issuer acknowledges that the Indenture
Trustee and the Note Holders have certain rights under and pursuant to the
Operating Services Agreement which rights shall be exercisable under the
circumstances and in accordance with the terms of the Operating Services
Agreement without any demand on, or legal or other proceeding or action against,
the Issuer.
7.6 Performance of Obligations. The Issuer will pay the Notes according
to the reading, tenor and effect thereof; and the Issuer will perform every act
and discharge all of the obligations to be performed and discharged by it under
the Credit Documents including, without limitation, this Indenture, at the time
or times and in the manner specified.
7.7 ERISA Information and Compliance. The Issuer will furnish to the
Trustee and the Note Holders (i) immediately upon becoming aware of the
occurrence of any ERISA Event or of any "prohibited transaction," as described
in section 406 of ERISA or in section 4975 of the Code, in connection with any
Plan or any trust created thereunder, a written notice signed by a Responsible
Officer specifying the nature thereof, what action the Issuer or the ERISA
Affiliate is taking or proposes to take with respect thereto, and, when known,
any action taken or proposed by the Internal Revenue Service, the Department of
Labor or the PBGC with respect thereto, and (ii) immediately upon receipt
thereof, copies of any notice of the PBGC's intention to terminate or to have a
trustee
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appointed to administer any Plan. With respect to each Plan (other than a
Multiemployer Plan), the Issuer will, and will cause each ERISA Affiliate to,
(i) satisfy in full and in a timely manner without giving rise to any Lien, all
of the contribution and funding requirements of section 412 of the Code
(determined without regard to subsections (d), (e), (f) and (k) thereof) and of
section 302 of ERISA (determined without regard to sections 303, 304 and 306 of
ERISA), and (ii) pay, or cause to be paid, to the PBGC in a timely manner, all
premiums required pursuant to sections 4006 and 4007 of ERISA.
7.8 Debt Service Reserve Fund. The Trustee shall establish an account
styled "Noble/Paul Romano Debt Service Reserve Fund" (the "Debt Service Reserve
Fund"), subject to the Trustee's sole dominion and control. From the proceeds
received by the Issuer, upon the issuance of the Notes pursuant hereto and
pursuant to the Note Purchase Agreements, Issuer shall deposit or cause to be
deposited an amount in the Debt Service Reserve Fund equal to two (2) months
worth of prepayments required on the Notes pursuant to Section 3.4(a) and (b).
Five (5) Business Days prior to a Payment Date, the Trustee shall determine
whether the sums received in the Collection Account pursuant to Section 4.1, 4.2
or 4.3 since the last preceding Payment Date together with the Working Capital
Reserve Fund provided pursuant to Section 7.15 below will be sufficient to cover
the required payments of principal and interest due on the Notes under Article 3
hereof on the next Payment Date. In the event the Trustee determines that
insufficient funds are available as aforesaid, the Trustee will give notice to
the Issuer and each Note Holder three (3) Business Days prior to the Payment
Date that a shortfall (a "Shortfall") exists, the amount thereof, the basis for
such Shortfall and the Trustee's intention to draw on the Debt Service Reserve
Fund to cover such Shortfall. In such event, the Trustee will transfer an amount
equal to the lesser of (i) the Shortfall and (ii) the balance in the Debt
Service Reserve Fund to the Collection Account on the Business Day next
preceding the Payment Date. Thereafter, from time to time, any Shortfall in the
Debt Service Reserve Fund shall be replenished as provided in Section 4.1.
In the event (A) the Parent executes and delivers the Capital Funding
Agreement together with an opinion of counsel for the Parent in form and
substance reasonably satisfactory to the Trustee as to the authorization and
enforceability of the Capital Funding Agreement upon the Parent, (B) no
Indenture Default or Indenture Event of Default exists and is continuing
hereunder and (C) the then outstanding senior unsecured debt securities of Noble
Corp. are rated Investment Grade, the Trustee shall distribute to the Issuer,
upon the Issuer's request, all sums then held in the Debt Service Reserve Fund
and such account shall be closed but if such debt securities of Noble Corp. at
any time thereafter are not rated Investment Grade or are not rated then Issuer
and Parent shall immediately re-open and fund the Debt Service Reserve Fund and
or provide comparable security (as in a letter of credit) to the satisfaction of
the Majority Holders.
7.9 Maintenance of Agency. So long as any of the Notes remain
Outstanding, the Issuer will maintain a single agency where: (i) the Notes may
be presented for payment, and (ii) the Notes may be presented for registration
of transfer, exchange or replacement as in Article 2 provided. The Issuer hereby
designates the principal corporate trust office of the Trustee in Houston,
Texas, as its agency for each such purpose. The Issuer will give to the Trustees
and the holders of the Notes prior written notice of any change of location of
any such agency, which shall be located in the United States. In case the Issuer
shall fail to maintain such agency or shall fail to give such notices of any
change of the location thereof, presentations and demands may be made and notice
may be served
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at the address specified for the Issuer in or pursuant to Section 12.3. Notice
and demands to or upon the Issuer in respect to the Notes or this Indenture may
also be served at such address.
7.10 Additional Assurances. The Issuer will cause this Indenture, any
and all supplemental indentures, mortgages, security agreements, instruments of
further assignment, financing statements and continuation statements at all
times to be kept recorded and filed in such manner and in such places as may be
required by law to fully preserve and protect the rights of the holders of the
obligations secured hereby as a first priority security interest and the
Trustees hereunder and under all other documents and instruments evidencing or
securing the obligations secured hereby (including, without limitation,
documents and instruments granting Liens to the Trustees with respect to the
Trust Estate). The Issuer will, at its expense and at any time and from time to
time, promptly execute and deliver all further instruments and documents and
take all further action that may be necessary or desirable or that the Trustee
may request in order to (a) perfect and protect the Liens and other rights
created or purported to be created hereby and by the other Credit Documents and
the first priority of such Liens and other rights; (b) enable the Trustee to
exercise and enforce its rights and remedies hereunder in respect of the
Collateral; or (c) otherwise effect the purposes of this Indenture, including,
without limitation: (i) executing and filing such supplements to this Indenture
and such financing or continuation statements (or amendments thereto) as may be
necessary or desirable or that the Trustee may reasonably request in order to
perfect and preserve the Liens created or purported to be created hereby or
thereby; and (ii) furnishing to the Trustee from time to time such other
information in connection with the Collateral as the Trustee may reasonably
request, all in reasonable detail. The Issuer will furnish to the Trustee any
information which the Trustee may from time to time reasonably request
concerning any covenant, provision or representation contained herein or
concerning any other matter in connection with the Collateral.
7.11 Year 2000 Compliance. The Issuer shall take appropriate steps to
assess, quantify, address and resolve its business and financial risks resulting
from the Year 2000 Problem, including those business and economic risks
resulting from the failure of key suppliers, vendors and customers of the Issuer
to properly assess, quantify, address and resolve the Year 2000 Problem.
7.12 Change in Location of Collateral or Issuer. The Drilling Rig shall
be kept at all times in United States territorial waters in the Gulf of Mexico
or in the Gulf of Mexico on or above the outer Continental Shelf of the United
States and as set forth in Section 1 of the Drilling Order. Issuer will not,
without the Required Holders' prior written consent, change the location of any
of the other Collateral to any state, county or other jurisdiction in which
Trustee has not already filed a financing statement or taken other necessary
steps to perfect its first priority security interests in the Collateral or to
maintain such perfection. Issuer will give Trustee and each Note Holder thirty
(30) days' prior written notice of (i) the opening or closing of any place of
Issuer's business or (ii) any change in the location of Issuer's chief executive
office or address.
7.13 Change in Issuer's Name. Issuer will not change its name or
identity without notifying Trustee of such change in writing at least thirty
(30) days prior to the effective date of such change. Without the express
written consent of the Majority Holders, however, Issuer will not engage in any
other business or transaction under any name other than Issuer's name hereunder.
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7.14 Corporate Independence. Until 367 days have elapsed following
payment and satisfaction of all Notes, the Issuer shall not change its legal
structure to anything other than a corporation and shall observe the applicable
legal requirements for the recognition of the Issuer as a legal entity separate
and apart from Parent and its Affiliates, including, without limitation,
compliance with the following:
(i) the Issuer shall maintain separate corporate records,
books of account and financial statements (each of which shall be
sufficiently full and complete to permit a determination of the
Issuer's assets and liabilities and to permit a determination of the
obligees thereon and the time for performance on each of the Issuer's
obligations) from those of the Parent and its Affiliates;
(ii) the Issuer shall not commingle any of its assets or funds
with those of the Parent or any of its Affiliates;
(iii) the board of directors of the Issuer shall be elected
independently from the board of directors of the Parent and any of its
Affiliates and shall at all times include at least one Independent
Director (except in the case of death, incapacity, resignation or
removal, and in any such case said Independent Director shall be
promptly replaced);
(iv) the board of directors and stockholders of the Issuer
shall hold all regular and special meetings appropriate to authorize
corporate actions. Regular meetings of directors will be held at least
annually. The board of directors may act from time to time through one
or more committees of the board in accordance with the Issuer's
by-laws. Appropriate minutes of all meetings of board of directors (and
committees thereof) and of the stockholders' meetings shall be kept by
the Issuer;
(v) the Issuer shall act solely in its own corporate name and
through its own authorized officers and agents. Neither the Parent nor
any of its Affiliates shall be appointed agent of the Issuer;
(vi) the Issuer will maintain a separate office which shall be
physically separate from space occupied by the Parent, or any of its
Affiliates (but may be separate space occupied solely by the Issuer at
the offices of the Parent or any of its Affiliates) and shall be
identified as the Issuer's office so it can be identified by outsiders;
(vii) the Issuer shall at all times hold itself out to the
public under the Issuer's own name as a legal entity separate and
distinct from Parent and its Affiliates (the foregoing to include, but
not be limited to, use of materially separate and distinct letterhead
and telephone number(s));
(viii) all financial reports prepared by the Issuer shall
comply with GAAP and shall be issued separately from any reports
prepared for Parent and any of its Affiliates; and
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(ix) Parent's financial reports shall disclose the
separateness of the Issuer as required by GAAP and that the Collateral
is owned by the Issuer and is not available to creditors of Parent or
any of its Affiliates.
7.15 Working Capital Fund. The Trustee shall establish an account
styled "Noble/Paul Romano Working Capital Fund" (the "Working Capital Fund"),
subject to the Trustee's sole dominion and control. From the proceeds received
by the Issuer, upon the issuance of the Notes pursuant hereto and pursuant to
the Note Purchase Agreements, Issuer shall deposit or cause to be deposited an
amount in the Working Capital Fund equal to $1,950,000. Five (5) Business Days
prior to the first two Payment Dates, the Trustee shall determine whether the
sums in the Collection Account will be sufficient to cover the required payments
of principal and interest due on the Notes under Article 3 hereof on the next
Payment Date. In the event the Trustee determines that insufficient funds are
available as aforesaid, the Trustee will draw on the Working Capital Fund. In
such event, the Trustee will transfer an amount equal to the lesser of (i) the
amount necessary to pay the principal and interest due on the Notes under
Article 3 and (ii) the balance in the Working Capital Fund to the Collection
Account on the Business Day next preceding the Payment Date. Following the
second Payment Date, if the funds in the Collection Account are otherwise
sufficient to pay the amounts required under Article 3, and no Indenture Default
or Indenture Event of Default shall have occurred and be continuing, the Trustee
shall release any funds remaining in the Working Capital Fund to the Collection
Account.
ARTICLE 8. NEGATIVE COVENANTS.
The Issuer covenants and agrees that, so long as any of the commitments
under the Note Purchase Agreements are in effect and until payment in full of
Notes issued hereunder, all interest thereon and all other amounts payable by
the Issuer hereunder, without the prior written consent of the Majority Holders
(except for Sections 8.12, 8.13, 8.17 and 8.18 which shall require the prior
written consent of the Required Holders):
8.1 Debt. The Issuer will not incur, create, assume, suffer to exist or
otherwise become liable in respect of any Debt, except:
(a) the Notes or other indebtedness arising under the Credit
Documents;
(b) accounts payable (for the deferred purchase price of
Property or services) from time to time incurred in the ordinary course
of business which, if greater than 60 days past the invoice or billing
date, are being Contested In Good Faith; and
(c) Debt owing to the Parent evidenced by subordinated
promissory notes in the form attached hereto as Annex C.
8.2 Liens. The Issuer will not create, incur, assume or permit to exist
any Lien on any of its Properties (now owned or hereafter acquired), or upon any
income or profits therefrom except:
(a) Liens securing the payment of the Notes; and
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(b) during the period up to but not including the Maturity
Date, Excepted Liens.
8.3 Investments, Loans and Advances. The Issuer will not make or permit
to remain outstanding any loans or advances to or investments in any Person,
except that the foregoing restriction shall not apply to:
(a) accounts receivable arising in the ordinary course of
business; and
(b) Permitted Investments made pursuant to the requirements of
this Indenture.
8.4 Dividends, Distributions and Redemptions. In the event of the
occurrence and during the continuance of an Indenture Default or Indenture Event
of Default, the Issuer will not declare or pay any dividend, purchase, redeem or
otherwise acquire for value any of its stock now or hereafter outstanding,
return any capital to its stockholders or make any distribution of its assets to
its stockholders.
8.5 Sales and Leasebacks. The Issuer will not enter into any
arrangement, directly or indirectly, with any Person whereby the Issuer shall
sell or transfer any of its Property, whether now owned or hereafter acquired,
and whereby the Issuer shall then or thereafter rent or lease as lessee such
Property or any part thereof or other Property which the Issuer intends to use
for substantially the same purpose or purposes as the Property sold or
transferred.
8.6 Nature of Business. The Issuer will not engage directly or
indirectly in any business or activity except owning and operating the Drilling
Rig and activities incidental thereto.
8.7 Limitation on Leases. The Issuer will not create, incur, assume or
suffer to exist any obligation for the payment of rent or hire of Property of
any kind whatsoever (real or personal including capital leases), under leases or
lease agreements which would cause the aggregate amount of all payments made by
the Issuer pursuant to all such leases or lease agreements to exceed $500,000 in
any period of twelve consecutive calendar months during the life of such leases.
8.8 Mergers, Etc. The Issuer will not merge into or with or consolidate
with any other Person, or sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
Property to any other Person.
8.9 Proceeds of Notes. The Issuer will not permit the proceeds of the
Notes to be used for any purpose other than those permitted by the Note Purchase
Agreements. Neither the Issuer nor any Person acting on behalf of the Issuer has
taken or will take any action which might cause any of the Credit Documents to
violate Regulation T, U or X or any other regulation of the Board of Governors
of the Federal Reserve System or to violate Section 7 of the Securities Exchange
Act of 1934 or any rule or regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect.
8.10 ERISA Compliance. The Issuer will not at any time:
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(a) engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which the Issuer or any ERISA Affiliate
could be subjected to either a civil penalty assessed pursuant to
section 502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of
Subtitle D of the Code that is Material;
(b) terminate, or permit any ERISA Affiliate to terminate, any
Plan in a manner, or take any other action with respect to any Plan,
which could result in any liability of the Issuer or any ERISA
Affiliate to the PBGC that is Material;
(c) fail to make, or permit any ERISA Affiliate to fail to
make, full payment when due of all amounts which, under the provisions
of any Plan, agreement relating thereto or applicable law, the Issuer
or any ERISA Affiliate is required to pay as contributions thereto to
the extent that such failure could reasonably be expected to result in
a liability of the Issuer or any ERISA Affiliate that is Material;
(d) permit to exist, or allow any ERISA Affiliate to permit to
exist, any accumulated funding deficiency within the meaning of Section
302 of ERISA or section 412 of the Code, whether or not waived, with
respect to any Plan;
(e) permit, or allow any ERISA Affiliate to permit, the
actuarial present value of the benefit liabilities under any Plan
maintained by the Issuer or any ERISA Affiliate which is regulated
under Title IV of ERISA to exceed the current value of the assets
(computed on a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities by an amount
which in the event of the termination of such Plan would be Material.
The term "actuarial present value of the benefit liabilities" shall
have the meaning specified in section 4041 of ERISA;
(f) contribute to or assume an obligation to contribute to, or
permit any ERISA Affiliate to contribute to or assume an obligation to
contribute to, any Multiemployer Plan if a future withdrawal or partial
withdrawal from such Plan could reasonably be expected to result in a
withdrawal liability assessment which is Material;
(g) acquire, or permit any ERISA Affiliate to acquire, an
interest in any Person that causes such Person to become an ERISA
Affiliate with respect to the Issuer or any ERISA Affiliate if such
Person sponsors, maintains or contributes to, or at any time in the
six-year period preceding such acquisition has sponsored, maintained,
or contributed to, (1) any Multiemployer Plan, if a Material withdrawal
liability has been assessed by such Plan against such ERISA Affiliate
or Person or if a future withdrawal or partial withdrawal from such
Plan could reasonably be expected to result in a withdrawal liability
assessment which is Material or (2) any other Plan that is subject to
Title IV of ERISA under which the actuarial present value of the
benefit liabilities under such Plan exceeds the current value of the
assets (computed on a plan termination basis in accordance with Title
IV of ERISA) of such Plan allocable to such benefit liabilities by an
amount which in the event of the termination of such Plan would be
Material;
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(h) incur, or permit any ERISA Affiliate to incur, a Material
liability to or on account of a Plan under sections 515, 4062, 4063,
4064, 4201 or 4204 of ERISA;
(i) contribute to or assume an obligation to contribute to, or
permit any ERISA Affiliate to contribute to or assume an obligation to
contribute to, any employee welfare benefit plan, as defined in section
3(1) of ERISA, including, without limitation, any such plan maintained
to provide benefits to former employees of such entities, that may not
be terminated by such entities without any Material liability; or
(j) amend or permit any ERISA Affiliate to amend, a Plan
resulting in an increase in current liability such that the Issuer or
any ERISA Affiliate is required to provide security to such Plan under
section 401(a)(29) of the Code.
8.11 Sale or Discount of Receivables. The Issuer will not discount or
sell (with or without recourse) any of its notes receivable or accounts
receivable.
8.12 Sale of Drilling Rig. The Issuer will not sell, lease, charter,
assign, convey, dispose or otherwise transfer the Drilling Rig or any interest
therein; provided, however, this covenant shall not apply to attendant equipment
to the Drilling Rig which is obsolete or which is replaced by equipment of equal
or greater value.
8.13 Environmental Matters. The Issuer will not cause or permit any of
its Property to be in violation of, or do anything or permit anything to be done
which will subject any such Property to any remedial obligations under any
Environmental Laws, assuming disclosure to the applicable Governmental Authority
of all relevant facts, conditions and circumstances, if any, pertaining to such
Property where such violations or remedial obligations would have a Material
Adverse Effect.
8.14 Transactions with Affiliates. The Issuer will not enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate unless
such transactions are otherwise permitted under this Indenture or the other
Credit Documents, are in the ordinary course of its business and are upon fair
and reasonable terms no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
8.15 Subsidiaries. The Issuer has no subsidiaries and shall not create
or acquire any subsidiaries.
8.16 Location of Issuer. The Issuer will not cause or permit any change
to be made in its corporate name or identity or any change to be made in the
address of its chief executive office or principal place of business (presently
being the address set forth in Section 12.3), unless the Issuer shall have first
notified the Trustee and each Note Holder of such change at least thirty (30)
days prior to the effective date of such change and shall have first taken all
action required by the Trustee for the purpose of further perfecting or
protecting the rights of the Trustee in the Collateral. In any notice furnished
pursuant to this subsection 8.16, the Issuer will state that the notice is
required by this Indenture and contains facts that may require additional
filings of financing statements.
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8.17 Acquisition of Notes. The Issuer will not, directly or indirectly
through any of its Affiliates or otherwise, purchase, redeem, prepay or
otherwise acquire any of the Outstanding Notes except upon payment or prepayment
of the Notes in accordance with the terms of this Indenture and the Notes. In
case the Issuer or any of its Affiliates acquires any Notes, such Notes shall
thereupon be delivered to the Trustee for cancellation and no Notes shall be
issued in substitution therefor.
8.18 Non-Petition Covenant. With respect to the CP Conduit as a
Purchaser, the Issuer hereby agrees that until the 368th day following the
maturity of the last maturing commercial paper note to be issued by the CP
Conduit in connection with its funding of its investment in the Notes, the
Issuer will not institute, and will not join with others in instituting, any
involuntary bankruptcy or analogous proceeding against the CP Conduit under any
bankruptcy, reorganization, receivership or similar law, domestic or foreign, as
now or hereafter in effect.
8.19 Jurisdiction of Registration. The Issuer shall not change the
jurisdiction of registration of the Drilling Rig to another jurisdiction, unless
the Issuer has given the Trustee and the Note Holders not less than 60 days
prior written notice, the Required Holders have consented (which consent shall
not be unreasonably withheld) and the Issuer has furnished the Trustee and the
Note Holders with a new replacement ship mortgage acceptable to the Trustee and
the Required Holders and appropriate opinions of counsel, acceptable in form and
substance to the Required Holders, with respect to such mortgage and the filing
and first priority thereof.
ARTICLE 9. THE TRUSTEES.
9.1 Certain Duties and Responsibilities of Trustees.
(a) Except during the continuance of an Indenture Event of
Default:
(i) each Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be
read into this Indenture against such Trustee; and
(ii) each Trustee may conclusively rely, in good
faith, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or
opinions furnished to such Trustee and conforming to the
requirements of this Indenture or other Credit Documents; but
in the case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished to
such Trustee, such Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture.
(b) In case an Indenture Event of Default has occurred and is
continuing, each Trustee shall exercise such of the rights and powers
vested in it by this Indenture for the benefit of the holders of the
Notes, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
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(c) No provision of this Indenture shall be construed to
relieve any Trustee from liability for its own negligence or its own
willful misconduct, or the inaccuracy of any of its representations or
warranties made in Section 9.14, except that:
(i) no Trustee which is a corporation or banking
association shall be liable for any error of judgment made in
good faith by an officer of such Trustee unless it shall be
proved that such Trustee was negligent in ascertaining
material facts; and
(ii) no Trustee shall be liable to the holder of any
Note with respect to any action taken or omitted to be taken
by it, in good faith after an Indenture Event of Default shall
have occurred in accordance with the direction of the Majority
Holders relating to the method and place of conducting any
proceeding for any remedy available to such Trustee.
(d) No provision of this Indenture shall require any Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the
liability of or affording protection to any Trustee shall be subject to
the provisions of this Section 9.1.
(f) The Trustee shall give to the holder of each Note written
notice of each and every Indenture Default or Indenture Event of
Default of which one of its Responsible Officers has actual knowledge
within three (3) days of obtaining such actual knowledge unless the
same shall be cured during such period.
9.2 Trustees' Compensation and Indemnification. The Issuer covenants
and agrees to pay to each Trustee promptly (and in any event within 30 days
after receipt of any invoice or other statement or notice) and each Trustee
shall be entitled to the fees and expenses determined as provided in Schedule
9.2 hereto for all services rendered and expenses incurred by it in the
execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of such Trustee, which compensation shall
not be limited by any provisions of law in regard to the compensation of a
trustee of an express trust, and the Issuer will pay or reimburse each Trustee
promptly (and in any event within 30 days after receipt of any invoice or other
statement or notice) for all reasonable expenses, disbursements and advances
incurred or made by such Trustee in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the expenses and
disbursements of its external counsel and of all Persons not regularly in its
employ) except any such expense, disbursement or advance as may arise from its
gross negligence (but not mere negligence) or bad faith or wilful misconduct.
Subject to Section 9.3(f), each Trustee agrees that it shall have no right
against any holder of any Note for the payment of compensation for its services
hereunder or any expenses or disbursements incurred in connection with the
exercise and performance of its powers and duties hereunder or any
indemnification against liability which it may incur in the exercise and
performance of such powers and duties but on the contrary, shall look solely
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to the Issuer for such payment and indemnification and that it shall have no
Lien on or security interest in the Collateral as security for such
compensation, expenses, disbursements and indemnification except to the extent
provided for in Section 4.3.
9.3 Certain Rights of Trustees.
(a) No Trustee shall be responsible for any recitals herein or
for insuring all or any portion of the Trust Estate nor shall any
Trustee be bound to ascertain or inquire as to the performance or
observance of any covenants, conditions or agreement contained herein.
Except in the case of an Indenture Default or Indenture Event of
Default of which a Responsible Officer of the Trustee has actual
knowledge, the Trustee shall be deemed to have knowledge of an
Indenture Default or Indenture Event of Default only upon receipt of
written notice thereof from the Issuer or any holder of a Note;
provided, however, that the Trustee shall be deemed to have actual
knowledge of (i) any failure to receive payments under the Shell
Contract when due, if the Trustee shall have received a copy of the
billing for such payment pursuant to Section 7.3(e) above, (ii) sums
required to be deposited in the Debt Service Reserve Fund and sums
actually deposited, and (iii) of the principal of, any applicable
Make-Whole Amount or interest on, any Note on the date any such payment
is due.
(b) No Trustee makes any representation, or warranty as to the
validity, sufficiency or enforceability of this Indenture, the Notes,
the Note Purchase Agreements or any other Credit Documents, or as to
the title, operation, merchantability or fitness for use or purpose,
value, compliance with specifications, condition, design, quantity,
durability or otherwise with respect to the Drilling Rig or any other
Collateral or any substitute therefor. No Trustee shall be accountable
to anyone for the use or application of any of the Notes of the
proceeds thereof or for the use or application of any Collateral or the
proceeds thereof which shall be released from the Lien and security
interest in favor of such Trustee held in trust under the terms hereof,
in accordance with the provisions of this Indenture.
(c) Each Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice request, direction, consent, order,
bond, note or other paper or document believed by it, in good faith, to
be genuine and to have been signed or presented by the proper party or
parties.
(d) Any request, direction or authorization by the Issuer
shall be sufficiently evidenced by a request, direction or
authorization in writing, delivered to a Trustee, and signed in the
name of such party by a Responsible Officer; and any resolution of the
Board of Directors of the Issuer or any committee thereof shall be
sufficiently evidenced by a copy of such resolution certified by its
Secretary or an Assistant Secretary to have been duly adopted and to be
in full force and effect on the date of such certification, and
delivered to such Trustee.
(e) Any Trustee may consult with counsel, appraisers,
engineers, accountants and other skilled persons to be selected by such
Trustee, and the written advice of any thereof shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon.
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(f) No Trustee shall be under any obligation to take any
action to protect, preserve or enforce any rights or interests in the
Collateral or to take any action towards the execution or enforcement
of the trusts hereunder or otherwise hereunder, whether on its own
motion or on the request of any other Person, if it shall have notified
the holders of the Notes that the same, in the opinion of such Trustee,
may involve pecuniary loss, liability or expense, unless the Issuer or
one or more holders of the Notes shall offer and furnish reasonable
security or indemnity reasonably satisfactory to such Trustee against
pecuniary loss, liability and expense to such Trustee. With respect to
any original Purchasers of the Notes or any other Institutional
Investor an indemnity agreement by such Purchaser, in form and
substance reasonably satisfactory to such Trustee, will satisfy such
requirement without any bond, security or third party indemnity.
(g) No Trustee shall 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, note or other paper or document, unless requested in
writing to do so by the Majority Holders and such holders shall have
tendered funds to pay expenses to be incurred in performing such
duties.
(h) Any Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and such Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed by it with due care.
(i) The provisions of paragraphs (c) through (h), inclusive,
of this Section 9.3, shall be subject to the provisions of Section 9.1.
(j) No Trustee need post any bond for any action taken under
this Indenture.
9.4 Showings Deemed Necessary by a Trustee. Anything else in this
Indenture contained to the contrary notwithstanding, each Trustee shall have the
right, but shall not be required, to demand in respect of the withdrawal of any
cash (other than payments out of the Collection Account or the Debt Service
Reserve Fund or the Working Capital Fund), the release of any Property or the
subjection of any after acquired Property to any Lien to be held by such Trustee
pursuant to the terms hereof, or any other action whatsoever within the purview
hereof, any showings, certificates, opinions, appraisals or other information
which such Trustee may deem reasonably necessary or appropriate in addition to
the matters required by the terms hereof as a condition precedent to such
action.
9.5 Status of Monies Received. All monies received by a Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received, but, if such Trustee is a bank, need not be segregated
in any manner from any other monies, except to the extent required by law, and
may be deposited by such Trustee under such general conditions as may be (if
such Trustee is a bank) prescribed by law and such Trustee's trust department,
and such Trustee shall be under no liability for interest on any monies received
by it hereunder except as provided in Section 4.4. Any Trustee which is a trust
company, banking corporation or banking association and any affiliated
corporation may be interested in any financial transaction with the Issuer or
any of its
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Affiliates; and any such Trustee may act as depository or otherwise in respect
to other Securities of the Issuer or any of its Affiliates, all with the same
rights which it would have if not a Trustee; provided that such Trustee shall
not exercise any right of setoff against any part of the Trust Estate.
9.6 Resignation of Trustees. Any Trustee may resign and be discharged
of the trusts hereby created by mailing notice to the Issuer and to all holders
of Notes specifying the time and date (not earlier than sixty (60) days after
the date of such notice) when such resignation shall take effect. Such
resignation shall take effect upon the appointment, qualification and acceptance
of a successor trustee as herein provided.
9.7 Removal of Trustees. Any Trustee may be removed, with or without
cause, and a successor Trustee may be appointed at any time by the Majority
Holders and delivered to each other Trustee and the Issuer, and, in the case of
the appointment of a successor Trustee, to such successor Trustee.
9.8 Successor Trustee. Each Trustee appointed in succession of the
Trustee named in this Indenture, or its successor in trust, shall be a trust
company, banking corporation or banking association organized under the laws of
the United States of America, in good standing and having a capital and
unimpaired surplus aggregating at least $500,000,000, if there be such a trust
company, banking corporation or banking association qualified, able and willing
to accept the trusts upon reasonable or customary terms; and otherwise having
the highest capital of such trust companies, banking corporations or banking
associations that are qualified, able and willing to accept the trusts upon
reasonable or customary terms.
9.9 Appointment of Successor Trustees. If a Trustee shall have given
notice of resignation pursuant to Section 9.6 or if notice of removal shall have
been given to a Trustee and the Issuer pursuant to Section 9.7 and such notice
does not appoint a successor Trustee or if such notice of removal appointed a
successor Trustee and such successor shall not have accepted such appointment
within fifteen (15) days after the giving of such notice of removal, a successor
Trustee may be appointed by the Majority Holders with the consent of the Issuer
not to be unreasonably withheld. If no such appointment shall have been made
within twenty-five (25) days after the giving of such notice of resignation or
the giving of such notice of removal, a successor Trustee may be appointed by
the holder of any Outstanding Note or, upon application of the retiring Trustee,
by any court of competent jurisdiction.
9.10 Merger or Consolidation of Trustee. Any corporation into which a
Trustee which is a corporation, or any successor to it in the trusts created by
this Indenture, may be merged or consolidated or with which it or any successor
to it may be consolidated or any corporation resulting from any merger or
consolidation to which such Trustee or any successor to it shall be a party or
any state or national bank or trust company succeeding to the corporate trust
business of the Trustee as a whole or substantially as a whole (provided such
corporation which is a successor to the Trustee shall be a corporation organized
under the laws of any state of the United States of America or of the United
States of America, having a capital and surplus of at least $500,000,000 and
such corporation which is a successor to any other Trustee shall be permitted by
law to perform its obligations hereunder), shall be the successor to such
Trustee under this Indenture without the execution or filing of any paper or any
further act on the part of any of the parties hereto. The Issuer covenants that
in
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case of any such merger, consolidation or transfer of the corporate trust
business it will, upon the request of the merged, consolidated or transferred
corporation, execute, acknowledge and cause to be recorded or filed suitable
instruments in writing to confirm the estates, rights and interests of such
corporation as such Trustee under this Indenture.
9.11 Acceptance of Appointment by Successor Trustee. Any new Trustee
appointed pursuant to any of the provisions hereof shall execute, acknowledge
and deliver to the Issuer an instrument accepting such appointment; and
thereupon such new Trustee, without any further act, deed or conveyance, shall
become vested with all the estates, Properties, rights, powers and trusts of its
predecessor in the rights hereunder with like effect as if originally named as
Trustee herein; but, nevertheless upon the Written Request of the Issuer or the
successor Trustee, the Trustee ceasing to act, upon payment of fees and expenses
due to it, shall execute and deliver an instrument transferring to such
successor Trustee, upon the trusts herein expressed, all the estates,
Properties, rights, powers, and trusts of the Trustee so ceasing to act, and
shall duly assign, transfer and deliver any of the Property of the Trust Estate
and monies held by such Trustee to the successor Trustee so appointed in its or
his place. Upon acceptance of appointment by a successor Trustee as provided in
this Section 9.11, the successor Trustee shall give to the Note Holders written
notice of the succession of such Trustee to the trusts hereunder. Neither
failure so to mail nor any defect in the notice so mailed shall affect the
sufficiency of the proceedings in question.
9.12 Conveyance upon Request of Successor Trustee. Should any deed,
conveyance or instrument in writing from the Issuer be required by any successor
Trustee for more fully and certainly vesting in and confirming to such new
Trustee such estates, Properties, rights, powers and trusts, then upon request
of such successor Trustee any and all such deeds, conveyances and instruments in
writing shall be made, executed, acknowledged and delivered, and, if and where
appropriate, shall be caused to be recorded and filed, by the Issuer.
9.13 Co-Trustees and Additional Trustees.
(a) Delivery of Documents. Anything herein contained to the
contrary notwithstanding, if, at any time or times, in order to conform
with any law of any jurisdiction in which the Issuer shall then own or
hold any Collateral, the Trustee shall be advised by counsel
satisfactory to it that it is necessary or prudent in the interest of
the holders of the Notes so to do, the Trustee shall execute and
deliver any and all instruments and agreements necessary or proper to
appoint, on behalf of the Trustee, the Note Holders and the Issuer,
another trust company, banking corporation or banking association, or
one or more other Persons approved by the Trustee either to act as
co-trustee or co-trustees hereunder, jointly with the Trustee, or its
successors, or to act as separate trustee or trustees hereunder; and
the trust company, banking corporation or banking association, or the
Person or Persons so appointed shall be such co-trustee or co-trustees,
or separate trustee or trustees, with such powers, duties and
discretion as shall be specified in the said instruments or agreements
of appointment, executed as aforesaid. It shall not be necessary for
any holder of a Note or the Issuer or any other Person other than the
Trustee to execute and deliver any such instruments or agreements.
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(b) Exercise of Powers. The rights, powers, duties and
obligations conferred or imposed upon the Trustee shall be conferred
and imposed upon, and exercised or performed by the Trustee, or jointly
by the Trustee and any co-trustee or co-trustees or separate trustee or
trustees appointed pursuant to this Section 9.13 as provided herein or
in the instrument or agreement appointing such co-trustee or
co-trustees or separate trustee or trustees, except to the extent that
under the law of any jurisdiction in which any particular act or acts
are to be performed the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations shall be exercised and performed by such co-trustee or
co-trustees or separate trustee or trustees.
(c) Trustee Attorney-in-Fact. Any co-trustee or co-trustees or
separate trustee or trustees appointed hereunder may at any time by an
instrument in writing, and each Trustee by this Indenture does hereby,
constitute the Trustee, or its successor in the trusts hereunder, his,
their or its agent or attorney-in-fact, with full power and authority,
to the extent which may be permitted by law, to do any and all acts and
things and exercise any and all discretion authorized or permitted by
him, them or it, for and on behalf of him, them or it, and in his,
their or its name.
(d) Resignation of Co-Trustee or Separate Trustee. Each
co-trustee or separate trustee appointed pursuant to the provisions of
this Section 9.13 may resign and may be removed by the Trustee, and the
successors to such trustees may be appointed by the Trustee as set
forth in the first paragraph of this Section 9.13.
9.14 Trustee's Representations and Warranties. The Trustee represents,
warrants and covenants that:
(a) Organization, Etc. It is a national banking association
duly chartered, validly existing and in good standing under the laws of
the United States of America, and has all requisite power, authority
and legal right under the laws of the State of Texas and the United
States to execute, deliver and carry out the terms of each of the
Credit Documents to which it is a party. Its principal place of
business is located at its street address set forth in Section 12.3.
(b) Authorization, Etc. It has duly authorized, executed and
delivered this Indenture and the other Credit Documents to which it is
a party and this Indenture and the other Credit Documents constitute
legal, valid and binding obligations, enforceable against it in
accordance with the terms thereof.
(c) No Violation. The execution and delivery of, and
performance of its obligations under, this Indenture and the other
Credit Documents to which it is a party will not result in any
violation of, or be in conflict with, or constitute a default under,
any of the provisions of its articles of association or by-laws, or of
any indenture, mortgage, chattel mortgage, deed of trust, conditional
sales contract, lease, note or bond purchase agreement, license or bank
loan or credit agreement or other agreement to which it is a party or
by which it is bound, or any law, judgment, governmental rule,
regulation or order of any government or governmental authority or
agency governing the banking or trust powers of the Trustee.
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(d) No Consents or Approvals. Neither the execution and
delivery by it, in its individual capacity or as Trustee, as the case
may be, of this Indenture nor the consummation of any of the
transactions contemplated thereby requires the consent or approval of,
the giving of notice to, or the registration with, any federal or State
governmental authority or agency pursuant to any federal or State law
governing the banking or trust powers of Trustee.
(e) Capitalization. It has unimpaired capital and surplus
aggregating at least $500,000,000.
9.15 Non-Petition Covenant. With respect to the CP Conduit as a
Purchaser, the Trustee hereby agrees that until the 368th day following the
maturity of the last maturing commercial paper note to be issued by the CP
Conduit in connection with its funding of its investment in the Notes, the
Trustee will not institute, and will not join with others in instituting, any
involuntary bankruptcy or analogous proceeding against the CP Conduit under any
bankruptcy, reorganization, receivership or similar law, domestic or foreign, as
now or hereafter in effect.
ARTICLE 10. SUPPLEMENTAL INDENTURES, WAIVERS.
10.1 Supplemental Indentures Without Note Holders' Consent. The Issuer
and the Trustee from time to time and at any time, subject to the restrictions
in this Indenture contained, may, without consent from the holder of any Note,
enter into an indenture or indentures supplemental hereto and which thereafter
shall form a part hereof for any one or more or all of the following purposes:
(a) to add to the Trust Estate held by the Trustees pursuant
to the terms hereof additional Property hereafter acquired by the
Issuer and intended to be subjected to this Indenture, and to correct
and amplify the description of any Property subject to this Indenture;
(b) to cure any ambiguity or cure, correct or supplement any
defective provisions of this Indenture or any supplement hereto;
provided, that the same shall in no respect be adverse to the interests
of the holders of the Series A Notes or the Series B Notes; and
(c) to appoint a co-trustee or co-trustees, or a separate
trustee or trustees, pursuant to Section 9.13.
and the Issuer covenants to perform all requirements of any such supplemental
indenture. No restrictions or obligations imposed upon the Issuer may, except as
otherwise proved in this Indenture, be waived or modified by such supplemental
indentures or otherwise.
10.2 Waivers and Consents by Note Holders; Supplemental Indentures with
Consent.
(a) Subject to the provisions of the following subsection 10.2(b), upon
the waiver or consent of the Majority Holders (unless it is specifically
required that the Required Holders act): (i) the Trustee shall execute an
appropriate instrument permitting any Person to take any action prohibited, or
omit the taking of any action required, by any of the provisions of this
Indenture or any indenture supplemental hereto, or any other Credit Document to
which the Trustee is a party or of
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which the Trustee is a third party beneficiary or which is granted in favor of
the Trustee ("Trustee Security Document"), or (ii) the Issuer and the Trustee
may enter into an indenture or indentures supplemental hereto or to a Trustee
Security Document for the purpose of adding, changing or eliminating any
provisions of this Indenture or of any indenture supplemental hereto or to a
Trustee Security Document or modifying in any manner the rights of the holders
of the Notes or the rights and obligations of the Issuer; provided, that no such
waiver, consent or supplemental indenture or amendment shall (A) impair or
affect the right of any Note Holder to receive payments of the principal of and
payments of the interest and any applicable Make-Whole Amount (if any), Yield
Protection Amount or Breakage Amount, if any, on any Note held by it, as therein
and herein provided including, without limitation, the timing of any such
payment or the principal amount of any Note or rate of interest thereon, without
the consent of such holder, (B) permit the creating of any Lien with respect to
any of the Trust Estate, without the consent of the holders of all the Notes at
the time Outstanding, (C) deprive the holder of any Note of the benefit of the
Liens held by the Trustee pursuant to the terms of this Indenture or any other
Credit Document without the consent of such holder, (D) amend Article 2, Article
3, Article 4 or Article 6 (other than an amendment of the nature described, and
permitted by the provisions of, Section 10.1), without the consent of the
holders of all of the Notes at the time Outstanding, (E) reduce the aforesaid
percentage of the aggregate principal amount of Notes, the holders of which are
required to consent to any such waiver or supplemental indenture or amendment
pursuant to this Section 10.2, without the consent of the holders of all of the
Notes at the time Outstanding, or (F) modify the rights, duties, or immunities
of any Trustee, without the consent of such Trustee. The holder of any Notes may
specify that any such waiver or consent shall be effective only with respect to
a portion of the Notes held by it (in which case it shall specify by dollar
amount the aggregate principal amount of Notes with respect to which such waiver
or consent shall be effective) and in the event of any such specification such
holder shall be deemed to have given such waiver or consent only with respect to
the portion of Notes so specified.
(b) Notwithstanding the provisions of the foregoing subsection 10.2(a)
(and in addition to, and not in limitation of, any provisions of this Indenture,
the Note Purchase Agreements or any other Credit Documents specifically
requiring that the Required Holders act), (i) so long as there is no Indenture
Event of Default continuing hereunder, the Trustee shall not enter into any
indenture supplemental hereto (except as permitted by the foregoing Section
10.1), or agree to any amendment, modification or waiver of any of the terms,
conditions or provisions of this Indenture or any indenture supplemental hereto,
or any Trustee Security Document without the consent of the Required Holders,
and (ii) regardless of the existence and continuance of any Indenture Event of
Default, the Trustee shall not (A) agree to any amendment, modification or
waiver of any of the terms, conditions or provisions of Section 12.16 of this
Indenture, section 6 of the Performance Agreement or section 5 of the Operating
Services Agreement, the effect of which would be to reduce, modify or amend any
indemnities payable by the Issuer or the Parent to any Note Holder (except to
add additional indemnities by the Issuer or the Parent), (B) agree to any
amendment of the definition of Indenture Event of Default or (C) agree to any
amendment, modification or waiver of any of the terms, conditions, or provisions
of Sections 7.3(c), 7.3(d)(i), 7.4(a) or 7.12 of this Indenture, sections 2.3,
3.3(c), 2.4, 2.9 or 2.13 of the First Naval Mortgage, section 2(a) of the
Performance Agreement or section 1(b) of the Operating Services Agreement.
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10.3 Notice of Supplemental Indenture. Promptly after the execution by
the Issuer and the Trustee of any supplemental indenture or promptly after the
execution by the Trustee of an appropriate instrument or permission pursuant to
the provisions of Section 10.2, the Trustee shall give written notice, setting
forth in general terms the substance of such supplemental indenture or
instrument, together with a conformed copy thereof to each holder of the Notes.
Any failure of the Trustee to give such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture or instrument.
10.4 Solicitation of Note Holders. So long as there are any Notes
Outstanding, the Issuer will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Indenture or the Notes unless each holder of the Notes shall be informed thereof
by the Issuer and shall be afforded the opportunity of considering the same and
shall be supplied by the Issuer with sufficient information to enable it to make
an informed decision with respect thereto. The Issuer will not, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of Notes as
consideration for or as an inducement to entering into by any holder of Notes of
any waiver or amendment of any of the provisions of this Indenture or of any
Note unless such remuneration is concurrently offered to be paid, on the same
terms, ratably to the holders of all Notes then Outstanding even if such holder
did not consent to such waiver or amendment. Such remuneration will not be
inferred solely from the participation by a holder of the Notes in an existing
or future loan to or investment in or with the Issuer or any of its Affiliates.
10.5 Opinion of Counsel Conclusive as to Supplemental Indentures. The
Trustee is hereby authorized to join with the Issuer in the execution of any
such supplemental indenture authorized or permitted by the terms of this
Indenture and to make the further agreements and stipulations which may be
therein contained, and the Trustee may receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to the
provisions of this Article 10 complies with the requirements of this Article 10.
10.6 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article 10, this
Indenture shall be deemed to be modified and amended in accordance therewith and
the respective rights, duties and obligations under this Indenture of the
Issuer, the Trustees and all holders of Notes thereunder shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modification and amendment, and all the terms and conditions of any such
supplemental indenture shall be deemed to be part of the terms and conditions of
this Indenture for any and all purposes.
10.7 New Notes. Notes executed and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article 10 may bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If such supplemental indenture shall so provide, new
Notes, so modified as to conform, in the opinion of the Trustee and the Board of
Directors of the Issuer to any modification or amendment of this Indenture
contained in any such supplemental indenture, may be prepared by the Issuer,
executed and delivered without cost to the holders of Notes, upon surrender of
such Notes, in equal aggregate principal amounts.
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ARTICLE 11. UNCLAIMED MONIES.
11.1 Satisfaction and Discharge of Agreement. If at any time (a) the
Issuer shall pay and discharge the entire indebtedness on all Notes hereunder by
paying or causing to be paid as provided in Article 4 the principal of, and any
applicable Make-Whole Amount, Yield Protection Amount and Breakage Amount and
interest on, all Notes hereunder, as and when the same become due and payable or
(b) all such Notes shall have been repurchased by the Issuer or an Affiliate of
the Issuer and canceled as herein provided (other than any Notes which shall
have been destroyed, lost or stolen and which shall have been replaced as
provided in Section 2.9); and if the Issuer shall also pay or cause to be paid
all other sums payable hereunder by the Issuer (including, without limitation,
fees and expenses of the Trustees), and the Issuer shall fully and faithfully
discharge, and cause to be faithfully discharged, every other obligation herein
and in each of the other Credit Documents contained, then and in that case this
Indenture shall cease, determine, and become null and void, and thereupon each
Trustee shall, upon Written Request of the Issuer or any other party to the
Credit Documents forthwith execute proper instruments acknowledging satisfaction
of and discharging this Indenture and releasing all Liens held by it pursuant to
the terms hereof and any other Credit Document, including the First Naval
Mortgage; provided, however, that in no event shall the trusts created by this
Indenture continue beyond the expiration of twenty-one (21) years after the
death of the last to die of all descendants living on the date of execution of
this Indenture of Joseph P. Kennedy, late father of the late President of the
United States, John F. Kennedy. The satisfaction and discharge of this Indenture
shall be without prejudice to the rights of each Trustee under Section 9.2 to
charge and be reimbursed by the Issuer for any expenditures which it may
thereafter incur in connection herewith.
11.2 Return of Unclaimed Monies. Notwithstanding any provisions of this
Indenture, any monies deposited with any Trustee in trust for the payment of the
principal of, or interest or any applicable Make-Whole Amount on, any Notes and
remaining unclaimed for two (2) years after the last date on which any such
principal, interest or any applicable Make-Whole Amount shall have become due
and payable (whether at maturity or upon optional or required prepayment or by
declaration as provided in this Indenture), shall then be repaid to the Issuer
upon its Written Request, unless otherwise required by mandatory provisions of
applicable escheat or abandoned property laws, and the holders of such Notes,
unless otherwise required by mandatory provisions of applicable escheat or
abandoned property laws, shall thereafter be entitled to look only to the Issuer
for repayment thereof, and all liability of such Trustee with respect to such
monies shall thereupon cease; provided, however, that before the repayment of
such monies to the Issuer, as aforesaid, such Trustee shall (at the cost of the
Issuer) first mail to all holders of the Notes then Outstanding at their
addresses as set forth in the register required to be maintained pursuant to
Section 2.3, a notice that said monies remain unclaimed and that, after a date
named in said notice, which date shall not be less than ten (10) or more than
twenty (20) days after the date of the first mailing of such notice, the balance
of such monies then unclaimed will be returned to the Issuer. In the event of
the repayment of any such monies to the Issuer as aforesaid, the holders of the
Notes in respect of which such monies were deposited shall thereafter be deemed
to be unsecured creditors of the Issuer for amounts equivalent to the respective
amounts deposited for the payment of such Notes and so repaid to the Issuer
(without interest thereon and subject to applicable escheat and abandoned
property laws).
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ARTICLE 12. MISCELLANEOUS.
12.1 Successors and Assigns. Whenever any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; and all the covenants, promises and agreements in this
Indenture contained by or on behalf of the Issuer, by or on behalf of a Trustee
or by or on behalf of a Purchaser, shall bind and inure to the benefit of the
respective successors and assigns of such parties whether so expressed or not;
provided; however, that the Issuer shall not assign or transfer any of its
rights or delegate any of its duties or obligations under the Credit Documents
without the prior written consent of the Majority Holders.
12.2 Partial Invalidity. Any provision of this Indenture that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
12.3 Communications. All communications provided for herein shall be in
writing or by telecommunication device capable of creating a written record and
shall be deemed to have been given when delivered personally or otherwise
actually received by such Person listed below at its address set forth below:
If to the Issuer:
If by mail:
Noble Drilling (Paul Romano) Inc.
10370 Richmond Avenue, Suite 581
Houston, Texas 77042
Attention: President
If by personal delivery:
Noble Drilling (Paul Romano) Inc.
10370 Richmond Avenue, Suite 581
Houston, Texas 77042
Attention: President
in either case with a copy to:
Robert D. Campbell, Esq.
Thompson & Knight, P.C.
1700 Pacific Avenue, Suite 3300
Dallas, Texas 75201
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If to the Trustee:
If by mail or personal delivery:
Chase Bank of Texas, National Association
600 Travis, Suite 1150, 11th Floor
Houston, Texas 77002
Attention: Mauri Cowen
Corporate Trust Dept.
or to either such party at such other address as such party may designate by
notice duly given in accordance with this Section to the other party. Where this
Indenture provides for any communication to holders of Notes, such communication
shall be deemed to have been given when delivered personally or otherwise
actually received by such holder at its last address as it appears in the
register required to be maintained pursuant to Section 2.3.
12.4 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS INDENTURE AND THE NOTES (INCLUDING, BUT NOT LIMITED
TO, THE VALIDITY AND ENFORCEABILITY HEREOF AND THEREOF) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK OTHER THAN CONFLICT OF LAW RULES THEREOF THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE CREDIT
DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS INDENTURE, EACH OF THE ISSUER
AND THE TRUSTEES HEREBY ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED
BY LAW) IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH OF THE ISSUER AND THE
TRUSTEES HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES
NOT PRECLUDE THE PARTIES FROM OBTAINING JURISDICTION OVER OTHER PARTIES
IN ANY COURT OTHERWISE HAVING JURISDICTION.
(c) THE ISSUER HEREBY IRREVOCABLY DESIGNATES CT CORPORATION
LOCATED AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, AS THE DESIGNEE,
APPOINTEE AND AGENT OF THE ISSUER TO RECEIVE, FOR AND ON BEHALF OF THE
ISSUER, SERVICE OF PROCESS IN SUCH JURISDICTION IN ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THE CREDIT DOCUMENTS. IT IS UNDERSTOOD THAT
A COPY OF SUCH PROCESS SERVED ON SUCH AGENT WILL BE PROMPTLY FORWARDED
BY OVERNIGHT COURIER TO THE ISSUER AT ITS ADDRESS SET FORTH IN SECTION
12.3 HEREOF, BUT THE FAILURE OF THE ISSUER TO RECEIVE SUCH COPY SHALL
NOT AFFECT IN ANY WAY THE SERVICE OF SUCH
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PROCESS. THE ISSUER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE ISSUER AT ITS SAID ADDRESS, SUCH SERVICE
TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING.
(d) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ISSUER OR THE
TRUSTEES OR ANY HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE ISSUER IN ANY OTHER JURISDICTION, INCLUDING WITHOUT
LIMITATION, THE COMMENCEMENT OF ENFORCEMENT PROCEEDINGS UNDER THE
CREDIT DOCUMENTS IN ALL APPLICABLE JURISDICTIONS.
(e) EACH OF THE ISSUER AND THE TRUSTEES HEREBY (I) IRREVOCABLY
AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN; (II) IRREVOCABLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES,
OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY
PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT
SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVERS, AND (IV) ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.4.
12.5 Limitation on Interest.
(a) It is the intent of the parties hereto to comply strictly
with applicable usury laws, and the parties hereto stipulate and agree
that none of the terms and provisions contained in this Indenture, the
Notes or any other Credit Documents shall ever be construed to create a
contract to pay, for the use, forbearance or detention of money,
interest in excess of the maximum amount of interest permitted to be
charged by applicable law from time to time in effect. If any excess of
interest in such respect is hereby provided for or shall be adjudicated
to be so provided, in this Indenture, in any Note or otherwise in
connection with the Credit Documents, the provisions of this Section
12.5 shall govern and prevail, and neither the Issuer nor any present
or future guarantors, endorsers, or other Persons hereafter becoming
liable for payment of the Notes shall ever be obligated to pay the
excess amount of such interest. The provisions of this Section 12.5
shall control over all other provisions of the Credit Documents which
may be in conflict or apparent conflict herewith. Each of the Trustees
and the holders of the Notes expressly disavows any intention to
charge, collect or contract for excessive unearned interest or finance
charges in the event the maturity of any of the Notes is accelerated.
If the maturity of a Note is accelerated for any reason, any amounts
held to constitute interest (including any applicable Make-Whole
Amount, Yield
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Protection Amount or Breakage Amount due upon acceleration if such
applicable Make-Whole Amount, Yield Protection Amount or Breakage
Amount is held to constitute interest under applicable law) which are
then unearned and have theretofore been collected by any Trustee or the
holder of such Note shall be applied as of the date of receipt thereof
to reduce the principal balance thereof then outstanding and if the
principal of the Notes has been paid in full, any remaining excess
shall be forthwith paid to the Issuer. If any Trustee or any holder of
any Note shall receive, collect or apply monies which are deemed to
constitute interest which would otherwise increase the interest on such
Note to an amount in excess of that permitted to be charged by
applicable law then in effect, all such sums deemed to constitute
interest in excess of such legal limit shall be applied to reduce the
principal balance thereof then outstanding or immediately returned to
the Issuer or the other payor thereof upon such determination. All sums
paid or agreed to be paid to any Trustee or holder of any Note for the
use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to such party, be amortized,
prorated, allocated and spread throughout the full term of the
indebtedness evidenced by the Notes until payment in full so that the
rate or amount of interest on account of any indebtedness hereunder
does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of interest payable to
any holder of a Note on any date shall be pursuant to this Section 12.5
be limited and (ii) in respect of any subsequent interest computation
period the amount of interest otherwise payable to such holder would be
less than the amount of interest payable to such holder computed at the
maximum lawful rate applicable to such holder, then the amount of
interest payable to such holder in respect to such subsequent interest
computation period shall continue to be computed at the maximum lawful
rate applicable to such holder until the total amount of interest
payable to such holder shall equal the total amount of interest which
would have been payable to such holder if the total amount of interest
had been computed without giving effect to this Section 12.5. As used
in this section the term "applicable law" means the laws of the State
of New York or the laws of the United States of America, whichever laws
allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.
(b) All proceeds of the sale of the Notes are to be delivered
by the Purchasers to the Issuer and used by the Issuer as represented
in Section 5.14 of the Note Purchase Agreements.
(c) Notwithstanding any term or provision contained in this
Indenture, the Notes or any other Credit Document to the contrary the
Make-Whole Amount, Yield Protection Amount and/or Breakage Amount shall
be charged and payable only to the extent permitted by applicable law.
12.6 Counterparts. This Indenture may be executed, acknowledged and
delivered in any number of counterparts, each of such counterparts constituting
an original but all together only one Indenture; provided, however, that this
Indenture shall not be deemed to be delivered until at least one counterpart
shall have been executed by the Issuer and the Trustee and a counterpart so
executed shall have been delivered to the Trustee at its principal place of
business specified in Section 12.3.
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12.7 Headings, etc.; Gender. Any headings or captions preceding the
text of the several sections hereof are intended solely for convenience of
reference and shall not constitute a part of this Indenture nor shall they
affect its meaning, construction or effect. Each covenant contained in this
Indenture shall be construed (absent an express contrary provision therein) as
being independent of each and every other covenant contained herein and
compliance with any one covenant shall not (absent such an express contrary
provision) be deemed to excuse compliance with any and all other covenants. All
references herein or in any other Credit Document to the masculine, feminine or
neuter gender shall also include and refer to each other gender not so referred
to.
12.8 Amendments. This Indenture may, subject to the provisions of
Article 10 hereof, from time to time and at any time, be amended or supplemented
by an instrument or instruments in writing executed by the parties hereto.
12.9 Benefits of Agreement Restricted to Parties and Note Holders.
Nothing in this Indenture expressed or implied is intended or shall be construed
to give to any Person other than the Issuer, the Trustees, the Credit Support
Parties and the holders of the Notes, any legal or equitable right, remedy or
claim under or in respect of this Indenture or any covenant, condition or
provision therein or herein contained; and all such covenants, conditions and
provisions are and shall be held to be for the sole and exclusive benefit of the
Issuer, the Trustees and the holders of the Notes issued hereunder.
12.10 Waiver of Notice. Whenever in this Indenture the giving of notice
by mail or otherwise is required, the giving of such notice may be waived in
writing by the Person or Persons entitled to receive such notice.
12.11 Intentionally Omitted.
12.12 Additional Financing Statement Filings. The Issuer hereby
authorizes the Trustee to file, without the signature of the Issuer where
permitted by law, one or more financing or continuation statements, and
amendments thereto, relating to the Collateral. The Issuer further agrees that a
carbon, photographic or other reproduction of any Credit Document or any
financing statement describing any Collateral is sufficient as a financing
statement and may be filed in any jurisdiction the Trustee may deem appropriate.
12.13 Directly or Indirectly. Where any provision in this Indenture
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether such action is taken
directly or indirectly by such Person, including actions taken by or on behalf
of any partnership in which such Person is a general partner.
12.14 Exhibits, Annexes and Sections. All references herein to
Exhibits, Annexes or Sections shall be to the Exhibits and Annexes attached to
this Indenture and to the Sections hereof unless the context otherwise requires
reference to an exhibit, annex to or section of another document. All Exhibits
and Annexes attached to this Indenture are made a part hereof for all purposes.
The words "this Indenture," "this instrument," "herein," "hereof," "hereby,"
"hereunder," and words of similar import refer to this Indenture as a whole and
not to any particular subdivision unless expressly so limited. The phrases "this
section" and "this subsection" and similar phrases refer
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only to the sections or subsections hereof in which such phrases occur. The word
"or" is not exclusive.
12.15 Officers' Certificate and Opinions of Counsel; Statements to be
Contained Therein.
(a) Upon any request, application or demand by the Issuer to
the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee a certificate signed
by two of its Responsible Officers stating that all conditions
precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent (to which
a legal opinion is reasonably appropriate) have been complied with,
except that in the case of any such request, application or demand as
to which the furnishing of such documents is specifically required by
any provision of this Indenture relating to such particular request,
application or demand, no additional certificate or opinion need be
furnished.
(b) Each certificate or opinion provided for in this Indenture
and delivered to the Trustee with respect to compliance with a
condition or covenant provided for in this Indenture shall include (i)
a statement that the person making such certificate or opinion has read
such covenant or condition, (ii) 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, (iii) a
statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with, and (iv) a statement as to whether or not, in the
opinion of such person, such condition or covenant has been complied
with.
(c) Any certificate, statement or opinion of an officer of the
Issuer may be based, insofar as it relates to legal matters, upon a
certificate or opinion of or representations by counsel, unless such
officer has actual knowledge that the certificate or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar
as it relates to factual matters, upon information with respect to
which is in the possession of the Issuer, upon the certificate,
statement or opinion of or representations by a Responsible Officer or
Officers of the Issuer, unless such counsel has actual knowledge that
the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be
based as aforesaid are erroneous.
(d) Any certificate, statement or opinion of an officer of the
Issuer or of counsel may be based, insofar as it relates to accounting
matters, upon a certificate or opinion of or representations by an
accountant or firm of accountants in the employ of the Issuer or an
Affiliate thereof, unless such officer or counsel, as the case may be,
has actual knowledge that the certificate or opinion or representations
with respect to the accounting matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.
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(e) Any certificate or opinion of any independent firm of
public accountants filed with the Trustee shall contain a statement
that such firm is independent.
12.16 Payment of Expenses, Indemnities, etc. The Issuer agrees:
(a) to pay all reasonable expenses of the Trustees in the
administration (both before and after the execution hereof and
including advice of counsel as to the rights and duties of the Trustees
and the Note Holders with respect thereto) of, and in connection with
the negotiation, investigation, preparation, execution and delivery of,
recording or filing of, preservation of rights under, enforcement of,
and refinancing, renegotiation or restructuring of, any Credit Document
and any proposed amendment, waiver or consent, whether or not adopted,
relating thereto (including, without limitation, travel, photocopy,
mailing, courier, telephone and other similar expenses of the Trustees,
the reasonable fees and disbursements of external counsel and other
outside consultants for the Trustees and, in the case of enforcement,
the reasonable fees and disbursements of external counsel for the
Trustees and any of the Note Holders; provided that to the extent it is
feasible and a conflict of interest does not exist in the reasonable
judgment of the Series A Note Holders or Series B Note Holders as
applicable, the Series A Note Holders shall all use the same counsel
and the Series B Note Holders shall all use the same counsel); and
promptly reimburse the Trustees and the Note Holders for all amounts
expended, advanced or incurred by the Trustees and any of the Note
Holders to satisfy any obligation of the Issuer under this Indenture or
any other Credit Document, including without limitation, all costs and
expenses of foreclosure;
(b) TO INDEMNIFY EACH TRUSTEE, EACH NOTE HOLDER AND EACH
CREDIT SUPPORT PARTY AND EACH OF THEIR AFFILIATES AND EACH OF THEIR
OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS,
ACCOUNTANTS AND EXPERTS ("INDEMNIFIED PARTIES") FROM, HOLD EACH OF THEM
HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM
FOR, THE INDEMNITY MATTERS WHICH MAY BE INCURRED BY OR ASSERTED AGAINST
OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A
PARTY THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO
(I) ANY ACTUAL OR PROPOSED USE BY THE ISSUER OF THE PROCEEDS OF ANY OF
THE NOTES, (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF THE CREDIT
DOCUMENTS, (III) THE OPERATIONS OF THE BUSINESS OF THE ISSUER OR ANY
AFFILIATE THEREOF (IV) THE FAILURE OF THE ISSUER OR ANY AFFILIATE
THEREOF TO COMPLY WITH THE TERMS OF ANY CREDIT DOCUMENT INCLUDING,
WITHOUT LIMITATION, THE PERFORMANCE AGREEMENT OR THIS INDENTURE, OR
WITH ANY GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF THE ISSUER
OR ANY AFFILIATE THEREOF SET FORTH IN ANY OF THE CREDIT DOCUMENTS, (VI)
ANY ASSERTION THAT THE TRUSTEE OR THE NOTE HOLDERS WERE NOT ENTITLED TO
RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE CREDIT DOCUMENTS OR (VI)
ANY OTHER ASPECT OF THE CREDIT DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL AND ALL
OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR
PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY
INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND INCLUDING ALL
INDEMNITY MATTERS ARISING BY REASON OF
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THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY, BUT EXCLUDING ALL
INDEMNITY MATTERS ARISING SOLELY BY REASON OF CLAIMS BETWEEN THE NOTE
HOLDERS OR A NOTE HOLDER AND A NOTE HOLDER'S SHAREHOLDER OR SOLELY BY
REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF THE
INDEMNIFIED PARTY; AND
(c) TO INDEMNIFY AND HOLD HARMLESS THE INDEMNIFIED PARTIES
FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH
ANY SUCH PERSON MAY BECOME SUBJECT IN CONNECTION WITH THIS INDENTURE,
THE NOTE PURCHASE AGREEMENTS OR ANY OTHER CREDIT DOCUMENT (I) UNDER ANY
ENVIRONMENTAL LAW, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY
THE ISSUER OR ANY AFFILIATE THEREOF WITH ANY ENVIRONMENTAL LAW
APPLICABLE TO THE ISSUER OR ANY AFFILIATE THEREOF, (III) DUE TO PAST
OWNERSHIP BY THE ISSUER OR ANY AFFILIATE THEREOF OF ANY OF THEIR
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT OR
FUTURE LIABILITY, (IV) THE PRESENCE, USE, RELEASE, DISCHARGE, STORAGE,
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES OR OIL ON OR AT ANY OF
THE PROPERTIES NOW OR FORMERLY OWNED OR OPERATED BY THE ISSUER OR ANY
AFFILIATE THEREOF, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY
CONDITION IN CONNECTION WITH THE CREDIT DOCUMENTS, PROVIDED, HOWEVER,
NO INDEMNITY SHALL BE AFFORDED UNDER THIS SECTION 12.16 IN RESPECT OF
ANY PROPERTY FOR ANY OCCURRENCE ARISING SOLELY FROM THE ACTS OR
OMISSIONS (IN EACH CASE CONSTITUTING GROSS NEGLIGENCE OR WILFUL
MISCONDUCT) OF A TRUSTEE OR ANY NOTE HOLDER ARISING DURING THE PERIOD
AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS SHALL HAVE OBTAINED
POSSESSION OF SUCH PROPERTY (WHETHER BY FORECLOSURE OR DEED IN LIEU OF
FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR OTHERWISE).
(d) So long as no Indenture Default or Indenture Event of
Default has occurred and is continuing, no Indemnified Party may settle
any claim to be indemnified without the consent of the indemnitor, such
consent not to be unreasonably withheld; provided, that the indemnitor
may not reasonably withhold consent to any settlement that an
Indemnified Party proposes, if the indemnitor does not have the
financial ability to pay all its obligations outstanding and asserted
against the indemnitor at that time, including the maximum potential
claims against the Indemnified Party to be indemnified pursuant to this
Section 12.16.
(e) In the case of any indemnification hereunder, an
Indemnified Party shall give notice to the Issuer of any claim or
demand being made against it; provided, however, that the failure to
give such notice shall not release the Issuer from any of its
obligations, except to the extent that failure to give notice of any
action, suit or proceeding against such Indemnified Party shall prevent
the Issuer's ability to contest such claim or demand. Subject to the
provisions of the following paragraph, the Issuer shall at its sole
cost and expense be entitled to control, and shall assume full
responsibility for, the defense of such claim or liability; provided
that the Issuer shall keep the Indemnified Party which is the subject
of such proceeding fully apprised of the status of such proceeding and
shall provide such Indemnified
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Party with all information with respect to such proceeding as such
Indemnified Person shall reasonably request.
Notwithstanding any of the foregoing to the contrary, the Issuer shall
not be entitled to control and assume responsibility for the defense of such
claim or liability if (i) an Indenture Event of Default shall have occurred and
be continuing, (ii) such proceeding will involve any possibility of the sale,
forfeiture or loss of, or the creation of any Lien (other than an Excepted Lien
or a Lien which is adequately bonded to the satisfaction of such Indemnified
Party) on, the Trust Estate or any part thereof, (iii) in the good faith opinion
of such Indemnified Party, there exists an actual or potential conflict of
interest such that it is advisable for such Indemnified Person to retain control
of such proceeding or (iv) such claim or liability involves the possibility of
criminal sanctions or liability to such Indemnified Party. In the circumstances
described in clauses (i) - (iv), the Indemnified Party shall be entitled to
control and assume responsibility for the defense of such claim or liability at
the expense of the Issuer. In addition, any Indemnified Party may participate in
any proceeding controlled by the Issuer, at its own expense in respect of any
such proceeding as to which the Issuer shall have acknowledged in writing its
obligation to indemnify the Indemnified Party, and at the expense of the Issuer
in respect of any such proceeding as to which the Issuer shall not have so
acknowledged its obligation to the Indemnified Party, the Issuer may in any
event participate in all such proceedings at its own cost. Nothing contained
herein shall be deemed to require an Indemnified Party to contest any claim or
demand or to assume responsibility for or control of any judicial proceeding
with respect thereto.
(f) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED
PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND
OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN
AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT LIMITATION, ALL TYPES
OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF
ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY
IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED PARTIES. TO
THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE COMMITTED AN ACT
OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, THIS CONTRACTUAL OBLIGATION
OF INDEMNIFICATION AS TO SUCH INDEMNIFIED PARTY SHALL CONTINUE BUT
SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE
OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE INDEMNIFIED PARTY.
(g) The Issuer's obligations under this Section 12.16 shall
survive any termination of this Indenture or any other Credit Document
and the payment of the Notes and shall continue thereafter in full
force and effect.
(h) The Issuer shall pay any amounts due under this Section
12.16 within thirty (30) days of the receipt by the Issuer of notice of
the amount due.
(i) If any amounts due by the Issuer to the Trustees or any
Note Holder under this Section 12.16 or any other provision of this
Agreement or any other Credit Document is not paid on the date due,
such amounts shall bear interest and Issuer agrees to pay such amounts
with interest at the Default Rate from the due date of such payable
until paid.
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12.17 NO ORAL AGREEMENTS. THE CREDIT DOCUMENTS EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPO
RANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
12.18 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO SPECIFICALLY
AGREES THAT IT HAS A DUTY TO READ THIS INDENTURE AND THE OTHER CREDIT DOCUMENTS
AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS
INDENTURE AND THE OTHER CREDIT DOCUMENTS; THAT IT HAS IN FACT READ THIS
INDENTURE AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS INDENTURE; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS INDENTURE AND THE OTHER CREDIT DOCUMENTS; AND HAS RECEIVED
THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS INDENTURE AND THE OTHER CREDIT
DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS INDENTURE
AND THE OTHER CREDIT DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY
INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS INDENTURE AND THE OTHER CREDIT DOCUMENTS ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
12.19 Trustees Not Engaging in a Trade or Business. The trusts created
hereunder have been organized for the purposes described herein with no
objective by the Trustees to engage in the conduct of a trade or business. The
Trustees shall report the trusts for federal income tax purposes as a "grantor
trust" subject to the provisions of Subchapter J, subpart E of the Code unless
otherwise required.
[Signature Pages Start Next Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers thereunto duly authorized, and their
respective corporate seals to be hereunder affixed and attested, all as of the
day and year first written above.
Witnesses to all Signatures
- ------------------------------------
- ------------------------------------
ATTEST: NOBLE DRILLING (PAUL ROMANO) INC.
By /s/ Byron L. Welliver
- ------------------------------------ ------------------------------------
Name: Name: Byron L. Welliver
Title: Title: Senior Vice President
(seal)
ATTEST: CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION
By /s/ Mauri J. Cowen
- ------------------------------------ ------------------------------------
Name: Name: Mauri J. Cowen
Title: Title: Senior Vice President and
Trust Officer
(seal)
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ANNEX A-1
NOBLE DRILLING (PAUL ROMANO) INC.
No. AR-_____
6.33% SERIES A SENIOR SECURED NOTE DUE DECEMBER 20, 2003
$
------------------ ------------------
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE ISSUER IS NOT
REQUIRED TO REGISTER THIS SECURITY UNDER THE SECURITIES ACT. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION.
NOBLE DRILLING (PAUL ROMANO) INC., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
_________________________ or registered assigns the principal sum of
_________________________ Dollars ($__________) on December 20, 2003, and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal balance thereof from the date of this Note at the rate of
6.33% per annum, monthly on the twentieth (20th) day of each month of each year,
commencing on December 20, 1998, until the principal amount hereof shall become
due and payable and to pay on demand interest on any overdue principal,
including any overdue prepayment of principal, and (to the extent permitted by
applicable law) on any applicable Make-Whole Amount or overdue installment of
interest, at a rate of interest per annum equal to the Default Rate; provided
that interest on this Note shall in no event exceed the maximum rate permitted
by applicable law, and this Note is expressly made subject to Section 12.5 of
the Indenture.
Payments of principal, applicable Make-Whole Amount, if any, or other
amounts due hereon, and interest shall be made in any coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts in installments in such manner and at such
place as provided in Section 4.6 of the Indenture.
This Note is one of an issue of Series A Senior Secured Notes of the
Company issued in an aggregate original principal amount limited to $95,412,500
under the Trust Indenture and Security Agreement of the Company (said indenture,
together with all agreements and indentures supplemental thereto being herein
called the "Indenture") dated as of November 24, 1998, with Chase Bank of Texas,
National Association as Trustee and is entitled to the benefits thereof.
Reference is hereby made to the Indenture for a description of certain rights,
obligations and duties of the parties thereto and for the meanings assigned to
terms used and not defined in this Note. As provided
<PAGE> 82
in the Indenture, this Note is subject to optional prepayment. The Company
agrees to make required prepayments on account of this Note in accordance with
the prepayment schedule attached to this Note and in accordance with the
provisions of the Indenture. This Note is secured as set forth in the Indenture
and in the separate Note Purchase Agreements dated as of September 24, 1998,
between the Company and each of the Purchasers (listed on Schedule A attached
thereto).
This Note is a registered Note and is transferable only by surrender
thereof at the agency of the Company maintained pursuant to Section 7.9 of the
Indenture, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of this Note or its attorney duly authorized
in writing.
Following any partial prepayment of this Note, this Note shall, prior
to any transfer hereof, be (a) made available to the Trustee for notation on the
prepayment schedule attached hereto of the amount of principal so prepaid or,
(b) at the option of the holder hereof and in lieu of the alternative in the
foregoing clause (a), held by the holder who shall make a notation of such
schedule of the amount of principal so prepaid. In case the entire principal
amount on this Note is prepaid or paid, this Note shall, upon written request
therefor by the Company, be surrendered promptly at the agency of the Company
maintained pursuant to Section 7.9 of the Indenture, for cancellation.
In any case where the date of maturity of any interest, applicable
Make-Whole amount, or other amount due hereon, or principal owed with respect to
this Note or the date fixed for any prepayment (in whole or in part) of this
Note will not be a Business Day, then payment of such interest, applicable
Make-Whole Amount, or other amount due hereon, or principal need not be made on
such date but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for such
prepayment.
Under certain circumstances, as specified in the Indenture, the
principal of this Note (together with interest accrued thereon and any
applicable Make-Whole Amount) may be declared due and payable in the manner and
with the effect provided in the Indenture.
This Note and the Indenture are governed by, and shall be construed and
enforced in accordance with, the law of the State of New York applicable to
contracts made and to be performed entirely within such state and applicable
federal law.
Dated:
ATTEST: NOBLE DRILLING (PAUL ROMANO) INC.
By
- ------------------------------------ ------------------------------------
Secretary Name:
-------------------------------
Title:
------------------------------
[CORPORATE SEAL]
-2-
<PAGE> 83
This is one of the Series A Notes described in the Indenture referred
to herein.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
By
----------------------------------------
Name:
-----------------------------------
Its:
------------------------------------
-3-
<PAGE> 84
PREPAYMENT SCHEDULE TO
NOTE NO. AR-_______________
(SERIES A)
In addition to paying the entire outstanding principal amount of, and
the interest due on, this Note on _______________, 20__, the maturity date
hereof, the Company agrees to prepay, and there shall become due and payable,
principal amounts of this Note on the last day of each month, in each year,
beginning on ___________, 1998, as follows:
<TABLE>
<CAPTION>
Date Due Amount Due
- -------- ----------
<S> <C>
</TABLE>
-4-
<PAGE> 85
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. 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. The agent may substitute
another to act for him.
Date:
Your Signature:
--------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee:
---------------------------------------
-5-
<PAGE> 86
ANNEX A-2
NOBLE DRILLING (PAUL ROMANO) INC.
No. BR-_____
6.09% SERIES B SENIOR SECURED NOTE DUE DECEMBER 20, 2003
$
---------------- -----------------------
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE ISSUER IS NOT
REQUIRED TO REGISTER THIS SECURITY UNDER THE SECURITIES ACT. THE HOLDER
OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY
THAT SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1) IN ACCORDANCE WITH AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, OR (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION.
NOBLE DRILLING (PAUL ROMANO) INC., a Delaware corporation (the
"Company"), for value received, hereby promises to pay to
_________________________ or registered assigns the principal sum of
_________________________ Dollars ($__________) on December 20, 2003, and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal balance thereof from the date of this Note at the rate of
6.09% per annum, monthly on the twentieth (20th) day of each month of each year,
commencing on December 20, 1998, until the principal amount hereof shall become
due and payable and to pay on demand interest on any overdue principal,
including any overdue prepayment of principal, and (to the extent permitted by
applicable law) on any applicable Make-Whole Amount or overdue installment of
interest, at a rate of interest per annum equal to the Default Rate; provided
that interest on this Note shall in no event exceed the maximum rate permitted
by applicable law, and this Note is expressly made subject to 12.5 of the
Indenture.
Payments of principal, applicable Make-Whole Amount, if any, or other
amounts due hereon, and interest shall be made in any coin or currency of the
United States of America as at the time of payment is legal tender for the
payment of public and private debts in such manner and at such place as provided
in Section 4.6 of the Indenture.
This Note is one of an issue of Series B Senior Secured Notes of the
Company issued in an aggregate original principal amount limited to $16,837,500
under the Trust Indenture and Security Agreement of the Company (said indenture,
together with all agreements and indentures supplemental thereto being herein
called the "Indenture") dated as of November 24, 1998, with Chase Bank of Texas,
National Association as Trustee and is entitled to the benefits thereof.
Reference is hereby
-6-
<PAGE> 87
made to the Indenture for a description of certain rights, obligations and
duties of the parties thereto and for the meanings assigned to terms used and
not defined in this Note. As provided in the Indenture, this Note is subject to
optional prepayment. This Note is secured as set forth in the Indenture and in
the separate Note Purchase Agreements dated as of September 24, 1998, between
the Company and each of the Purchasers (listed on Schedule A attached thereto).
This Note is a registered Note and is transferable only by surrender
thereof at the agency of the Company maintained pursuant to Section 7.9 of the
Indenture, duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of this Note or its attorney duly authorized
in writing.
Following any partial prepayment of this Note, this Note shall, prior
to any transfer hereof, be (a) made available to the Trustee for notation on the
prepayment schedule attached hereto of the amount of principal so prepaid or,
(b) at the option of the holder hereof and in lieu of the alternative in the
foregoing clause (a), held by the holder who shall make a notation of such
schedule of the amount of principal so prepaid. In case the entire principal
amount on this Note is prepaid or paid, this Note shall, upon written request
therefor by the Company, be surrendered promptly at the agency of the Company
maintained pursuant to Section 7.9 of the Indenture, for cancellation.
In any case where the date of maturity of any interest, applicable
Make-Whole Amount, or other amounts due hereon, or principal owed with respect
to this Note or the date fixed for any prepayment (in whole or in part) of this
Note will not be a Business Day, then payment of such interest, applicable
Make-Whole Amount, or other amounts due hereon, or principal need not be made on
such date but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for such
prepayment.
Under certain circumstances, as specified in the Indenture, the
principal of this Note (together with interest accrued thereon and any
applicable Make-Whole Amount) may be declared due and payable in the manner and
with the effect provided in the Indenture.
This Note and the Indenture are governed by, and shall be construed and
enforced in accordance with, the law of the State of New York applicable to
contracts made and to be performed entirely within such state and applicable
federal law.
Dated:
ATTEST: NOBLE DRILLING (PAUL ROMANO) INC.
By
- ------------------------------------ ------------------------------------
Secretary Name:
-------------------------------
Title:
------------------------------
[CORPORATE SEAL]
-7-
<PAGE> 88
This is one of the Series B Notes described in the Indenture referred
to herein.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
By
-----------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
-8-
<PAGE> 89
PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Date of Principal Amount
Payment Amount Paid Remaining Unpaid Authorized Signature
- ---------------------- -------------------------- ------------------------------ -----------------------------------
<S> <C> <C> <C>
</TABLE>
-9-
<PAGE> 90
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. 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. The agent may substitute
another to act for him.
Date:
Your Signature:
---------------------------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee:
----------------------------------------
-10-
<PAGE> 1
================================================================================
EXHIBIT 4.19
FIRST NAVAL MORTGAGE
Made by
Noble Drilling (Paul Romano) Inc.
In Favor of
Chase Bank of Texas, National Association, as Indenture Trustee
on
Noble Paul Romano
Dated as of November 24, 1998
================================================================================
<PAGE> 2
First Naval Mortgage
Mortgagor: Noble Drilling (Paul Romano) Inc.
10370 Richmond Avenue
Suite 581
Houston, Texas 77042
Mortgagor's Interest in the Vessel: 100%
Mortgagee: Chase Bank of Texas, National
Association
600 Travis, Suite 1150
11th Floor
Houston, Texas 77002
Amount of Mortgage: $112,250,000.00
Maturity Date: Five years from the "Closing Date"
(as defined in the Trust Indenture
refined to below)
THIS FIRST NAVAL MORTGAGE dated as of the 24th day of November, 1998
(as amended, supplemented or otherwise modified from time to time, the
"Mortgage") is made and given by Noble Drilling (Paul Romano) Inc., a Delaware
corporation (the "Mortgagor"), whose address is set forth above, to Chase Bank
of Texas, National Association, as Indenture Trustee for any and all future
holders of the Notes (as such term is hereinafter defined), whose address is set
forth above (hereinafter referred to, together with its successors and assigns,
as the "Mortgagee").
RECITALS
A. Of even date herewith, Mortgagor and Chase Bank of Texas, National
Association have entered into that certain Trust Indenture and Security
Agreement (as the same may be amended, supplemented, restated or otherwise
modified from time to time, the "Trust Indenture"). Pursuant to the terms and
conditions contained in the Trust Indenture, Mortgagor entered into those
certain Note Purchase Agreements dated September 24, 1998 (the "Note Purchase
Agreements") wherein certain lenders (the "Lenders") have agreed to make a term
loan to Mortgagor in the aggregate principal amount of $112,250,000.00, as
evidenced by those certain Series A Senior Secured Notes in the original
principal amount of $95,412,500 and those certain Series B Senior Secured Notes
in the original principal amount of $16,837,500 (the promissory notes referred
to above, as the same may be amended, supplemented, restated or otherwise
modified from time to time, being herein collectively referred to as the
"Notes"). The Series A Senior Secured Notes are payable in installments of
interest at a rate per
<PAGE> 3
annum (based on a 360 day year of twelve thirty day months) determined in
accordance with the following formula: 6.33% per annum plus an additional 3
basis points to be added on the 16th day of each calendar month hereafter if the
Closing has failed to occur prior thereto; and payments of principal in
accordance with the provisions of an amortization schedule attached attached to
each of the Notes, and the Series B Senior Secured Notes provide for the monthly
payment of interest at a rate per annum (based on a 360 day year of twelve
thirty day months) determined in accordance with the following formula: the rate
reported at 2:00 p.m. United States eastern time on the Business Day immediately
before the Closing Date (as defined in the Trust Indenture) on the PX1
government page of the Bloomberg Service as the yield to maturity for the five
year on-the-run U.S. Treasury security, plus 164 basis points; with principal
payable at maturity. Copies of the Trust Indenture, Note Purchase Agreements and
the Notes are on file at the offices of Mortgagee at the address above, where
they may be consulted for the full text thereof. The Trust Indenture, Note
Purchase Agreements and the Notes, by reference, are incorporated herein.
B. Mortgagee has requested pursuant to the terms of the Trust Indenture
that Mortgagor execute and deliver this Mortgage, and Mortgagor has agreed to
enter into this Mortgage on the vessel "Noble Paul Romano", duly documented in
the name of Mortgagor under the laws and flag of the Republic of Panama Patente
No. 27264-HT, bearing international call letters HP-9320, of 13,665 gross
tonnage, 4,099 net tonnage, 93.68 meters in length, 100.05 meters in width,
39.62 meters in depth, and title registered at Filing Card N-21215, Roll 61088,
Frame 0012 on July 24, 1998 (together with the Equipment, as defined below, the
"Vessel").
C. Now, therefore, in consideration of the premises and of other
valuable consideration, receipt of which is hereby acknowledged, Mortgagor
hereby agrees as follows:
ARTICLE I
GRANTING CLAUSE AND DEFINITIONS
Section 1.1 Granting Clause. To secure the full and timely payment of
and the full and timely performance and discharge of the Obligations (as
hereinafter defined), Mortgagor hereby Mortgages and executes and constitutes a
First Naval Mortgage in accordance with the provisions of Chapter V Title IV of
Book Second of the Code of Commerce and other pertinent legislation of the
Republic of Panama in favor of Mortgagee, its successors and assigns, upon the
whole of the Vessel, together with its boilers, engines, machinery, masts,
spars, sails, riggings, boats, anchors, cables, chains, tackle, tools, pumps and
pumping equipment, apparel, furniture, fittings and equipment, spare parts,
capstans, outfit, tanks and tank batteries, fixtures, valves, fittings, draw
works, machinery and parts, meters, apparatus, equipment, appliances, tools,
implements, cables, wires, derricks, towers, casing, tubing and rods, and all
other appurtenances thereunto appertaining or belonging, whether now owned or
hereafter acquired, whether or not on board the Vessel, and all additions,
improvements, renewals and replacements hereafter made in or to the Vessel or
any part thereof, or in or to any said appurtenances (the "Equipment").
TO HAVE AND TO HOLD all and singular the above mortgaged and described
property unto Mortgagee, its successors and assigns, forever upon the terms
herein set forth;
PROVIDED, HOWEVER, and these presents are on the condition that if the
Obligations are paid and performed in accordance with the terms thereof and this
Mortgage, then these
-2-
<PAGE> 4
presents and the estates and rights hereunder shall cease, terminate and be
void, otherwise to be and remain in full force and effect.
Section 1.2 Definitions. As used in this Mortgage, the terms "Lenders",
"Mortgage", "Mortgagor", "Mortgagee", "Note Purchase Agreements", "Notes",
"Trust Indenture", and "Vessel" shall have the meanings assigned to them in the
recitals hereto. Any capitalized term used in this Mortgage and not defined
herein shall have the meaning assigned to such term in the Trust Indenture. As
used herein, the following terms shall have the following meanings:
"Dollars" or "$" means the lawful currency of the United States of
America.
"Equipment" shall have the meaning set forth in Section 1.1 hereof.
"Event of Loss" shall mean any one of the following events: (i) actual
total loss or destruction of the Vessel or any accident, occurrence or event
resulting in a constructive total loss or an agreed or compromised total loss of
the Vessel; or (ii) substantial damage to the Vessel, the repair of which is
uneconomical as determined in good faith by the Mortgagor, including, but not
limited to, any event pursuant to which insurance proceeds are available which
are not applied to repair the Vessel or any other event resulting for any reason
whatsoever in the Vessel being permanently rendered unfit for normal use; or
(iii) the condemnation, confiscation, requisition, seizure, detention,
forfeiture, purchase or other taking of title to or use of the Vessel (unless in
the case of a requisition, seizure, detention, or forfeiture, such action is
revoked within thirty (30) days or such shorter period within which SDDI may
terminate the Shell Contract as an event of force majeure) except the
requisition of the use of the Vessel by any Governmental Authority of the United
States or any state thereof on a basis not involving requisition of title to or
seizure or forfeiture of the Vessel.
"Event of Default" shall have the meaning set forth in Section 3.1
hereof.
"Notice of Entitlement to Terminate" shall have the meaning set forth
in the Performance Agreement.
"Obligations" shall mean (i) the payment when due of all indebtedness
evidenced by the Notes in the aggregate principal sum of $112,250,000.00 USD,
interest (including post-petition interest) as set forth in the Notes and the
Trust Indenture, and premiums (including Make-Whole Amount), penalties and late
charges thereon, (ii) all other indebtedness and other sums (including, without
limitation, all expenses, attorneys' fees, other fees, indemnifications,
reimbursements, damages, other monetary liabilities, and other charges) that may
and shall become due hereunder or under the Notes, the Trust Indenture or the
other Credit Documents, and (iii) any and all renewals, modifications,
amendments, extensions for any period, supplements or restatements of any of the
foregoing.
"Master's Wages" shall have the meaning set forth in Section 2.6
hereof.
-3-
<PAGE> 5
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
In order to induce Mortgagee to accept this Mortgage as collateral
security for the Obligations, Mortgagor represents and warrants to Mortgagee and
covenants and agrees with Mortgagee that:
Section 2.1 Legal Existence; Citizenship and Authorization. Mortgagor
is a corporation duly organized and validly existing under the laws of the state
of Delaware; and except as permitted by the Trust Indenture, shall maintain its
corporate existence during the term of this Mortgage; and is duly qualified to
engage in the trade in which the Vessel operates. Mortgagor is duly authorized
to mortgage the Vessel, and all action necessary and required by law for the
execution and delivery of this Mortgage has been duly and effectively taken by
it, and this Mortgage is the valid and enforceable obligation of Mortgagor. All
necessary consents and approvals of any Governmental Authority or any other
entity to the entering into and performance of this Mortgage have been duly
obtained or given and the entering into and performance of this Mortgage does
not and will not contravene the terms of or constitute a default under (with or
without giving of notice or lapse of time or both) any material agreement,
instrument or document to which Mortgagor is a party or by which it or its
properties are bound or affected after giving effect to the use of the proceeds
of the Notes.
Section 2.2 Ownership of Vessel; Warranty and Defense of Title.
Mortgagor is the sole owner of the whole of the Vessel and is lawfully possessed
of the whole of the Vessel, free from any Lien whatsoever other than the Lien of
this Mortgage, and the Liens permitted by Section 2.6 hereof not in excess of
$5,000,000, and Mortgagor will warrant and defend the title to and possession of
the Vessel and every part thereof for the benefit of Mortgagee against the
claims and demands of all other Persons whomsoever, subject to the Liens and
other matters permitted by the Trust Indenture or this Mortgage.
Section 2.3 Compliance with Laws.
(a) Documentation. The Vessel is, and during the term of this
Mortgage shall continue to be, duly and lawfully registered under the laws and
flag of the Republic of Panama, and Mortgagor will comply with and satisfy all
of the provisions of the laws of the Republic of Panama in order that the Vessel
shall continue to be documented pursuant to the laws of the Republic of Panama
as a vessel of the Republic of Panama under the Republic of Panama flag.
(b) Laws, Treaties and Conventions. The Vessel shall, and
Mortgagor covenants that it will in the operation of the Vessel, at all times
comply in all material respects with all applicable laws, treaties and
conventions and rules and regulations issued thereunder, and shall have on board
as and when required thereby valid certificates showing compliance therewith,
except when (i) the use or title of the Vessel has been taken, requisitioned or
chartered by any Governmental Authority, (ii) there has been an Event of Loss,
or (iii) there has been any other
-4-
<PAGE> 6
partial loss or damage with respect to the Vessel and Mortgagor shall be in
compliance with its obligations under Sections 4.2(c) and 7.3(c) of the Trust
Indenture.
Section 2.4 Operation of Vessel. Mortgagor will not (except during any
period when the use or title to the Vessel has been taken, requisitioned or
chartered by any Governmental Authority) cause or permit the Vessel to be
operated in any manner contrary to applicable law or regulation, will not
abandon the Vessel in any non-United States port (unless an Event of Loss has
occurred as to the Vessel or the safety or welfare of Mortgagor's employees on
the Vessel is endangered), will not engage in any unlawful trade, violate any
law or carry any cargo that will expose the Vessel to penalty, forfeiture or
capture and will not do, or suffer or permit to be done, anything which can or
may injuriously affect the documentation of the Vessel under the existing laws
and regulations of the Republic of Panama or the United States of America.
Without limiting the generality of the foregoing, the Mortgagor shall not
charter the Vessel to, or permit the Vessel to serve under any contract with, a
person included within the definition of (i) "national" of a "designated foreign
country," or "specially designated national" of a "designated foreign county,"
in the Foreign Assets Control Regulations or the Cuban Assets Control
Regulations of the United States Treasury Department, 31 C.F.R. Parts 500 and
515, in each case as amended, (ii) "Government of Libya," "entity of the
Government of Libya" or "Libyan entity" in the Libyan Sanctions Regulations of
the United States Treasury Department, 31 C.F.R. Part 550, as amended, or (iii)
"Government of Iraq," "entity of the Government of Iraq" or "Iraqi Government
entity" in the Iraqi Sanctions Regulations, 31 C.F.R. Part 575, as amended, all
within the meaning of said Regulations or of any regulations, interpretations or
rulings issued thereunder, or engage in any transaction that violates any
provision of said Regulations or that violates any provision of the Iranian
Transactions Regulations, 31 C.F.R. Part 560, as amended, the Transaction
Control Regulations, 31 C.F.R. Part 505, as amended, the Foreign Assets Control
Regulations, 31 C.F.R. Part 500, as amended, or Executive Orders 12810 and
12831, or call at a Cuban port to load or discharge cargo or to effect repairs
on the Vessel. Furthermore, the Mortgagor shall keep the Vessel at all times in
United States territorial waters in the Gulf of Mexico or in the Gulf of Mexico
on or above the outer Continental Shelf of the United States and as set forth in
Section 1 of the Drilling Order.
Section 2.5 Claims, Taxes, Fees. etc. Mortgagor will pay and discharge
or cause to be paid and discharged prior to delinquency, all claims against, and
fees, taxes, assessments, governmental charges, fines and penalties imposed on,
the Vessel, its cargoes or any income therefrom; provided, that nothing in this
Section 2.5 shall require Mortgagor to pay any such claim, fee, tax, assessment,
governmental charge, fine or penalty so long as the validity thereof shall be
contested by it in good faith and by appropriate proceedings, and, provided,
further, that such contest shall not subject the Vessel, or any part thereof, to
arrest, attachment, forfeiture or loss or subject the Mortgagee or any Lender to
the risk of any civil or criminal liability.
Section 2.6 Liens. Neither Mortgagor, any charterer or subcharterer,
the master of the Vessel nor any other Person has or shall have any right, power
or authority to create, incur or permit to be placed or imposed or continued
upon the Vessel and Mortgagor shall not permit to exist on the Vessel any Lien
whatsoever other than the Lien of this Mortgage and the following:
-5-
<PAGE> 7
(i) Liens for wages of the crew (including wages of a master
to the extent provided by law, "Master's Wages"), general average and salvage
(including contract salvage) which shall not have been due and payable for
forty-five (45) days after termination of a voyage or which shall then be
contested by Mortgagor in good faith and by appropriate proceedings; provided
that such contest shall not subject the Vessel to arrest, attachment, forfeiture
or loss or subject the Mortgagee or any Lender to the risk of any civil or
criminal liability;
(ii) Liens for wages of the crew (including Master's Wages)
and salvage (including contract salvage) which are either unclaimed or covered
by insurance;
(iii) Liens incident to current operations of Mortgagor in the
ordinary course of business (except for wages of the crew including Master's
Wages and salvage) or liens covered by insurance and any deductible applicable
thereto;
(iv) Liens for repairs the payment for which is either not
overdue or is being contested by Mortgagor in good faith and by appropriate
proceedings; provided that such contest shall not subject the Vessel to arrest,
attachment, forfeiture or loss or subject the Mortgagee or any Lender to risk of
any civil or criminal liability;
(v) Liens arising by reason of an actual or constructive total
loss or an agreed or compromised total loss of the Vessel;
(vi) Liens permitted by the Trust Indenture;
provided that the Liens stated to be permitted by the foregoing subparagraphs
(i) through (iv) shall, unless they constitute a Lien for damage arising out of
tort, for wages of a stevedore when employed directly by Mortgagor, master,
ship's husband, or agent, for wages of the crew (including Master's Wages), for
general average, or for salvage (including contract salvage), be permitted only
to the extent such Liens are either accrued but not yet due or are subordinate
to the Lien of this Mortgage. Nothing contained in this Section 2.6 constitutes
a waiver by Mortgagee of Mortgagee's preferred status. If any such Lien is
placed on the Vessel which is not subordinate to the Lien of this Mortgage,
Mortgagor will promptly after becoming aware of such Lien notify Mortgagee.
Section 2.7 Notice of Mortgage. Mortgagor will at all times carry on
board the Vessel (with the ship's papers) a certified copy of this Mortgage and
any amendments and supplements hereto and any assignments hereof, and will
exhibit or cause to be exhibited the same to any Person having business with the
Vessel which might give rise to a Lien upon the Vessel or to the sale,
conveyance, mortgage or lease thereof and, on demand, to any representative of
Mortgagee. Mortgagor will also place and keep prominently displayed on the
Vessel a framed printed notice in plain type of such size that the paragraph of
reading matter shall cover a space of not less than six inches wide by nine
inches high (or such other dimensions as may be required by law) reading as
follows:
-6-
<PAGE> 8
"NOTICE OF MORTGAGE
This Vessel is owned by Noble Drilling (Paul Romano) Inc. and is
subject to a First Naval Mortgage in favor of Chase Bank of Texas,
National Association, as Indenture Trustee, as Mortgagee, a certified
copy of which Mortgage is kept with this Vessel's papers. Under the
terms of said Mortgage, neither the owner, any charterer or
subcharterer, the master of this Vessel nor any other person has any
right, power or authority to create, incur or permit to be placed or
imposed upon this Vessel any lien whatsoever other than the lien of
said Mortgage, liens for wages, general average or salvage, and certain
other liens permitted by the provisions of said Mortgage."
Section 2.8 Libel or Attachment. If a libel or any similar legal action
is filed against the Vessel or if the Vessel shall be attached, levied upon or
taken into custody by virtue of any proceeding in any court or tribunal,
Mortgagor will promptly notify Mortgagee thereof by telegram, cable or
facsimile, confirmed by letter addressed to Mortgagee, and within thirty (30)
days after any such libel (other than (i) a libel involving claims less than
$2,500,000 or (ii) a libel involving claims equal to or in excess of $2,500,000
and where the Mortgagee has not received a reservation of rights notice, or
similar communication from its insurance carrier contesting or denying
coverage), levy, attachment or taking into custody, Mortgagor will cause the
Vessel to be released and will promptly notify Mortgagee of such release in the
manner aforesaid. In the event that the Vessel shall not be released within
fifteen (15) days after such libel, levy, attachment or action to take the
Vessel into custody, or at any time Mortgagee receives a Notice of Entitlement
to Terminate with respect to any such libel, levy, attachment, or action to take
the Vessel into custody, Mortgagor does hereby authorize and empower Mortgagee,
in the name of Mortgagor, or its successor or assigns, to apply for and receive
possession of and to take possession of the Vessel with all the rights and
powers that Mortgagor, or its successors or assigns, might have, possess or
exercise in any such event; and this power of attorney shall be irrevocable and
may be exercised not only by Mortgagee hereinabove named but also by any one
such appointee or the appointees of Mortgagee, with full power of substitution,
to the same extent as if the said appointee or appointees had been named as one
of the attorneys above named by express designation.
Section 2.9 Maintenance of Vessel. Except as to such period as (i) the
use or title of the Vessel has been taken, requisitioned or chartered by a
Governmental Authority, (ii) there has been actual or constructive total loss or
an agreed or compromised total loss of the Vessel, or (iii) there has been any
other partial loss or damage with respect to the Vessel and Mortgagor shall be
in compliance with its obligations under Sections 4.2(c) and 7.3(c) of the Trust
Indenture, Mortgagor will, at all times and without cost or expense to
Mortgagee, maintain and preserve, or cause to be maintained and preserved, the
Vessel in good running order and repair, so that the Vessel shall be tight,
staunch, strong and well and sufficiently tackled, appareled, furnished,
equipped and in every respect seaworthy and in first class order and operating
condition and in full compliance with and able to perform all operations under
the Shell Contract; and otherwise in compliance with the provisions of the Trust
Indenture.
Section 2.10 Inspection. Weather permitting, Mortgagor will permit
Mortgagee, any Lender or its representative to visit and inspect the Vessel,
under the Mortgagor's guidance, to
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examine all of its books of account, records, reports and other papers, to make
copies and extracts therefrom and to discuss its affairs, finances and accounts
with its officers, employees, and independent public accountants (and by this
provision the Mortgagor authorizes said accountants to discuss with Mortgagee or
any Lender the finances and affairs of the Mortgagor) all at such reasonable
time, upon reasonable notice and as often as may be reasonably requested;
provided that the Mortgagor shall not be required to pay or reimburse any Lender
for expenses which such Lender may incur in connection with any such visitation
or inspection, except that if such visitation or inspection is made during any
period when an Indenture Default or an Indenture Event of Default shall have
occurred and be continuing, the Mortgagor agrees to reimburse such Lender for
all such expenses promptly upon demand.
Section 2.11 Sale or Other Disposition of Vessel. Except as allowed in
the Trust Indenture, Mortgagor will not sell, mortgage, transfer or in any other
way dispose of all or any part of the Vessel without the prior written consent
of Mortgagee.
Section 2.12 Notice. Mortgagor shall notify the Mortgagee forthwith by
facsimile thereafter confirmed by letter of:
(a) any casualty event in excess of $250,000 with respect to the
Vessel; and
(b) any occurrence in respect of the Vessel that is or is likely, by
the passing of time or otherwise, to become an Event of Loss; and
(c) any material requirement or recommendation made by any insurer or
classification society or by any competent authority which is not complied with
within a reasonable time; and
(d) any arrest, governmental detention, or attachment of the Vessel or
the assertion or purported assertion of any lien against the Vessel; and
(e) any intended dry docking of the Vessel, as to which the Mortgagor
shall give the Mortgagee 30 days' prior notice, provided, that in the event of
any emergency dry docking of the Vessel, the Mortgagor shall promptly notify the
Mortgagee; and
(f) any intended deactivation or lay-up of the Vessel.
Section 2.13 Insurance.
(a) All Risk Property Insurance. Mortgagor shall, at its own
expense, keep the Vessel insured, in lawful money of the United States, against
all such risks (including without limitation, hull and machinery/increased
value, protection and indemnity risk, pollution liability, war risks and, when
laid up, port risk insurance as well as such excess policies over and above
protection and indemnity and general liability coverage which shall represent
collective limits of not less than $400,000,000), in such form and with such
insurance companies or underwriters as required under Section 2.13(f) as shall
be at least as protective as insurance maintained by prudent owners of vessels
and equipment similar to the Vessel, engaged in international contract offshore
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oil and gas operations, and in any event all as reasonably acceptable to
Mortgagee and in compliance with the Shell Contract. Without limiting the
generality of the foregoing, with respect to hull and machinery/increased value
insurance, including war risk, the Mortgagor shall insure the Vessel for an
amount which is at least equal to the Obligations plus $250,000. Such insurance
shall cover marine and war risk perils, on hull and machinery, with per
occurrence deductibles not in excess of $250,000 and shall be maintained in the
broadest forms available in the American and British insurance markets. The
Mortgagor shall maintain protection and indemnity (or its equivalent) insurance,
including war risk protection and indemnity (or its equivalent) coverage in an
amount not less than $400,000,000. The Mortgagor shall maintain coverage against
pollution liability in an amount not less than $400,000,000 (or such greater
amount as may be required from time to time under Oil Pollution Act of 1990 or
other environmental laws). All of the foregoing insurance shall have a per
occurrence deductible not to exceed $250,000 and be placed through such
underwriters or associations reasonably acceptable to the Mortgagee. The Vessel
shall not operate in or proceed into any area then excluded by trading
warranties under its marine or war risk policies (including protection indemnity
or its equivalent) without satisfying the conditions of the relevant policies,
evidence of which shall be furnished to the Mortgagee.
(b) Liability; Workers' Compensation. Mortgagor shall maintain
at all times such worker's compensation, employer's liability, and longshoreman
and harbor worker's insurance as shall be required by applicable law. Mortgagor
shall also maintain public liability insurance together with umbrella liability
coverage as insured against by prudent owners of vessels and equipment similar
to the Vessel. Such policies shall provide that any loss under such insurance
may be paid directly to the entity to whom any liability covered by such
policies has been incurred.
(c) Payment Provisions. All payments made under policies of
insurance maintained under this Section shall be applied as set forth in Section
4.2 of the Trust Indenture.
(d) Constructive Total Loss. In the case of an Event of Loss
that is a constructive total loss of the Vessel, Mortgagee shall have the right
(but only with prior written consent of Mortgagor unless an Indenture Event of
Default has occurred and is continuing) to join in Mortgagor's claim for a
constructive total loss of the Vessel, and if both (i) such claims are accepted
by all underwriters under all policies then in force as to the Vessel and (ii)
payment in full is made in cash under such policies to Mortgagee in an amount at
least equal to the then outstanding amount of the Obligations, then Mortgagee
shall have the right to abandon the Vessel to the underwriters under such
policies, free from the Lien of this Mortgage.
(e) Agreed Total Loss. Mortgagee shall not have the right to
enter into an agreement or compromise providing for an agreed or compromised
total loss of the Vessel without the prior written consent of Mortgagor unless
an Indenture Event of Default has occurred and is continuing. If Mortgagor shall
have given its prior consent thereto, or an Indenture Event of Default has
occurred and is continuing, Mortgagee shall have the right in its discretion to
enter into an agreement or compromise providing for an agreed or compromised
total loss of the Vessel, provided the same is agreed to by underwriters under
all applicable policies.
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(f) Insurers. All insurance required under this Section 2.13
shall be placed and kept with such insurance companies, Lloyd's Syndicates,
underwriters' associations, clubs or underwriting funds as are reputable,
generally recognized within the industry, and (i) in the case of hull and
machinery insurance, rated by either Standard & Poors Rating Services, a
division of the McGraw Hill Companies, Inc. ("S&P") or Moody's Investors
Services, Inc. ("Moody's) with at least the equivalent to an S&P rating of BBB
(and with at least 75% of the companies, determined by dollar amount of policy
coverage, rated by S&P or Moody's with at least the equivalent to an S&P rating
of A) or, if not rated by S&P or Moody's then rated "excellent" or better by
A.M. Best, and (ii) in the case of protection and indemnity risk insurance,
rated by either S&P or Moody's with at least the equivalent to an S&P rating of
BBB.
(g) Taking by United States. During the continuance of a
taking, requisition or charter of the use of the Vessel by any governmental body
of the United States of America, the provisions of this Section 2.13 shall be
deemed to have been complied with in all respects as to the Vessel if the United
States Government or any such governmental body shall have agreed (i) to
reimburse Mortgagee and Mortgagor for loss or damage resulting from the risks
indicated in paragraphs (a) and (b) of this Section 2.13, or (ii) that Mortgagee
and Mortgagor shall be entitled to just compensation therefor. In the event of
any taking, requisition, charter or loss of the Vessel contemplated by this
paragraph (g), Mortgagor shall promptly furnish to Mortgagee a sworn certificate
of an officer of Mortgagor stating that such taking, requisition, charter or
loss has occurred and, if there shall have been a taking, requisition or charter
of the Vessel, that the United States Government or governmental body has agreed
(i) to reimburse Mortgagor for loss or damage resulting from the risks indicated
in the above-mentioned paragraphs (a) and (b) or (ii) that Mortgagor or
Mortgagee, as the case may be, is entitled to just compensation therefor.
(h) Mortgage Provisions. All insurance required under this
Section 2.13 shall be taken out in the name of Mortgagor or on its behalf by an
Affiliate of Mortgagor. Mortgagee and each Lender shall be named as an
additional insured under all liability policies (other than workers'
compensation and similar insurance), and Mortgagee shall be named as the sole
loss payee under all physical damage policies with respect to the Vessel. All
policies for such insurance shall also provide that (i) there shall be no
recourse against Mortgagee (or its assignee) or any Lender for the payment of
premiums or commissions, (ii) if such policies provide for the payment of club
calls, assessments or advances, there shall be no recourse against Mortgagee (or
its assignee) or any Lender for the payment thereof. All policies shall provide
that the insurers shall provide to Mortgagee (or its assignee) and each Lender
30 days prior notice of any material change in the coverage of such insurance as
well as ten (10) days prior written notice of any cancellation of such insurance
in the event of non-payment of premiums and seven (7) days prior written notice
of any cancellation of such insurance for war risk.
(i) Compliance. Mortgagor shall not do any act, nor permit any
act to be done, whereby any insurance required by this Section 2.13 shall or may
be suspended, impaired or defeated, or permit the Vessel to engage in any
voyage, to engage in any activity or to carry any cargo not permitted under the
policies of insurance then in effect without first procuring comparable
insurance for such voyage, activity or the carriage of such cargo.
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(j) Policies. Mortgagor, upon execution of this Mortgage,
shall deliver to Mortgagee certificates of insurance, evidencing the insurance
maintained under this Section 2.13. Mortgagor, upon the request of Mortgagee,
will promptly deliver to Mortgagee true copies of such policies.
(k) Opinion and Certificates. At such times as Mortgagee may
reasonably request, Mortgagor shall furnish or cause to be furnished to
Mortgagee a detailed certificate or opinion (signed by a reputable insurance
broker) as to the insurance maintained by Mortgagor pursuant to this Section
2.13, specifying the respective policies of insurance covering the same and
attaching certificates of confirmation evidencing the same and stating with
regard to the insurance maintained by Mortgagor pursuant to this Section 2.13
the amounts, deductibles, and the risks against which such insurance is issued.
(l) Obligation to Collect. Mortgagor shall, at no cost or
expense to Mortgagee, have the duty and responsibility to make all proofs of
loss and take any and all other steps necessary as a prudent owner or as
reasonably directed by Mortgagee to effect collections from underwriters for any
loss under any insurance on or in respect of the Vessel or the operation
thereof.
Section 2.14 Change of Flag, Port of Documentation or Name. Mortgagor
will not change or transfer the flag, port of documentation or the name of the
Vessel, except in strict compliance with Section 7.3 of the Trust Indenture.
ARTICLE III
REMEDIES; APPLICATION OF PROCEEDS
Section 3.1 Sale, Etc. If an Event of Default shall have occurred and
be continuing, Mortgagee may, to the fullest extent permitted by and in
accordance with applicable law:
(a) exercise all the rights and remedies in foreclosure and otherwise
given to mortgagees by the laws of the Republic of Panama, and by the applicable
laws of any other applicable jurisdiction;
(b) bring suit at law, in equity or in admiralty or initiate and
prosecute such other judicial, extrajudicial, or administrative proceedings as
it may consider appropriate to recover any and all sums due, or declared due, in
respect of the Obligations, with the right to enforce payment of said sums
against any assets of Mortgagor, whether they are covered by this Mortgage or
otherwise;
(c) to the extent permitted by and in accordance with any applicable
law, take possession of the Vessel, with or without legal proceedings, at any
place where it may be found, and Mortgagor or any Person in possession of the
Vessel, forthwith upon request by Mortgagee, as mortgage creditor, shall deliver
possession to Mortgagee on demand of Mortgagee, and
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Mortgagee shall have the right, subject to applicable law, without being
responsible for loss or damage to lay up, hold, charter, lease, operate or
otherwise use the Vessel for such period and under such conditions as it may
deem most expedient for its interest, accounting only for net profits, if any,
arising from such use and charging against all receipts from such use or from
the sale of the Vessel by court proceedings or pursuant to subsection (d) below,
all costs, expenses, charges, damages or losses by reason of such use; and if at
any time Mortgagee shall avail itself of the right herein given to it to take
the Vessel and shall take it, Mortgagee shall have the right to dock the Vessel
at any dock, pier or other premises owned or leased by Mortgagor without charge,
or at any other place at the cost and expense of Mortgagor;
(d) to the extent permitted by and in accordance with any applicable
law, sell the Vessel at public or private sale, by sealed bids or otherwise, on
such terms and conditions as Mortgagee deems best, free of any claim, lien,
commitment or encumbrance, regardless of the nature thereof, in favor of
Mortgagor and, except as provided by law, any other person, upon advance notice
of ten (10) consecutive days published in any newspaper authorized to publish
legal notices of that kind in the port of registry and the place of sale of the
Vessel and by sending notice of such sale at least twenty (20) days prior to the
date fixed for such sale, by telegraph, cable, telefax or telex, confirmed by
mail, to Mortgagor. In the event that the Vessel shall be offered for sale by
private sale, no newspaper publication of notice shall be required, nor notice
of adjournment of sale. Sale may be held at such place and at such time as
Mortgagee by notice may have specified, or may be adjourned by Mortgagee from
time to time by announcement at the time and place appointed for such sale or
for such adjourned sale, and without further notice or publication Mortgagee may
make any such sale at the time and place to which the same shall be so
adjourned; and any sale may be conducted without bringing the Vessel to the
place designated for such sale and in such manner as Mortgagee may deem to be
for its best advantage, and Mortgagee may become the purchaser at any public
sale, and shall have the right to credit on the purchase price any and all sums
of money due hereunder or under any other Credit Document. Without limiting the
generality of the foregoing, Mortgagee shall be entitled to exercise all the
rights and remedies available to it under Articles 1527 and 1527-A of the Code
of Commerce of the Republic of Panama;
(e) manage, insure, maintain and repair the Vessel and charter, employ,
sail or lay up the Vessel in such manner, upon such terms and for such period as
the Mortgagee deems reasonably expedient; and for the purposes aforesaid the
Mortgagee shall be entitled to do all acts and things reasonably incidental or
conducive thereto and in particular to enter into such arrangements respecting
such Vessel, and the insurance, management, maintenance, repair, classification,
chartering and employment of such Vessel, in all respects as if the Mortgagee
were the owner of such Vessel and without being responsible for any loss thereby
incurred;
(f) recover from the Mortgagor on demand any liabilities, losses and
reasonable expenses as may be incurred by the Mortgagee in or about the exercise
of the power vested in the Mortgagee hereunder;
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(g) generally, recover from the Mortgagor on demand any liabilities,
losses and reasonable expenses incurred by the Mortgagee in or about or
incidental to the exercise by it of any of the powers aforesaid;
(h) not be required to have the Vessel marshaled (upon any sale of the
Vessel) or be required to realize on any other collateral prior to its
realization on the Vessel; and
(i) exercise any other rights it may have under applicable law or any
other Credit Document.
As used in this Mortgage, "Event of Default" shall mean the occurrence
of an Indenture Event of Default under the Trust Indenture.
Section 3.2 Finality of Sale. A sale of the Vessel made in pursuance of
this Mortgage, whether under the power of sale hereby granted or any judicial
proceedings, shall operate to divest all right, title and interest of any nature
whatsoever of Mortgagor therein and thereto, and shall bar Mortgagor, its
successors and assigns, and all Persons claiming by, through or under them. No
purchaser shall be bound to inquire whether notice has been given or whether any
default has occurred, or as to the propriety of the sale, or as to application
of the proceeds thereof.
Section 3.3 Powers and Rights of Mortgagee Upon Notice of Default.
During the occurrence and continuance of an Event of Default, Mortgagee shall
have the following powers and rights:
(a) Sale. Mortgagor does hereby irrevocably appoint Mortgagee
and its successors and assigns the true and lawful attorney of Mortgagor, in its
name and stead, for the purpose of Sections 3.1 and 3.2, to make all necessary
transfers of the Vessel, and for that purpose Mortgagee shall execute all
necessary instruments of assignment and transfer (including bills of sale),
Mortgagor hereby ratifying and confirming all that its said attorney shall
lawfully do by virtue hereof. Nevertheless, Mortgagor shall, if so requested by
Mortgagee, ratify and confirm any sale of the Vessel by executing and delivering
to the purchaser thereof such proper bills of sale, conveyances, instruments of
transfer and releases as may be designated in such request.
(b) Revenues and proceeds of Vessel; Prior Liens.
(i) Mortgagee is hereby irrevocably appointed
attorney-in-fact of Mortgagor, with the power, among other things, so
long as an Event of Default has occurred and is continuing, in the name
of Mortgagor to demand, collect, receive, compromise and sue for, so
far as may be permitted by law, all freights, hire, earnings, issues,
revenues, income and profits of the Vessel, and all amounts due from
underwriters under any insurance thereon as payment of losses or as
return premiums or otherwise, salvage awards and recoveries, recoveries
in general average or otherwise, and all other sums due or to become
due in respect of the Vessel or in respect of any insurance thereon
from any person whomsoever, and to make, give and execute in the name
of Mortgagor
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acquittances, receipts, releases or other discharges for the same,
whether under seal or otherwise, and to endorse and accept in the name
of Mortgagor all checks, notes, drafts, warrants, agreements and all
other instruments in writing with respect to the foregoing, Mortgagor
hereby confirming and ratifying the same.
(ii) So long as an Event of Default has occurred and
is continuing, Mortgagee is hereby irrevocably authorized to pay or
furnish indemnity in the proper amounts against any Liens which have
or may (in the reasonable opinion of Mortgagee) have priority over the
Lien of this Mortgage and which are not permitted under this Mortgage
or the Trust Indenture.
(c) Additional Rights. Mortgagor covenants and agrees that in
addition to any and all other rights, powers and remedies elsewhere in this
Mortgage granted to and conferred upon Mortgagee, Mortgagee in any suit to
enforce any of its rights, powers or remedies shall be entitled as a matter of
right and not as a matter of discretion (i) to seek the appointment of a
receiver or receivers of the Vessel and any receiver or receivers so appointed
shall have full right and power to use and operate the Vessel as shall be
ordered by any court having jurisdiction, (ii) to a decree ordering and
directing the sale and disposal of the Vessel, and Mortgagee may become the
purchaser at such sale and shall have the right to credit against the purchase
price any and all sums of money due hereunder, and (iii) to have full rights and
remedies at law and in equity including, without limitation, specific
performance of the covenants hereof including, without limitation, the following
paragraph of this Section 3.3(c).
Mortgagor further covenants and agrees that if (i) an Indenture Event
of Default under Section 6.1(a), (d), (e), (f), (j), (l) or (m) has occurred and
is continuing or (ii) any other Indenture Event of Default has occurred and is
continuing which has resulted in acceleration of the maturity of the
Obligations, then Mortgagor shall, upon the request of Mortgagee and at the
direction of Majority Holders, immediately move the Vessel to such United States
port or other location within the territorial waters of the United States
subject to the in rem admiralty jurisdiction of the United States federal courts
as Mortgagee may designate in its sole and absolute discretion.
(d) Notice to Mortgagor. Mortgagee shall notify Mortgagor
promptly after taking any action permitted by this Section 3.3.
Section 3.4 Restoration of Position. In case Mortgagee shall have
proceeded to enforce any right, power or remedy under this Mortgage by
foreclosure, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Mortgagee, then and in every such case Mortgagor and Mortgagee shall, subject
to any determination in such proceeding, be restored to their former positions
and rights hereunder with respect to the property subject or intended to be
subject to this Mortgage, and all rights, remedies and powers of Mortgagee
shall, subject to any determination in such proceeding, continue as if no such
proceedings had been taken.
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Section 3.5 Application of Proceeds. The proceeds of any sale and net
earnings derived from the operation, use, charter, or any other employment of
the Vessel by Mortgagee, as mortgage creditor, and within any of the powers and
authority above given, as well as the proceeds of any judgment which Mortgagee
may obtain by reason of the breach or failure to perform any of the terms of
this Mortgage, as well as the proceeds of any claim for damage received by
Mortgagee while exercising the powers and the authorities above given shall be
applied as follows:
(i) to the payment of all charges and expenses, including the
costs of any public or private sale or sales, the cost of replevying or
taking possession of the Vessel which may be incurred or paid out by
Mortgagee, as mortgage creditor, and the expenses and reasonable
administrator and external attorneys' fees incurred on foreclosure or
in the protection of the rights and interests of Mortgagee founded upon
this Mortgage;
(ii) to pay or to furnish indemnity in the proper amounts
against any Liens which have or may (in the reasonable opinion of
Mortgagee) have priority over the Lien of this Mortgage and which are
not Liens permitted under this Mortgage; and
(iii) to deliver to the Mortgagee for application as provided
in the Trust Indenture.
Section 3.6 Waiver. (a) To the extent now or at any time hereafter
enforceable under applicable law, the Mortgagor covenants that it will not at
any time insist upon or plead, or in any manner whatsoever claim or take any
benefit or advantage of, any stay or extension law now or at any time hereafter
in force, nor claim, take nor insist upon any benefit or advantage of or from
any law now or hereafter in force providing for the valuation or appraisement of
the Vessel or any part thereof, prior to any sale or sales thereof to be made
pursuant to any provision herein contained, or to the decree, judgment or order
of any court of competent jurisdiction, nor, after such sale or sales, claim or
exercise any right under any statute now or hereafter made or enacted by any
state or otherwise to redeem the property so sold or any part thereof, and
hereby expressly waives for itself and on behalf of each and every Person, all
benefit and advantage of any such law or laws, and covenants that it will not
invoke or utilize any such law or laws or otherwise hinder, delay or impede the
execution of any power herein granted and delegated to the Mortgagee, but will
suffer and permit the execution of every such power as though no such law or
laws had been made or enacted.
(b) The Mortgagor waives any right to require the Mortgagee or
the Lenders to proceed against any other Person, or to exhaust any other
Collateral or other security for the obligations secured hereby, or to have any
other Person joined with the Mortgagor in any suit arising out of the
Obligations or the other Credit Documents, or to pursue any other remedy in the
Mortgagee's or the Lenders' power. The Mortgagor further waives any and all
notice of acceptance of this Mortgage by any other Person directly or indirectly
liable for such obligations from time to time. The Mortgagor further waives any
defense arising by reason of any disability or other defense of any other Person
or by reason of the cessation from any cause whatsoever of the liability of any
other Person liable for the Obligations secured hereby. Until all of such
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Obligations shall have been paid in full, the Mortgagor shall have no right to
subrogation and the Mortgagor waives the right to enforce any remedy which the
Mortgagee or the Lenders have or may hereafter have against any other Person
liable for such obligations, and the Mortgagor waives any benefit of any right
to participate in any security whatsoever now or hereafter held by the Mortgagee
or the Lenders. The Mortgagor authorizes the Mortgagee and the Lenders, without
notice or demand and without any reservation of rights against the Mortgagor and
without affecting the Mortgagor's liability hereunder or on the obligations
secured hereby, from time to time to (a) take or hold any Property other than
the Collateral from any other Person as security for such obligations, and
exchange, enforce, waive and release any or all of such Property, (b) apply such
Property and direct the order or manner of sale thereof as the Mortgagee and the
Lenders may in their discretion determine, and (c) renew, extend for any period,
accelerate, modify, compromise, settle or release any of the obligations of any
other Person in respect of the obligations secured hereby or other security for
such obligations.
ARTICLE IV
GENERAL POWERS OF MORTGAGEE
Section 4.1 General Powers of Mortgagee.
(a) Arrest or Detention of Vessel. In the event that the
Vessel shall be arrested or detained by a marshal or other officer of any court
of law, equity or admiralty jurisdiction in any country or nation of the world
or by any government or other entity and shall not be released from arrest or
detention within fifteen (15) days from the date of arrest or detention or upon
Mortgagee's receipt of a Notice of Entitlement to Terminate as a result of such
detention or arrest, Mortgagor does hereby authorize and empower Mortgagee, in
the name of Mortgagor, or its successors or assigns, to apply for and receive
possession of and to take possession of the Vessel with all the rights and
powers that Mortgagor, or its successors or assigns, might have, possess or
exercise in any such event; and this power of attorney shall be irrevocable and
may be exercised not only by Mortgagee but also by its appointee or appointees,
with full power of substitution, to the same extent as if the said appointee or
appointees had been named as the attorney above named by express designation.
(b) Suits. Mortgagor also authorizes and empowers Mortgagee or
its appointees or any of them to appear in the name of Mortgagor, its successors
or assigns, in any court of any country or nation of the world where a suit is
pending against the Vessel because of or on account of any alleged Lien against
the Vessel from which the Vessel has not been released in accordance with the
terms of this Mortgage and to take such proceedings as to it may seem proper
towards the defense of such suit and the discharge of such Lien.
(c) Reimbursement of Expenses. If Mortgagor fails to perform
any obligation or covenant under this Mortgage, Mortgagee shall have the right,
but not the obligation, to perform or take such actions to comply with the terms
of this Mortgage, and all amounts reasonably expended in connection with such
conduct shall be a demand obligation of Mortgagor
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owing to Mortgagee at the Default Rate specified in the Trust Indenture and
shall be secured by the Lien of this Mortgage.
ARTICLE V
SUNDRY PROVISIONS
Section 5.1 Release. If the Obligations shall have been fully satisfied
and discharged to the satisfaction of the Trustee then this Mortgage and the
estate and rights hereunder shall cease, determine, and become null and void;
and Mortgagee, on the request of Mortgagor and at Mortgagor's cost and expense,
shall forthwith cause satisfaction and discharge of this Mortgage to be entered
upon its and other appropriate records and shall execute and deliver to
Mortgagor such instruments as may be necessary in Mortgagor's reasonable opinion
to duly acknowledge the satisfaction and discharge of this Mortgage. Upon any
termination of this Mortgage or release of the Vessel as permitted by the Trust
Indenture, Mortgagee will, at the expense of Mortgagor, execute and deliver to
Mortgagor such documents and take such other actions as Mortgagor shall
reasonably request to evidence the termination of this Mortgage or the release
of the Vessel, as the case may be.
Section 5.2 Right of Peaceful Enjoyment. During the term of this
Mortgage and so long as no Event of Default shall have occurred and be
continuing, Mortgagor shall have full and peaceful enjoyment, use, right to
possession and control of the Vessel subject to the terms of the Credit
Documents.
Section 5.3 Cumulative Remedies; No Waiver. Each and every power and
remedy herein given to Mortgagee shall be cumulative and shall be in addition to
every other power and remedy herein or in any other Credit Document or now or
hereafter existing at law, in equity, in admiralty, or by statute, and each and
every power and remedy whether herein given or given in any other Credit
Document or otherwise existing may be exercised from time to time and as often
and in such order, or in the alternative as may be deemed expedient by
Mortgagee, and the exercise or the beginning of the exercise of any power or
remedy shall not be construed to be a waiver of the right to exercise at the
same time or thereafter any other power or remedy. No course of dealing on the
part of Mortgagee, its officers, employees, consultants or agents, nor any delay
or omission by Mortgagee in the exercise of any right or power or in the
pursuance of any remedy shall operate as a waiver of any such right, power or
remedy.
Section 5.4 Further Assurances. In the event that this Mortgage, or any
provisions hereof, shall be deemed invalid in whole or in part by reason of any
present or future law or any decision of any court having jurisdiction, or if
the documents at any time held by Mortgagee shall be deemed by Mortgagee for any
reason insufficient to carry out the rights and powers granted to Mortgagee
herein, then, from time to time, Mortgagor will do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered, such other
and further assurances and documents as in the opinion of Mortgagee may
reasonably be required in order to more effectively subject the
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<PAGE> 19
Vessel to the Lien of this Mortgage or more effectively subject the Vessel to
the performance of the terms and provisions of this Mortgage, or to enable this
Mortgage to continuously enjoy the status of a first preferred ship mortgage.
Section 5.5 Survival of Agreements. All representations, warranties,
covenants and agreements herein contained or made in writing in connection with
this Mortgage shall survive the execution of this Mortgage and shall continue in
full force and effect until all sums secured hereby shall have been paid in
full, and the same shall bind and inure to the benefit of the respective
successors and assigns of Mortgagor and Mortgagee.
Section 5.6 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when actually delivered or in the case
of facsimile transmission, when received and telephonically confirmed, addressed
as follows or to such other address as may be hereafter notified by the
respective parties hereto or any assignee thereof or successor thereto:
Mortgagor: Noble Drilling (Paul Romano) Inc.
10370 Richmond Avenue
Suite 581
Houston, Texas 77042
Facsimile No. 713-974-3181
Attention: President
Mortgagee: Chase Bank of Texas, National Association
600 Travis Street, Suite 1150
11th Floor
Houston, Texas 77002
Attention: Mauri Cowen
Corporate Trust Department
Section 5.7 Counterparts. This instrument may be executed in any number
of counterparts, and each of such counterparts shall for all purposes be deemed
to be an original.
Section 5.8 Section Headings. The section headings used in this
Mortgage are for convenience of reference only and are not to affect the
construction of or be taken into consideration in interpreting this Mortgage.
SECTION 5.9 GOVERNING LAW. THIS MORTGAGE, AND ALL OF THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER, AND THEIR RESPECTIVE SUCCESSORS AND
ASSIGNS, SHALL BE GOVERNED BY THE LAWS OF THE REPUBLIC OF PANAMA AND, BY THE
MARITIME LAWS OF THE UNITED STATES OF AMERICA OR THE STATE OF NEW YORK AS MAY BE
APPLICABLE.
-18-
<PAGE> 20
Section 5.10 Jurisdiction.
(a) Any legal action or proceeding with respect to this Mortgage may be
brought in the courts of the United States for the Southern District of New York
and the Mortgagor hereby accepts for itself and its property, generally and
unconditionally, the non-exclusive jurisdiction of such court. The Mortgagor
further irrevocably consents to the service of process out of such court in any
such action or proceeding in the manner provided for in the Trust Indenture.
Nothing herein shall affect the right of the Mortgagee to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against the Mortgagor in any other jurisdiction.
(b) Without prejudice to the generality of Clause 5.10(a), the
Mortgagee shall have the right to arrest and take action against the Vessel at
whatever place such Vessel shall be found lying and for the purpose of any
action which the Mortgagee may bring before the courts of such jurisdiction or
other judicial authority and for the purpose of any action which the Mortgagee
may bring against such Vessel, any writ, notice, judgment or other legal process
or documents may (without prejudice to any other method of service under
applicable law) be served upon the master of such Vessel (or upon anyone acting
as the master) and such service shall be deemed good service on the Mortgagor
for all purposes.
(c) Each of the parties hereto stipulates that, when the Vessel is
located on the Outer Continental Shelf within the jurisdiction of the United
States Federal District Courts under 43 U.S.C. ss.ss.1331(1) and 1349(b)(1), (i)
that the United States Federal District Courts shall have "in rem" admiralty
jurisdiction over the Vessel and (ii) that the Vessel is present within the
territorial jurisdiction of said courts for all purposes, including the
enforcement of any maritime liens or other remedies hereunder.
Section 5.11 Amendments and Waivers. None of the terms or provisions of
this Mortgage may be waived, amended, supplemented or otherwise modified except
if made in compliance with the terms and provisions of the Trust Indenture.
Section 5.12 Termination. The grant of the Liens hereunder and all of
Mortgagee's rights, powers and remedies in connection therewith, shall unless
otherwise provided in the Trust Indenture or this Mortgage, remain in full force
and effect until payment in full of (A) the Notes under the terms thereof or of
the Trust Indenture, and (B) all Obligations then due and owing under the Trust
Indenture, the Notes and the other Credit Documents. Upon the payment in full of
(A) the Notes under the terms thereof or of the Trust Indenture, and (B) all
Obligations then due and owing under the Trust Indenture, the Notes and the
other Credit Documents, Mortgagor shall be entitled to the return, upon its
request and at its expense, of the Vessel free and clear of all liens created by
this Mortgage.
Section 5.13 Trust Indenture. This Mortgage is issued pursuant to the
terms, conditions and provisions of the Trust Indenture.
Section 5.14 Severability. In the event that any provision of this
Mortgage or the Trust Indenture or the Notes shall be deemed invalid or
unenforceable by reason of any present or future
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<PAGE> 21
law or any decision of any authoritative court, the validity and enforceability
of the other provisions hereof or thereof shall not be affected thereby.
Section 5.15 Power to Record. Mortgagee and Mortgagor declare that they
hereby confer a special Power of Attorney on Roy Phillipps P., a lawyer of
Panama, Republic of Panama, empowering him to take all necessary steps to file
and register this First Naval Mortgage in the appropriate registries of the
Republic of Panama.
[Signature Pages Begin Next Page]
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<PAGE> 22
IN WITNESS WHEREOF, Mortgagor has caused this Mortgage to be duly
executed as of the day and year first above written.
MORTGAGOR: NOBLE DRILLING (PAUL ROMANO) INC.
By: /s/ Byron L. Welliver
-------------------------------
Name: Byron L. Welliver
Title: Senior Vice President
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
THIS INSTRUMENT was acknowledged before me on __________, 1998, by
_____________________________, ___________________________________ of Noble
Drilling (Paul Romano) Inc., a Delaware corporation on behalf of such
corporation, and after having first been duly authorized by said corporation to
do so.
AND THE said ___________ did further produce to me sufficient proof
that he is the duly elected ___________ of said corporation and that he was duly
authorized by said corporation to execute the foregoing Mortgage, and I the
notary hereby certify that the signature of the said ______________ on the
foregoing Mortgage was placed thereon in my presence and is therefore authentic.
------------------------------
Notary Public in and for
the State of Texas
Printed Name of Notary:
------------------------------
My Commission Expires:
------------------------------
Signature Page - 1
<PAGE> 23
MORTGAGEE: CHASE BANK OF TEXAS, National
Association, as Indenture Trustee,
By: /s/ Mauri J. Cowen
--------------------------------------
Name: Mauri J. Cowen
Title: Vice President and Trust Officer
THE STATE OF TEXAS )
)
COUNTY OF HARRIS )
THIS INSTRUMENT was acknowledged before me on __________, 1998, by
_____________________________, __________________ of Chase Bank of Texas,
National Association, a national banking association, on behalf of such
association, and after having first been duly authorized by said association to
do so.
AND THE said ___________ did further produce to me sufficient proof
that he is the duly elected ___________ of said association and that he was duly
authorized by said association to execute the foregoing Mortgage, and I the
notary hereby certify that the signature of the said ______________ on the
foregoing Mortgage was placed thereon in my presence and is therefore authentic.
------------------------------
Notary Public in and for
the State of Texas
Printed Name of Notary:
------------------------------
My Commission Expires:
------------------------------
Signature Page - 2
<PAGE> 1
EXHIBIT 4.24
================================================================================
NOBLE DRILLING (JIM THOMPSON) INC.,
$115,000,000
Fixed Rate Senior Secured Notes
--------------
NOTE PURCHASE AGREEMENT
--------------
Dated as of December 21, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
SECTION 1. AUTHORIZATION, PURCHASE AND SALE OF NOTES.............................................................. 1
1.01 Authorization and Commitment to Purchase................................................................. 1
1.02 Disbursement of Funds.................................................................................... 2
1.03 Interest................................................................................................. 2
SECTION 2. FEES; COMMITMENTS...................................................................................... 3
2.01 Fees..................................................................................................... 3
2.02 Termination of Commitments............................................................................... 3
SECTION 3. PAYMENTS............................................................................................... 3
3.01 Voluntary Prepayments.................................................................................... 3
3.02 Mandatory Repayments..................................................................................... 5
3.03 Method and Place of Payment.............................................................................. 8
3.04 Net Payments............................................................................................. 8
3.05 Purchase of Notes........................................................................................ 9
SECTION 4. CONDITIONS PRECEDENT................................................................................... 9
4.01 Execution of Agreement................................................................................... 9
4.02 No Default; Representations and Warranties............................................................... 9
4.03 Officers Certificate..................................................................................... 10
4.04 Opinions of Counsel...................................................................................... 10
4.05 Corporate Proceedings.................................................................................... 10
4.06 Construction Contract.................................................................................... 10
4.07 Adverse Change, etc...................................................................................... 10
4.08 Litigation............................................................................................... 11
4.09 Approvals................................................................................................ 11
4.10 Fees..................................................................................................... 11
4.11 Guaranties............................................................................................... 11
4.12 Insurance Report......................................................................................... 11
4.13 Assignment of Insurances................................................................................. 11
4.14 Mortgages................................................................................................ 11
4.15 Purchase Permitted By Applicable Law, etc................................................................ 12
4.16 Sale of Other Notes...................................................................................... 12
4.17 Private Placement Number................................................................................. 12
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS............................................................. 12
5.01 Corporate Status......................................................................................... 12
5.02 Corporate Power and Authority............................................................................ 13
5.03 No Violation............................................................................................. 13
5.04 Litigation............................................................................................... 13
5.05 Use of Proceeds; Margin Regulations...................................................................... 13
5.06 Governmental Approvals................................................................................... 14
5.07 Investment Company Act................................................................................... 14
5.08 Public Utility Holding Company Act....................................................................... 14
5.09 True and Complete Disclosure............................................................................. 14
5.10 Financial Condition...................................................................................... 14
5.11 Tax Returns and Payments................................................................................. 15
5.12 Employee Benefit Plans................................................................................... 15
5.13 Subsidiaries............................................................................................. 15
</TABLE>
(i)
<PAGE> 3
<TABLE>
<S> <C> <C>
5.14 Patents, etc............................................................................................. 15
5.15 Pollution and Other Regulations.......................................................................... 15
5.16 Properties............................................................................................... 16
5.17 Labor Relations.......................................................................................... 16
5.18 Existing Indebtedness.................................................................................... 17
5.19 Rig Classification....................................................................................... 17
5.20 Security Interests....................................................................................... 17
5.21 Foreign Assets Control Regulations, etc.................................................................. 17
5.22 Compliance with Laws, etc................................................................................ 17
5.23 Offering of the Notes.................................................................................... 17
SECTION 6.AFFIRMATIVE COVENANTS................................................................................... 18
6.01 Information Covenants.................................................................................... 18
6.02 Books, Records and Inspections........................................................................... 18
6.03 Maintenance of Property; Insurance....................................................................... 18
6.04 Payment of Taxes......................................................................................... 18
6.05 Consolidated Corporate Franchises........................................................................ 19
6.07 Good Repair.............................................................................................. 19
6.08 End of Fiscal Years; Fiscal Quarters..................................................................... 19
6.09 Use of Proceeds.......................................................................................... 19
6.10 ERISA.................................................................................................... 19
6.11 Earnings Concentration Account........................................................................... 20
6.12 Further Assurances....................................................................................... 20
6.13 Nature of Business....................................................................................... 20
SECTION 7.NEGATIVE COVENANTS...................................................................................... 21
7.01 Changes in Business...................................................................................... 21
7.02 Consolidation, Merger, Sale of Assets, etc............................................................... 21
7.03 Indebtedness............................................................................................. 21
7.04 Liens.................................................................................................... 22
7.05 Restricted Payments...................................................................................... 23
7.06 Restrictions on Subsidiaries............................................................................. 23
7.07 Transactions with Affiliates............................................................................. 23
7.08 Vessel Management........................................................................................ 23
SECTION 8.EVENTS OF DEFAULT....................................................................................... 24
8.01 Payments................................................................................................. 24
8.02 Representations, etc..................................................................................... 24
8.03 Covenants................................................................................................ 24
8.04 Default Under Other Agreements........................................................................... 24
8.05 Bankruptcy, etc.......................................................................................... 24
8.06 Parent Guaranty.......................................................................................... 25
8.07 Judgments................................................................................................ 25
8.08 Employee Benefit Plans................................................................................... 25
8.09 Change of Control........................................................................................ 26
8.10 Vessel in Class.......................................................................................... 26
SECTION 9.DEFINITIONS............................................................................................. 26
SECTION 10.THE TRUSTEE............................................................................................ 36
10.01 Appointment.............................................................................................. 36
10.02 Nature of Duties......................................................................................... 37
10.03 Lack of Reliance on the Trustee.......................................................................... 37
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<S> <C> <C>
10.04 Certain Rights of the Trustee............................................................................ 38
10.05 Reliance................................................................................................. 38
10.06 Indemnification.......................................................................................... 38
10.07 The Trustee in Its Individual Capacity................................................................... 39
10.08 Holders.................................................................................................. 39
10.09 Resignation by the Trustee; Removal...................................................................... 39
10.10 Concentration Account.................................................................................... 40
10.11 Insurance................................................................................................ 40
10.12 Knowledge of Default..................................................................................... 40
SECTION 11.MISCELLANEOUS.......................................................................................... 41
11.01 Payment of Expenses, etc................................................................................. 41
11.02 Right of Setoff.......................................................................................... 42
11.03 Notices.................................................................................................. 42
11.04 Successors and Assigns - Representations of the Purchasers............................................... 42
11.05 No Waiver; Remedies Cumulative........................................................................... 44
11.06 Payments Pro Rata........................................................................................ 44
11.07 Computations............................................................................................. 45
11.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial................................... 45
11.09 Counterparts............................................................................................. 46
11.10 Effectiveness............................................................................................ 46
11.11 Headings Descriptive..................................................................................... 46
11.12 Amendment or Waiver...................................................................................... 46
11.13 Survival................................................................................................. 47
11.14 Domicile of Notes........................................................................................ 47
11.15 Confidentiality.......................................................................................... 47
11.16 (a) Registration of Notes, etc........................................................................... 48
</TABLE>
ANNEX I -- Commitments
ANNEX II -- Purchaser Addresses
EXHIBIT A-1 -- Form of Series A Note
EXHIBIT A-2 -- Form of Series B Note
EXHIBIT A-3 -- Form of Series C Note
EXHIBIT A-4 -- Form of Series D Note
EXHIBIT B-1 -- Form of Opinion of Thompson & Knight, P.C.
EXHIBIT B-2 -- Form of Opinion of Watson, Farley & Williams
EXHIBIT B-3 -- Form of Opinion of Roy Phillipps
EXHIBIT B-4 -- Form of Opinion of White & Case
EXHIBIT C -- Form of Officers' Certificate
EXHIBIT D-1 -- Form of Parent Guaranty
EXHIBIT D-2 -- Form of Subsidiary Limited Recourse Guaranty
EXHIBIT E-1 -- Form of Mortgage
EXHIBIT E-2 -- Form of First Preferred Fleet Mortgage
EXHIBIT E-3 -- Form of First Preferred Mortgage
EXHIBIT F -- Assignments of Insurances
(iii)
<PAGE> 5
FIXED RATE SENIOR SECURED NOTES
December 21, 1998
To Each of the Purchasers Named
in Annex I Attached Hereto:
Ladies and Gentlemen:
The undersigned, Noble Drilling (Jim Thompson) Inc., a corporation
organized and existing under the laws of the State of Delaware (the "Company")
agrees with the purchasers named in annex I attached hereto and any successors
and assigns thereof as holders of the Notes (each a "Purchaser" and,
collectively, the "Purchasers") and the Company and the Purchasers agree with
Chase Bank of Texas, National Association, as Trustee as follows:
SECTION 1. AUTHORIZATION, PURCHASE AND SALE OF NOTES.
1.01 Authorization and Commitment to Purchase. (a) The Company will
authorize the issue and sale of $115,000,000 aggregate principal amount of its
Fixed Rate Senior Secured Notes due April 1, 2002, October 1, 2004, January 1,
2009, and January 1, 2009, respectively, which Notes shall be divided among
Series A Notes, Series B Notes, Series C Notes and Series D Notes according to
the Commitments of the Purchasers set forth on Annex I hereto. The Notes shall
be substantially in the form of (i) Exhibit A-1, if issued pursuant to the
Series A Commitment (each a "Series A Note" and, collectively, the "Series A
Notes"), (ii) Exhibit A-2, if issued pursuant to the Series B Commitment (each a
"Series B Note" and, collectively, the "Series B Notes"), (iii) Exhibit A-3, if
issued pursuant to the Series C Commitment (each a "Series C Note" and,
collectively, the "Series C Notes") and (iv) Exhibit A-4, if issued pursuant to
the Series D Commitment (each a "Series D Note" and, collectively, the "Series D
Notes" and, together with the Series A Notes, the Series B Notes and the Series
C Notes, each a "Note" and, collectively, the "Notes"), in each case with blanks
appropriately completed in conformity therewith.
(b) The Company agrees to sell and, subject to and upon the terms and
conditions herein set forth, each Purchaser severally but not jointly agrees to
purchase on the Closing date from the Company, at the closing provided for in
Section 1.02, for a purchase price equal to 100% of the principal amount
thereof, Series A Notes in a principal amount equal to each such Purchaser's
Series A Commitment, which Series A Notes (i) shall, in the aggregate for all
Purchasers, be equal to the Total Series A Commitment and (ii) shall not exceed
for any Purchaser the Series A Commitment of such Purchaser on the Closing date
Once repaid, the Series A Notes issued hereunder may not be reissued.
(c) The Company agrees to sell and, subject to and upon the terms and
conditions herein set forth, each Purchaser severally but not jointly agrees to
purchase, on the
<PAGE> 6
Closing date, for a purchase price equal to 100% of the principal amount
thereof, Series B Notes in a principal amount equal to each such Purchaser's
Series B Commitment, which Series B Notes (i) shall, in the aggregate for all
Purchasers, be equal to the Total Series B Commitment and (ii) shall not exceed
for any Purchaser the Series B Commitment of such Purchaser on the Closing date.
Once repaid, the principal of Series B Notes issued hereunder may not be
reissued.
(d) The Company agrees to sell and, subject to and upon the terms and
conditions herein set forth, each Purchaser severally but not jointly agrees to
purchase, on the Closing date, for a purchase price equal to 100% of the
principal amount thereof, Series C Notes in a principal amount equal to each
such Purchaser's Series C Commitment, which Series C Notes (i) shall, in the
aggregate for all Purchasers, be equal to the Total Series C Commitment and (ii)
shall not exceed for any Purchaser the Series C Commitment of such Purchaser on
the Closing date. Once repaid, the Series C Notes issued hereunder may not be
reissued.
(e) The Company agrees to sell and, subject to and upon the terms and
conditions herein set forth, each Purchaser severally but not jointly agrees to
purchase, on the Closing date, for a purchase price equal to 100% of the
principal amount thereof, Series D Notes in a principal amount equal to such
Purchaser's Series D Commitment, which Series D Notes (i) shall, in the
aggregate for all Purchasers, be equal to the total Series D Commitment and (ii)
shall not exceed for any Purchaser the Series D Commitment of such Purchaser on
the Closing date. Once repaid, the Series D Notes issued hereunder may not be
reissued.
1.02 Disbursement of Funds. The sale and purchase of the Notes to be
purchased by you and the other Purchasers shall occur at the offices of White &
Case LLP, 1155 Avenue of the Americas, New York, New York 10036, at 10:00 a.m.,
New York City time, at a closing (the "CLOSING") on December 22, 1998 or on such
other Business Day thereafter on or prior to January 15, 1999 as may be agreed
upon by the Company and you and the other Purchasers. At the Closing the Company
will deliver to each Purchaser the Notes to be purchased by such Purchaser in
the form of a single Note (or such greater number of Notes in denominations of
at least $100,000 as you may request) dated the date of the Closing and
registered in your name (or in the name of your nominee). If at the Closing the
Company shall fail to tender such Notes to you as provided above in this Section
1.02, or any of the conditions specified in Section 4 shall not have been
fulfilled to your satisfaction, you shall, at your election, be relieved of all
further obligations under this Agreement, without thereby waiving any rights you
may have by reason of such failure or such nonfulfillment. On the Closing date,
each Purchaser will make available to the Company, in Dollars and immediately
available funds to the account of the Company specified to the Purchasers in
writing, its pro rata share of the Total Commitment on such date.
1.03 Interest. (a) The unpaid principal amount of each Note shall bear
interest from the Closing date until maturity (whether by acceleration or
otherwise) at a rate per annum which shall at all times be (i) in the case of
Series A Notes, the Series A Rate, (ii) in the case of Series B Notes, the
Series B Rate, (iii) in the case of Series C Notes, the Series C Rate and (iv)
in the case of Series D Notes, the Series D Rate.
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<PAGE> 7
(b) All overdue principal and, to the extent permitted by law, overdue
interest in respect of each Note and any other overdue amount payable hereunder
shall bear interest at a rate per annum equal to 2% per annum in excess of the
interest rate applicable to such Notes at maturity, with such interest payable
on demand.
(c) Interest shall accrue from and including the Closing date to but
excluding the date of repayment of the Notes and shall be payable quarterly in
arrears on each Scheduled Repayment Date, upon prepayment (on the amount
prepaid) and at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(d) All computations of interest hereunder shall be made in accordance
with Section 11.07.
SECTION 2. FEES; COMMITMENTS.
2.01 Fees. (a) The Company shall pay to the Trustee (x) on the
Effective Date, for its own account and/or for distribution to the Arrangers,
such Fees as heretofore agreed in writing by the Company and the Arrangers and
(y) for its own account such other fees as agreed to in writing between the
Company and the Trustee, when and as due.
(b) All computations of Fees shall be made in accordance with Section
11.07.
2.02 Termination of Commitments. The Total Commitment (and the
Commitments of each Purchaser) shall terminate in its entirety on the earlier of
(i) January 15, 1999 and (ii) the Closing date (immediately after giving effect
to the purchase of the Notes on such date).
SECTION 3. PAYMENTS.
3.01 Voluntary Prepayments. (a) The Company shall have the right to
prepay the Notes pro rata among each Series of Notes, in whole or in part, from
time to time on any Business Day after January 1, 2001 at 100% of the
outstanding principal balance of such Series of Notes (or portion thereof) plus
accrued interest and the Make-Whole Amount. The Company shall give the
Purchasers written notice (or telephonic notice promptly confirmed in writing)
of its intent to prepay the Notes and the amount of such prepayment, which
notice shall be given by the Company not less than 30 nor more than 60 days
prior to the date of such prepayment; (x) each partial prepayment of Notes shall
be in an aggregate principal amount of at least $10,000,000 and, if greater, in
an integral multiple of $100,000, provided that no partial prepayment of Notes
shall reduce the aggregate principal amount of the Notes outstanding to an
amount less than $10,000,000; (y) each prepayment of Notes in a Series shall be
applied pro rata among the Purchasers which have Notes of such Series
outstanding; and (z) each voluntary prepayment of any Series of Notes pursuant
to this Section 3.01 shall be applied to reduce the then remaining Scheduled
Repayments of such Series pro rata based on the then remaining amount of each
Scheduled Repayment after giving effect to all prior reductions thereto.
(b) The term "MAKE-WHOLE AMOUNT" means, with respect to any
Note, an amount equal to the excess, if any, of the Discounted Value of the
Remaining
-3-
<PAGE> 8
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 3.01
or has become or is declared to be immediately due and payable pursuant
to Section 8, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as "Page 500" on the
Telerate Access Service (or such other display as may replace Page 500
on Telerate Access Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or (ii) if such
yields are not reported as of such time or the yields reported as of
such time are not ascertainable including by way of interpolation, the
Treasury Constant Maturity Series Yields reported, for the latest day
for which such yields have been so reported as of the second Business
Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average
Life of such Called Principal as of such Settlement Date. Such implied
yield will be determined, (A) if necessary, by (x) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with
accepted financial practice and (y) interpolating linearly between (1)
the actively traded U.S. Treasury security with the duration closest to
and greater than the Remaining Average Life and (2) the actively traded
U.S. Treasury security with the duration closest to and less than the
Remaining Average Life and (B) by converting all such implied yields to
a quarterly payment basis in accordance with accepted financial
practice.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with
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<PAGE> 9
respect to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 3.01 or Section 8.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 3.01 or has become or is declared to be immediately
due and payable pursuant to Section 8, as the context requires.
3.02 Mandatory Repayments. (a) In addition to any other mandatory
repayments pursuant to this Section 3.02, on each date set forth below, the
Company shall pay interest on and principal of the Series A Notes, to the extent
then outstanding, in the amount set forth opposite such date (each such
repayment, as the same may be reduced from time to time pursuant to Section
3.01, a "Series A Scheduled Repayment" and each such date a "Series A Scheduled
Repayment Date"):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Series A Scheduled Repayment Date Interest Payment Principal Payment Total Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
April 1, 1999 $247,083 $ 0 $ 247,083
July 1, 1999 $222,375 $ 0 $ 222,375
October 1, 1999 $222,375 $1,265,531 $1,487,906
January 1, 2000 $203,614 $1,284,292 $1,487,906
April 1, 2000 $184,574 $1,303,332 $1,487,906
July 1, 2000 $165,252 $1,322,654 $1,487,906
October 1, 2000 $145,644 $1,342,262 $1,487,906
January 1, 2001 $125,745 $1,362,161 $1,487,906
April 1, 2001 $105,551 $1,382,355 $1,487,906
July 1, 2001 $ 85,057 $1,402,848 $1,487,906
October 1, 2001 $ 64,260 $1,423,646 $1,487,906
January 1, 2002 $ 43,154 $1,444,751 $1,487,906
April 1, 2002 $ 21,736 $1,466,170 $1,487,906
</TABLE>
(b) In addition to any other mandatory repayments pursuant to this
Section 3.02, on each date set forth below, the Company shall pay interest on
and principal of the Series B Notes, to the extent then outstanding, in the
amount set forth opposite such date (each such repayment, as the same may be
reduced from time to time pursuant to Section 3.01, a "Series B Scheduled
Repayment" and each such date a "Series B Scheduled Repayment Date"):
-5-
<PAGE> 10
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Series B Scheduled Repayment Date Interest Payment Principal Payment Total Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
April 1, 1999 $747,778 $ 0 $ 747,778
July 1, 1999 $673,000 $ 0 $ 673,000
October 1, 1999 $673,000 $ 0 $ 673,000
January 1, 2000 $673,000 $ 0 $ 673,000
April 1, 2000 $673,000 $ 0 $ 673,000
July 1, 2000 $673,000 $ 0 $ 673,000
October 1, 2000 $673,000 $ 0 $ 673,000
January 1, 2001 $673,000 $ 0 $ 673,000
April 1, 2001 $673,000 $ 0 $ 673,000
July 1, 2001 $673,000 $ 0 $ 673,000
October 1, 2001 $673,000 $ 0 $ 673,000
January 1, 2002 $673,000 $ 0 $ 673,000
April 1, 2002 $673,000 $ 0 $ 673,000
July 1, 2002 $673,000 $3,706,410 $4,379,410
October 1, 2002 $610,640 $3,768,770 $4,379,410
January 1, 2003 $547,230 $3,832,180 $4,379,410
April 1, 2003 $482,754 $3,896,656 $4,379,410
July 1, 2003 $417,192 $3,962,217 $4,379,410
October 1, 2003 $350,528 $4,028,881 $4,379,410
January 1, 2004 $282,742 $4,096,667 $4,379,410
April 1, 2004 $213,816 $4,165,594 $4,379,410
July 1, 2004 $143,730 $4,235,680 $4,379,410
October 1, 2004 $ 72,464 $4,306,945 $4,379,410
</TABLE>
(c) In addition to any other mandatory repayments pursuant to this
Section 3.02, on each date set forth below, the Company shall pay interest on
and principal of the Series C Notes, to the extent then outstanding, in the
amount set forth opposite such date (each such repayment, as the same may be
reduced from time to time pursuant to Section 3.01, a "Series C Scheduled
Repayment" and each such date a "Series C Scheduled Repayment Date"):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Series C Scheduled Repayment Date Interest Payment Principal Payment Total Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
April 1, 1999 $791,111 $0 $791,111
July 1, 1999 $712,000 $0 $712,000
October 1, 1999 $712,000 $0 $712,000
January 1, 2000 $712,000 $0 $712,000
April 1, 2000 $712,000 $0 $712,000
July 1, 2000 $712,000 $0 $712,000
October 1, 2000 $712,000 $0 $712,000
January 1, 2001 $712,000 $0 $712,000
April 1, 2001 $712,000 $0 $712,000
July 1, 2001 $712,000 $0 $712,000
October 1, 2001 $712,000 $0 $712,000
January 1, 2002 $712,000 $0 $712,000
April 1, 2002 $712,000 $0 $712,000
July 1, 2002 $712,000 $0 $712,000
October 1, 2002 $712,000 $0 $712,000
January 1, 2003 $712,000 $0 $712,000
April 1, 2003 $712,000 $0 $712,000
</TABLE>
-6-
<PAGE> 11
<TABLE>
<S> <C> <C> <C>
July 1, 2003 $712,000 $ 0 $ 712,000
October 1, 2003 $712,000 $ 0 $ 712,000
January 1, 2004 $712,000 $ 0 $ 712,000
April 1, 2004 $712,000 $ 0 $ 712,000
July 1, 2004 $712,000 $ 0 $ 712,000
October 1, 2004 $712,000 $ 0 $ 712,000
January 1, 2005 $712,000 $2,035,590 $2,747,590
April 1, 2005 $675,766 $2,071,824 $2,747,590
July 1, 2005 $638,888 $2,108,702 $2,747,590
October 1, 2005 $601,353 $2,146,237 $2,747,590
January 1, 2006 $563,150 $2,184,440 $2,747,590
April 1, 2006 $524,267 $2,223,323 $2,747,590
July 1, 2006 $484,692 $2,262,899 $2,747,590
October 1, 2006 $444,412 $2,303,178 $2,747,590
January 1, 2007 $403,416 $2,344,175 $2,747,590
April 1, 2007 $361,689 $2,385,901 $2,747,590
July 1, 2007 $319,220 $2,428,370 $2,747,590
October 1, 2007 $275,995 $2,471,595 $2,747,590
January 1, 2008 $232,001 $2,515,589 $2,747,590
April 1, 2008 $187,224 $2,560,367 $2,747,590
July 1, 2008 $141,649 $2,605,942 $2,747,590
October 1, 2008 $ 95,263 $2,652,327 $2,747,590
January 1, 2009 $ 48,052 $2,699,539 $2,747,590
</TABLE>
(d) In addition to any other mandatory repayments pursuant to this
Section 3.02, on each date set forth below, the Company shall pay interest on
and principal of the Series D Notes, to the extent then outstanding, in the
amount set forth opposite such date (each such repayment, as the same may be
reduced from time to time pursuant to Section 3.01, a "Series D Scheduled
Repayment" and each such date a "Series D Scheduled Repayment Date"):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Series D Scheduled Repayment Date Interest Payment Principal Payment Total Payment
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
April 1, 1999 $402,778 $0 $402,778
July 1, 1999 $362,500 $0 $362,500
October 1, 1999 $362,500 $0 $362,500
January 1, 2000 $362,500 $0 $362,500
April 1, 2000 $362,500 $0 $362,500
July 1, 2000 $362,500 $0 $362,500
October 1, 2000 $362,500 $0 $362,500
January 1, 2001 $362,500 $0 $362,500
April 1, 2001 $362,500 $0 $362,500
July 1, 2001 $362,500 $0 $362,500
October 1, 2001 $362,500 $0 $362,500
January 1, 2002 $362,500 $0 $362,500
April 1, 2002 $362,500 $0 $362,500
July 1, 2002 $362,500 $0 $362,500
October 1, 2002 $362,500 $0 $362,500
January 1, 2003 $362,500 $0 $362,500
April 1, 2003 $362,500 $0 $362,500
July 1, 2003 $362,500 $0 $362,500
October 1, 2003 $362,500 $0 $362,500
January 1, 2004 $362,500 $0 $362,500
April 1, 2004 $362,500 $0 $362,500
</TABLE>
-7-
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
July 1, 2004 $362,500 $ 0 $ 362,500
October 1, 2004 $362,500 $ 0 $ 362,500
January 1, 2005 $362,500 $ 0 $ 362,500
April 1, 2005 $362,500 $ 0 $ 362,500
July 1, 2005 $362,500 $ 0 $ 262,500
October 1, 2005 $362,500 $ 0 $ 362,500
January 1, 2006 $362,500 $ 0 $ 362,500
April 1, 2006 $362,500 $ 0 $ 362,500
July 1, 2006 $362,500 $ 0 $ 362,500
October 1, 2006 $362,500 $ 0 $ 362,500
January 1, 2007 $362,500 $ 0 $ 362,500
April 1, 2007 $362,500 $ 0 $ 362,500
July 1, 2007 $362,500 $ 0 $ 362,500
October 1, 2007 $362,500 $ 0 $ 362,500
January 1, 2008 $362,500 $ 0 $ 362,500
April 1, 2008 $362,500 $ 0 $ 362,500
July 1, 2008 $362,500 $ 0 $ 362,500
October 1, 2008 $362,500 $ 0 $ 362,500
January 1, 2009 $362,500 $20,000,000 $20,362,500
</TABLE>
(e) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding principal amount of the Series A Notes
shall be repaid in full on the Series A Maturity Date, (ii) all then outstanding
principal amount of the Series B Notes shall be repaid in full on the Series B
Maturity Date and (iii) all then outstanding principal amount of the Series C
Notes and the Series D Notes shall be repaid in full on the Final Maturity Date.
(f) On the date on which any Change of Control occurs, unless otherwise
agreed by a Purchaser in regard to Notes held by it, the outstanding Notes, if
any, shall become due and payable in full at 100% of the outstanding principal
balance of each Series of Notes plus accrued interest and the Make-Whole Amount.
(g) Each prepayment of any Series of Notes pursuant to this Section
3.02 shall be applied pro rata among the Purchasers which have outstanding Notes
of such Series.
3.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Purchasers (based on their pro rata shares) not later than 1:00 P.M. (New York
time) on the date when due and shall be made in immediately available funds and
in Dollars at the Payment Office, subject to 11.06(b). Any payments under this
Agreement which are made later than 1:00 P.M. (New York time) shall be deemed to
have been made on the next succeeding Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day which is not a Business Day,
such payment shall instead be made on the immediately succeeding Business Day
without including the days elapsed in the computation of interest payable on
such immediately succeeding Business Day.
3.04 Net Payments. All payments made by the Company hereunder or under
any Note will be made without setoff, counterclaim or other defense. All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now
-8-
<PAGE> 13
or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Purchaser pursuant to the
laws of the jurisdiction in which it is organized or managed and controlled or
the jurisdiction in which the principal office or applicable lending office of
such Purchaser is located or any subdivision thereof or therein) and all
interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Company agrees to pay the full amount of such Taxes, and such
additional amounts, if any, as may be necessary so that every payment of all
amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, the Company agrees to reimburse each
Purchaser, upon the written request of such Purchaser, for taxes imposed on or
measured by the net income or net profits of such Purchaser pursuant to the laws
of the jurisdiction in which the principal office or applicable lending office
of such Purchaser is located or under the laws of any political subdivision or
taxing authority of any such jurisdiction in which the principal office or
applicable lending office of such Purchaser is located and for any withholding
of taxes as such Purchaser shall determine are payable by, or withheld from,
such Purchaser in respect of such amounts so paid to or on behalf of such
Purchaser pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Purchaser pursuant to this sentence. The Company will
furnish to the Trustee within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Company. The Company agrees to indemnify and hold harmless each
Purchaser, and reimburse such Purchaser upon its written request, for the amount
of any Taxes so levied or imposed and paid by such Purchaser.
3.05 Purchase of Notes. The Company will not and will not permit any
Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
SECTION 4. CONDITIONS PRECEDENT.
The occurrence of the Effective Date pursuant to Section 11.10 and the
Commitments of the Purchasers to purchase their respective Notes hereunder are
subject to the satisfaction, at the time of the occurrence of each such event,
of each of the following conditions at Closing:
4.01 Execution of Agreement. (i) The Effective Date shall have occurred
as provided in Section 11.10 and (ii) there shall have been delivered to each
Purchaser the
-9-
<PAGE> 14
appropriate Note executed by the Company, and in the amount, maturity and as
otherwise provided herein.
4.02 No Default; Representations and Warranties. On the Closing date,
(i) there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit Documents
in effect at such time shall be true and correct in all material respects as
though such representations and warranties were made on the Closing date (except
to the extent that such representations and warranties expressly relate to the
Effective Date, in which case they shall be true and correct in all material
respects as of the Effective Date).
4.03 Officer's Certificate. On the Effective Date, the Trustee shall
have received a certificate dated such date signed by the President, any Vice
President or the Treasurer of the Company stating that all of the applicable
conditions set forth in Sections 4.02, 4.07, 4.08(a) and 4.09 exist as of such
date.
4.04 Opinions of Counsel. On the Effective Date, the Trustee shall have
received opinions, addressed to the Trustee and each of the Purchasers and dated
the Effective Date, from (i) Thompson & Knight, P.C., counsel to the Company,
which opinion shall cover the matters contained in Exhibit B-1, (ii) Watson,
Farley & Williams, special maritime counsel to the Purchasers, covering the
matters set forth in Exhibit B-2, (iii) Roy Phillipps, Panamanian counsel to the
Company, which opinion shall cover the matters contained in Exhibit B-3 and (iv)
White & Case LLP, special counsel to the Purchasers, which opinion shall cover
the matters contained in Exhibit B-4, each of which opinions shall be in form
and substance reasonably satisfactory to the Purchasers.
4.05 Corporate Proceedings. (a) On the Effective Date, the Trustee
shall have received from each Credit Party a certificate, dated the Effective
Date, signed by the President, any Vice President, the Treasurer or the
Secretary or other appropriate representative of such Credit Party in the form
of Exhibit C with appropriate insertions and deletions, together with copies of
the certificate of incorporation, memorandum and articles of association,
by-laws, and resolutions, or such other administrative approval, of such Credit
Party referred to in such certificate and all of the foregoing shall be
reasonably satisfactory to the Purchasers.
(b) On the Effective Date, all corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Agreement and the other Credit Documents shall be reasonably satisfactory
in form and substance to the Purchasers, and each Purchaser shall have received
all information and copies of all certificates, documents and papers, including
good standing certificates and any other records of corporate proceedings and
governmental approvals, if any, which a Purchaser may have reasonably requested
in connection therewith, such documents and papers, where appropriate, to be
certified by proper corporate or governmental authorities.
(c) The Company shall not have changed its jurisdiction of
incorporation or been a party to any merger or consolidation and shall not have
succeeded to all or any
-10-
<PAGE> 15
substantial part of the liabilities of any other entity, at any time following
December 31, 1997.
4.06 Construction Contract. On or prior to the Effective Date, there
shall have been delivered to the Trustee a copy, certified as true and correct
by an appropriate officer of the Company of the Construction Contract.
4.07 Adverse Change, etc. On the Effective Date, (a) no Material
Adverse Effect shall have occurred since December 31, 1997 or (b) no Purchaser
shall have become aware of any facts or conditions not previously known which
such Purchaser shall determine in its reasonable business judgment (i) has, or
is reasonably likely to have, a material adverse effect on the rights or
remedies of the Purchasers hereunder or under any other Credit Document, or on
the ability of the Company or the Parent Guarantor to perform their respective
obligations to them, or (ii) has, or is reasonably likely to have, a Material
Adverse Effect.
4.08 Litigation. On the Effective Date, there shall be no actions,
suits or proceedings pending or threatened (a) with respect to this Agreement or
any other Credit Document or the transactions contemplated hereby or thereby or
(b) which any Purchaser shall determine in its reasonable business judgment is
reasonably likely to (i) have a Material Adverse Effect or (ii) have a Material
Adverse Effect on the rights or remedies of the Purchasers hereunder or under
any other Credit Document or on the ability of the Company or the Parent
Guarantor to perform their respective obligations to the Purchasers hereunder or
under any other Credit Document.
4.09 Approvals. On the Effective Date, all necessary governmental and
third party approvals in connection with the transactions contemplated by the
Credit Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any competent authority which
restrains or prevents such transactions or imposes, in the reasonable business
judgment of any Purchaser, materially adverse conditions upon the consummation
of such transactions.
4.10 Fees. On the Effective Date, the Company shall have paid to the
Trustee all Fees and expenses (including the fees and expenses of each special
counsel to the Purchasers) agreed upon by such parties to be paid on or prior to
such date.
4.11 Guaranties. On the Effective Date (i) Parent Guarantor shall have
duly authorized, executed and delivered the Parent Guaranty in the form of
Exhibit D-1 hereto (as modified, amended or supplemented from time to time in
accordance with the terms thereof and hereof, the "Parent Guaranty"), and (ii)
each Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiary Limited Recourse Guaranty in the form of Exhibit D-2 hereto in each
case with blanks appropriately completed in conformity therewith (as modified,
amended or supplemented from time to time in accordance with the terms thereof
and hereof, the "Subsidiary Guaranty").
4.12 Insurance Report. On or prior to the Effective Date, each
Purchaser shall have received a detailed report from Aon Risk Services of Texas,
Inc. or another firm of
-11-
<PAGE> 16
independent marine insurance brokers reasonably acceptable to the Purchasers
with respect to the insurance maintained in connection with the Mortgaged Rigs,
together with a certificate from such broker certifying that such insurances are
placed with such insurance companies and/or underwriters and/or clubs, in such
amounts, against such risks, and in such form, as are normally insured against
by similarly situated insureds.
4.13 Assignment of Insurances. On the Effective Date, the Assignments
of Insurances in the form of Exhibit F (as modified, amended or supplemented
from time to time in accordance with the terms thereof and hereof, the
"Assignments of Insurances") shall be in full force and effect.
4.14 Mortgages. On the Effective Date, mortgages (in each case
substantially in the form of Exhibits E-1, E-2 and E-3, respectively, as
modified, amended, or supplemented from time to time in accordance with the
terms thereof and hereof, the "Mortgages") shall have been executed and
delivered to the satisfaction of the Purchasers with respect to the (i) Vessel,
the Noble Eddie Paul (Official No. 570632), the Noble Bill Jennings (Official
No. 568214), the Noble Tom Jobe (Official No. 653116) and (ii) the Noble John
Sandifer (Official No. 569799), each documented under the laws and flag of the
Republic of Panama or the United States of America as appropriate (collectively,
including the Vessel, the "Mortgaged Rigs") and shall otherwise be in full force
and effect and all actions necessary, desirable or otherwise reasonably
requested by any Purchaser to provide the Trustee with a perfected first
priority security interest in all Collateral purported to be covered by the
Mortgages shall have been taken.
4.15 Purchase Permitted By Applicable Law, etc. On the date of the
Closing the purchase of Notes shall (i) be permitted by the laws and regulations
of each jurisdiction to which each Purchaser is subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (ii) not violate any applicable law or
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System) and (iii) not subject such Purchaser to
any tax, penalty or liability under or pursuant to any applicable law or
regulation, which law or regulation was not in effect on the date hereof. If
requested by a Purchaser, such Purchaser shall have received a certificate from
one of the officers specified in Section 4.03 certifying as to such matters of
fact as you may reasonably specify to enable it to determine whether such
purchase is so permitted.
4.16 Sale of Other Notes. Contemporaneously with the Closing the
Company shall sell to each Purchaser and each Purchaser shall purchase the Notes
to be purchased by it at the Closing as specified in Annex I.
4.17 Private Placement Number. A Private Placement number issued by
Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
The acceptance of the benefits of the Notes shall constitute a representation
and warranty by the Company to the Trustee and each of the Purchasers that all
of the applicable
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<PAGE> 17
conditions specified above exist as of that time. All of the certificates, legal
opinions and other documents and papers referred to in this Section 4, unless
otherwise specified, shall be delivered at the Closing for the account of each
of the Purchasers and, except for the Notes, in sufficient counterparts or
copies for each of the Purchasers and shall be satisfactory in form and
substance to the Purchasers.
SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
In order to induce the Purchasers to enter into this Agreement and to
purchase the Notes, the Company makes the following representations and
warranties to, and agreements with, the Purchasers and the Trustee, all of which
shall survive the execution and delivery of this Agreement and the purchase of
the Notes:
5.01 Corporate Status. The Company (i) is a duly organized and validly
existing company in good standing under the laws of the jurisdiction of its
organization and has the corporate power and authority to own its property and
assets and to transact the business in which it is engaged, except in such case
where the failure to be duly organized and validly existing in good standing and
to have such corporate power and authority (x) is not reasonably likely to have
a Material Adverse Effect or (y) is not reasonably likely to have a material
adverse effect on the rights or remedies of the Purchasers or on the ability of
the Company to perform its obligations to them hereunder and under the other
Credit Documents to which it is a party, and (ii) has duly qualified and is
authorized to do business and is in good standing in all jurisdictions where it
is required to be so qualified and where the failure to be so qualified would
have a Material Adverse Effect.
5.02 Corporate Power and Authority. The Company has the corporate power
and authority to execute, deliver and carry out the terms and provisions of the
Credit Documents to which it is a party and has taken all necessary corporate
action to authorize the execution, delivery and performance of the Credit
Documents to which it is a party. The Company has duly executed and delivered
each Credit Document to which it is a party and each such Credit Document
constitutes the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
5.03 No Violation. Neither the execution, delivery and performance by
the Company of the Credit Documents to which it is a party nor compliance with
the terms and provisions thereof, nor the consummation of the transactions
contemplated therein (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality of the United States or any State thereof, (ii)
will result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Company pursuant to the terms of, any indenture,
mortgage, deed of trust, agreement or other instrument to which the Company is a
party or by which it or any of its property or
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<PAGE> 18
assets are bound or to which it is subject, other than Permitted Liens, or (iii)
will violate any provision of the memorandum and articles of association of the
Company.
5.04 Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of the Company, after due inquiry, threatened with respect to
the Company (i) that are likely to have a Material Adverse Effect or (ii) that
are reasonably likely to have a Material Adverse Effect on the rights or
remedies of the Purchasers or on the ability of the Company to perform its
obligations to them hereunder and under the other Credit Documents to which it
is a party.
5.05 Use of Proceeds; Margin Regulations. (a) The proceeds of all Notes
shall be used as contemplated by Section 7.05 to fund costs and expenses
incurred by the Company and its Affiliates in connection with the conversion of
the Vessel from a submersible offshore drilling rig to a Noble Drilling
EVA-4000(tm) semisubmersible drilling rig.
(b) Neither the purchase of any Note hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System and
no part of the proceeds of any Note will be used to purchase or carry any Margin
Stock in violation of Regulation U or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
5.06 Governmental Approvals. Except for the orders, consents,
approvals, licenses, authorizations, validations, recordings, registrations and
exemptions that have already been duly made or obtained and remain in full force
and effect, no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of any Credit Document, (ii) the legality, validity,
binding effect or enforceability of any Credit Document or (iii) completion of
the Project.
5.07 Investment Company Act. The Company is not an "investment company"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
5.08 Public Utility Holding Company Act. The Company is not a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.09 True and Complete Disclosure. All information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of the Company or its
Affiliates or any agent thereof, including the Arrangers, in writing to any
Purchaser for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such information (taken as a
whole) hereafter furnished by or on behalf of the Company in writing to any
Purchaser will be, true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any material fact necessary to make such information (taken as a whole)
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not misleading at such time in light of the circumstances under which such
information was provided. There is no fact known to the Company which is
reasonably likely to have a Material Adverse Effect, which has not been
disclosed herein or in such other documents, certificates and statements
furnished to the Trustee and the Purchasers for use in connection with the
transactions contemplated hereby.
5.10 Financial Condition. On and as of the Effective Date, on a pro
forma basis after giving effect to all Indebtedness incurred, and to be
incurred, by the Company in connection herewith, (x) the sum of the assets, at a
fair valuation, of the Company will exceed its debts, (y) the Company will not
have incurred or intended to, or believe that it will, incur debts beyond its
ability to pay such debts as such debts mature and (z) the Company will not have
unreasonably small capital with which to conduct its business. Nothing has
occurred since the incorporation of the Company that (x) has had or is
reasonably likely to have a Material Adverse Effect on the rights or remedies of
the Purchasers hereunder or under any other Credit Document, or on the ability
of the Company to perform its obligations to them, or (y) has had or is
reasonably likely to have a Material Adverse Effect. There were as of the
Effective Date no liabilities or obligations with respect to the Company of a
nature (whether absolute, accrued, contingent or otherwise and whether or not
due) which, either individually or in aggregate, would be material to the
Company.
5.11 Tax Returns and Payments. The Company has filed all tax returns,
domestic and foreign, required to be filed by it and has paid all material taxes
and assessments payable by it which have become due, other than those not yet
delinquent and except for those contested in good faith for which adequate
reserves have been provided in accordance with GAAP. The Company has paid, or
has provided adequate reserves (in the good faith judgment of the management of
the Company) for the payment of, all federal, state and foreign income taxes
applicable for all prior fiscal years and for the current fiscal year to the
date hereof.
5.12 Employee Benefit Plans. (a) Neither the Company nor any ERISA
Affiliate has ever maintained or contributed to (or had an obligation to
contribute to) any Plan or any Foreign Pension Plan where any current or
reasonably foreseeable liability of the Company with respect to such Plan or
such Foreign Pension Plan would be reasonably likely to have a Material Adverse
Effect. All contributions required to be made with respect to (i) any employee
pension benefit plan (as defined in Section 3(2) of ERISA) maintained or
contributed to by (or to which there is an obligation to contribute of) the
Company or an ERISA Affiliate and (ii) any Foreign Pension Plan have been timely
made except any such failures to contribute which would not individually or in
the aggregate be reasonably likely to have a Material Adverse Effect. The
Company may cease contributions to or terminate any employee benefit plan
(within the meaning of Section 3(3) of ERISA) maintained or contributed to by
(or to which there is an obligation to contribute of) it without incurring any
liability which, individually or in the aggregate would be reasonably likely to
have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules,
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regulations and orders and has been maintained, where required, in good standing
with applicable regulatory authorities.
(c) In reliance upon the representations of the Purchasers herein, the
execution and delivery of this Agreement and the issuance and sale of the Notes
hereunder will be exempt from, or will not involve any transaction which is
subject to, the prohibitions of either Section 406 of ERISA or Section 4975 of
the Code and will not involve any transaction in connection with which a penalty
could be imposed under Section 502(i) of ERISA or a tax could be imposed
pursuant to Section 4975 of the Code.
5.13 Subsidiaries. The Company has no Subsidiaries on the Effective
Date.
5.14 Patents, etc. The Company has obtained all patents, trademarks,
service marks, trade names, copyrights, licenses and other rights, free from
burdensome restrictions, that are necessary for the operation of its business
taken as a whole as presently conducted, and the Company knows of no such rights
the absence of which would be reasonably likely to have a Material Adverse
Effect.
5.15 Pollution and Other Regulations. (a) The Company is in compliance
with all applicable Environmental Laws governing its business for which failure
to comply is reasonably likely to have a Material Adverse Effect, and the
Company is not liable for any material penalties, fines or forfeitures for
failure to comply with any of the foregoing. All licenses, permits,
registrations or approvals required for the business of the Company, as
conducted as of the Effective Date, under any Environmental Law have been
secured and the Company is in substantial compliance therewith, except such
licenses, permits, registrations or approvals the failure to secure or to comply
therewith is not likely to have a Material Adverse Effect. The Company is not in
any respect in noncompliance with, breach of or default under any applicable
writ, order, judgment, injunction, or decree to which the Company is a party or
which would affect the ability of the Company to operate the Vessel or facility
owned or operated by the Company and no event has occurred and is continuing
which, with the passage of time or the giving of notice or both, would
constitute noncompliance, breach of or default thereunder, except in each such
case, such noncompliance, breaches or defaults as are not likely to, in the
aggregate, have a Material Adverse Effect. There are as of the Effective Date no
Environmental Claims pending or, to the knowledge, after due inquiry, of the
Company, threatened, against the Company wherein an unfavorable decision, ruling
or finding would be reasonably likely to have a Material Adverse Effect. There
are no facts, circumstances, conditions or occurrences on the Vessel or facility
owned or operated by the Company that is reasonably likely (i) to form the basis
of an Environmental Claim against the Company or the Vessel or facility owned by
the Company, or (ii) to cause the Vessel or facility owned or operated by the
Company to be subject to any restrictions on its ownership, occupancy, use or
transferability under any Environmental Law, except in each such case, such
Environmental Claims or restrictions that individually or in the aggregate are
not reasonably likely to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated, used,
treated or stored on, or transported to or from, the Vessel or facility at any
time owned or operated by the Company or (ii) released on or from the Vessel or
any such facility, in each case
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<PAGE> 21
where, to the Company's knowledge, after due inquiry, such occurrence or event
individually or in the aggregate is reasonably likely to have a Material Adverse
Effect.
5.16 Properties. The Company has title to all material properties owned
by it free and clear of all Liens, other than Permitted Liens. Noble Drilling
(U.S.) Inc. ("NDUS") as contractor under the SDDI Contract has duly assigned or
transferred the SDDI Contract to the Company (after appropriate notice to the
counterparties thereto).
5.17 Labor Relations. The Company is not engaged in any unfair labor
practice that is reasonably likely to have a Material Adverse Effect. There is
(i) no unfair labor practice complaint pending against the Company or threatened
against the Company, before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Company or, to the Company's knowledge,
after due inquiry, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against the Company or, to the Company's
knowledge, after due inquiry, threatened against the Company and (iii) no union
representation petition existing with respect to the employees of the Company
and no union organizing activities are taking place, except with respect to any
matter specified in clause (i), (ii) or (iii) above, either individually or in
the aggregate, such as is not reasonably likely to have a Material Adverse
Effect.
5.18 Existing Indebtedness. The Company has no Indebtedness (other than
the Notes) on the Effective Date.
5.19 Rig Classification. Each Mortgaged Rig is classified in the
highest class available for rigs of its age and type with the American Bureau of
Shipping, Inc, Bureau Veritas, Det Norske Veritas, Lloyd's Register of Shipping,
or another internationally recognized classification society reasonably
acceptable to the Trustee, free of any material requirements or recommendations,
provided that the Vessel may be out of class as a result of, and pending the
completion of, the Project.
5.20 Security Interests. On and after the Effective Date, each of the
Security Documents creates, as security for the Obligations purported to be
secured thereby, a valid and enforceable perfected first priority security
interest in and Lien on all of the Collateral subject thereto, to the extent
perfection of a security interest or Lien is governed by Article 8 or Article 9
of the UCC (as defined in the applicable Security Documents), the Ship Mortgage
Act (as defined in the Mortgages, if any), or comparable provisions under the
laws of the Republic of Panama, Liberia or any other jurisdiction in which any
Mortgaged Rig is registered, and subject to no other Liens (except that the
Collateral may be subject to Permitted Liens), in favor of the Trustee for the
benefit of the Purchasers. No filings or recordings are required in order to
perfect the security interests created under any Security Document except for
filings or recordings required in connection with any such Security Document
which shall have been made upon or prior to (or are the subject of arrangements,
satisfactory to the Trustee, for filing on or promptly after the date of) the
execution and delivery thereof.
5.21 Foreign Assets Control Regulations, etc. Neither the sale of the
Notes by the Company hereunder nor its use of the proceeds thereof will violate
the Trading with
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<PAGE> 22
Enemy Act, as amended, or any of the foreign assets control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or
any enabling legislation or executive order relating thereto.
5.22 Compliance with Laws, etc. The Company is not in violation of (i)
any laws, ordinances, governmental rules or regulations to which it is subject
or by which it or any of its properties might be bound, (ii) any order, judgment
or decree of any court, arbitrator or administrative or governmental body to
which it is subject or by which it or any of its properties might be bound,
(iii) any term of any contract, agreement or other instrument to which it is a
party or by which it or any of its properties might be bound, or (iv) any term
of its memorandum and articles of association; where, in each case, such
violation might reasonably be expected to have a Material Adverse Effect.
5.23 Offering of the Notes. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes or
any similar security of the Company from, or otherwise approached or negotiated
with respect thereto with, any Person other than 29 Institutional Investors, and
neither the Company nor any agent acting on its behalf has taken or will take
any action directly or indirectly, which would require the registration of the
Notes under the provisions of section 5 of the Securities Act of 1933, as
amended, or under the provisions of any securities or Blue Sky law of any
applicable jurisdiction relating to securities offered to the public.
SECTION 6. AFFIRMATIVE COVENANTS.
The Company covenants and agrees that on the Effective Date and
thereafter for so long as this Agreement is in effect and until the Notes
(together with interest), Fees and all other Obligations incurred hereunder, are
paid in full:
6.01 Information Covenants. The Company will furnish to the Trustee
(with sufficient copies for each of the Purchasers, and the Trustee will
promptly forward to each of the Purchasers):
(a) Notice of Default or Litigation. Promptly, and in any event within
(x) five days after a member of the senior management of the Company obtains
knowledge thereof, notice of the occurrence of any event which constitutes a
Default or Event of Default, which notice shall specify the nature thereof, the
period of existence thereof and what action the Company proposes to take with
respect thereto and (y) ten Business Days after a member of the senior
management of the Company obtains knowledge thereof, notice of the commencement
of or any significant development in any litigation or governmental proceeding
pending against the Company which is likely to have a Material Adverse Effect or
is likely to have a material adverse effect on the ability of the Company to
perform its obligations hereunder or under any other Credit Document.
(b) Other Information. From time to time, such other information or
documents (financial or otherwise) as the Trustee or any Purchaser may
reasonably request.
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<PAGE> 23
6.02 Books, Records and Inspections. The Company will, upon reasonable
notice to the Senior Vice President-Finance, Controller or any other Authorized
Officer of the Company, permit officers and designated representatives of the
Trustee (at the expense of the Trustee, but after the occurrence and during the
continuance of a Default or an Event of Default, at the expense of the Company)
or any Purchaser (at the expense of such Purchaser but after the occurrence and
during the continuance of a Default or an Event of Default at the expense of the
Company), to the extent necessary, to examine the books of account of the
Company and discuss the affairs, finances and accounts of the Company with, and
be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as the Trustee or the Purchaser may desire.
6.03 Maintenance of Property; Insurance. There will at all times be
maintained on behalf of the Company in full force and effect insurance in such
amounts with carriers of such insurance industry ratings, covering such risks
and liabilities and with such deductibles or self-insured retentions as are in
accordance with normal industry practice for similarly situated insureds.
6.04 Payment of Taxes. The Company will pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge upon any properties of the Company, provided that the
Company shall not be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
6.05 Consolidated Corporate Franchises. The Company will do all things
necessary to preserve and keep in full force and effect its corporate existence,
material rights and authority, unless the failure to do so is not reasonably
likely to have a Material Adverse Effect, provided that any transaction
permitted by Section 7.02 will not constitute a breach of this Section 6.05.
6.06 Compliance with Statutes, etc. The Company will comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property other than those the
non-compliance with which would not have a Material Adverse Effect or would not
have a material adverse effect on the ability of the Company to perform its
obligations under any Credit Document to which it is party.
6.07 Good Repair. Except in the event the Vessel has been damaged or
has suffered a casualty as to which (within a reasonable period of time) the
Company has not made a determination whether to replace or repair, or if the
determination to replace or repair has been made, as to which such replacement
or repairs are being undertaken, subject to availability of equipment, materials
and/or repair facilities, the Company will keep its properties and equipment
used or useful in its business, in whomsoever's possession they may be, in good
repair, working order and condition, normal wear and
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<PAGE> 24
tear excepted, and, subject to Section 7.02, see that from time to time there
are made in such properties and equipment all needful and proper repairs,
renewals, replacements, extensions, additions, betterments and improvements
thereto, (i) to the extent and in the manner useful or customary for companies
in similar businesses and (ii) to the extent the failure to do so is reasonably
likely to cause a Material Adverse Effect.
6.08 End of Fiscal Years; Fiscal Quarters. The Company will, for
financial reporting purposes, cause (i) its fiscal years to end on December 31
of each year and (ii) its fiscal quarters to end on March 31, June 30, September
30 and December 31 of each year.
6.09 Use of Proceeds. All proceeds of the Notes shall be used as
provided in Section 5.05.
6.10 ERISA. As soon as possible and, in any event, within 10 days after
the Company or any ERISA Affiliate knows or has reason to know that: (a) a
material contribution required to be made with respect to (i) any employee
pension benefit plan (as defined in Section 3(2) of ERISA) maintained or
contributed to by (or to which there is an obligation to contribute of) the
Company or an ERISA Affiliate or (ii) any Foreign Pension Plan has not been
timely made or (b) the Company may incur any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA), the Company will deliver to each of the
Purchasers a certificate of the Senior Vice President-Finance or Controller of
the Company setting forth details as to such occurrence and the action, if any,
that the Company or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by the Company, the ERISA Affiliate, a plan participant or the plan
administrator.
6.11 Earnings Concentration Account. The Company, shall maintain with
the Trustee a trust account (the "Concentration Account"), as provided in
Section 10.10. The Company shall cause all payments made under the SDDI Contract
to be deposited into the Concentration Account. Until the Company or any
Purchaser has given the Trustee notice, pursuant to Section 10.12, of the
occurrence of a Default or an Event of Default, any and all funds in the
Concentration Account may from time to time be freely disbursed to the Company
as provided in Section 10.10. Following the occurrence of a Default or an Event
of Default, the Company shall have no right to receive funds from the
Concentration Account, and such funds shall be held by the Trustee as security
or applied to the outstanding Obligations as Required Purchasers may direct.
6.12 Further Assurances. (a) The Company will at the expense of the
Company, make, execute, endorse, acknowledge, file and/or deliver to the
Trustee, from time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, power of
attorney, certificates, real property surveys, reports and other assurances or
instruments and take such further steps relating to the Collateral as the
Trustee or any Purchaser may reasonably require.
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<PAGE> 25
(b) The Company agrees that each action required above by this Section
6.12 shall be completed as soon as possible, but in no event later than 60 days
after such action is requested to be taken by the Trustee or the Required
Purchasers, provided that in no event shall the Company be required to take
action, other than using its reasonable commercial efforts, to obtain consents
or other actions from third parties with respect to its compliance with this
Section 6.12
(c) The Trustee hereby agrees that, so long as there exists no Default
or Event of Default, it will, after written notification from the Company of the
occurrence of the Project Completion Date, upon the request of and at the
expense of the Company, release, from the respective Mortgages each Mortgaged
Rig other than the Vessel (collectively, the "Pre-Delivery Mortgaged Rigs") and
release each Subsidiary Guarantor from its Subsidiary Guaranty, whereafter such
Subsidiary Guarantor shall have no further obligation with respect to the
security interests theretofore maintained for the benefit of the Secured
Creditors in such rigs and the insurances thereon or its guaranty under such
Subsidiary Guaranty.
6.13 Nature of Business. The Company shall:
(i) do all such things as are necessary to maintain its
corporate existence, except this paragraph shall not prevent the Company from
entering into any transaction permitted by Section 7.02;
(ii) ensure that it has the right and is duly qualified to
conduct its business as it is conducted in all applicable jurisdictions and will
obtain and maintain all rights necessary for the conduct of its business, except
where such failure to do so could reasonably be expected to not result in a
Material Adverse Effect;
(iii)at all times comply with all laws and with all rules,
regulations and orders made by any governmental authority applicable to it or to
any or all of its property, except for those being contested in good faith by
appropriate proceedings and except where such failure to do so could reasonably
be expected to not result in a Material Adverse Effect; and
(iv) own or have a leasehold interest in all of its property,
except where the failure to do so could reasonably be expected to not result in
a Material Adverse Effect.
SECTION 7. NEGATIVE COVENANTS.
The Company hereby covenants and agrees that as of the Effective Date
and thereafter for so long as this Agreement is in effect and until the Notes
(together with interest), Fees and all other Obligations incurred hereunder, are
paid in full:
7.01 Changes in Business. The Company will not materially alter the
character of its business taken as a whole from that conducted at the Effective
Date.
7.02 Consolidation, Merger, Sale of Assets, etc. The Company will not
wind up, liquidate or dissolve its affairs, or enter into any transaction of
merger or consolidation,
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<PAGE> 26
sell or otherwise dispose of all or any part of its property or assets,
including the Vessel (other than inventory or obsolete equipment or excess
equipment no longer needed in the conduct of the business in the ordinary course
of business) or agree to do any of the foregoing at any future time, except that
the following shall be permitted:
(a) the Company may be merged or consolidated with or into, or be
liquidated into, the Parent Guarantor; provided, however, that the Parent
Guarantor shall have assumed the obligations of the Company hereunder in writing
and shall have delivered to the Trustee an opinion of counsel to the effect that
the obligations of the Company have been duly and validly assumed and constitute
valid and binding obligations of the Parent Guarantor enforceable against Parant
Guarantor in accordance with its terms.
(b) Restricted Payments permitted pursuant to Section 7.05; and
(c) so long as no Default or Event of Default exists or would result
therefrom, the Company may, on or after January 1, 2001, sell or dispose of the
Vessel ,provided that the Company shall prepay the Notes in full with the
proceeds of such sale or disposition or otherwise pursuant to Section 3.01.
7.03 Indebtedness. The Company will not contract, create, incur, assume
or suffer to exist any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents; and
(b) Indebtedness (i) of not to exceed $10,000,000 in the aggregate
outstanding at any one time owed to the Parent Guarantor incurred in connection
with working capital advances for operation of the Vessel, (ii) owed to the
Parent Guarantor for advances for repairs to the Vessel or (iii) owed to the
Parent Guarantor for advances for upgrades to the Vessel, in each case to the
extent such Indebtedness is subordinated to the obligations of the Company
hereunder on terms of subordination approved by the Required Purchasers.
7.04 Liens. The Company will not create, incur, assume or suffer to
exist any Lien upon or with respect to any property or assets (real or personal,
tangible or intangible) of the Company, whether now owned or hereafter acquired
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable or notes with recourse to the Company) or assign any
right to receive income, or file or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any similar recording or
notice statute, except:
(a) Liens for taxes not yet due or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves (in the
good faith judgment of the management of the Company) have been established;
(b) Liens imposed by law or arising by operation of law which were
incurred in the ordinary course of business, such as carriers', warehousemen's
and mechanics' Liens, statutory landlord's Liens, maritime Liens and other
similar Liens arising in the ordinary
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<PAGE> 27
course of business, and (x) which do not in the aggregate materially detract
from the value of the Company's property or assets or materially impair the use
thereof in the operation of the business of the Company or (y) which are being
contested in good faith by appropriate proceedings (including the providing of
bail), which proceedings have the effect of preventing the forfeiture or sale of
the property or assets subject to such Lien or procuring the release of the
property or assets subject to such Lien from arrest or detention; and (z) in
each case not incurred or made, as the case may be, in connection with (i) the
borrowing of money, (ii) the obtaining of advances or credit or (iii) the
payment of deferred purchase price of property pursuant to the Credit Documents;
(c) Liens created in favor of the Purchasers;
(d) Liens arising from judgments, decrees or attachments (or securing
of appeal bonds with respect thereto) to the extent not covered by insurance
(or, if insured, only to the extent the insurer has admitted coverage in
writing), so long as the obligations in connection therewith do not exceed
$5,000,000 in the aggregate and otherwise in circumstances not constituting an
Event of Default under Section 8.07;
(e) any interest or title of a lessor or charterer under any lease
permitted by this Agreement;
(f) immaterial Liens on any assets of the Company other than the
Collateral, so long as the obligations in connection therewith do not exceed
$500,000 in the aggregate;
(g) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business consistent with past practices and
securing obligations not to exceed $5,000,000 in the aggregate (i) in connection
with workers' compensation, unemployment insurance and other types of social
security or retirement benefits, or (ii) to secure the performance of tenders,
statutory obligations, surety bonds, appeal bonds, bids, leases (other than
Capital Leases), performance bonds, purchase, construction or sales contracts
and other similar obligations, in each case not incurred or made, as the case
may be, in connection with (x) the borrowing of money, (y) the obtaining of
advances or credit or (z) the payment of the deferred purchase price of
property;
(h) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges, encumbrances or minor title defects, in
each case incidental to, and not interfering with, or reasonably likely to
interfere with, the ordinary conduct of the business of the Company; or
(i) Liens on the Vessel arising in connection with the Construction
Contract prior to the Project Completion Date or, after the Project Completion
Date, Liens on the Vessel arising from repairs, to the extent payments therefor
are not delinquent and further to the extent that of 100% of the costs of such
repairs are insured and the insurer has admitted coverage in writing.
7.05 Restricted Payments. The Company will not make any Restricted
Payments, except:
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(a) On the Closing date, the Company shall use the proceeds of the sale
of the Notes to pay a dividend to NDUS which will in turn be used to repay
indebtedness incurred by NDUS in connection with the conversion of the Vessel.
(b) So long as no Default or Event of Default exists or would result
therefrom, to the extent the Company is the beneficial owner of the funds in the
Concentration Account, the Company may pay Dividends to its parent with any
funds in such Concentration Account.
7.06 Restrictions on Subsidiaries. The Company shall not create any
Subsidiaries.
7.07 Transactions with Affiliates. The Company will not transfer the
Vessel to any Affiliate or enter into any transaction or series of transactions
after the Effective Date whether or not in the ordinary course of business, with
any Affiliate other than on terms and conditions as favorable to the Company as
would be obtainable by the Company at the time in a comparable arm's-length
transaction with a Person other than an Affiliate, provided that the foregoing
restrictions shall not apply to (i) employment arrangements entered into in the
ordinary course of business with officers of the Company or (ii) customary fees
paid to members of the Board of Directors of the Company.
7.08 Vessel Management. The Company shall not contract out the
management of the Vessel except to an Affiliate.
SECTION 8. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
8.01 Payments. The Company shall (a) default in the payment when due of
any principal of the Notes or any Make-Whole Amount or (b) default in the
payment when due, and such default shall continue for more than five Business
Days, of any interest, Fees or other amounts owing hereunder or under any other
Credit Document; or
8.02 Representations, etc. Any representation, warranty or statement
made by Parent Guarantor or the Company in any Credit Document or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
8.03 Covenants. The Company shall (a) default in the due performance or
observance by it of any term, covenant or agreement contained in Section 6.08 or
Section 7 or (b) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in Section 8.01, 8.02 or
clause (a) of this Section 8.03) contained in this Agreement or the Mortgage on
the Vessel and such default shall continue unremedied for a period of at least
30 days after the earlier of the date on which an officer of the Company has
actual knowledge thereof or the date of notice to the Company by the Trustee or
any Purchaser; or
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8.04 Default Under Other Agreements. (a) Parent Guarantor or any of its
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, applicable
thereto or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or (b) any such
Indebtedness of Parent Guarantor or any of its Subsidiaries shall be declared to
be due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof, provided
that it shall not constitute an Event of Default pursuant to this Section 8.04
unless the aggregate amount of all Indebtedness referred to in clauses (a) and
(b) above with respect to Parent Guarantor and its Subsidiaries that is recourse
to the Parent Guarantor, or any Subsidiary of the Parent Guarantor, other than
the obligor thereunder exceeds $25,000,000 at any one time; or
8.05 Bankruptcy, etc. The Parent Guarantor or any of its Subsidiaries
(other than an Insignificant Subsidiary) shall commence a voluntary case
concerning itself under Title 7 or 11 of the United States Code entitled
"Bankruptcy", as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"); or an involuntary case is commenced against the Parent
Guarantor or any of its Subsidiaries (other than an Insignificant Subsidiary)
and the petition is not controverted within 10 days, or is not dismissed within
60 days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the Parent Guarantor or any of its Subsidiaries (other than
an Insignificant Subsidiary); or the Parent Guarantor or any of its Subsidiaries
(other than an Insignificant Subsidiary) commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Parent Guarantor or any of
its Subsidiaries (other than an Insignificant Subsidiary); or there is commenced
against the Parent Guarantor or any of its Subsidiaries (other than an
Insignificant Subsidiary) any such case or proceeding which remains undismissed
for a period of 60 days; or the Parent Guarantor or any of its Subsidiaries
(other than an Insignificant Subsidiary) is adjudicated insolvent or bankrupt;
or any order of relief or other order approving any such case or proceeding is
entered; the Parent Guarantor or any of its Subsidiaries (other than an
Insignificant Subsidiary) suffers any appointment of any custodian or the like
for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or the Parent Guarantor or any of its
Subsidiaries (other than an Insignificant Subsidiary) makes a general assignment
for the benefit of creditors; or any corporate action is taken by the Parent
Guarantor or any of its Subsidiaries (other than an Insignificant Subsidiary)
for the purpose of effecting any of the foregoing; or
8.06 Parent Guaranty. The Parent Guaranty or any provision thereof
shall cease to be in full force and effect, or the Parent Guarantor or any
Person acting by or on behalf of the Parent Guarantor shall deny or disaffirm
all or any portion of the Parent
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Guarantor's obligation thereunder, or the Parent Guarantor shall (i) default in
the observance of any term, covenant or agreement contained in Sections 11(g) or
12 of the Parent Guaranty or in the obligation to make any payment thereunder or
(ii) default in the observance of any other term, covenant or agreement
contained in the Parent Guaranty and such default shall continue unremedied for
a period of at least 30 days after the earlier of the date on which an officer
of the Parent Guarantor has actual knowledge thereof or the date of notice to
the Parent Guarantor or the Company by the Trustee or any Purchaser; or
8.07 Judgments. One or more judgments or decrees shall be entered
against the Parent Guarantor or any of its Subsidiaries involving a liability of
$25,000,000 or more in the aggregate for all such judgments and decrees (not
paid or to the extent not covered by insurance or, if insured, only to the
extent the insurer has admitted coverage in writing) and any such judgments or
decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 60 days from the entry thereof; or
8.08 Employee Benefit Plans. Each of the following shall occur: (a)(i)
A contribution required to be made with respect to any (x) employee pension
benefit plan (as defined in Section 3(2) of ERISA) maintained or contributed to
by (or to which there is an obligation to contribute of) the Parent Guarantor,
any of its Subsidiaries or an ERISA Affiliate or (y) Foreign Pension Plan has
not been timely made or (ii) the Parent Guarantor or any of its Subsidiaries has
incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or employee pension benefit plans (as defined in
Section 3(2) of ERISA); and (b) there shall result from any such event or events
the imposition of a Lien, the granting of a security interest, or a liability or
a material risk of incurring a liability; and (c) such Lien, security interest
or liability, individually or in the aggregate when combined with all other such
Liens, security interests or liabilities, will, in the opinion of the Required
Purchasers, have a Material Adverse Effect; or
8.09 Change of Control. Any Change of Control shall occur; or
8.10 Vessel in Class. Any insurance required to be maintained by the
terms of the Mortgages shall cease to be in full force and effect or, at any
time after the Project Completion Date the Vessel no longer is classified in the
highest class available for rigs of its age and type with the American Bureau of
Shipping, Inc., Bureau Veritas, Det Norske Veritas, Lloyd's Register of
Shipping, or another internationally recognized classification society
reasonably acceptable to the Purchasers;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Trustee shall, upon the written request of the
Required Purchasers, by written notice to the Company, take any or all of the
following actions, without prejudice to the rights of the Trustee or any
Purchaser to enforce its claims against the Company , except as otherwise
specifically provided for in this Agreement (provided that, if an Event of
Default specified in Section 8.05 shall occur with respect to Parent Guarantor
or any of its Subsidiaries (other than an Insignificant Subsidiary), the result
which would occur upon the giving of written notice by the Trustee as specified
in clauses (i) and (ii)
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below shall occur automatically without the giving of any such notice): (i)
declare the Notes and all Obligations owing hereunder to be due, whereupon the
same shall become, forthwith due and payable in the full at 100% of the
outstanding principal balance of the respective Series of Notes plus accrued
interest and the Make-Whole Amount without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company; (ii) declare
any other obligations owing hereunder to be due, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Company; (iii) apply
any amounts held as cash collateral to repay Obligations, and (iv) exercise all
available rights and remedies under the Mortgage. Notwithstanding the foregoing,
nothing herein shall impair the right of any Purchaser to accelerate its own
Notes if an Event of Default under Section 8.01 shall occur and be continuing.
SECTION 9. DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms in this Agreement
shall include in the singular number the plural and in the plural the singular:
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control (x) a corporation
if such Person possesses, directly or indirectly, the power (i) to vote 25% or
more of the securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise or (y) any partnership, association
joint venture, limited liability company or other entity in which such person,
directly or indirectly through one or more subsidiaries, has more than a 25%
equity interest.
"Agreement" shall mean this Note Purchase Agreement, as the same may be
from time to time further modified, amended and/or supplemented.
"Approved Bank" shall have the meaning provided in the definition of
"Cash Equivalents."
"Approved Company" shall have the meaning provided in the definition of
"Cash Equivalents."
"Arrangers" shall mean Christiania Bank og Kreditkasse ASA, New York
Branch and Kramer, Clark & Company, Inc.
"Assignments of Insurances" shall mean the Assignments of Insurances
substantially in the form of Exhibit F.
"Authorized Officer" shall mean any senior officer of the Company
designated as such in writing to the Trustee by the Company.
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"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Business Day" shall mean any day excluding Saturday, Sunday and any
day which shall be in the City of New York a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close.
"Capital Lease" as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Company in each case taken at the amount thereof accounted
for as liabilities in accordance with GAAP
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than four years from the date of acquisition, or repurchase obligations with
respect thereto, (ii) U.S. dollar denominated time deposits, certificates of
deposit, bankers' acceptances and Eurocurrency deposits of (x) any Purchaser,
(y) any domestic commercial bank of recognized standing having capital and
surplus in excess of $100,000,000 or (z) any bank (or the parent company of such
bank) whose short-term commercial paper rating from Standard & Poor's Rating
Group ("S&P") is at least A-1 or the equivalent thereof or from Moody's
Investors Service, Inc. ("Moody's") is at least P-1 or the equivalent thereof
(any such bank, an "Approved Bank"), in each case with maturities of not more
than one year from the date of acquisition, (iii) repurchase obligations with a
term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial paper issued by
any Purchaser or Approved Bank or by the parent company of any Purchaser or
Approved Bank and commercial paper issued by, or guaranteed by, any corporation
with a short-term commercial paper rating of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by Moody's (any such
company, an "Approved Company"), or guaranteed by any industrial company with a
long term unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case maturing
within one year after the date of acquisition and (v) investments in money
market mutual funds having assets in excess of $100,000,000.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean (a) Parent Guarantor shall at any time
cease to own, either directly or indirectly, 100% of the capital stock of the
Company or (b) any "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended), is or becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under said Exchange Act), directly or
indirectly, of more than 50% of the total voting power of the Voting Stock of
Parent Guarantor or (c) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board
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of Directors of the Company (together with any new directors whose election by
such Board of Directors or whose nomination for election by the stockholders of
the Company was approved by a vote of a majority 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 of the Company
then in office.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Closing" shall have the meaning provided in Section 1.02.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect on the Effective
Date and any subsequent provisions of the Code, amendatory thereof, supplemental
thereto or substituted therefor.
"Collateral" shall mean cash in the Concentration Account, the
Assignments of Insurances and the Mortgaged Rigs and the proceeds of each
thereof.
"Commitment" shall mean, with respect to each Purchaser, the sum of
such Purchaser's Series A Commitment, Series B Commitment, Series C Commitment
and Series D Commitment.
"Company" shall have the meaning provided in the first paragraph of
this Agreement.
"Confidential Information" shall have the meaning provided in Section
11.15.
"Concentration Account" shall have the meaning provided in Section
6.11.
"Construction Contract" shall mean the Agreement for the
Semi-Submersible Conversion of the Mobile Offshore Drilling Unit "Jim Thompson",
dated August 29, 1997, between NDUS, an Affiliate of the Company, and Ham
Marine, Inc., relating to the Project.
"Credit Documents" shall mean this Agreement, the Notes, the Mortgages,
the Assignments of Insurances, the Parent Guaranty, each Subsidiary Guaranty and
any documents executed in connection herewith and therewith.
"Credit Party" shall mean Parent Guarantor, each Subsidiary Guarantor
and the Company.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Dividends" shall mean to declare or pay on the part of the Company any
dividends (other than dividends payable solely in capital stock of such Person)
or return
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any capital to, its stockholders or authorize or make any other distribution,
payment or delivery of property or cash to its stockholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for a
consideration, any shares of any class of its capital stock now or hereafter
outstanding (or any warrants for or options or stock appreciation rights in
respect of any of such shares), or set aside any funds for any of the foregoing
purposes.
"Dollars" shall mean freely transferable lawful money of the United
States.
"Effective Date" shall have the meaning provided in Section 11.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined by Regulation D
of the Securities Act of 1933).
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by the Company solely in the ordinary course of such Person's business and not
in response to any third party action or request of any kind) or proceedings
relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials arising from alleged injury or threat of injury to health,
safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guide, policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 7401 et seq.; the Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss. 3808 et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq. and any applicable state
and local or foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the
Effective Date and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Parent Guarantor or any of its Subsidiaries would
be deemed to be a "single employer" (i) within the meaning of Sections 414(b),
(c), (m) and (o) of the
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Code or (ii) as a result of the Company being or having been a general partner
of such person.
"Event of Default" shall have the meaning provided in Section 8.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 2.01.
"Final Maturity Date" shall mean January 1, 2009.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Company primarily for the
benefit of employees of the Company residing outside the United States of
America, which plan, fund or other similar program provides, or results in,
retirement income, a deferral of income in contemplation of retirement or
payments to be made upon termination of employment, and which plan is not
subject to ERISA or the Code.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that
contained electric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
"Indebtedness" of any Person shall mean without duplication (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease Obligations
of such Person, (vi) all net obligations of such Person under Interest Rate
Agreements and (vii) all Contingent Obligations (as defined in the Parent
Guaranty) of such Person (other than such Contingent Obligations arising from
the guaranty by such Person of Permitted Indebtedness of the Company and/or its
Subsidiaries) provided that Indebtedness shall not include trade payables and
accrued expenses, in each case arising in the ordinary course of business.
"Insignificant Subsidiary" shall mean any Subsidiary of the Parent
Guarantor which has assets of not greater than $5,000,000 in the aggregate and
which, if aggregated with all other Subsidiaries of the Parent Guarantor with
respect to which an event
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described in Section 8.05 has occurred and is continuing, would have assets of
not greater than $25,000,000.
"Institutional Investor" shall mean (a) any original purchaser of a
Note, (b) any holder of a Note holding more than 4% of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
"Interest Rate Agreement" shall mean any interest rate swap agreement,
any interest rate cap agreement, any interest rate collar agreement or other
similar agreement or arrangement designed to protect the Company against
interest rate risk.
"Investments" shall mean and include (i) lending money or credit or
making advances to any Person (net of any repayments or returns thereof), (ii)
purchasing or acquiring any stock, obligations or securities of, or any other
interest in, or making capital contributions to any Person, or (iii)
guaranteeing the debt or obligations of any other Person.
"Lien" shall mean any mortgage, pledge, security interest, security
title, encumbrance, lien or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement or
any lease in the nature thereof).
"Make-Whole Amount" shall have the meaning provided in Section 3.01(b).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Company or the Parent Guarantor and its Subsidiaries taken as a whole, or
(b) the ability of the Company to perform its obligations under this Agreement
and the Notes, or the ability of the Parent Guarantor to perform its obligations
under the Parent Guaranty or the ability of any Subsidiary Guaranty to perform
its obligations under its Subsidiary Guaranty or (c) the validity or
enforceability of this Agreement, the Notes, the Parent Guaranty or a Subsidiary
Guarantor.
"Mortgages" shall have the meaning provided in Section 4.14.
"Mortgaged Rig" shall have the meaning provided in Section 4.14;
provided that such rigs shall constitute Mortgaged Rigs only for so long as the
Mortgage thereon is required to remain in effect pursuant to the terms of this
Agreement.
""NDAHC" shall mean Noble Drilling Asset Holding Corporation, a
Delaware corporation.
"NDUS" shall have the meaning provided in Section 5.16.
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"Note" shall have the meaning provided in Section 1.01.
"Notice Office" shall mean the office of the Trustee set forth below
its signature hereto, or such other office as the Trustee may designate to the
Company from time to time.
"Obligations" shall mean (i) all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Trustee or any Purchaser pursuant to the terms of this Agreement or
any other Credit Document (other than the Parent Guaranty) and (ii) each and
every obligation of the Company or NDAHC or NDUS as owners under the Mortgages.
"Parent Guarantor" means Noble Drilling Corporation, a Delaware
corporation.
"Parent Guaranty" shall have the meaning provided in Section 4.11(i)
"Payment Office" shall mean the office of the Trustee set forth below
its signature hereto, or such other office as the Trustee may designate to the
Company from time to time. "Permitted Indebtedness" shall mean Indebtedness
permitted by Section 7.03.
"Permitted Indebtedness" shall mean Indebtedness permitted by Section
7.03.
"Permitted Investments" shall mean and include the following:
(a) the Company may make Investments in cash and Cash Equivalents;
(b) the Company may acquire and hold receivables owing to them, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
(c) the Company may make loans and advances to employees in the
ordinary course of business or in connection with employee relocation in an
aggregate principal amount not to exceed $500,000 at any time outstanding; and
(d) the Company may acquire and own investments (including debt
obligations) received in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course of
business.
"Permitted Liens" shall mean Liens permitted by Section 7.04.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) the Company or an ERISA Affiliate.
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"Pre-Delivery Mortgaged Rigs" shall have the meaning provided in
Section 6.12(c).
"Project" shall mean the upgrade of the Vessel from a submersible
drilling rig to a Noble Drilling EVA-4000(tm) semisubmersible drilling rig.
"Project Completion Date" shall mean the date upon which all work
relating to the Project has been completed in accordance with the Construction
Contract and the Vessel has been delivered by the Shipyard to the Company free
from any Lien or other claim of the Shipyard.
"Purchaser" shall have the meaning provided in the first paragraph of
this Agreement.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. ss. 6901 et seq.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Replaced Purchaser" shall have the meaning provided in Section 1.06.
"Replacement Purchaser" shall have the meaning provided in Section
1.06.
"Required Purchasers" shall mean Purchasers whose outstanding
Commitments (or, if after the Total Commitment has been terminated, outstanding
Notes) constitute greater than 66 2/3% of the sum of the Total Commitment (or,
if after the Total Commitment has been terminated, the total principal balance
of all outstanding Notes, other than those held by the Company or any Affiliate,
at such time).
"Restricted Payments" shall mean any Dividend or Investment, other than
Permitted Investments.
"Scheduled Repayment" shall mean a Series A Scheduled Repayment, a
Series B Scheduled Repayment or a Series C Scheduled Repayment.
"Scheduled Repayment Date" shall mean a Series A Scheduled Repayment
Date, a Series B Scheduled Repayment Date or a Series C Scheduled Repayment
Date.
"SDDI Contract" shall mean (i) that certain Marine Drilling Order dated
October 14, 1998 by NDUS and accepted and approved by SDDI, and (ii) that
certain Master Drilling Agreement dated June 1, 1997 between SDDI and NDUS, to
the extent, but only to the extent, such Drilling Order completes a contract
under the Master Drilling Agreement and/or is otherwise applicable thereto, in
each as from time to time amended or supplemented.
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"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Secured Creditors" shall have the meaning assigned to such term in the
respective Security Documents.
"Security Documents" shall mean the Mortgages and the Assignments of
Insurances.
"Series" shall mean the respective series of Notes issued pursuant to
this Agreement, with their being four separate Series, i.e., Series A Notes,
Series B Notes, Series C Notes and Series D Notes.
"Series A Commitment" shall mean, with respect to each Purchaser, the
amount set forth opposite such Purchaser's name in Annex I directly below the
column entitled "Series A Commitment," as the same may be reduced from time to
time pursuant to Section 2.02.
"Series A Maturity Date" shall mean April 1, 2002.
"Series A Note" shall have the meaning provided in Section 1.01.
"Series A Rate" shall mean 5.93% per annum.
"Series A Scheduled Repayment" shall have the meaning provided in
Section 3.02.
"Series A Scheduled Repayment Date" shall have the meaning provided in
Section 3.02.
"Series B Commitment" shall mean, with respect to each Purchaser, the
amount set forth opposite such Purchaser's name in Annex I directly below the
column entitled "Series B Commitment," as the same may be reduced from time to
time pursuant to Section 2.02.
"Series B Maturity Date"shall mean October 1, 2004.
"Series B Note" shall have the meaning provided in Section 1.01.
"Series B Rate" shall mean 6.73% per annum.
"Series B Scheduled Repayment" shall have the meaning provided in
Section 3.02.
"Series B Scheduled Repayment Date" shall have the meaning provided in
Section 3.02.
"Series C Commitment" shall mean, with respect to each Purchaser, the
amount set forth opposite such Purchaser's name in Annex I directly below the
column entitled
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"Series C Commitment," as the same may be reduced from time to time pursuant to
Section 2.02.
"Series C Note" shall have the meaning provided in Section 1.01.
"Series C Rate" shall mean 7.12% per annum.
"Series C Scheduled Repayment" shall have the meaning provided in
Section 3.02.
"Series C Scheduled Repayment Date" shall have the meaning provided in
Section 3.02.
"Series D Commitment" shall mean, with respect to each Purchaser, the
amount set forth opposite such Purchaser's name in Annex I directly below the
column entitled "Series D Commitment," as the same may be reduced from time to
time pursuant to Section 2.02.
"Series D Note" shall have the meaning provided in Section 1.01.
"Series D Rate" shall mean 7.25% per annum.
"Series D Scheduled Repayment" shall have the meaning provided in
Section 3.02.
"Series D Scheduled Repayment Date" shall have the meaning provided in
Section 3.02.
"Shipyard" means the shipyard of Friede Goldman Offshore-West, where
the Project is being undertaken.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through one or more Subsidiaries and (ii) any partnership,
association, joint venture, limited liability company or other entity in which
such Person directly or indirectly through one or more Subsidiaries, has more
than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean NDAHC and NDUS.
"Subsidiary Guaranty" shall have the meaning provided in Section 4.11.
"Taxes" shall have the meaning provided in Section 3.04(a).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Purchasers.
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"Total Series A Commitment" shall mean, at any time, the sum of the
Series A Commitments of the Purchasers.
"Total Series B Commitment" shall mean, at any time, the sum of the
Series B Commitments of the Purchasers.
"Total Series C Commitment" shall mean, at any time, the sum of the
Series C Commitments of the Purchasers.
"Total Series D Commitment" shall mean, at any time, the sum of the
Series D Commitments of the Purchasers.
"Trustee" shall have the meaning provided in the first paragraph of
this Agreement and shall include any successor to the Trustee appointed pursuant
to Section 10.09.
"UCC" shall mean the Uniform Commercial Code.
"Vessel" shall mean the offshore drilling rig "Noble Jim Thompson"
registered under the laws and flag of the Republic of Panama (Official
No.27476-HT).
"Voting Stock" shall mean, with respect to any corporation, the
outstanding stock of all classes (or equivalent interests) which ordinarily, in
the absence of contingencies, entitles holders thereof to vote for the election
of directors (or Persons performing similar functions) of such corporation, even
though the right so to vote has been suspended by the happening of such a
contingency.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex or facsimile transmission.
SECTION 10. THE TRUSTEE.
10.01 Appointment. (a) The Purchasers hereby designate Chase Bank of
Texas, National Association as Trustee (for purposes of this Agreement, the term
"Trustee" shall also refer to Chase Bank of Texas, National Association in its
capacity as Trustee pursuant to the Credit Documents) to act as specified herein
and in the other Credit Documents. Each Purchaser hereby irrevocably authorizes,
and each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Trustee to enter into and take such action on its
behalf under the provisions of this Agreement, the other Credit Documents and
any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Trustee by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Trustee
may perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or Affiliates.
(b) If an Event of Default shall occur and be continuing, upon the
written request of the Required Purchasers, and upon being secured or
indemnified to its satisfaction pursuant to Section 10.06(c), the Trustee shall
proceed to protect and enforce the rights of
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the Purchasers under this Agreement and the Credit Documents by a suit or action
at law or in equity, either for the specific performance of any covenant or
agreement contained herein or therein, or in aid of the execution of any power
herein or therein granted, or by any other appropriate judicial or non-judicial
proceedings for the enforcement of any other legal or equitable remedy.
(c) The Trustee hereby represents to the Company and each Purchaser
that it is duly authorized to enter into this Agreement and each Credit Document
to which it is a party, has duly executed and delivered each such document and
each constitutes a valid and binding agreement of the Trustee enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moritorium
or similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
10.02 Nature of Duties. The Trustee shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. Neither the Trustee nor any of its respective officers,
directors, agents, employees or Affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross negligence
or willful misconduct. The duties of the Trustee shall be mechanical and
administrative in nature; the Trustee shall not have by reason of this Agreement
or any other Credit Document a fiduciary relationship in respect of any
Purchaser or the holder of any Note; and nothing in this Agreement or any other
Credit Document, expressed or implied, is intended to or shall be so construed
as to impose upon the Trustee any obligations in respect of this Agreement or
any other Credit Document except as expressly set forth herein or therein.
10.03 Lack of Reliance on the Trustee. Independently and without
reliance upon the Trustee, each Purchaser and the holder of each Note, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Credit
Parties in connection with the purchase of the Notes and the taking or not
taking of any action in connection herewith and (ii) its own appraisal of the
creditworthiness of the Credit Parties and, except as expressly provided in this
Agreement, the Trustee shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Purchaser or the holder of
any Note with any credit or other information with respect thereto, whether
coming into its possession before the purchase of the Notes or at any time or
times thereafter. The Trustee shall not be responsible to any Purchaser or the
holder of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of the Credit
Parties or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any other Credit Document, or the financial condition of the Credit Parties or
the existence or possible existence of any Default or Event of Default.
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10.04 Certain Rights of the Trustee. If the Trustee shall request
instructions from the Required Purchasers with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Trustee shall be entitled to refrain from such act or taking such
action unless and until the Trustee shall have received instructions from the
Required Purchasers; and the Trustee shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, neither any Purchaser
nor the holder of any Note shall have any right of action whatsoever against the
Trustee as a result of the Trustee acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Purchasers.
10.05 Reliance. The Trustee shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Trustee believed to be the proper Person, including, without
limitation, counsel to Credit Parties, and, with respect to all legal matters
pertaining to this Agreement and any other Credit Document and its duties
hereunder and thereunder, upon advice and statements of legal counsel to the
Trustee.
10.06 Indemnification. (a) The Company shall pay to the Trustee from
time to time such compensation for its services as shall have been agreed to by
the Company and the Trustee. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of enforcement of the Credit Documents, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Trustee's agents,
counsel, accountants and experts. The Company shall defend and indemnify the
Trustee against any and all loss, liability or expense (including reasonable
attorneys' fees) incurred by the Trustee in connection with the administration
of this trust and the performance of their duties hereunder except for any loss,
liability or expense which is ultimately adjudicated to have been caused by the
gross negligence or willful misconduct of the Trustee. The Trustee shall notify
the Company of any claim for which it may seek indemnity promptly upon obtaining
actual knowledge thereof; provided, however, that any failure so to notify the
Company shall not relieve the Company or any Subsidiary Guarantor of its
indemnity obligations hereunder. The Company shall defend the claim and the
indemnified party shall provide reasonable cooperation at the Company's expense
in the defense. Such indemnified parties may have separate counsel and the
Company and the Subsidiary Guarantors, as applicable shall pay the fees and
expenses of such counsel; provided, however, that the Company shall not be
required to pay such fees and expenses if it assumes such indemnified parties'
defense and, in such indemnified parties' reasonable judgment, there is no
conflict of interest between the Company and the Subsidiary Guarantors, as
applicable, and such parties in connection with such defense. The Company's
payment obligations pursuant to this Section shall survive the satisfaction,
expiration or termination of this Agreement, any rejection or termination of
this Agreement under any bankruptcy law or the resignation or removal of the
Trustee.
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(b) The rights, privileges, protections and benefits given to the
Trustee, including, without limitation, its rights to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder.
(c) The Trustee shall not be required to expend or risk its own funds
or to otherwise incur any financial liability in the performance of any of its
duties hereunder or under the Credit Documents or in the exercise of its rights,
remedies or powers hereunder or under any of the Credit Documents. The Trustee
shall be under no obligation to exercise any of the rights or powers vested in
it by this Agreement or any other applicable Credit Document at the request or
direction of any of the Purchasers, unless such Purchasers shall have offered to
the Trustee security or indemnity reasonably satisfactory to the Trustee against
the costs, expenses and liabilities which might reasonably by incurred by it in
compliance with such request or direction.
10.07 The Trustee in Its Individual Capacity. In the event that the
Trustee purchases or otherwise acquires any Notes under this Agreement, the
Trustee shall have the rights and powers specified herein for a "Purchaser" and
may exercise the same rights and powers as though it were not performing the
duties specified herein; and the term "Purchasers," "Required Purchasers,"
"holders of Notes" or any similar terms shall, unless the context clearly
otherwise indicates, include the Trustee in its individual capacity; provided,
that any action taken in respect of funds in the Concentration Account shall be
for the pro rata benefit of all Purchasers. The Trustee may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or other
business with the Credit Parties or any Affiliate thereof as if it were not
performing the duties specified herein, and may accept fees and other
consideration from the Credit Parties for services in connection with this
Agreement and otherwise without having to account for the same to the
Purchasers.
10.08 Holders. The Trustee may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Trustee. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
10.09 Resignation by the Trustee; Removal. (a) The Trustee may resign
from the performance of all its functions and duties hereunder and/or under the
other Credit Documents (and shall so resign in the event the Trustee shall fail
to have a combined capital and surplus of less than $500,000,000) at any time by
giving 15 Business Days' prior written notice to the Company and the Purchasers.
Such resignation shall take effect upon the appointment of a successor Trustee
pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Purchasers shall
appoint a successor Trustee hereunder or thereunder who shall be a commercial
bank or trust company authorized by law to accept the obligations contemplated
hereby and having a combined capital and surplus of at least $500,000,000 as set
forth in its most recently
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published annual report of condition and being rated at lease "A" by a
recognized rating agency and reasonably acceptable to the Company.
(c) If a successor Trustee shall not have been so appointed within such
15 Business Day period, the Trustee, with the consent of the Company, shall then
appoint a successor Trustee who shall serve as Trustee hereunder or thereunder
until such time, if any, as the Required Purchasers appoint a successor Trustee
as provided above.
(d) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and appoint a
successor trustee by delivering to the Trustee so removed, to the successor
trustee so appointed and to the Company and to any Purchasers not joining in
such notice written notice of such removal. Any removal of the Trustee and any
appointment of a successor trustee shall become effective upon acceptance of
appointment by the successor trustee.
10.10 Concentration Account (a) The Trustee shall establish the
Concentration Account into which the Company or its successor and assignee shall
deposit any and all payments made to it under the SDDI Contract. The Trustee is
hereby instructed to disburse all funds deposited with it and credited to the
Concentration Account prior to 2:00 P.M local time on any Business Day to the
Company to such account as the Company shall designate in writing to the Trustee
from time to time on the same Business Day. Funds received and deposited after
2:00 P.M. local time shall be so disbursed prior to 2:00 P.M. of the next
Business Day. Receipt of such funds by the Company shall constitute a
representation and warranty by the Company to each Purchaser and the Trustee
that no Default or Event of Default has occurred and is continuing.
(b) Following the occurrence of a Default or an Event of Default the
Company shall have no right to receive funds from the Concentration Account and
such funds shall be held by the Trustee as security and applied by the Trustee
to outstanding obligations as Required Purchasers may direct. The Trustee shall
mark its books and records to indicate that following receipt of notification of
the occurrence and continuance of a Default or an Event of Default and the
Concentration Account shall be under the exclusive dominion and control of the
Trustee and the Company shall have no control whatsoever over funds or items
deposited in the Concentration Account.
10.11 Insurance. The Trustee is not responsible for effecting,
maintaining or renewing any policies of insurance of the Company or any
Affiliate of the Company or for the sufficiency of any insurance policy
coverage.
10.12 Knowledge of Default. The Trustee shall not be deemed to have
knowledge of any Default or Event of Default hereunder unless and until a
corporate trust officer of the Trustee who is responsible for the account
established hereby shall have actual knowledge of such Default or Event of
Default or shall have received written notice thereof from the Company or any
Purchaser.
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SECTION 11. MISCELLANEOUS.
11.01 Payment of Expenses, etc. The Company agrees to (and to cause
each other Credit Party, in respect of the Credit Document to which it is a
party, to): (i) whether or not the transactions herein contemplated are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Purchasers in connection with the negotiation, preparation, execution and
delivery of the Credit Documents and the documents and instruments referred to
therein and any amendment, waiver or consent (whether or not ultimately
executed) relating thereto (including, without limitation, the reasonable fees
and disbursements of White & Case LLP and Watson, Farley & Williams) and of the
Trustee and, after the occurrence and during the continuance of a Default or an
Event of Default, each of the Purchasers and the Trustee in connection with the
enforcement of the Credit Documents and the documents and instruments referred
to therein (including, without limitation, the actual reasonable fees and
disbursements of external counsel for the Trustee and, the Purchasers), provided
that to the extent it is feasible and a conflict of interest does not exist in
the reasonable discretion of the Trustee, the Purchasers and their counsel, the
Purchasers shall use the same counsel in connection with the foregoing; (ii) pay
and hold each of the Purchasers and the Trustee harmless from and against any
and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Purchasers harmless from and against any
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to such Purchaser) to pay such taxes; and
(iii) defend and indemnify each Purchaser and the Trustee and their respective
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, (a) any investigation, litigation or other
proceeding (whether or not any Purchaser is a party thereto) related to the
entering into and/or performance of any Credit Document or the use of the
proceeds of any Notes hereunder or the consummation of any transactions
contemplated in any Credit Document, whether initiated by Parent Guarantor, the
Company or any other Person, including, without limitation, the actual
reasonable fees and disbursements of external counsel incurred in connection
with any such investigation, litigation or other proceeding (but excluding any
such losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence, willful misconduct, unlawful act or material
breach of the terms of this Agreement of the Person to be indemnified), (b) the
ownership, management, transportation, operation or conduct of the Vessel or the
Mortgaged Rigs, including without limitation any claims of workmen, seamen,
contractors and subcontractors, vendors, customers, and any and all Persons,
whether or not based on negligence or theories of strict liability or (c) the
actual or alleged presence of Hazardous Materials in the air, surface water,
groundwater, surface or subsurface of the Mortgaged Rigs or any facility or
location at any time owned or operated by the Company, the generation, storage,
transportation or disposal of Hazardous Materials at the Mortgaged Rigs or any
facility or location at any time owned or operated by the Company, the
non-compliance of the Mortgaged Rigs or any facility or location at any time
owned or operated by the Company with federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to the Mortgaged Rigs or any such facility or location, or any Environmental
Claim asserted against the Company, the Mortgaged Rigs or any facility or
location at any time owned or operated by the Company, including, in each case,
without limitation, the actual reasonable fees and disbursements of external
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counsel and other consultants incurred in connection with any such
investigation, litigation or other proceeding (but excluding any losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence, willful misconduct, unlawful act or material breach of the
terms of this Agreement of the Person to be indemnified). To the extent that the
undertaking to indemnify, pay or hold harmless the Trustee or any Purchaser set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, the Company shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
11.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an Event of Default then exists, each Purchaser is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Company or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Purchaser (including without limitation by
branches and agencies of such Purchaser wherever located) to or for the credit
or the account of the Company against and on account of the Obligations and
liabilities of the Company to such Purchaser under this Agreement or under any
of the other Credit Documents, including, without limitation, all interests in
Obligations of the Company purchased by such Purchaser pursuant to Section
11.06(b), and all other claims of any nature or description arising out of or
connected with this Agreement or any other Credit Document, irrespective of
whether or not such Purchaser shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured. Without limiting the foregoing, each Purchaser agrees to use
reasonable efforts to notify the Company of any exercise of such Purchaser's
right of setoff granted hereby.
11.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telex or telecopier communication) and mailed or sent by overnight
delivery services, telexed, telecopied or delivered by hand, if to the Company
or any other Credit Party, at the address specified opposite its signature below
or in the other relevant Credit Documents, as the case may be; if to any
Purchaser, at its address specified for such Purchaser on Annex II if to the
Trustee, at the address specified below its signature below; or, at such other
address as shall be designated by any party in a written notice to the other
parties hereto. All such notices and communications shall be effective when
received and, in the case of notice by telecopier, after confirmation of such
receipt has been given by the recipient, excluding by way of automatic receipt
produced by telecopier.
11.04 Successors and Assigns - Representations of the Purchasers. (a)
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
provided that the Company may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of the Purchasers.
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(b) Each Purchaser represents as to itself that it is purchasing the
Notes for its own account or for one or more separate accounts maintained by it
or for the account of one or more pension or trust funds and not with a view to
the distribution thereof, provided that the disposition of its or their property
shall at all times be within its or their control. Each Purchaser understands
that the Notes have not been registered under the Securities Act of 1933, as
amended, and may be resold only if registered pursuant to the provisions of said
Securities Act or if an exemption from registration is available, except under
circumstances where neither such registration nor such an exemption is required
by law and that the Company is not required to register the Notes.
(c) Each Purchaser represents that at least one of the following
statements is an accurate representation as to each source of funds (a "Source")
to be used by such Purchaser to pay the purchase price of the Notes to be
purchased by it hereunder:
(i) if such Purchaser is an insurance company, the Source does
not include assets allocated to any separate account maintained by it
in which any employee benefit plan (or its related trust) has any
interest, other than a separate account that is maintained solely in
connection with your fixed contractual obligations under which the
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(ii) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as you have disclosed to the Company in
writing pursuant to this paragraph (ii), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(iii) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of PTE 84-14, the "QPAM Exemption")
managed by a "qualified professional asset manager" or "QPAM" (within
the meaning of Part V of the QPAM Exemption), no employee benefit
plan's assets that are included in such investment fund, when combined
with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning
of Section V(c)(1) of the QPAM Exemption) of such employer or by the
same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM, the conditions of Part I(c)
and (g) of the QPAM Exemption are satisfied, and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets
are included in such investment fund have been disclosed to the Company
in writing pursuant to this clause (iii); or
(iv) the Source is an insurance company general account, as
such term is defined in PTE 95-60 (issued July 12, 1995) and as of the
date of this Agreement there is no employee benefit plan with respect
to which the aggregate amount of
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such general account's reserves and liabilities for the contracts held
by or on behalf of such employee benefit plan and all other employee
benefit plans maintained by the same employer (and affiliates thereof
as defined in Section V(a)(1) of PTE 95-60) or by the same employee
organization (in each case determined in accordance with the provisions
of PTE 95-60) exceeds 10% of the total reserves and liabilities of such
general account (as determined under PTE 95-60) (exclusive of separate
account liabilities) plus surplus as set forth in the National
Association of Insurance Commissioners Annual Statement filed with the
state of domicile of such Purchaser; or
(v) the Source is the assets of one or more employee benefit
plans which are managed by an "in-house asset manager," as that term is
defined in PTE 96-23 (issued April 10, 1996), the conditions of Part
(I)(a), (b), (c), (g) and (h) of such exemption have been met with
respect to the purchase of the Notes and the names of all employee
benefit plans whose assets are included in the transaction have been
disclosed to the Company in writing pursuant to this clause (v); or
(vi) the Source is a governmental plan; or
(vii) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this clause (vii)
(viii) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA, or
(ix) The Source constitute an asset of an "investment fund"
(within the meaning of Part V of PTE-84-14, the "QPAM Exemption")
managed by a "Qualified Professional Asset Manager" or "QPAM" within
the meaning of Part V of the QPAM Exemption" and the purchaser of such
Notes is exempt under PTE-84-14.
As used in this Section 11.04, the terms "EMPLOYEE BENEFIT PLAN",
"GOVERNMENTAL PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
11.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Trustee or any Purchaser in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Company and the Trustee or any Purchaser shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Trustee or any
Purchaser would otherwise have. No notice to or demand on the Company in any
case shall entitle the Company to any other or further notice or demand in
similar or other
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circumstances or constitute a waiver of the rights of the Trustee or the
Purchasers to any other or further action in any circumstances without notice or
demand.
11.06 Payments Pro Rata. Home Office Payment. (a) The Trustee agrees
that promptly after its receipt of any funds in respect of any Obligations of
the Company hereunder, it shall distribute such payment to the Purchasers (other
than any Purchaser that has expressly waived its right to receive its pro rata
share thereof) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) So long as the original Purchaser or its nominee shall be the
holder of any Note, and notwithstanding anything contained herein or in such
Note to the contrary, the Company will pay all sums becoming due on such Note
for principal, Make-Whole Amount, if any, and interest by the method and at the
address specified for such purpose below its name in Annex II, or by such other
method or at such other address as such Purchaser shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that
upon written request of the Company made concurrently with or reasonably
promptly after payment or prepayment in full of any Note, any such Purchaser
shall surrender such Note for cancellation, reasonably promptly after any such
request, to the Trustee. Prior to any sale or other disposition of any Note held
by a Purchaser or its nominee such Purchaser will, at its election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Trustee in exchange
for a new Note or Notes pursuant to Section 11.16. The Company will afford the
benefits of this Section 11.06(b) to any Institutional Investor that is the
direct or indirect transferee of any Note purchased by such Purchasers under
this Agreement and that has made the same agreement relating to such Note such
Purchasers have made in this Section 11.06(b).
11.07 Computations. All computations of interest hereunder shall be
made on the basis of a 360 day year of twelve 30 day months.
11.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial. (a) This Agreement and the other Credit Documents and the rights and
obligations of the parties hereunder and thereunder shall be construed in
accordance with and be governed by the internal law of the state of New York.
Any legal action or proceeding with respect to this Agreement or any other
Credit Document may be brought in the courts of the state of New York or of the
United States for the Southern District of New York, and, by execution and
delivery of this Agreement, the Company hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts. The Company further irrevocably consents
to the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to the Company located outside New York City and by hand
delivery to the Company located within New York City, at its address for notices
pursuant to Section 11.03, such service to become effective 7 days after such
mailing. Nothing herein shall affect the right of the Trustee or any Purchaser
to serve process in any other manner
-46-
<PAGE> 51
permitted by law or to commence legal proceedings or otherwise proceed against
the Company in any other jurisdiction.
(b) The Company hereby irrevocably waives any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Agreement, the other Credit Documents or the transactions
contemplated hereby or thereby.
(d) Any payment on account of an amount that is payable hereunder in
Dollars which is made to or for the account of any Purchaser in the lawful
currency of any other jurisdiction ("Currency"), whether as a result of any
judgment or order or the enforcement thereof or the realization of any security
or the liquidation of the Person obligated to make such payment shall constitute
a discharge of the such Person's obligation under this Agreement and the other
Credit Documents or the Notes only to the extent of the amount of Dollars which
such Purchaser could purchase in the London foreign exchange markets with the
amount of other Currency in accordance with normal banking procedures at the
rate of exchange prevailing on the first day (other than a Saturday or Sunday)
on which banks in London are generally open for business following receipt of
the payment first referred to above. If the amount of Dollars that could be so
purchased is less than the amount of Dollars originally due to such Purchaser,
the Person obligated hereunder to make such payment shall indemnify and save
harmless such Purchaser from and against all loss or damage arising out of or as
a result of such deficiency. This indemnity shall constitute an obligation
separate and independent from the other obligations contained in this Agreement,
the other Credit Documents or the Notes, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by such Purchaser from time to time and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in respect of an
amount due hereunder or under any judgment or order.
11.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Company and the
Trustee.
11.10 Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which (i) the Company, the Trustee and each of the
Purchasers shall have signed a copy hereof (whether the same or different
copies) and shall have delivered the same to the Trustee at the Payment Office
of the Trustee or, in the case of the Purchasers, shall have given to the
Trustee telephonic (confirmed in writing), written telex or facsimile
transmission notice (actually received) at such office that the same has
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<PAGE> 52
been signed and mailed to it and (ii) the Company shall have fully satisfied
each of the conditions set forth in Section 4.
11.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
11.12 Amendment or Waiver. Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Company; the Trustee and the Required Purchasers, provided that no
such change, waiver, discharge or termination shall, without the consent of each
Purchaser affected thereby, (i) extend the maturity date of any Series of Notes,
or reduce the rate or extend the time of payment of interest (other than as a
result of waiving the applicability of any post-default increase in interest
rates) or Fees thereon, or reduce the principal amount thereof, (ii) change the
timing of payment or the amount of either the principal or the Make-Whole Amount
(iii) amend, modify or waive any provision of this Section, (iv) reduce the
percentage specified in the definition of Required Purchasers, (v) consent to
the assignment or transfer by the Company of any of its rights and obligations
under this Agreement, or (vi) release the Lien on the Collateral or release the
Parent Guarantor from the Parent Guaranty or a Subsidiary Guarantor from a
Subsidiary Guaranty, in each case otherwise than as contemplated by Section
6.12(c).
11.13 Survival. All indemnities, representations and warranties set
forth herein including, without limitation, in Section 1.04, 3.04, 10.06 or
11.01 shall survive the execution and delivery of this Agreement and the
purchase and repayment of the Notes.
11.14 Domicile of Notes. Each Purchaser may transfer and carry its
Notes at, to or for the account of any branch office, subsidiary or Affiliate of
such Purchaser, provided that the Company shall not be responsible for costs
arising under Section 3.04 resulting from any such transfer (other than a
transfer pursuant to Section 1.05(a)) to the extent not otherwise applicable to
such Purchaser prior to such transfer.
11.15 Confidentiality. For the purposes of this Section 11.15,
"CONFIDENTIAL INFORMATION" means information delivered to a Purchaser by or on
behalf of the Company or any Subsidiary in connection with the transactions
contemplated by or otherwise pursuant to this Agreement that is proprietary in
nature and that was clearly marked or labeled or otherwise adequately identified
when received by a Purchaser as being confidential information of the Company or
such Subsidiary, provided that such term does not include information that (a)
was publicly known or otherwise known to such Purchaser prior to the time of
such disclosure, (b) subsequently becomes publicly known through no act or
omission by such Purchaser or any person acting on its behalf, (c) otherwise
becomes known to such Purchaser other than through disclosure by the Company or
any Subsidiary or (d) constitutes financial statements delivered to such
Purchaser hereunder that are otherwise publicly available. Each Purchaser will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by it in good faith to protect confidential information of
third parties delivered to it, provided that such Purchaser may deliver or
disclose Confidential Information to (i) its
-48-
<PAGE> 53
directors, officers, employees, agents, attorneys and affiliates (to the extent
such disclosure reasonably relates to the administration of the investment
represented by such Purchaser's Notes), (ii) such Purchaser's financial advisors
and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 11.15,
(iii) any other holder of any Note, (iv) any Institutional Investor to which a
Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
11.15), (v) any Person from which a Purchaser offers to purchase any security of
the Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 11.15),
(vi) any federal or state regulatory authority having jurisdiction over such
Purchaser, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about such Purchaser's investment portfolio or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Purchaser is a
party or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under its Notes and this Agreement. Each holder of a Note,
by its acceptance of a Note, will be deemed to have agreed to be bound by and to
be entitled to the benefits of this Section 11.15 as though it were a party to
this Agreement. On reasonable request by the Company in connection with the
delivery to any holder of a Note of information required to be delivered to such
holder under this Agreement or requested by such holder (other than a holder
that is a party to this Agreement or its nominee), such holder will enter into
an agreement with the Company embodying the provisions of this Section 11.15.
11.16 (a) Registration of Notes, etc. The Company thereby appoints the
Trustee as its agent solely for purposes of this Section 11.16, to maintain a
register for the registration and registration of transfers of Notes. The name
and address of each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be registered in
such register. Prior to due presentment for registration of transfer, the Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall cause the
Trustee to give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the names and
addresses of all registered holders of Notes.
(b) Upon surrender of any Note at the office of the Trustee for
registration of transfer or exchange (and in the case of a surrender for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder of such Note or his attorney
duly authorized in writing and accompanied by the address for notices of each
transferee of such Note or part thereof), the Company shall execute and deliver,
at the Company's expense (except as provided below), one or
-49-
<PAGE> 54
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be of the same Series and substantially in the form
of the Note so surrendered. Each such new Note shall be dated and bear interest
from the date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to cover any stamp
tax or governmental charge imposed in respect of any such transfer of Notes.
Notes shall not be transferred in denominations of less than $100,000, provided
that if necessary to enable the registration of transfer by a holder of its
entire holding of Notes, one Note may be in a denomination of less than
$100,000. Any transferee, by its acceptance of a Note registered in its name (or
the name of its nominee), shall be deemed to have made the representations set
forth in Section 11.04(b) and (c); provided, however, that the Trustee shall not
be permitted to register the transfer of any Note without the prior written
consent of the Company if a transferee makes the representation set forth in
clauses (ii), (iii), (v) or (vii) of Section 11.04(c) as to its source of funds
to be used by it to pay the purchase price of such Note and the Company states
to the Trustee that it has reasonably determined (based on an opinion of counsel
provided to the Trustee at the cost of the Company) that such transfer would
result in a prohibited transaction under Section 406(a)(1)(A)-(D) of ERISA or
Section 4975(c)(1)(A)-(D) of the Code.
(c) Upon receipt by the Company of evidence reasonably satisfactory to
it of the ownership of and the loss, theft, destruction or mutilation of any
Note (which evidence shall be, in the case of an Institutional Investor, notice
from such Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(i) in the case of loss, theft or destruction, such Person's
own unsecured agreement of indemnity shall be deemed to be
satisfactory, or
(ii) in the case of mutilation, upon surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, in the same principal amount and Series dated and bearing interest from
the date to which interest shall have been paid on such lost, stolen, destroyed
or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated
Note if no interest shall have been paid thereon.
-50-
<PAGE> 55
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Address: NOBLE DRILLING (JIM THOMPSON) INC.
10370 Richmond Avenue, Suite 400
Houston, TX 77042
By: /s/ BYRON L. WELLIVER
---------------------------
Name: Byron L. Welliver
Title: Senior Vice President
with a copy to:
10370 Richmond Avenue, Suite 400
Houston, TX 77042
Attn: Byron L. Welliver
Telephone: (713) 974-3131
Facsimile: (713) 974-3181
The foregoing is hereby agreed
to as of the date hereof.
[NAME OF EACH PURCHASER]
By:
---------------------------------
Name:
Title:
By:
---------------------------------
Name:
Title:
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<PAGE> 56
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ MAURI J. COWEN
---------------------------------
Name: Mauri J. Cowen
Title: Vice President and Trust Officer
Address:
Chase Bank of Texas, National Association
Global Trust Department
600 Travis, Suite 1150, 11th floor
Houston, TX 77002
Attn: Ms. Mauri J. Cowen
Vice President and Trust Officer
Telephone: (713) 216-6686
Telecopy: (713) 216-5476
-52-
<PAGE> 57
ANNEX I
COMMITMENTS
<TABLE>
<CAPTION>
PURCHASER Series A Series B Series C Series D
- --------- Commitment Commitment Commitment Commitment
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
USAA Life Insurance $20,000,000
Company
USAA Life Insurance $20,000,000
Company
The Variable Annuity $20,000,000
Life Insurance
Company
John Hancock Mutual $11,000,000
Life Insurance
Company
John Hancock Mutual $ 6,000,000
Life Insurance
Company
John Hancock Mutual $ 2,000,000
Life Insurance
Company
Investors Partner Life $ 500,000
Insurance Company
John Hancock $ 500,000
Variable Life
Insurance Company
Great-West Life & $10,000,000
Annuity Insurance
Company
The Great-West Life $ 5,000,000
Assurance Company
</TABLE>
<PAGE> 58
ANNEX I
<TABLE>
<CAPTION>
PURCHASER Series A Series B Series C Series D
- --------- Commitment Commitment Commitment Commitment
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Principal Life $ 6,000,000
Insurance Company on
Behalf of One or More
Separate Accounts
Principal Life $ 4,000,000
Insurance Company on
Behalf of One or More
Separate Accounts
Nationwide Life $ 6,500,000
Insurance Company
Nationwide Life and $ 3,500,000
Annuity Insurance
Company
TOTALS: $15,000,000 $40,000,000 $40,000,000 $20,000,000
</TABLE>
<PAGE> 59
ANNEX II
INFORMATION RELATING TO THE PURCHASERS
NAME OF PURCHASER
(1) All payments by wire transfer of immediately
available funds to:
with sufficient information to identify
the source and application of such funds.
(2) All notices of payments and written
confirmations of such wire transfers:
(3) All other communications:
<PAGE> 1
EXHIBIT 4.25
INDENTURE OF FIRST NAVAL MORTGAGE
NOBLE DRILLING (JIM THOMPSON) INC.
as Owner
- and -
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS TRUSTEE
as Mortgagee
NOBLE JIM THOMPSON
Dated December 21, 1998
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
CLAUSE SUBJECT MATTER PAGE
- ------ -------------- ----
<S> <C> <C>
1 REPRESENTATIONS AND COVENANTS..........................................................................2
2 DEFINITIONS AND INTERPRETATION.........................................................................4
3 MORTGAGE...............................................................................................6
4 PAYMENT COVENANTS......................................................................................7
5 PRESERVATION OF SECURITY...............................................................................8
6 INSURANCE..............................................................................................9
7 RIG COVENANTS.........................................................................................12
8 PROTECTION OF SECURITY................................................................................17
9 ENFORCEABILITY AND MORTGAGEE'S POWERS.................................................................18
10 APPLICATION OF MONEYS.................................................................................20
11 FURTHER ASSURANCES....................................................................................21
12 POWER OF ATTORNEY.....................................................................................21
13 INDEMNITIES...........................................................................................22
14 EXPENSES..............................................................................................23
15 COMMUNICATIONS........................................................................................24
16 ASSIGNMENTS...........................................................................................24
17 TOTAL AMOUNT, ETC.....................................................................................24
18 WAIVER; AMENDMENT.....................................................................................24
19 MISCELLANEOUS.........................................................................................24
20 JURISDICTION..........................................................................................25
</TABLE>
EXHIBIT 1 FORM OF NOTE PURCHASE AGREEMENTS AND THE FORM OF SERIES A NOTE, SERIES
B NOTE, SERIES C NOTE AND SERIES D NOTE
<PAGE> 3
THIS INDENTURE OF FIRST NAVAL MORTGAGE made and entered into this
21st day of December, 1998, between NOBLE DRILLING (JIM THOMPSON) INC., a
corporation duly constituted and existing in conformity with the laws of
Delaware with its registered office at 10370 Richmond Avenue, Suite 400,
Houston, Texas 77042 (hereinafter called the "Owner") and CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as Trustee for the Purchasers (as defined herein) having
its office at 600 Travis, Suite 1150, 11th Floor, Houston, Texas TX 77002,
United States of America (hereinafter called the "Mortgagee"), on the Panamanian
rig NOBLE JIM THOMPSON of 13,665.00 gross registered tons, 4,099.00 net
registered tons and with a length of 93.68m, a breadth of 100.05m and a depth of
39.62m and Provisional Patente Number 27476-HT (hereinafter called the "Rig"),
duly registered under the laws and flag of the Republic of Panama, the detailed
description of which is hereinafter more particularly set forth.
W I T N E S S E T H :
WHEREAS
(A) The Owner is the sole owner of the whole of the rig NOBLE JIM
THOMPSON documented under the laws and flag of the Republic of
Panama.
(B) Pursuant to several Note Purchase Agreements each dated as of
December 21, 1998, entered into among (i) the Owner, as issuer (ii)
the respective purchasers set out in Annex I thereto (collectively,
the "Purchasers") and (iii) the Mortgagee, as trustee for the
Purchasers (in such capacity, the "Trustee") (the form of which Note
Purchase Agreements (without exhibits B through F thereto) is annexed
hereto as Exhibit 1), the Owner has agreed to issue and the
Purchasers have agreed to purchase certain Fixed Rate Senior Secured
Notes the latest majority of which are due April 1, 2002, October 1,
2004, January 1, 2009 and January 1, 2009 (collectively, the
"Notes"), divided among Series A Notes, Series B Notes, Series C
Notes and Series D Notes according to the Commitments of the
Purchasers set forth in Annex I thereto, in an aggregate principal
amount of $115,000,000. As required by Article 1515 Section 3 of the
Commercial Code of Panama, the dates on which payments of principal
in respect of the Notes are due may be determined from the provisions
of the Note Purchase Agreements and the Notes.
(C) The Owner, in order to secure (i) the full and prompt payment when
due of (x) the principal of and interest on the Notes issued under
the Note Purchase Agreements (y) all other obligations and
indebtedness (including, without limitation, indemnities, Fees and
interest thereon) of the Owner to the Secured Creditors (as
hereinafter defined), whether now existing or hereafter incurred
under, arising out of or in connection with the Note Purchase
Agreements and this Mortgage and the due performance and compliance
with all of the terms, conditions and agreements contained in the
Note Purchase Agreements and this Mortgage; (ii) any and all sums
advanced by the Mortgagee in order to preserve the Collateral (as
hereinafter defined) or preserve its security interest in the
Collateral; (iii) in the event of any proceeding for the collection
or enforcement of any indebtedness, obligations, or liabilities of
the Owner referred to in clause (i) above, after an Event of Default
shall have occurred and be continuing, the reasonable expenses of the
Mortgagee of re-taking, holding, preparing for sale or lease, selling
or otherwise disposing of or
<PAGE> 4
realizing on the Collateral, or of any exercise by the Mortgagee of
its rights hereunder, together with reasonable attorneys' fees of
counsel to the Mortgagee and court costs; and (iv) all amounts paid
by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Clause 13 of this Mortgage (all such obligations,
liabilities, sums and expenses referred to in clauses (i) through
(iv) above being collectively referred to as the "Obligations"). It
is acknowledged and agreed that the "Obligations" shall include
extensions of credit of the types described above, whether
outstanding on the date of this Mortgage or extended from time to
time after the date of this Mortgage.
NOW, THEREFORE, the appearing parties, each in the name and on behalf of his
respective principal, state that they hereby execute this Indenture of First
Naval Mortgage pursuant to the following representations:
1 REPRESENTATIONS AND COVENANTS
1.01 The Owner represents and covenants to the Mortgagee that:
a. the Owner is the sole and absolute owner of the Rig,
registered under the laws and the flag of the Republic of
Panama;
b. the Owner, as sole legal and beneficial owner of the Rig,
has received and presently possesses a Provisional Patente
of Navigation for the Rig, duly issued by the Republic of
Panama under No. 27476-HT;
c. neither the whole nor any share in the Rig is subject to any
Security Interest (as defined herein) (except for Permitted
Liens and the lien of this Mortgage);
d. the Owner has not sold or transferred, or agreed to sell or
transfer, title to the Rig or any share therein;
e. the Owner is a corporation duly organized and validly
existing and in good standing under the laws of Delaware;
f. the Owner has full power and authority (i) to execute and
deliver this Mortgage, (ii) to mortgage the Rig as security
for the Obligations and (iii) to comply with the provisions
of, and perform all its obligations under, this Mortgage;
g. the Owner has complied with all statutory and other material
requirements relative to the ownership, registration and
operation of the Rig;
h. the Owner has taken all necessary action to authorize the
execution and delivery of this Mortgage and this Mortgage
constitutes the legal, valid and binding obligation of the
Owner enforceable against the Owner in accordance with its
terms (except to the extent limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other
laws of general application relating to or affecting the
2
<PAGE> 5
enforcement of creditors' rights as from time to time in
effect and general equitable principles) and when
preliminarily registered with the Public Registry in Panama
through the Panamanian Consulate in Houston, Texas will
create a legal, valid and enforceable first priority
mortgage lien on the Rig subject only to the permanent
registration of this Mortgage in the Public Registry in
Panama within six months of the date of the preliminary
registration;
i. the entry into and performance by the Owner of this Mortgage
does not and will not during the Security Period (as defined
herein) violate in any respect (i) any law or regulation of
any governmental or official authority or body, or (ii) any
of the constitutive documents of the Owner including the
Certificate of Incorporation or the Memorandum of Articles
and Association, as amended from time to time, or (iii) any
material agreement, contract or other undertaking to which
the Owner is a party or which is binding upon the Owner or
any of its assets;
j. all consents, licenses, approvals and authorizations
required in connection with the entry into, performance,
validity and enforceability of this Mortgage and the
transactions contemplated hereby and thereby have been
obtained and are in full force and effect and will be so
maintained during the Security Period;
k. save for such registrations and filings as are referred to
in this Mortgage, it is not necessary for the legality,
validity, enforceability or admissibility in evidence of
this Mortgage that it or any document relating thereto be
registered, filed, recorded or enrolled with any court or
authority in any relevant jurisdiction or that any stamp,
registration or similar taxes be paid on or in relation to
this Mortgage;
l. the Owner is in compliance with all applicable Environmental
Laws and all Environmental Approvals (as defined herein)
relating to the Rig, its operation and management and the
business of the Owner (as now conducted and as reasonably
anticipated to be conducted in the future) have been
obtained and complied with;
m. no Environmental Claim has been made or threatened against
the Owner or otherwise in connection with the Rig;
n. no Environmental Incident (as defined herein) which has
resulted, or which could reasonably be expected to result,
in an Environmental Claim in excess of US$200,000 has
occurred; and
o. the Owner hereby affirms as its representations all of the
statements contained in the "WHEREAS" clauses of this
Mortgage.
1.02 The representations and warranties of the Owner set out in Clause
1.01 shall survive the execution of this Mortgage and the purchase of
the Notes.
3
<PAGE> 6
2 DEFINITIONS AND INTERPRETATION
2.01 In this Mortgage unless the context otherwise requires, the following
expressions shall have the following meanings:
"Default Rate" shall mean the rate of interest calculated in
accordance with Section 1.03(b) of the Note Purchase Agreements;
"Environmental Approvals" means all approvals, licenses, permits,
exemptions or authorization required under applicable Environmental
Laws;
"Environmental Incident" means (i) any release of Hazardous Materials
from the Rig, (ii) any incident in which Hazardous Materials are
released from a vessel other than the Rig and which involves
collision between the Rig and such other vessel or some other
incident of navigation or operation, in either case, where the Rig or
the Owner are actually or allegedly at fault or otherwise liable (in
whole or in part) or (iii) any incident in which Hazardous Materials
are released from a vessel other than the Rig and where the Rig is
actually or potentially liable to be arrested as a result and/or
where the Owner is actually or allegedly at fault or otherwise liable
(and, in each such case, "release" shall mean disposing, discharging,
injecting, spilling, leaking, leaching, dumping, emitting, escaping,
emptying, seeping, placing and the like, into or upon any land or
water or air, or otherwise entering into the environment);
"Indemnitee" shall have the meaning set forth in Section 13.01;
"Insurances" includes all policies and contracts of insurance (which
expression includes all entries of the Rig in a protection and
indemnity association) which are from time to time taken out or
entered into in respect of the Rig or otherwise by the Owner (whether
in the sole name of the Owner or in the joint names of the Owner and
the Mortgagee and all benefits thereof (including claims of
whatsoever nature and return of premiums);
"ISM Code" means in relation to its application to the Owner, the Rig
and its operation:
(a) The International Management Code for the Safe Operation
of Ships and for Pollution Prevention, currently known or
referred to as the `ISM Code', adopted by the Assembly of the
International Maritime Organisation by Resolution A.741(18) on
4 November 1993 and incorporated on 19 May 1994 into chapter
IX of the International Convention for the Safety of Life at
Sea 1974 (SOLAS 1974); and
(b) all further resolutions, circulars, codes, guidelines,
regulations and recommendations which are now or in the future
issued by or on behalf of the International Maritime
Organisation or any other entity with responsibility for
implementing the ISM Code, including without limitation, the
`Guidelines on implementation or administering of the
International Safety Management (ISM)
4
<PAGE> 7
Code by Administrations' produced by the International
Maritime Organisation pursuant to Resolution A.788(19) adopted
on 25 November 1995,
as the same may be amended, supplemented or replaced from time to
time;
"Major Casualty" means any casualty to the Rig in respect whereof the
claim or the aggregate of the claims against all insurers, before
adjustment for any relevant franchise or deductible, exceeds Five
Hundred Thousand United States Dollars (US$500,000) or the equivalent
in any other currency;
"Note Purchase Agreements" means, collectively, the several Note
Purchase Agreements, each dated as of December 21, 1998 among the
Owner, the respective Purchasers and the Mortgagee first referred to
in Recital (B) hereto, as further amended, restated or supplemented
from time to time;
"Obligations" shall have the meaning provided in Recital (C) hereto;
"Protection and Indemnity Risks" means the usual risks covered by
protection and indemnity associations of international repute
including the proportion not recoverable in case of collision under
the ordinary running-down clause (unless such is recoverable under
the relevant hull and machinery coverage);
"Requisition Compensation" means all moneys or other compensation
payable during the Security Period by reason of requisition for title
or other compulsory acquisition of the Rig otherwise than by
requisition for hire;
"Rig" means the vessel described in Recital (A) hereto and includes
any share or interest therein and her engines, machinery, boats,
tackle, outfit, spare gear, fuel, consumable or other stores,
belongings and appurtenances whether on board or ashore and whether
now owned or hereafter acquired (but excluding therefrom any leased
equipment not affixed to the Rig and owned by third parties);
"Secured Creditors" shall mean the Purchasers and the Mortgagee;
"Security Interest" means a mortgage, charge (whether fixed or
floating), pledge, lien, hypothecation, assignment, trust
arrangement, title retention or other security interest or
arrangement of any kind whatsoever;
"Security Period" means the period from the date of the Note Purchase
Agreements and ending on the date all and any amounts together with
interest, fees and all other obligations under the Credit Documents
are indefeasibly paid in full;
"Total Loss" means (a) the actual, constructive, arranged, agreed, or
compromised total loss of the Rig; (b) the requisition for title or
other compulsory acquisition or forfeiture of the Rig otherwise than
by requisition for hire; (c) the capture, seizure, arrest, detention
or confiscation of the Rig by any government or by persons acting or
purporting to act on
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<PAGE> 8
behalf of any government unless the Rig be released from such
capture, seizure, arrest or detention within sixty (60) days after
the occurrence thereof;
"United States Dollars" and "US$" means the lawful currency of the
United States of America;
"War Risks" includes the risk of mines and all risks excluded from
the standard form of American marine policy by the free of capture
and seizure clause.
2.02 Except where otherwise expressly provided herein or unless the
context otherwise requires, words and expressions defined in the Note
Purchase Agreements shall bear the same meanings when used in this
Mortgage.
2.03 In this Mortgage:
(a) Clause headings are inserted for convenience only and shall
not affect the construction of this Mortgage and, unless
otherwise specified, all references to Clauses are to
clauses of this Mortgage;
(b) unless the context otherwise requires, words denoting the
singular number shall include the plural and vice versa;
(c) references to persons include bodies corporate and
unincorporated;
(d) references to assets include property, rights and assets of
every description;
(e) references to any document are to be construed as references
to such document as amended or supplemented from time to
time; and
(f) references to any enactment include re-enactments,
amendments and extensions thereof.
3 MORTGAGE
3.01 In order to secure the Obligations the Owner has granted and
mortgaged and hereby does by these presents grant and mortgage unto
the Mortgagee, its successors and assigns, in accordance with the
provisions of Chapter V, Title IV of Book Second of the Code of
Commerce and pertinent provisions of the Civil Code and other
legislation of the Republic of Panama, the whole of the Rig, the
detailed description of which is as follows:
offshore drilling rig vessel NOBLE JIM THOMPSON; gross
tonnage approximately 13,665.00; net tonnage approximately
4,099.00; length overall 93.68 meters, breadth 100.05
meters; depth 39.62 meters; built in 1982 by Ingalls
Shipbuilding of the United States of America; radio call
letters HP-9401;
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<PAGE> 9
TO HAVE AND TO HOLD the same unto the Mortgagee, its successors and
assigns forever, upon the terms herein set forth for the enforcement
of the Obligations.
PROVIDED ONLY and the condition of these presents is such that if the
Owner or its successors and assigns shall pay or cause to be repaid
to the Secured Creditors and their respective successors or assigns
the Obligations in their entirety as and when the same shall become
due and payable in accordance with the terms of the Note Purchase
Agreements, the Notes and this Mortgage and shall observe and comply
with the covenants, terms and conditions contained in the Note
Purchase Agreements, the Notes and this Mortgage, expressed or
implied to be performed, observed or complied with by and on the part
of the Owner and its successors and assigns, then these presents and
the rights hereunder shall cease, determine and be void upon the
discharge of this Mortgage by the Mortgagee and, in such event, the
Mortgagee agrees to furnish, execute and record, at the expense of
the Owner, all such documents as the Owner may reasonably require to
discharge this Mortgage, otherwise to be and remain in full force and
effect.
Notwithstanding anything to the contrary herein it is not intended
that any provision of this Mortgage shall waive the priority and
preferred status of this Mortgage and that if any provision or part
thereof herein shall be construed as waiving the priority and
preferred status of this Mortgage then such provision shall to such
extent be void and of no effect.
3.02 The Owner shall remain liable to perform all the obligations assumed
by it in relation to the Rig and none of the Secured Creditors shall
be under any obligation of any kind whatsoever in respect thereof or
be under any liability whatsoever in event of any failure by the
Owner to perform its obligations in respect thereof.
3.03 This Mortgage, when it shall have been duly executed and signed on
behalf of the parties, shall be provisionally registered through the
Panamanian Consulate at Houston, Texas and thereafter within six (6)
months permanently registered in the Public Registry in Panama.
4 PAYMENT COVENANTS
4.01 The Owner hereby covenants with the Secured Creditors:
(a) to pay and indemnify the Secured Creditors for all such
expenses, claims, liabilities, losses, costs, duties, fees,
charges or other moneys as are stated in the Note Purchase
Agreements, the Notes and this Mortgage to be payable by the
Owner to or recoverable from the Owner by the Secured
Creditors (or in respect of which the Owner agrees in this
Mortgage to indemnify any of the Secured Creditors) at the
times and in the manner specified in the Note Purchase
Agreements, the Notes and this Mortgage;
(b) to pay interest on any such expenses, claims, liabilities,
losses, costs, duties, fees, charges or other moneys
referred to in Clause 4.01(a) from the date on which the
relevant expense, claim, liability, loss, cost, duty, fee,
charge or other money is
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<PAGE> 10
paid by any Secured Creditor (both before and after any
relevant judgment) at the Default Rate; and
(c) to pay and perform its obligations which may be or become
due or owing to any Secured Creditor, as the case may be,
under the Note Purchase Agreements, the Notes and this
Mortgage at the times and in the manner specified herein or
therein.
5 PRESERVATION OF SECURITY
5.01 It is declared and agreed that:
(a) the security created by this Mortgage shall be held by the
Mortgagee as a continuing security for the performance of
the Obligations and that the security so created shall not
be satisfied by any intermediate payment or satisfaction of
any part of the Obligations;
(b) the security so created shall be in addition to and shall
not in any way be prejudiced or affected by any of the other
Security Documents;
(c) the Mortgagee shall not be bound to enforce any of the other
Security Documents before enforcing the security created by
this Mortgage;
(d) no failure or delay on the part of the Mortgagee in
exercising any right, power, privilege or remedy hereunder
and no course of dealing between Owner and Mortgagee shall
operate as a waiver thereof; nor shall any single or partial
exercise of any right, power, privilege or remedy hereunder
preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.
The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which
the Mortgagee would otherwise have. No notice to or demand
on the Owner in any case shall entitle the Owner to any
other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the
Mortgagee to any other or further action in any
circumstances without notice or demand; and
(e) any waiver by the Mortgagee of any terms of this Mortgage or
any consent given by the Mortgagee under this Mortgage shall
only be effective if given in writing and then only for the
purpose and upon the terms for which it is given.
5.02 It shall be a condition of any settlement or discharge under this
Mortgage between the Mortgagee and the Owner that no security or
payment to the Secured Creditors or any of them by the Credit Parties
or any other person is avoided or set-aside or ordered to be refunded
or reduced by virtue of any provision or enactment relating to
bankruptcy, insolvency, administration or liquidation for the time
being in force and, if such condition is not satisfied, the Mortgagee
shall be entitled to recover from the Owner on demand the value of
such security or the amount of any such payment as if such settlement
or discharge had not occurred.
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<PAGE> 11
5.03 The rights of the Secured Creditors under this Mortgage and the
security hereby constituted shall not be affected by any act,
omission, matter or thing which, but for this provision, might
operate to impair, affect or discharge such rights and security, in
whole or in part, including without limitation, and whether or not
known to or discoverable by the Credit Parties, the Secured Creditors
or any other person:
(a) any waiver granted to or composition with the Credit Parties
or any other person; or
(b) the taking, variation, compromise, renewal or release of or
refusal or neglect to perfect or enforce any rights,
remedies or securities against any of the Credit Parties or
any other persons; or
(c) any legal limitation, disability, incapacity or other
circumstances relating to the Credit Parties or any other
person; or
(d) any amendment or supplement to the Note Purchase Agreements,
the Notes, any of the other Credit Documents or any other
document or security; or
(e) the dissolution, liquidation, amalgamation, reconstruction
or reorganization of any of the Credit Parties or any other
person; or
(f) the unenforceability, invalidity or frustration of any
obligations of the Credit Party or any other person under
the Note Purchase Agreements, the Notes, any of the other
Credit Documents or any other document or security.
6 INSURANCE
6.01 The Owner covenants with the Mortgagee throughout the Security Period
that:
(a) The Owner shall, at its own expense, when and so long as any
Obligation remains outstanding, insure the Rig and keep her
insured, or cause the Rig to be insured, in lawful money of
the United States, in such amounts, for such risks
(including without limitation, hull and machinery,
Protection and Indemnity Risks, pollution liability, and War
Risks), in the broadest forms available in the American,
British and Scandinavian insurance markets or in such other
major international markets acceptable to the Mortgagee
(including without limitation, the form of the loss payable
clause and the designation of named assureds), and with such
first class insurance companies, underwriters, funds, mutual
insurance associations or clubs, as shall be reasonably
satisfactory to the Mortgagee. The Owner shall insure the
Rig and keep her insured, or cause the Rig to be insured (1)
with respect to hull and machinery, including War Risks, for
an amount which is not less than her agreed value as set
forth in the applicable policies, provided, however, the
aggregate amount of such insurances in respect of the
Mortgaged Rigs shall never be less than 100% of the
aggregate unpaid principal amount of the Notes
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<PAGE> 12
outstanding from time to time, with a deductible amount not
greater than U.S.$1,000,000 per occurrence, except if losses
in excess of U.S.$25,000 per occurrence for all vessels and
rigs insured by the Parent Guarantor or its Affiliates shall
exceed an aggregate amount of U.S.$4,000,000 during any
twelve month period, thereafter the deductible amount shall
be not greater than U.S.$50,000 per occurrence, and (2) with
respect to Protection and Indemnity Risks and excess
liability coverage for an amount not less than
U.S.$400,000,000, with a deductible amount not greater than
U.S.$100,000 per occurrence. In addition, the Owner shall,
at its own expense, furnish to the Mortgagee a mortgagee's
single interest policy providing coverage in respect of the
Mortgaged Rigs in an aggregate amount equal to 100% of the
aggregate unpaid principal amount of the Notes outstanding
from time to time (or in lieu of such mortgagee's interest
insurance Owner shall cause the hull and machinery
insurances for the Mortgaged Rigs to be endorsed to afford
breach of warranty coverage for the benefit of the
Mortgagee). Such mortgagee's interest insurance and any
additional insurance policies for the benefit of the
Mortgagee shall be maintained in the broadest form available
in the American, British and Scandinavian markets or other
major international markets acceptable to the Mortgagee
through underwriters acceptable to the Mortgagee. The Rig
shall not operate in or proceed into any area then excluded
by trading warranties under its marine or war risk policies
(including protection and indemnity) without satisfying the
conditions of the relevant policies evidence of which shall
be furnished to the Mortgagee.
(b) The policy or policies of insurance shall be issued by
responsible underwriters reasonably acceptable to the
Mortgagee, shall contain conditions, terms, stipulations and
insuring covenants satisfactory to the Mortgagee, and shall
be kept in full force and effect by the Owner so long as the
Credit Documents and the Obligations shall be outstanding.
All such policies, binders and other interim insurance
contracts shall be executed and issued in the name of the
Owner and shall, to the extent required herein, provide that
the Mortgagee shall be the loss payee for distribution to
the Secured Creditors and the Owner as their interests may
appear, and shall provide for at least ten (10) (in case of
War Risks, seven (7)) days' prior notice to be given to the
Mortgagee by the underwriters or association in the event of
cancellation of the policy. The Mortgagee, as Trustee for
the Purchasers shall be named as an additional assured on
all such policies and insurance contracts, but without
liability of the Mortgagee, or the Purchasers for premiums
or calls. Upon request of the Mortgagee, the Owner shall
cause complete certified copies of all such policies,
binders and other interim insurance contracts to be
delivered to the Mortgagee. Originals shall also be provided
upon the request of the Mortgagee. The Owner shall furnish
to the Mortgagee annually a detailed report signed by a firm
of marine insurance brokers satisfactory to the Mortgagee as
to the insurance maintained in respect of the Rig, as to
their opinion as to the adequacy thereof and as to
compliance with the provisions of this Clause 6.01.
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<PAGE> 13
Unless otherwise required by the Mortgagee, by notice to the
underwriters (which notice shall be given by the Mortgagee
only upon the written request of the Required Purchasers
following the occurrence of an Event of Default), although
the following insurance is payable to the Mortgagee, (i) any
loss under any insurance on the Rig with respect to
Protection and Indemnity Risks may be paid directly to the
Owner to reimburse it for any loss, damage or expense
incurred by it and covered by such insurance or to the
person to whom any liability covered by such insurance has
been incurred and (ii) in the case of any loss (other than a
loss covered by (i) above or by the next following paragraph
of this Clause 6.01(b)) under any insurance with respect to
the Rig involving any damage to the Rig, the underwriters
may pay directly for the repair, salvage or other charges
involved or, if the Owner shall have first fully repaired
the damage or paid the salvage or other charges, may pay the
Owner as reimbursement therefor; provided, however, that if
such damage involves a before deductible loss in excess of
US$5,000,000.00, the underwriters shall not make such
payment without first obtaining the written consent thereto
of the Mortgagee (which consent shall not be unreasonably
withheld); provided, further, so long as the Mortgagee shall
not have received notice from the Owner or any Secured
Creditor that an Event of Default has occurred and is
continuing, the Mortgagee shall make available to the Owner
by an appropriate payment order directed to the interested
underwriter the proceeds of any such payment in respect of
damage in excess of U.S.$5,000,000 to reimburse the Owner in
whole or in part for any expenditures the Owner may have
made for repairing the Rig and/or to pay any third party
claim, provided the Owner shall have furnished to the
Mortgagee a copy of a proof of loss and an adjustment of
claim prepared by such underwriter with respect to such
expenditures. If the Owner does not effect repairs to the
Rig or pay third party claims, the Mortgagee shall be
entitled to receive the proceeds of any insurance applicable
to such loss and upon payment shall credit the net proceeds
of any insurance in accordance with Clause 10.01. Any loss
covered by this paragraph which is paid to the Mortgagee but
which might have been paid, in accordance with the
provisions of this paragraph, directly to the Owner or
others, shall be paid by the Mortgagee to, or as directed
by, the Owner and all other payments to the Mortgagee of
losses covered by this paragraph shall be applied by the
Mortgagee in accordance with Clause 10.01.
In the event of a Total Loss, all insurance payments
therefor shall be paid to the Mortgagee. The Owner shall not
declare or agree with the underwriters that the Rig is a
Total Loss without the prior written consent of the
Mortgagee.
(c) In the event of a Total Loss of the Rig, the Mortgagee shall
retain out of the insurance payments received on account of
such loss any sum or sums that shall be or become owing to
the Secured Creditors under the Credit Documents, whether or
not the same shall be then due and payable, together with
accrued interest and the cost, if any, of collecting the
insurance, and pay the balance as provided in Clause 10.
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<PAGE> 14
(d) The Owner shall comply with and satisfy all of the
provisions of each applicable law, regulation, proclamation
or order concerning financial responsibility for liabilities
imposed on the Owner or the Rig with respect to the carriage
of passengers or pollution, and will maintain, or cause to
be maintained, all certificates or other evidence of
financial responsibility as may be required by each such
law, regulation, proclamation or order with respect to the
trade in which the Rig from time to time is engaged.
(e) The Owner shall renew all such insurances as they expire and
so as to insure that there is no gap in coverage, keep the
Mortgagee advised of the progress of such renewals, and
shall provide evidence of such renewal in writing to the
Mortgagee as and when each such renewal is effected.
(f) The Owner shall punctually pay all premiums, calls,
contributions or other sums payable in respect of all such
insurances and produce all relevant receipts when so
required by the Mortgagee.
(g) The Owner shall arrange for the execution of such guarantees
as may from time to time be required by any protection and
indemnity or war risks association.
(h) The Owner shall not employ the Rig or suffer the Rig to be
employed otherwise than in conformity with the terms of the
instruments of insurance aforesaid relative to the Rig
(including any warranties, express or implied, therein)
without first obtaining the consent to such employment of
the insurers and complying with such requirements as to
extra premium or otherwise as the insurers may prescribe.
7 RIG COVENANTS
7.01 The Owner covenants with the Mortgagee that throughout the Security
Period the Owner will:
(a) keep the Rig registered in its name as a Panamanian flag
vessel and do or allow to be done nothing whereby such
registration may be forfeited or imperilled;
(b) not without the previous consent in writing of the Mortgagee
change the name of the Rig or make any modification to the
Rig which would adversely alter the structure, type or
performance characteristics of the Rig or which would
materially reduce the value of the Rig;
(c) keep the Rig in a good and efficient state of repair
consistent with first-class ship-ownership and management
practice employed by owners of drilling rigs of similar size
and type and so as to maintain her in the highest class
available for rigs of its age and type with American Bureau
of Shipping, Bureau Veritas, Det norske Veritas, Lloyd's
Register of Shipping or another internationally recognized
classification society reasonably acceptable to the
Mortgagee free of recommendations and qualifications and
change of class, save those approved in
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<PAGE> 15
writing by the Mortgagee and so as to comply with all
applicable laws, treaties and conventions of the Republic of
Panama and other applicable jurisdictions, and rules and
regulations issued thereunder, and have on board as and when
required thereby valid certificates showing compliance
therewith;
(d) procure that all repairs to or replacement of any damaged,
worn or lost parts or equipment in such manner (both as
regards workmanship and quality of materials) as to not
materially diminish the value of the Rig and not to remove
any material part of, or item of equipment owned by the
Owner installed on, the Rig unless (i) the part or item so
removed is forthwith replaced by a suitable part or item
which is in the same condition as or better condition than
the part or item removed, is free from any Security Interest
(other than Permitted Liens) in favor of any person other
than the Mortgagee and becomes on installation on the Rig
the property of the Owner and subject to the security
constituted by this Mortgage or (ii) the removal will not
materially diminish the value of the Rig;
(e) submit the Rig to such periodical or other surveys as may be
required for classification purposes and if so required to
supply to the Mortgagee copies of all survey reports issued
in respect thereof;
(f) permit the Mortgagee by independent surveyors to board the
Rig at all reasonable times and upon reasonable notice for
the purpose of inspecting her condition or for the purpose
of satisfying themselves in regard to proposed or executed
repairs and to afford all proper facilities for such
inspections, provided that unless an Event of Default shall
have occurred and be continuing, the cost of any such
inspection more frequently than once per calendar year shall
be for the account of the Mortgagee;
(g) promptly pay and discharge all debts, damages and
liabilities whatsoever which have given or may give rise to
maritime or possessory liens (other than Permitted Liens) on
or claims enforceable against the Rig and all tolls, dues,
taxes, assessments, governmental charges, fines and
penalties lawfully charged on or in respect of the Rig and
all other expenses whatsoever in respect of the Rig and in
the event of arrest of the Rig pursuant to legal process, or
in the event of her detention in exercise or purported
exercise of any such lien or claim as aforesaid, procure the
release of the Rig from such arrest or detention forthwith
upon receiving notice thereof by providing bail or otherwise
as the circumstances may require;
(h) not employ the Rig or allow her employment in any trade or
business which is unlawful under the laws of any relevant
jurisdiction or in carrying illicit or prohibited goods or
in any manner whatsoever which can reasonably be expected to
render her liable to destruction, seizure or confiscation
and in the event of hostilities in any part of the world
(whether war be declared or not) not employ the Rig or
suffer her employment in carrying any contraband goods or to
enter or trade to any zone which is declared a war zone by
any government or by the War Risks
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<PAGE> 16
insurers of the Rig unless there shall have been effected by
the Owner (at its expense) such special, additional or
modified insurance cover as the Mortgagee may reasonably
require;
(i) promptly furnish to the Mortgagee all such information as it
may from time to time require regarding the Rig, her
employment, position and engagements, particulars of all
towages and salvages and, upon the request of the Mortgagee
in writing, copies of all charters and other contracts for
her employment or otherwise howsoever concerning her;
(j) notify the Mortgagee forthwith by telecopy thereafter
confirmed by letter of:
(i) any casualty to the Rig which is or is likely to be a
Major Casualty; and
(ii) any occurrence in consequence whereof the Rig has
become or could, by the passing of time or otherwise,
become a Total Loss; and
(iii) any requirement or recommendation made by any insurer
or classification society or by any competent
authority which is not complied with in full; and
(iv) any arrest of the Rig or the exercise or purported
exercise of any lien on the Rig or any requisition of
the Rig for hire; and
(v) any intended dry docking of the Rig, as to which the
Owner shall give the Mortgagee 30 days prior notice,
provided, that in the event of any emergency dry
docking of the Rig, the Owner shall immediately
notify the Mortgagee; and
(vi) any intended deactivation or lay-up of the Rig (other
than for normal periods of inactivity between
contracts for the Rig during which periods the Rig
remains manned) and obtain the prior written consent
of the Mortgagee;
(k) keep proper books of account in respect of the Rig and as
and when the Mortgagee may so reasonably require make such
books available for inspection on behalf of the Mortgagee
and furnish satisfactory evidence that the wages and
allotments and the insurance of the master and crew are
being regularly paid and that all deductions from crew's
wages in respect of tax and/or social security liability are
being properly accounted for and that the master has no
claim for disbursements other than those incurred by him in
the ordinary course of trading on the voyage then in
progress;
(l) comply with the provisions of Section 7 of the Note Purchase
Agreements, all of which are expressly incorporated in this
Mortgage;
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<PAGE> 17
(m) not without the previous consent in writing of the Mortgagee
(such consent not to be unreasonably withheld), put the Rig
into the possession of any person for the purpose of work
being done upon her if the aggregate amount at any time due
and payable in respect thereof shall or is likely to exceed
Five Million United States Dollars (US$5,000,000.00) (or the
equivalent in any other currency) unless (i) such person
shall first have given to the Mortgagee and in terms
satisfactory to it a written undertaking not to exercise any
lien on the Rig for the cost of such work or otherwise or
(ii) the cost of such work shall be fully covered by
applicable insurance;
(n) comply with and satisfy all the provisions of applicable
laws and regulations of the Republic of Panama, as at any
time amended, in order to establish and maintain this
Mortgage as a first priority naval mortgage thereunder upon
the Rig and upon all renewals, improvements and replacements
made in or to the same, and promptly to furnish to the
Mortgagee from time to time such proofs as the Mortgagee may
request for its satisfaction with respect to the compliance
by the Owner with the provisions of this sub-clause,
including, appropriate certificates of the Public Registry
showing that this Mortgage has been duly registered and
filed and is a first and absolute lien on the Rig;
(o) place, and use due diligence to retain, a properly certified
copy of this Mortgage on board the Rig with her papers and
cause such certified copy of this Mortgage to be exhibited
to any and all persons having business with the Rig which
might give rise to any lien thereon other than a lien for
crew's wages and salvage and to any representative of the
Mortgagee on demand and to place and keep prominently
displayed in the chart room and in the master's cabin of the
Rig a framed printed notice in plain type in English of such
size that the paragraph of reading matter shall cover a
space not less than 6 inches wide and 9 inches high reading
as follows:
"NOTICE OF MORTGAGE
This Rig is subject to an Indenture of First Naval
Mortgage in favor of CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee for the Purchasers defined in said
Mortgage, in conformity with the provisions of Chapter V,
Title IV of Book Second of the Code of Commerce, and the
pertinent provisions of the Civil Code and other legislation
of the Republic of Panama. Under the terms of said Mortgage
neither the owner, any charterer, the Master of the Rig nor
any other person shall have the right, power or authority to
create, incur or permit to be placed upon the Rig any other
lien whatsoever other than for current crew's wages and
salvage and Permitted Liens (as that term is defined in said
Mortgage)."
(p) comply, or procure compliance with, the ISM Code (upon said
code becoming legally applicable to the Rig), all
Environmental Laws and Environmental
15
<PAGE> 18
Approvals relating to the Rig, its operation or management
and the business of the Owner from time to time;
(q) notify the Mortgagee forthwith upon:
(i) any Environmental Claim which could reasonably be
expected to result in damages in excess of
US$1,000,000 being or made against the Owner, or
otherwise in connection with the Rig; or
(ii) any Environmental Incident occurring, and keep the
Mortgagee advised, in writing on such regular basis
and in such detail as the Mortgagee shall require, of
the Owner's response to such Environmental Claim or
Environmental Incident.
(r) not sell, mortgage or transfer the Rig (other than as
permitted by the Note Purchase Agreements) without the
written consent of the Mortgagee having first been obtained,
and any such written consent to any one such sale, mortgage
or transfer shall not be construed to be a waiver of this
provision with respect to any subsequent proposed sale,
mortgage or transfer. Any such sale, mortgage or transfer
shall be subject to the provisions of this Mortgage and the
lien it creates. The Owner shall not (a) charter the Rig to,
or permit the Rig to serve under any contract with, a person
included within the definition of (i) "national" of a
"designated foreign country", or "specially designated
national" of a "designated foreign country", in the Foreign
Assets Control Regulations or the Cuban Assets Control
Regulations of the United States Treasury Department, 31
C.F.R. Parts 500 and 515, in each case as amended, (ii)
"Government of Libya", "entity of the Government of Libya"
or "Libya entity" in the Libyan Sanctions Regulations of the
United States Treasury Department, 31 C.F.R. Part 550, as
amended, (iii) "Government of Iraq", "entity of the
Government of Iraq" or "Iraqi Government entity" in the
Iraqi Sanctions Regulations, 31 C.F.R. Part 575, as amended,
(iv) "Government of Iran" or "entity owned or controlled by
the Government of Iran", in the Iranian Transactions
Regulations, 31 C.F.R. Part 560, as amended, (v) "Government
of Angola or UNITA", "entity of the Government of Angola or
UNITA" or "Angola or UNITA entity" in the UNITA (Angola)
Sanctions Regulations, 31 C.F.R. Part 590, as amended, (vi)
"Government of Sudan" in Executive Order 13067, as amended,
and any regulations issued pursuant thereto, or (vii)
"Government of the Federal Republic of Yugoslavia (Serbia
and Montenegro)", "Government of the Republic of Serbia", or
"Government of the Republic of Montenegro" in Executive
Order 13088, as amended, and any regulations issued pursuant
thereto, all within the meaning of said Regulations or of
any regulations, interpretations or rulings issued
thereunder or (b) engage in any transaction that violates
any provision of said Regulations, or that violates any
provision of regulations promulgated from time to time by
the Office of Foreign Assets Control, U.S. Department of
Treasury, or that violates any Executive Order issued
pursuant to the International Emergency Economic Powers Act
(50
16
<PAGE> 19
U.S.C. 1701 et seq.), the National Emergencies Act (50
U.S.C. 1601 et seq.), or the Trading With the Enemy Act (50
U.S.C. App. 1 et seq.), or (c) call at a Cuban port to load
or discharge cargo or to effect repairs on any Rig if such
transaction or violation listed in (a) - (c) could (i)
expose the Mortgagee to any penalty, sanction or
investigation or (ii) jeopardize the lien created by this
Mortgage or (iii) have a material adverse effect on the
Owner or the operation of the Rig;
(s) shall not cause or permit the Rig to be operated in any
manner contrary to law (except where the failure to operate
in compliance with any law would not have a material adverse
effect on the Owner or the Rig, or would not have an adverse
effect on the lien of this Mortgage), shall not abandon the
Rig in a foreign port and shall not engage in any unlawful
trade or violate any law or carry any cargo that shall
expose the Rig to forfeiture or capture.
8 PROTECTION OF SECURITY
8.01 The Mortgagee shall without prejudice to its other rights and powers
under this Mortgage and the other Credit Documents be entitled (but
not bound) at any time and as often as may be necessary (but unless
an Event of Default shall have occurred and be continuing with prior
written notice to the Owner) to take any such action as it may in the
reasonable exercise of its discretion think fit for the purpose of
protecting or maintaining the security created by this Mortgage and
the other Credit Documents (including, without limitation, such
action as is referred to in Clause 8.02) and each and every expense,
liability, or loss (including, without limitation, reasonable legal
fees) so incurred by the Secured Creditors in or about the protection
or maintenance of the said security together with interest payable
thereon under Clause 4.01(b) shall be repayable to it by the Owner on
demand.
8.02 Without prejudice to the generality of Clause 8.01:
(a) if the Owner does not comply with the provisions of Clause 6
or any of them the Mortgagee shall be entitled (but not
bound) to effect or to replace and renew and thereafter to
maintain the Insurances in such manner it, in its
discretion, may think fit and to require that all policies,
contracts and other records relating to the Insurances
(including details of any correspondence concerning
outstanding claims) be forthwith delivered to such brokers
as the Mortgagee may nominate and, upon the direction of the
Mortgagee to collect, recover, compromise and give a good
discharge for all claims then outstanding or thereafter
arising under the Insurances or any of them and to take over
or institute (if necessary using the name of the Owner) all
such proceedings in connection therewith as the Mortgagee in
its absolute discretion, may think fit and to permit the
brokers through whom the collection or recovery is effected
to charge the usual brokerage therefor;
(b) if the Owner does not comply with the provisions of Clause
7.01(d) and/or 7.01(f) or any of them, the Mortgagee shall
be entitled (but not bound) to arrange for the
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carrying out of such repairs to and/or surveys of the Rig as
it deems expedient or necessary; and
(c) if the Owner does not comply with the provisions of Clause
7.01(g) or any of them, the Mortgagee shall be entitled (but
not bound) to pay and discharge all such debts, damages and
liabilities and all such tolls, dues, taxes, assessments,
charges, fines, penalties and other outgoings as are therein
mentioned and/or to take any such measures as it deems
expedient or necessary for the purpose of securing the
release of the Rig.
9 ENFORCEABILITY AND MORTGAGEE'S POWERS
9.01 Upon the happening of any of the Events of Default specified in the
Note Purchase Agreements but without the necessity for any court
order or declaration in any jurisdiction to the effect that an Event
of Default has occurred (and whether prior to or after the Mortgagee
or the Required Purchasers having served on the Owner any such notice
as is referred to in Section 8 of the Note Purchase Agreements) the
security constituted by this Mortgage shall become immediately
enforceable and the Mortgagee shall be entitled, as and when it may
from time to time see fit, to put into force and exercise all or any
of the powers possessed by it as mortgagee of the Rig or otherwise
and in particular:
(a) to exercise all the rights and remedies in foreclosure and
otherwise given to mortgagees by the laws of the Republic of
Panama or other applicable laws;
(b) to take possession of the Rig whether actually or
constructively and/or otherwise to take control of the Rig
wherever the Rig may be and cause the Owner or any other
person in possession of the Rig forthwith upon demand to
surrender the same to the Mortgagee without legal process
and without liability of the Mortgagee for any losses or
damages incurred thereby and without having to render
accounts to the Owner in connection therewith;
(c) to require that all policies, contracts, certificates of
entry and other records relating to the Insurances
(including details of and correspondence concerning
outstanding claims) be forthwith delivered to or to the
order of the Mortgagee;
(d) to collect, recover, compromise and give a good discharge
for or procure that the Mortgagee collect, recover,
compromise and give good discharge for any and all moneys or
claims for moneys then outstanding or thereafter arising
under the Insurances or any Requisition Compensation and to
permit any brokers through whom collection or recovery is
effected to charge the usual brokerage therefor;
(e) to take over or institute (if necessary using the name of
the Owner) all such proceedings in connection with the Rig,
the Insurances, or any Requisition Compensation as the
Mortgagee in its absolute discretion thinks fit and to
discharge, compound, release or compromise claims against
the Owner in respect
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of the Rig which have given or may give rise to any charge
or lien on the Rig or which are or may be enforceable by
proceedings against the Rig;
(f) to sell the Rig or any share therein free from any claim of
or by the Owner of any nature whatsoever, and with or
without the benefit of any charterparty or other contract
for her employment, by public auction or private contract at
such place and upon such terms (including, without
limitation, on terms such that payment of some or all of the
purchase price be deferred) as the Mortgagee in its absolute
discretion may determine with power to postpone any such
sale, without being answerable for any loss occasioned by
such sale or resulting from postponement thereof, and/or
itself to purchase the Rig at any such public auction and to
set off the purchase price against all or any part of the
Obligations, subject to notice of sale being given by the
Mortgagee to the Owner and other mortgagees of record, if
any, by airmail, postage pre-paid and by publication once in
a newspaper of general circulation in the City of Panama,
Republic of Panama, not less than twenty (20) calendar days
in advance of the sale, to satisfy the requirement of notice
of sale contained in Article 1527 of the Panama Code of
Commerce. Such notice shall be necessary only in respect of
the initial date of sale;
(g) to manage, insure, maintain and repair the Rig and to
charter, employ, sail or lay up the Rig in such manner, upon
such terms and for such period as the Mortgagee in its
absolute discretion deems expedient and for the purposes
aforesaid the Mortgagee shall be entitled to do all acts and
things incidental or conducive thereto and in particular to
enter into such arrangements respecting the Rig, and the
insurance, management, maintenance, repair, classification,
chartering and employment of the Rig, in all respects as if
the Mortgagee were the owner of the Rig and without being
responsible for any loss thereby incurred;
(h) to recover from the Owner on demand any expenses,
liabilities or losses as may be incurred by the Mortgagee in
or about the exercise of the power vested in the Mortgagee
under Clause 9.01(g); and
(i) generally, to recover from the Owner on demand each and
every expense, liability or loss incurred by the Mortgagee
in or about or incidental to the exercise by it of any of
the powers aforesaid.
9.02 The Mortgagee shall not be obliged to make any enquiry as to the
nature or sufficiency of any payment received by it under this
Mortgage or to make any claim, take any action or enforce any rights
and benefits assigned to the Mortgagee by this Mortgage or to which
the Mortgagee may at any time be entitled hereunder.
9.03 Neither the Secured Creditors nor their agents, managers, officers,
employees, delegates and advisers shall be liable for any expense,
claim, liability, loss, cost, damage or expense incurred or arising
in connection with the exercise or purported exercise of any rights,
powers and discretions under this Mortgage in the absence of gross
negligence or willful misconduct.
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9.04 The Mortgagee shall not by reason of the taking possession of the Rig
be liable to account as mortgagee-in-possession or for anything
except actual receipts or be liable for any loss upon realization or
for any default or omission for which a mortgagee-in-possession might
be liable.
9.05 Upon any sale of the Rig or any share therein by the Mortgagee the
purchaser shall not be bound to see or enquire whether the power of
sale of the Mortgagee has arisen in the manner provided in this
Mortgage and the sale shall be deemed to be within the power of the
Mortgagee and the receipt of the Mortgagee for the purchase money
shall effectively discharge the purchaser who shall not be concerned
with the manner of application of the proceeds of sale or be in any
way answerable therefor.
10 APPLICATION OF MONEYS
10.01 (a) All moneys received by the Mortgagee or any other Secured
Creditor, including, without limitation, in respect of sale
of the Rig or any part thereof, in respect of recovery under
the Insurances, or in respect of Requisition Compensation,
shall be applied in the following manner:
(i) first, to the payment of all amounts owing the
Mortgagee or any other Secured Creditors of the type
described in clauses (ii), (iii) and (iv) of Recital
(C);
(ii) second, to the extent moneys remain after the
application pursuant to the preceding clause (i), in
retention of an amount equal to any part or parts of
the outstanding Obligations as is or are not then due
and payable but which will or may become due and
payable in the future, and upon same becoming due and
payable, in payment to the Purchasers as provided in
Clause 10.01(c), with each Purchaser receiving an
amount equal to such Obligations held by it or, if
the proceeds are insufficient to pay in full all such
Obligations, its Pro Rata Share (as defined below) of
the amount remaining to be distributed; and
(iii) third, to the extent moneys remain after the
application pursuant to the preceding clauses (i) and
(ii), and following the termination of this Mortgage
pursuant to Clause 3.01, any surplus then remaining
shall be paid to the Owner, subject, however, to the
rights of the holder of any then existing Lien of
which the Mortgagee has actual notice (without
investigation).
(b) For purposes of this Mortgage "Pro Rata Share" shall mean,
when calculating a Purchaser's portion of any distribution
or amount in respect of any Obligations, the amount
(expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such
Obligations owing to or held by such Purchaser and the
denominator of which is the then outstanding amount of all
such Obligations. For purposes of determining the amount
payable to each Purchaser,
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<PAGE> 23
the Mortgagee shall be entitled to request each Purchaser to
furnish it with written notice of the amount of Obligations
then owed to it and, to the extent not inconsistent with the
Note Purchase Agreements, shall be entitled to rely upon the
amounts stated therein in making such distribution.
(c) All payments required to be made to Purchasers hereunder
shall be made to the Mortgagee for the account of the
Secured Creditors.
11 FURTHER ASSURANCES
11.01 The Owner shall execute and do all such assurances, acts and things
as the Mortgagee in its absolute discretion may require for:
(a) perfecting or protecting the security created (or intended
to be created) by this Mortgage; or
(b) preserving or protecting any of the rights of the Mortgagee
and the other Secured Creditors under this Mortgage; or
(c) ensuring that the security constituted by this Mortgage and
the covenants and obligations of the Owner under this
Mortgage shall inure to the benefit of any transferee,
successor or assignee of the Mortgagee; or
(d) enforcing the security constituted by this Mortgage on or at
any time after the same shall have become enforceable; or
(e) the exercise of any power, authority or discretion vested in
the Mortgagee under this Mortgage,
in any such case, forthwith upon demand by the Mortgagee and at the
expense of the Owner.
12 POWER OF ATTORNEY
12.01 The Owner, by way of security and in order to more fully secure the
performance of the Obligations under this Mortgage, hereby
irrevocably appoints the Mortgagee as its attorney for the duration
of the Security Period for the purposes of:
(a) doing in its name all acts and executing, signing and (if
required) registering in its name all documents which the
Owner itself could do, execute, sign or register in relation
to the Rig (including without limitation, transferring title
to the Rig to a third party), provided, however, that such
power shall not be exercisable by or on behalf of the
Mortgagee until this Mortgage shall have become immediately
enforceable pursuant to Clause 9.01 and at all times
thereafter; and
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(b) executing, signing, perfecting, doing and (if required)
registering every such further assurance document, act or
thing as is referred to in Clause 11.
12.02 The exercise of such power as is referred to in Clause 12.01(a) by or
on behalf of the Mortgagee shall not put any person dealing with the
Mortgagee upon any enquiry as to whether this Mortgage has become
enforceable nor shall such person be in any way affected by notice
that this Mortgage has not become enforceable and, in relation to
both Clauses 12.01(a) and 12.01(b), the exercise by the Mortgagee of
such power shall be conclusive evidence as against third parties of
its right to exercise the same.
13 INDEMNITIES
13.01 The Owner will indemnify and save harmless each of the Secured
Creditors and each agent or attorney appointed by such Secured
Creditor under or pursuant to this Mortgage (each an "Indemnitee")
from and against any and all expenses, claims, liabilities, losses,
taxes, costs, duties, fees and charges suffered, incurred or made by
such Secured Creditor or such agent or attorney in good faith:
(a) in the exercise or purported exercise of any rights, powers
or discretions vested in them pursuant to this Mortgage; or
(b) in the preservation or enforcement of the rights of the
Mortgagee under this Mortgage; or
(c) on the release of the Rig from the security created by this
Mortgage,
and the Secured Creditors and each such agent or attorney may retain
and pay all sums in respect of the same out of money received under
the powers conferred by this Mortgage. All such amounts recoverable
by a Secured Creditors or such agent or attorney shall be recoverable
on a full indemnity basis.
13.02 Without limiting the foregoing Clause 13.01, the Owner hereby further
indemnifies and holds harmless each of the Secured Creditors and
their respective officers, directors, employees, attorneys and agents
from and against any and all liabilities, losses, obligations,
claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and
expenses, consultant fees, investigation and laboratory fees) imposed
upon or incurred by or asserted against them, or any of them, by
reason of (a) an actual, alleged or threatened occurrence or
incident, including, without limitation, any Environmental Incident;
(b) any personal injury (including wrongful death) or property damage
(real or personal) or economic damage arising out of or related to
occurrence or incident, including, without limitation, any
Environmental Incident; (c) any Environmental Claim brought or
threatened, or settlement reached; or (d) any violation of laws,
orders, regulations, requirements or demands of government
authorities relating to occurrence or incident, including, without
limitation, any Hazardous Materials at, or discharged from the Rig.
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13.03 If, under any applicable law or regulation, and whether pursuant to a
judgment being made or registered against the Owner or the
liquidation of the Owner or for any other reason, any payment under
or in connection with this Mortgage is made or fails to be satisfied
in a currency (the "payment currency") other than the currency in
which such payment is due under or in connection with this Mortgage
(the "contractual currency"), then to the extent that the amount of
such payment actually received by the Mortgagee, when converted into
the contractual currency at the rate of exchange, falls short of the
amount due under or in connection with this Mortgage, the Owner, as a
separate and independent obligation, shall indemnify and hold
harmless the Mortgagee against the amount of such shortfall. For the
purposes of this Clause 13.03, "rate of exchange" means the rate at
which the Mortgagee is able on the date of such payment (or, if it is
not practicable for the Mortgagee to purchase the contractual
currency with the payment currency on the date of such payment, at
the rate of exchange as soon afterwards as is practicable for the
Mortgagee to do so) to purchase the contractual currency with the
payment currency and shall take into account any premium and other
costs of exchange with respect thereto.
14 EXPENSES
14.01 The Owner shall pay to any Secured Creditor or the Mortgagee on
demand all costs, fees and expenses, including, but not limited to,
legal fees and expenses and valuation fees and Taxes thereon incurred
by any Secured Creditor or for which any Secured Creditor may become
liable in connection with:
(a) the negotiation, preparation and execution of this Mortgage;
and/or
(b) the preserving or enforcing of, or attempting to preserve or
enforce, any of its rights under this Mortgage.
14.02 The Owner shall pay to the Mortgagee on demand all costs, fees and
expenses (including, but not limited to, legal fees and expenses) and
Taxes thereon incurred by any Secured Creditor in connection with:
(a) any variation of, or amendment or supplement to, any of the
terms of this Mortgage requested by the Owner, necessary or
advisable under applicable law or initiated during the
occurrence and continuation of an Event of Default; and/or
(b) any consent or waiver required from the Mortgagee in
relation to this Mortgage,
and in each case, regardless of whether the same is actually
implemented, completed or granted, as the case may be.
14.03 The Owner shall pay promptly all stamp, documentary and other like
duties and Taxes to which this Mortgage may be subject or give rise
and shall indemnify the Mortgagee on demand against any and all
liabilities with respect to or resulting from any delay or omission
on the part of the Owner to pay any such duties or Taxes.
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<PAGE> 26
15 COMMUNICATIONS
15.01 All notices required to be given to the Mortgagee shall be made to
the following address:
Chase Bank of Texas, National Association
Global Trust Department
600 Travis
Suite 1150, 11th Floor
Houston, Texas 77002
Attention: Ms. Mauri J. Cowen
Vice President and Trust Officer
Telephone: (713) 216-6686
Facsimile: (713) 216-5476
All other notices shall be made to the addresses provided for in
Section 11.03 of the Note Purchase Agreements.
16 ASSIGNMENTS
16.01 This Mortgage shall be binding upon and shall inure to the benefit of
the Secured Creditors and their respective transferees, successors
and permitted assigns, and references in this Mortgage to any of them
shall be construed accordingly.
16.02 The Owner may not assign or transfer all or any part of its rights
and/or obligations under this Mortgage.
16.03 Pursuant to Section 11.04 of the Note Purchase Agreements, each
Purchaser has the right to assign or transfer all or any part of its
rights and/or obligations under its Note Purchase Agreement on the
terms therein provided. The Mortgagee shall notify the Owner promptly
following any such assignment, transfer or change.
17 TOTAL AMOUNT, ETC.
17.01 The total amount of this Mortgage is One Hundred and Fifteen Million
United States Dollars (US$115,000,000) of principal plus interest,
premiums, fees, commissions and performance of mortgage covenants.
The discharge amount is the same as the total amount.
18 WAIVER; AMENDMENT
18.01 None of the terms and conditions of this Mortgage may be changed,
waived, modified or varied in any manner whatsoever unless in writing
duly signed by the Owner and the Mortgagee (with the consent of the
Required Purchasers).
19 MISCELLANEOUS
19.01 This Mortgage shall be governed by the laws of the Republic of
Panama.
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19.02 If at any time any one or more of the provisions in this Mortgage is
or becomes invalid, illegal or unenforceable in any respect under any
law or regulation, the validity, legality and enforceability of the
remaining provisions of this Mortgage shall not be in any way
affected or impaired thereby.
19.03 The Mortgagee, at any time and from time to time, may delegate by
power of attorney or in any other manner to any person or persons all
or any of the powers, authorities and discretions which are for the
time being exercisable by the Mortgagee under this Mortgage in
relation to the Rig. Any such delegation may be made upon such terms
and subject to such regulations as the Mortgagee may think fit. The
Mortgagee shall not be in any way liable or responsible to the Owner
or any Secured Creditor for any loss or damage arising from any act,
default, omission or misconduct on the part of any such delegate.
19.04 The appearing parties hereby confer a special power of attorney on
Roy Phillipps P., lawyer of Panama, Republic of Panama authorizing
him to take all necessary steps to record this Indenture of First
Naval Mortgage in the appropriate registries of the City of Panama,
and to substitute this Power of Attorney herein granted.
19.05 A certification or determination by the Mortgagee as to any matter
provided for in this Mortgage shall, in the absence of manifest
error, be conclusive and binding on the Owner.
19.06 The Mortgagee declares that it accepts the naval mortgage hereby
created under the terms above set forth.
20 JURISDICTION
20.01 The Owner agrees that the Mortgagee shall have the liberty but shall
not be obliged to take any proceedings in the courts of any country
to protect or enforce the security constituted by this Mortgage or to
enforce any provisions of this Mortgage or to enforce the Obligations
and for the purpose of any proceedings for such enforcement the Owner
hereby submits to the jurisdiction of the courts of any country of
the choice of the Mortgagee.
20.02 Without prejudice to the generality of Clause 20.01, the Mortgagee
shall have the right to arrest and take action against the Rig at
whatever place the Rig shall be found lying and for the purpose of
any action which the Mortgagee may bring before the courts of such
jurisdiction or other judicial authority and for the purpose of any
action which the Mortgagee may bring against the Rig, any writ,
notice, judgment or other legal process or documents may (without
prejudice to any other method of service under applicable law) be
served upon the master of the Rig (or upon anyone acting as the
master) and such service shall be deemed good service on the Owner
for all purposes.
20.03 The Owner agrees that should the Mortgagee bring a legal action or
proceedings against it or its assets in relation to any matters
arising out of or in connection with this Mortgage, no immunity from
such legal action or proceedings (which shall be deemed to include,
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<PAGE> 28
without limitation, suit, attachment prior to judgment, other
attachment, the obtaining of judgment, execution or other
enforcement) shall be claimed by or on behalf of the Owner or with
respect of its assets, and the Owner hereby irrevocably waives any
such right of immunity which it or its assets now has or may
hereafter acquire and the Owner hereby consents generally in respect
of any legal action or proceedings arising out of or in connection
with this Mortgage to the giving out of any relief or the issue of
any process in connection with such action or proceedings including,
without limitation, the making, enforcement or execution or
attachment against any property whatsoever of any order or judgment
which may be made or given in such action or proceedings.
IN WITNESS whereof the Owner and the Mortgagee have duly executed these presents
the day and year first before written.
NOBLE DRILLING (JIM THOMPSON) INC.
By: /s/ BYRON L. WELLIVER
-----------------------------------
Name: Byron L. Welliver
Title: Senior Vice President
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, as Trustee
By: /s/ MAURI J. COWEN
-----------------------------------
Name: Mauri J. Cowen
Title: Vice President and Trust Officer
26
<PAGE> 1
EXHIBIT 4.26
EXHIBIT D-1
FORM OF PARENT GUARANTY
GUARANTY, dated as of December 21, 1998, by NOBLE DRILLING CORPORATION
("Parent Guarantor"), a Delaware corporation, in favor of CHASE BANK OF TEXAS,
National Association, as trustee ("Trustee") for the benefit of the Purchasers.
All capitalized terms used herein and not otherwise defined shall have the
meanings provided such terms in the Agreement referred to below.
W I T N E S S E T H :
WHEREAS, Noble Drilling (Jim Thompson) Inc. (the "Company") has entered
into a Note Purchase Agreement (the "Agreement"), dated the date hereof, among
the Company, the Trustee and the Purchasers, pursuant to which the Company is to
issue and sell, and the Purchasers are to purchase, the Notes referred to
therein;
WHEREAS, Parent Guarantor will obtain benefits from the purchase of the
Notes by the Purchasers, and it is a condition precedent to the purchase of the
Notes by the Purchasers that Parent Guarantor execute and deliver this Guaranty
guaranteeing the Obligations of the Company under the Agreement and the Notes;
WHEREAS, Parent Guarantor may reasonably be expected to benefit, either
directly or indirectly, from this Guaranty;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Parent Guarantor hereby agrees as
follows:
1. The Guaranty. In order to induce the Purchasers to enter into the
Agreement and to purchase the Notes, and in recognition of the direct benefits
to be received by Parent Guarantor from the proceeds of the Notes, Parent
Guarantor hereby unconditionally and irrevocably guarantees, as primary obligor
and not merely as surety the full and prompt payment when due, whether upon
maturity, acceleration or otherwise, of any and all of the (x) Obligations and
(y) all other obligations (including which but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Company to the Purchasers under the Agreement (including, without
limitation, indemnities and interest thereon) now existing or hereafter incurred
under arising out of or in connection with the Agreement or any other Credit
Document and the due performance and compliance with the terms of the Credit
Documents by the Company and each Subsidiary Guarantor (collectively, the
"Guaranteed Obligations"),
<PAGE> 2
EXHIBIT D-1
Page 2
and additionally Parent Guarantor hereby unconditionally and irrevocably
guarantees the performance of all obligations and covenants of the Company under
the SDDI Contract. If any of the Guaranteed Obligations becomes due and payable
hereunder, Parent Guarantor unconditionally promises to pay such indebtedness to
Secured Creditors, or order, on demand, together with (without duplication) any
and all expenses which may be incurred by Secured Creditors in collecting any of
the Guaranteed Obligations. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. If a claim is
ever made upon any Secured Creditor for repayment or recovery of any amount or
amounts received in payment or on account of any of the Guaranteed Obligations
and any of the aforesaid payees repays all or part of said amount by reason of
(i) any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, including, but not limited
to any repayment by reason of a preferential payment or fraudulent transfer or
(ii) any settlement or compromise of any such claim effected by such payee with
any such claimant (including the Company), then and in such event Parent
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon Parent Guarantor, notwithstanding any revocation of this
Guaranty or any other instrument evidencing any liability of the Company, and
Parent Guarantor shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
2. Bankruptcy. Additionally, Parent Guarantor unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
to the Secured Creditors whether or not due or payable by the Company upon the
occurrence in respect of the Company of any of the events specified in Section
8.05 of the Agreement, and unconditionally promises to pay such indebtedness on
demand, in Dollars.
3. Nature of Liability. The liability of Parent Guarantor hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations whether executed by Parent Guarantor, any other guarantor
or by any other party, and the liability of Parent Guarantor hereunder is not
affected or impaired by (a) any direction as to application of payment by the
Company or by any other party or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations or (c) any payment on or in reduction of any such other
guaranty or undertaking or (d) any dissolution, termination or increase,
decrease or change in personnel by the Company.
4. Absolute and Independent Obligation. No invalidity, irregularity or
unenforceability of all or any part of the Guaranteed Obligations or of any
security therefor shall affect, impair or be a defense to this Guaranty and this
Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable
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discharge of a surety or guarantor except irrevocable payment in full of the
Guaranteed Obligations. The obligations of Parent Guarantor hereunder are
independent of the obligations of the Company, any other guarantor or any other
Person and a separate action or actions may be brought and prosecuted against
Parent Guarantor whether or not action is brought against the Company or any
such other guarantor or Person and whether or not the Company, or any such other
guarantor or other Person be joined in any such action or actions. Parent
Guarantor waives, to the full extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
hereof.
5. Authorization. Parent Guarantor authorizes the Secured Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease
in the rate of interest thereon), any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the
Guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against any Credit
Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Company or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
substitute the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Company to its creditors other
than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Company to the Secured Creditors
regardless of what liability or liabilities of the Company remain
unpaid;
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(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge
of Parent Guarantor from its liabilities under this Guaranty.
6. Reliance. It is not necessary for the Secured Creditors to inquire
into the capacity or powers of the Company or the officers, directors, partners
or agents acting or purporting to act on its behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
7. Subordination. Any of the indebtedness of the Company now or
hereafter owing to Parent Guarantor is hereby subordinated to the Guaranteed
Obligations. Prior to the transfer by Parent Guarantor of any note or negotiable
instrument evidencing any of the indebtedness of the Company to Parent
Guarantor, Parent Guarantor shall mark such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, Parent Guarantor hereby agrees with the Secured
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Guaranty (whether contractual, under law
or otherwise) until all Guaranteed Obligations have been irrevocably paid in
full in cash.
8. Waiver. (a) Parent Guarantor waives any right (except as cannot be
waived under law) to require any Secured Creditor to (i) proceed against the
Company, any other guarantor or any other party, (ii) proceed against or exhaust
any security held from the Company, any other guarantor or any other party or
(iii) pursue any other remedy in any Secured Creditor's power whatsoever. Parent
Guarantor waives any defense based on or arising out of any defense of the
Company, any other guarantor or any other party, other than irrevocable payment
in full of the Guaranteed Obligations, based on or arising out of the disability
of the Company, any other guarantor or any other party, or the unenforceability
of the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Company other than irrevocable
payment in full of the Guaranteed Obligations. The Secured Creditors may, at
their election, foreclose on any security held by the Collateral Trustee or any
other Secured Creditor by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Secured Creditors may have against the Company or any other party, or any
security, without affecting or impairing in
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any way the liability of Parent Guarantor hereunder except to the extent the
Guaranteed Obligations have been irrevocably paid.
(b) Parent Guarantor waives all presentments, demands for performance,
protests and notices (except notices expressly provided for in the Credit
Documents to be provided to Parent Guarantor), including, without limitation,
notices of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or incurring
of new or additional Guaranteed Obligations. Parent Guarantor assumes all
responsibility for being and keeping itself informed of the Company's financial
condition and assets, and of all other circumstances, bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which Parent Guarantor assumes and incurs hereunder, and agrees that the
Secured Creditors shall have no duty to advise Parent Guarantor of information
known to them regarding such circumstances or risks.
(c) Until such time as the Guaranteed Obligations have been irrevocably
paid in full in cash , Parent Guarantor hereby waives all rights of subrogation
which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under law, or otherwise) to the claims of the Secured Creditors
against the Company or any other guarantor of the Guaranteed Obligations and all
contractual, statutory or common law rights of reimbursement, contribution or
indemnity from the Company or any other guarantor which it may at any time
otherwise have as a result of this Guaranty.
9. Enforcement. The Secured Creditors agree that this Guaranty may be
enforced only by the action of the Trustee, in each case acting upon the
instructions of the Required Purchasers and no Secured Creditor shall have any
right individually to seek to enforce or to enforce this Guaranty or to realize
upon the security to be granted by the Security Documents, it being understood
and agreed that such rights and remedies may be exercised by the Trustee for the
benefit of the Secured Creditors upon the terms of this Guaranty and the
Security Documents.
10. Representations, Warranties and Agreements. In order to induce the
Purchasers to accept this Guaranty and to purchase the Notes, Parent Guarantor
makes the following representations and warranties to, and agreements with, the
Purchasers, all of which shall survive the execution and delivery of this
Guaranty:
(a) Corporate Status. Parent Guarantor is a duly organized and validly
existing corporation in good standing under the laws of the
jurisdiction of its organization and has the corporate power and
authority to own its property and assets and to transact the business
in which it is engaged.
(b) Corporate Power and Authority. Parent Guarantor has the corporate
power and authority to execute, deliver and carry out the terms and
provisions
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hereof and has taken all necessary corporate action to authorize the
execution, delivery and performance hereof. Parent Guarantor has duly
executed and delivered this Guaranty and such Guaranty constitutes the
legal, valid and binding obligation of Parent Guarantor enforceable
against Parent Guarantor in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
(c) No Violation. Neither the execution, delivery and performance by
Parent Guarantor of this Guaranty nor compliance with the terms and
provisions hereof, nor the consummation of the transactions
contemplated herein (i) will contravene any applicable provision of any
law, statute, rule, regulation, order, writ, injunction or decree of
any court or governmental instrumentality , (ii) will result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the
property or assets of Parent Guarantor pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other instrument to
which Parent Guarantor or any of its Subsidiaries is a party or by
which they or any of their respective property or assets are bound or
to which they are subject, or (iii) will violate any provision of the
Certificate of Incorporation or Bylaws of Parent Guarantor.
(d) Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of Parent Guarantor, after due inquiry, threatened
with respect to Parent Guarantor or its Subsidiaries that are
reasonably likely to have a material adverse effect on the rights or
remedies of the Purchasers or on the ability of Parent Guarantor to
perform its obligations to them hereunder.
(e) Governmental Approvals. Except for the orders, consents, approvals,
licenses, authorizations, validations, recordings, registrations and
exemptions that have already been duly made or obtained and remain in
full force and effect, no order, consent, approval, license,
authorization, or validation of, or filing, recording or registration
with, or exemption by, any foreign or domestic governmental or public
body or authority, or any subdivision thereof, is required to authorize
or is required in connection with (i) the execution, delivery and
performance hereof, or (ii) the legality, validity, binding effect or
enforceability hereof.
(f) Investment Company Act. Neither the Parent Guarantor nor any other
Credit Party is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act
of 1940, as amended.
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(g) Public Utility Holding Company Act. Neither the Parent Guarantor
nor any other Credit Party is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(h) True and Complete Disclosure. All information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of Parent
Guarantor in writing to the Trustee or any Purchaser for purposes of or
in connection with the Agreement, this Guaranty or any transaction
contemplated herein is, and all other such information (taken as a
whole) hereafter furnished by or on behalf of Parent Guarantor in
writing to any Purchaser will be, true and accurate in all material
respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time in
light of the circumstances under which such information was provided.
There is no fact known to Parent Guarantor which is reasonably likely
to have a material adverse effect on the rights or remedies of the
Purchasers or on the ability of any Credit Party to perform its
respective obligations under any Credit Document to them, which has not
been disclosed herein or in such other documents, certificates and
statements furnished to the Trustee and the Purchasers for use in
connection with the transactions contemplated hereby.
(i) Financial Condition; Financial Statements. (i) On and as of the
Effective Date, on a pro forma basis after giving effect to all
Indebtedness incurred, and to be incurred, by the Credit Parties in
connection herewith, (x) the sum of the assets, at a fair valuation, of
Parent Guarantor on a consolidated basis taken as a whole will exceed
its debts, (y) Parent Guarantor on a consolidated basis taken as a
whole will not have incurred or intended to, or believe that it will,
incur debts beyond its ability to pay such debts as such debts mature
and (z) Parent Guarantor on a consolidated basis taken as a whole will
not have unreasonably small capital with which to conduct its business.
(ii)(A) The consolidated balance sheet of Parent Guarantor at
December 31, 1997 and the related consolidated statements of operations
and cash flows of Parent Guarantor for the fiscal year, as the case may
be, ended as of said date, which have been examined by Price Waterhouse
LLP, independent certified public accountants, who delivered an
unqualified opinion in respect thereto, and (B) the consolidated
balance sheet of Parent Guarantor as of March 31, 1998, copies of which
have heretofore been furnished to each Purchaser, present fairly the
financial position of such entities at the dates of said statements and
the results for the period covered thereby in accordance with GAAP,
except to the extent provided in the notes to said financial statements
and, in the case of the March 31,
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1998 statements, subject to normal and recurring year-end audit
adjustments. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except to the extent provided in the notes to said
financial statements. Nothing has occurred since December 31, 1997 that
has had or is reasonably likely to have a Material Adverse Effect on
the rights or remedies of the Purchasers hereunder, or on the ability
of Parent Guarantor to perform its obligations to them.
(iii) Except as reflected in the financial statements and the
notes thereto described in clause (ii) above, there were as of the
Effective Date no liabilities or obligations with respect to Parent
Guarantor of a nature (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in
aggregate, would be material to Parent Guarantor on a consolidated
basis and its Subsidiaries taken as a whole, except as incurred
subsequent to March 31, 1998 in the ordinary course of business
consistent with past practices.
(j) Tax Returns and Payments. The Parent Guarantor and each of its
Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it
and has paid all material taxes and assessments payable by it which
have become due, other than those not yet delinquent and except for
those contested in good faith. The Parent Guarantor and each of its
Subsidiaries has paid, or has provided adequate reserves (in the good
faith judgment of the management of the Parent Guarantor) for the
payment of, all federal, state and foreign income taxes applicable for
all prior fiscal years and for the current fiscal year to the date
hereof.
(k) Employee Benefit Plans. (i) Neither the Parent Guarantor nor any of
its Subsidiaries nor any ERISA Affiliate has ever maintained or
contributed to (or had an obligation to contribute to) any Plan or any
Foreign Pension Plan where any current or reasonably foreseeable
liability of the Parent Guarantor or any of its Subsidiaries with
respect to such Plan or such Foreign Pension Plan would be reasonably
likely to have a Material Adverse Effect. All contributions required to
be made with respect to (x) any employee pension benefit plan (as
defined in Section 3(2) of ERISA) maintained or contributed to by (or
to which there is an obligation to contribute of) the Parent Guarantor,
any of its Subsidiaries or an ERISA Affiliate and (y) any Foreign
Pension Plan have been timely made except any such failures to
contribute which would not individually or in the aggregate be
reasonably likely to have a Material Adverse Effect. The Parent
Guarantor and its Subsidiaries may cease contributions to or terminate
any employee benefit plan (within the meaning of Section 3(3) of ERISA)
maintained or contributed to by (or to which there is an obligation to
contribute of) them without incurring any
<PAGE> 9
EXHIBIT D-1
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liability which, individually or in the aggregate would be reasonably
likely to have a Material Adverse Effect.
(ii) Each Foreign Pension Plan has been maintained in material
compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities.
(l) Pollution and Other Regulations. (i) The Parent Guarantor and its
Subsidiaries are in compliance with all applicable Environmental Laws
governing its business for which failure to comply is reasonably likely
to have a Material Adverse Effect, and neither the Parent Guarantor nor
any of its Subsidiaries are liable for any material penalties, fines or
forfeitures for failure to comply with any of the foregoing. All
licenses, permits, registrations or approvals required for the business
of the Parent Guarantors and its Subsidiaries, as conducted as of the
Effective Date, under any Environmental Law have been secured and the
Parent Guarantor and its Subsidiaries are in compliance therewith,
except such licenses, permits, registrations or approvals the failure
to secure or to comply therewith is not likely to have a Material
Adverse Effect. The Parent Guarantor and its Subsidiaries are not in
any respect in noncompliance with, breach of or default under any
applicable writ, order, judgment, injunction, or decree to which the
Parent Guarantor or any such Subsidiary is a party or which would
affect the ability of the Parent Guarantor and its Subsidiaries to
operate the Mortgaged Rigs or any facility and no event has occurred
and is continuing which, with the passage of time or the giving of
notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or
defaults as are not likely to, in the aggregate, have a Material
Adverse Effect. There are as of the Effective Date no Environmental
Claims pending or, to the knowledge, after due inquiry, of the Parent
Guarantor, threatened, against the Parent Guarantor or any of its
Subsidiaries wherein an unfavorable decision, ruling or finding would
be reasonably likely to have a Material Adverse Effect. There are no
facts, circumstances, conditions or occurrences on any real property,
drilling rig or facility owned or operated by the Parent Guarantor or
any of its Subsidiaries that is reasonably likely (x) to form the basis
of an Environmental Claim against the Parent Guarantor, any Mortgaged
Rig or facility owned by any Credit Party, or (y) to cause the Vessel
or facility to be subject to any restrictions on its ownership,
occupancy, use or transferability under any Environmental Law, except
in each such case, such Environmental Claims or restrictions that
individually or in the aggregate are not reasonably likely to have a
Material Adverse Effect.
(ii) Hazardous Materials have not at any time been (x) generated, used,
treated or stored on, or transported to or from, any drilling rig or
facility including the
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EXHIBIT D-1
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Mortgaged Rigs at any time owned or operated by the Parent Guarantor or
any of its Subsidiaries or (y) released on or from any such drilling
rig or facility, in each case where, to the Parent Guarantor's
knowledge, after due inquiry, such occurrence or event individually or
in the aggregate is reasonably likely to have a Material Adverse
Effect.
(m) Properties. The Parent Guarantor and its Subsidiaries have title to
all material properties owned by them , free and clear of all Liens,
other than Permitted Liens.
(n) Labor Relations. Neither the Parent Guarantor nor any of its
Subsidiaries is engaged in any unfair labor practice that is reasonably
likely to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Parent Guarantor or any of its
Subsidiaries or threatened against the Parent Guarantor or any of its
Subsidiaries, before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is pending against the Parent Guarantor
or any of its Subsidiaries or, to the Parent Guarantor's knowledge,
after due inquiry, threatened against any of them, (ii) no strike,
labor dispute, slowdown or stoppage is pending against the Parent
Guarantor or any of its Subsidiaries or, to the Parent Guarantor's
knowledge, after due inquiry, threatened against the Parent Guarantor
or any of its Subsidiaries and (iii) no union representation petition
existing with respect to the employees of the Parent Guarantor or its
Subsidiaries and no union organizing activities are taking place,
except with respect to any matter specified in clause (i), (ii) or
(iii) above, either individually or in the aggregate, such as is not
reasonably likely to have a Material Adverse Effect.
(o) Rig Classification. Each Mortgaged Rig is classified in the highest
class available for rigs of its age and type with the American Bureau
of Shipping, Inc, Bureau Veritas, Det Norske Veritas, Lloyd's Register
of Shipping, or another internationally recognized classification
society reasonably acceptable to the Trustee, free of any material
requirements or recommendations, provided that the Vessel may be out of
class as a result of, and pending the completion of the Project.
(p) Patents, etc. The Parent Guarantor has obtained all patents,
trademarks, service marks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are necessary for the
operation of its business taken as a whole as presently conducted, and
Parent Guarantor knows of no such rights the absence of which would be
reasonably likely to have a Material Adverse Effect.
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(q) Representations In Mortgages. The Parent Guarantor hereby confirms
each representation and warranty of the Company and NDAHC and NDUS set
forth in the Mortgages.
11. Affirmative Covenants. Parent Guarantor covenants and agrees that
on the Effective Date and thereafter for so long as this Agreement is in effect
and until the Notes (together with interest), Fees and all other Obligations
incurred hereunder, are irrevocably paid in full:
(a) Information Covenants. Parent Guarantor will furnish to the Trustee
(with sufficient copies for each of the Purchasers, and the Trustee
will promptly forward to each of the Purchasers):
(i) Annual Financial Statements. Within 120 days after the
close of each fiscal year of Parent Guarantor, the consolidated balance
sheet of Parent Guarantor and its Subsidiaries, as at the end of such
fiscal year and the related consolidated statements of income and
retained earnings and of cash flows for such fiscal year, in each case
setting forth comparative consolidated figures for the preceding fiscal
year, and examined by independent certified public accountants of
recognized national standing whose opinion shall not be qualified as to
the scope of audit and as to the status of Parent Guarantor and its
Subsidiaries as a going concern shall state that such financial
statements present fairly, in all material respects, the financial
position of the companies being reported upon and their results of
operations and cash flows and have been prepared in conformity with
GAAP, and that the examination of such accountants in connection with
such financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances. Such opinion shall be
accompanied by a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making their
audit, they have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if they are aware
that any such condition or event then exists, specifying the nature and
period of the existence thereof (it being understood that such
accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in making an
audit in accordance with GAAP or did not make such an audit),
(ii) Quarterly Financial Statements. As soon as available and
in any event within 60 days after the close of each of the first three
quarterly accounting periods in each fiscal year, the consolidated
balance sheet of Parent Guarantor and its Subsidiaries, as at the end
of such quarterly period and the related consolidated
<PAGE> 12
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statements of income and retained earnings and of cash flows for such
quarterly period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period, in each case setting forth
comparative consolidated figures for the related period in the prior
fiscal year, subject to changes resulting from audit and normal
year-end audit adjustments.
(iii) Compliance Certificate. At the time of the delivery of
the financial statements provided for in clauses (i) and (ii) above, a
certificate of Parent Guarantor signed by its Senior Vice
President-Finance, Controller or other Authorized Officer setting forth
the calculations required to establish whether Parent Guarantor was in
compliance with the provisions of Section 12 hereof as at the end of
such fiscal period or year, as the case may be.
(iv) Notices. Promptly, and in any event (i) within ten
Business Days after Parent Guarantor obtains knowledge thereof, notice
of the commencement of or any significant development in any litigation
or governmental proceeding pending against Parent Guarantor which is
likely to have a Material Adverse Effect or (ii) within five days after
Parent Guarantor obtains knowledge thereof, notice of any Default or
Event of Default or a default or event of default under the Parent
Guaranty.
(v) Other Information. From time to time, such other
information or documents (financial or otherwise) as the Trustee or any
Purchaser may reasonably request.
(b) Books, Records, Inspection. The Parent Guarantor will, upon
reasonable notice to the Senior Vice President-Finance, Controller or
any other Authorized Officer of the Parent Guarantor, permit officers
and designated representatives of the Trustee (at the expense of the
Trustee, but after the occurrence and during the continuance of a
Default or any Event of Default, at the expense of the Parent
Guarantor) or any Purchaser (at the expense of such Purchaser but after
the occurrence and during the continuance of a Default or an Event of
Default at the expense of the Parent Guarantor), to the extent
necessary, to examine the books of account of the Parent Guarantor and
discuss the affairs, finances and accounts of the Parent Guarantor
with, and be advised as to the same by, its and their officers and
independent accountants, all at such reasonable times and intervals and
to such reasonable extent as the Trustee or the Purchaser may desire.
(c) Maintenance of Property; Insurance. There will at all times be
maintained in full force and effect insurance on the Mortgaged Rigs in
such amounts with carriers of such insurance industry ratings, covering
such risks and liabilities and with such deductibles or self-insured
retentions as are in accordance with normal industry practice for
similarly situated insureds.
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(d) Payment of Taxes. The Parent Guarantor will and will cause each of
its Subsidiaries to pay and discharge all material taxes, assessments
and governmental charges or levies imposed upon it or upon its income
or profits, or upon any properties belonging to it or its Subsidiaries,
prior to the date on which penalties attach thereto, and all lawful
claims which, if unpaid, might become a Lien or charge upon any
properties of the Parent Guarantor or its Subsidiaries, provided that
the Company shall not be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves (in the good
faith judgment of the management of the Parent Guarantor) with respect
thereto.
(e) Consolidated Corporate Franchises. The Parent Guarantor will do,
and will cause each Credit Party to do, all things necessary to
preserve and keep in full force and effect its corporate existence,
material rights and authority, unless the failure to do so is not
reasonably likely to have a Material Adverse Effect, provided that any
transaction permitted by Section 7.02 of the Agreement will not
constitute a breach of this clause (d).
(f) Compliance with Statutes, etc. The Parent Guarantor and its
Subsidiaries will comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of their
business and the ownership of their property other than those the
non-compliance with which would not have a Material Adverse Effect or
would not have a material adverse effect on the ability of any Credit
Party to perform its business or its respective obligations under any
Credit Document to which it is a party.
(g) Good Repair. Except in the event any Mortgaged Rig has been damaged
or has suffered a casualty as to which (within a reasonable period of
time) management has not made a determination whether to replace or
repair, or if the determination to replace or repair has been made, as
to which such replacement or repairs are being undertaken, subject to
availability of equipment, materials and/or repair facilities, the
Parent Guarantor will, and will cause each Credit Party to, keep the
Mortgaged Rigs, in whomsoever's possession they may be, in good repair,
working order and condition, normal wear and tear excepted, and,
subject to Section 7.02 of the Agreement, see that from time to time
there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, (i) to the extent and in the manner useful or
customary for companies in similar businesses and (ii) to the extent
the failure to do so is reasonably likely to cause a Material Adverse
Effect.
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(h) End of Fiscal Years; Fiscal Quarters. The Parent Guarantor will,
for financial reporting purposes, cause (i) its and its Subsidiaries
fiscal years to end on December 31 of each year and (ii) its fiscal
quarters to end on March 31, June 30, September 30 and December 31 of
each year.
(i) ERISA. As soon as possible and, in any event, within 10 days after
the Parent Guarantor, any of its Subsidiaries or any ERISA Affiliate
knows or has reason to know that: (a) a material contribution required
to be made with respect to (i) any employee pension benefit plan (as
defined in Section 3(2) of ERISA) maintained or contributed to by (or
to which there is an obligation to contribute of) the Parent Guarantor,
any of its Subsidiaries or an ERISA Affiliate or (ii) any Foreign
Pension Plan has not been timely made or (b) the Parent Guarantor or
any of its Subsidiaries may incur any material liability pursuant to
any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee
pension benefit plan (as defined in Section 3(2) of ERISA), the Parent
Guarantor or the Company will deliver to each of the Purchasers a
certificate of the Senior Vice President-Finance or Controller of the
Parent Guarantor setting forth details as to such occurrence and the
action, if any, that the Parent Guarantor, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the
Parent Guarantor, such Subsidiary, the ERISA Affiliate, a plan
participant or the plan administrator.
(j) Further Assurances. (i) The Parent Guarantor will, and will cause
each other Credit Party to, at the expense of such Credit Party, make,
execute, endorse, acknowledge, file and/or deliver to the Trustee, from
time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements,
power of attorney, certificates, real property surveys, reports and
other assurances or instruments and take such further steps relating to
the Trustee or any Purchaser may reasonably require.
(ii) The Parent Guarantor agrees that each action required
above by this clause (i) shall be completed as soon as possible, but in
no event later than 30 days after such action is requested to be taken
by the Trustee or the Required Purchasers, provided that in no event
shall the Parent Guarantor or any of its Subsidiaries be required to
take any action, other than using its reasonable commercial efforts
without any material expenditure, to obtain consents or other actions
from third parties with respect to its compliance with this clause (i).
12. Negative Covenants. Parent Guarantor hereby covenants and agrees
that as of the Effective Date and thereafter for so long as this Guaranty is in
effect and until all Obligations guaranteed hereunder are irrevocably paid in
full:
<PAGE> 15
EXHIBIT D-1
Page 15
(a) Changes in Business. The Parent Guarantor will not materially alter
the character of its business taken as a whole from that conducted at
the Effective Date.
(b) Consolidation, Merger, Sale of Assets, etc. The Parent Guarantor
will not and will not permit any Credit Party to wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or
consolidation, sell or otherwise dispose of all or any part of the
Collateral or agree to do any of the foregoing at any future time,
except that the following shall be permitted:
(i) any Subsidiary Guarantor may be merged into the Parent
Guarantor or any other Credit Party and the Company may be merged into
the Parent Guarantor; provided, however, that the surviving company
shall have assumed the obligations of the Subsidiary Guarantor under
the Subsidiary Guaranty in writing and shall have delivered to the
Trustee an opinion of counsel to the effect that the obligations of the
Subsidiary Guarantor under the Subsidiary Guaranty have been duly and
validly assumed and constitute valid and binding obligations of the
surviving company enforceable in accordance with their terms; and
(ii) so long as no Default or Event of Default exists or would
result therefrom, on or after June 1, 2001 the Credit Parties may sell
the Mortgaged Rigs for cash at fair market value, provided that the
proceeds of any such disposition shall be applied to prepay the Notes
in full in accordance with Section 3.01 of the Agreement.
(c) Interest Coverage Ratio. The Parent Guarantor shall not permit the
ratio at the end of each fiscal quarter of (i) Adjusted Consolidated
EBITDA to (ii) Consolidated Interest Expense for the period of the four
most recently completed consecutive fiscal quarters of the Company to
be less than 3.00:1.00.
(d) Leverage Ratio. The Parent Guarantor shall not permit the Leverage
Ratio as of the end of any fiscal quarter to be more than 0.40:1.00.
(e) Net Worth. The Parent Guarantor shall not permit Consolidated Net
Worth as of the end of any fiscal quarter to be less than $812,382,000
plus 50% of Consolidated Net Income (determined on a cumulative basis)
for all Cumulative Net Income Periods ending prior to the date of
determination for which Consolidated Net Income was a positive number.
13. Miscellaneous.
(a) Calculations; Computations. (a) The financial statements to be
furnished to the Purchasers pursuant hereto shall be made and prepared
in accordance with
<PAGE> 16
EXHIBIT D-1
Page 16
GAAP consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by
Parent Guarantor to the Purchasers), provided that (x) except as
otherwise specifically provided herein, all computations determining
compliance with Section 12, including definitions used therein, shall
utilize accounting principles and policies in effect at the time of the
preparation of, and in conformity with those used to prepare, the
December 31, 1997 and March 31, 1998 historical financial statements of
the Company delivered to the Purchasers pursuant to Section 10(i), and
(y) that if at any time the computations determining compliance with
Section 12 utilize accounting principles different from those utilized
in the financial statements furnished to the Purchasers, such financial
statements shall be accompanied by reconciliation work-sheets.
(b) Notices. All notices and other communications provided for
hereunder shall be given as set forth in the Agreement (i) to Guarantor
at the address set forth below its execution hereof, and (ii) to
Trustee and/or Purchasers at the addresses set forth in the Agreement.
(c) Benefit of Agreement. This Guaranty shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that Parent Guarantor may not
assign or transfer any of its rights or obligations hereunder without
the prior written consent of the Purchasers.
(d) Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial.
(i) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Guaranty 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
Guaranty, the Parent Guarantor hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. The Parent
Guarantor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Parent Guarantor located outside New York City and by
hand delivery to the Company located within New York City, at its
address for notices pursuant to Section 13(b) above, such service to
become effective 7 days after such mailing. Nothing herein shall affect
the right of the Trustee or any Purchaser to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise
proceed against Parent Guarantor in any other jurisdiction.
<PAGE> 17
EXHIBIT D-1
Page 17
(ii) The Parent Guarantor hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Guaranty brought in the courts referred to in
clause (i) 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.
(iii) The Parent Guarantor by its acceptance hereof, hereby
irrevocably waives all right to a trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Guaranty
or the transactions contemplated hereby.
(e) Headings Descriptive. The headings of the several sections and
subsections of this Guaranty are inserted for convenience only and
shall not in any way affect the meaning or construction of any
provision of this Guaranty.
14. Definitions. As used herein, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the term defined):
"Adjusted Consolidated EBITDA" shall mean for any period,
Consolidated EBITDA for such period, less cash dividends and cash taxes
paid during such period.
"Capital Lease" as applied to any Person shall mean any lease
of any property (whether real, personal or mixed) by that Person as
lessee which, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Parent Guarantor or any of its Subsidiaries
in each case taken at the amount thereof accounted for as liabilities
in accordance with GAAP.
"Consolidated EBIT" shall mean, for any period, (A) the sum of
the amounts for such period of (i) Consolidated Net Income, (ii)
provisions for taxes based on income, (iii) Consolidated Interest
Expense, (iv) amortization or write-off of deferred financing costs to
the extent deducted in determining Consolidated Net Income and (v)
losses on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary losses less (B) the amount for such
period of gains on sales of assets (excluding sales in the ordinary
course of business) and other extraordinary gains, all as determined on
a consolidated basis in accordance with GAAP.
<PAGE> 18
EXHIBIT D-1
Page 18
"Consolidated EBITDA" shall mean, for any period, the sum of
the amounts for such period of (i) Consolidated EBIT, (ii) depreciation
expense of the Parent Guarantor and its Subsidiaries and (iii)
amortization expense of the Parent Guarantor and its Subsidiaries, all
as determined on a consolidated basis in accordance with GAAP.
"Consolidated Indebtedness" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness (including the Notes) of the Parent Guarantor and its
Subsidiaries on a consolidated basis as determined in accordance with
GAAP, excluding all Contingent Obligations relating to the Indebtedness
of any Person which is included in the calculation of Consolidated
Indebtedness of the Parent Guarantor and its Subsidiaries.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that attributable to Capital Leases)
of the Parent Guarantor and its Subsidiaries in accordance with GAAP on
a consolidated basis with respect to all outstanding Indebtedness of
the Parent Guarantor and its Subsidiaries, provided that for purposes
of this definition only, "Indebtedness" shall be deemed to include all
indebtedness of the Parent Guarantor and its Subsidiaries which is
otherwise excluded pursuant to clause (y) of the proviso contained in
the definition of "Indebtedness".
"Consolidated Net Income" shall mean for any period, the net
income (or loss) of the Parent Guarantor and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP.
"Consolidated Net Worth" shall mean, at any time,
shareholder's equity of the Parent Guarantor and its Subsidiaries on a
consolidated basis determined in accordance with GAAP.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing or intending to guarantee any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting
direct or indirect security therefor, (b) to advance or supply funds
(i) for the purchase or payment of any such primary obligation or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or
<PAGE> 19
EXHIBIT D-1
Page 19
(d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof, provided, however, that the
term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"Cumulative Net Income Period" shall mean each period
consisting of a fiscal quarter of the Company ending after March 31,
1998.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time.
"Indebtedness" of any Person shall mean without duplication
(i) all indebtedness of such Person for borrowed money, (ii) the
deferred purchase price of assets or services which in accordance with
GAAP would be shown on the liability side of the balance sheet of such
Person, (iii) the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any
Lien on any property owned by such first Person, whether or not such
indebtedness has been assumed, (v) all Capitalized Lease Obligations of
such Person, (vi) all obligations of such Person to pay a specified
purchase price for goods or services whether or not delivered or
accepted, (vii) all net obligations of such Person under Interest Rate
Agreements and (viii) all Contingent Obligations of such Person (other
than Contingent Obligations arising from the guaranty by such Person of
Permitted Indebtedness of the Company and/or its Subsidiaries) provided
that Indebtedness shall not include (x) trade payables and accrued
expenses, in each case arising in the ordinary course of business and
(y) indebtedness incurred by non-Credit Party Subsidiaries of the
Parent Guarantor which is non-recourse to the Parent Guarantor or any
other Subsidiary of the Parent Guarantor.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar
agreement or other similar agreement or arrangement designed to protect
the Parent Guarantor against interest rate risk.
"Leverage Ratio" shall mean, at any date of determination, the
ratio of Consolidated Indebtedness on such date to Total Capitalization
on such date.
<PAGE> 20
EXHIBIT D-1
Page 20
"Non-Recourse Subsidiary" shall mean any Subsidiary of the
Parent Guarantor which is the obligor with respect to any Indebtedness
which is excluded from the definition of "Indebtedness" pursuant to
clause (y) of the proviso contained therein.
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Indebtedness and Consolidated Net Worth at such time.
<PAGE> 21
EXHIBIT D-1
Page 21
IN WITNESS WHEREOF, Parent Guarantor has caused multiple counterparts
of this Agreement to be duly executed and delivered as of the date first above
written.
NOBLE DRILLING CORPORATION
By /s/ Byron L. Welliver
----------------------------------
Address for Notices: Byron L. Welliver, Senior Vice President-
Finance
10370 Richmond Avenue, Suite 400
Houston, TX 77042
Attn: Byron L. Welliver
Telephone: (713) 974-3131
Facsimile: (713) 974-3181
Accepted and Agreed to:
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ Mauri J. Cowen
---------------------------------
Mauri J. Cowen
Vice President and Trust Officer
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF THOMPSON & KNIGHT, P.C.]
February 9, 1999
Noble Drilling Corporation
10370 Richmond Avenue, Suite 400
Houston, Texas 77042
Re: Noble Drilling Corporation Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Noble Drilling Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing of
the Company's Registration Statement on Form S-3 (the "Registration Statement")
to be filed with the Securities and Exchange Commission (the "Commission") on
February 9, 1999 under the Securities Act of 1933, as amended (the "Securities
Act"). The Registration Statement relates to the issuance and sale from time to
time, pursuant to the General Rules and Regulations promulgated under the
Securities Act, of up to $100,000,000 aggregate gross proceeds of (i) debt
securities, which may be either senior (the "Senior Debt Securities") or
subordinated (the "Subordinated Debt Securities" and, together with the Senior
Debt Securities, the "Debt Securities"), (ii) shares of common stock, par value
$.10 per share, of the Company (the "Common Stock"), (iii) shares of preferred
stock, par value $1.00 per share, of the Company (the "Preferred Stock"), which
may be issued in the form of depositary shares evidenced by depositary receipts
(the "Depositary Shares"), (iv) warrants to purchase Debt Securities (the "Debt
Warrants"), shares of Common Stock (the "Common Stock Warrants") and shares of
Preferred Stock (the "Preferred Stock Warrants" and, together with the Debt
Warrants and the Common Stock Warrants, the "Securities Warrants") of the
Company, (v) Debt Securities, Common Stock and Preferred Stock that may be
issued upon exercise of the Securities Warrants and (vi) such indeterminate
amount of Offered Securities (as defined below) as may be issued in exchange for
or upon conversion of, as the case may be, the Offered Securities. Pursuant to
Rule 429 of the Securities Act, the prospectus included in the Registration
Statement (the "Prospectus") will also be used in connection with registration
statement No. 333-68507 filed on December 8, 1998, by the Company on Form S-3,
pursuant to which the Company registered $300,000,000 of securities. The Debt
Securities, Common Stock, Preferred Stock, Depositary Shares and Securities
Warrants are hereinafter referred to collectively as the "Offered Securities."
The Offered Securities will be sold or delivered from time to time as
set forth in the Registration Statement, any amendment thereto, the Prospectus
and supplements to the Prospectus (the "Prospectus Supplements"). The Senior
Debt Securities will be issued under an Indenture to be entered into between the
Company and Chase Bank of Texas, National Association, as Trustee (the "Senior
Indenture"). The Subordinated Debt Securities will be issued under an Indenture
to be entered into between the Company and the Trustee (the "Subordinated
Indenture"). The forms of the Senior Indenture and Subordinated Indenture
(collectively, the "Indentures") are included as exhibits to the Registration
Statement.
This opinion is delivered in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise
<PAGE> 2
Noble Drilling Corporation
February 9, 1999
Page 2
identified to our satisfaction, of the Registration Statement and such
agreements, certificates of public officials, certificates of trustees,
certificates of officers or other representatives of the Company and others, and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of executed documents and documents to be executed, we have assumed
that the parties thereto had or will have the power, corporate, trust or other,
to enter into and perform all obligations thereunder and have also assumed the
due authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof on such parties. As to any facts material to the opinions expressed
herein which were not independently established or verified, we have relied upon
oral or written statements and representations of officers and other
representatives of the Company, trustees and others.
Based upon the foregoing, and subject to the qualifications and
limitations set forth herein, we are of the opinion that:
1. The Debt Securities have been duly authorized by the Company and,
(i) when the Registration Statement has become effective under the
Securities Act, (ii) when the Indenture or Indentures, as the case may
be, have been duly executed and delivered by the parties thereto and
(iii) when the Debt Securities have been duly executed and
authenticated in accordance with the terms of the Indentures and
delivered and sold and upon payment in full therefor as contemplated by
the Registration Statement, such Debt Securities will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms and entitled to the benefits of such
Indentures.
2. The shares of Common Stock being registered under the Registration
Statement have been duly authorized by the Company and (i) when the
Registration Statement has become effective under the Act and (ii)
when the shares of Common Stock have been delivered by the Company
upon purchase thereof and payment in full therefor as contemplated by
the Registration Statement, such shares of Common Stock will be
validly issued, fully paid and nonassessable.
3. The shares of Preferred Stock being registered under the
Registration Statement will be duly authorized by the Company, validly
issued, fully paid and nonassessable when (i) the Registration
Statement has become effective under the Act, (ii) a certificate of
designations relating to the series of the Preferred Stock being
issued, in a form to be included as an exhibit of the Registration
Statement, has been duly filed with the Secretary of State of Delaware
and (iii) the shares of Preferred Stock have been delivered by the
Company upon purchase thereof and payment in full therefor as
contemplated by the Registration Statement.
4. The Securities Warrants have been duly authorized by the Company and
(i) when the Registration Statement has become effective under the Act,
(ii) upon the execution and delivery of a debt warrant agreement,
common stock warrant agreement or preferred stock warrant agreement, as
the case may be, relating to such Securities Warrants in a form to be
included as an exhibit to the Registration Statement, and (iii) when
such Securities Warrants have been duly executed, countersigned,
delivered and sold in the applicable form and as contemplated by the
Registration Statement, such Securities Warrants will constitute valid
and
<PAGE> 3
Noble Drilling Corporation
February 9, 1999
Page 3
legally binding obligations of the Company enforceable against the
Company in accordance with their terms.
The opinions expressed above are limited by and subject to the
following qualifications:
(a) We express no opinion other than as to the federal securities laws
of the United States of America, the laws of the State of New York and the
General Corporation Law of the State of Delaware; provided, however, we have
assumed, without investigation, that the laws of the State of New York are
identical in all respects to the laws of the State of Texas.
(b) In rendering the opinions expressed herein, we have assumed that no
action heretofore taken by the Board of Directors of the Company in connection
with the matters described or referred to herein will be modified, rescinded or
withdrawn after the date hereof.
(c) The opinions expressed in paragraphs 1 and 4 above are subject to
the qualification that the validity and binding effect of the Securities and the
Indentures may be limited or affected by (i) bankruptcy, insolvency,
reorganization, fraudulent transfer or conveyance, receivership, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general principles of equity, regardless of whether applied in a proceeding in
equity or at law and (iii) an implied covenant of good faith and fair dealing.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
Rules and Regulations of the Commission promulgated thereunder. This opinion is
expressed as of the date hereof unless otherwise expressly stated, and we
disclaim any undertaking to advise you of any subsequent changes of the facts
stated or assumed herein or any subsequent changes in applicable law.
Very truly yours,
THOMPSON & KNIGHT, P.C.
By: /s/ David L. Emmons
----------------------------------
Shareholder
<PAGE> 1
EXHIBIT 12.1
NOBLE DRILLING CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER, 30 YEAR ENDED DECEMBER 31,
----------------- ------------------------------------------------------------
1998 1997 1996 1995 1994 1993
----------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Income before income taxes and
extraordinary charge....................(1) $186,434 $379,613 $101,959 $ 4,866 $ 27,195 $ 24,415
Add:
Interest on indebtedness and
amortization of debt expense
and discount.......................... 3,402 12,894 18,758 12,156 12,351 8,038
Interest component of rent expense...... 1,898 2,128 1,668 731 457 --
Equity in losses of joint ventures...... 2,888 528 -- -- -- --
Minority interest....................... -- 256 428 214 169 232
-------- -------- -------- -------- -------- --------
Earnings as adjusted.............. $194,622 $395,419 $122,813 $ 17,967 $ 40,172 $ 32,685
======== ======== ======== ======== ======== ========
Fixed Charges:
Interest on indebtedness and
amortization of debt expense
and discount.......................... $ 3,402 $ 12,894 $ 18,758 $ 12,156 $ 12,351 $ 8,038
Capitalized interest.................... 10,845 4,218 -- -- -- --
Interest component of rent expense...... 1,898 2,128 1,668 731 457 --
-------- -------- -------- -------- -------- --------
Fixed charges ........ $ 16,145 $ 19,240 $ 20,426 $ 12,887 $ 12,808 $ 8,038
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges......(2) 12.1 20.6 6.0 1.4 3.1 4.1
======== ======== ======== ======== ======== ========
</TABLE>
(1) Included in the 1997 amount is a non-recurring gain of $197,676,000 related
to the sale of the Company's mat-supported jackup rigs.
(2) Excluding a non-recurring gain of $197,676,000 related to the sale of the
Company's mat-supported jackup rigs, the ratio of earnings to fixed charges
for 1997 was 10.3.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 29, 1998 appearing on page 24 of Noble Drilling Corporation's Annual
Report for the year ended December 31, 1997. We also consent to the reference
to us under the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
Houston, Texas
February, 1999
<PAGE> 1
EXHIBIT 25.1
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ____
-----------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
74-0800980
(I.R.S. Employer Identification Number)
712 MAIN STREET, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip code)
LEE BOOCKER, 712 MAIN STREET, 26TH FLOOR
HOUSTON, TEXAS 77002 (713) 216-2448
(Name, address and telephone number of agent for service)
NOBLE DRILLING CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 73-0374541
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10370 RICHMOND AVENUE
HOUSTON, TEXAS 77042
(Address of principal executive offices) (Zip code)
SENIOR DEBT SECURITIES
(Title of indenture securities)
===============================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System, Washington,
D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
The obligor is not an affiliate of the trustee. (See Note on
Page 7.)
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING
SECURITIES OF THE TRUSTEE.
COL. A COL. B
TITLE OF CLASS AMOUNT OUTSTANDING
Not applicable by virtue of Form T-1 General Instruction
B and response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER
WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY
OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING
INFORMATION:
(a) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH
OTHER INDENTURE.
Not applicable by virtue of Form T-1 General Instruction
B and response to Item 13.
<PAGE> 3
ITEM 4. (CONTINUED)
(b) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS
FOR THE CLAIM THAT NO CONFLICTING INTEREST WITHIN THE MEANING
OF SECTION 310(B)(1) OF THE ACT ARISES AS A RESULT OF THE
TRUSTEESHIP UNDER ANY SUCH OTHER INDENTURE, INCLUDING A
STATEMENT AS TO HOW THE INDENTURE SECURITIES WILL RANK AS
COMPARED WITH THE SECURITIES ISSUED UNDER SUCH OTHER
INDENTURE.
Not applicable by virtue of Form T-1 General Instruction
B and response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH
OBLIGOR OR UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICER OF
THE TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR
REPRESENTATIVE OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY
EACH SUCH PERSON HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH
CONNECTION.
Not applicable by virtue of Form T-1 General Instruction
B and response to Item 13.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES
OF THE TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
------------- -------------- ------------ -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
<PAGE> 4
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR
THEIR OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES
OF THE TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
------------ -------------- ------------ -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO THE SECURITIES OF THE
OBLIGOR OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN
DEFAULT BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
WHETHER THE BENEFICIALLY OR PERCENT OF
SECURITIES HELD AS COLLATERAL CLASS
ARE VOTING SECURITY FOR REPRESENTED BY
OR NONVOTING OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS SECURITIES DEFAULT IN COL. C
-------------- ------------ ------------------ --------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response
to Item 13.
<PAGE> 5
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE
OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF
SUCH UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
-------------- ----------- ------------------ --------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING
SECURITIES OF CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE
OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE
KNOWLEDGE OF THE TRUSTEE (1) OWNS 10% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR OR (2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH
THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
-------------- ----------- ------------------- --------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
<PAGE> 6
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES
OF A PERSON OWNING 50% OR MORE OF THE VOTING SECURITIES OF
THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE
KNOWLEDGE OF THE TRUSTEE, OWNS 50% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OR
SUCH PERSON ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
--------------- ----------- ------------------ --------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS
INDEBTED TO THE TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
<TABLE>
<CAPTION>
COL. A COL. B COL. C
NATURE OF AMOUNT
INDEBTEDNESS OUTSTANDING DATE DUE
------------ ----------- ---------
<S> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response
to Item 13.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(a) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not, nor has there been, a default with respect to the
securities under this indenture. (See Note on Page 7.)
<PAGE> 7
ITEM 13. (CONTINUED)
(b) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There has not been a default under any such indenture or series. (See
Note on Page 7.)
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE
EACH SUCH AFFILIATION.
Not applicable by virtue of Form T-1 General Instruction B and response
to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN
TRUSTEE IS AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE
QUALIFIED UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
o 1. A copy of the articles of association of the trustee
now in effect.
# 2. A copy of the certificate of authority of the trustee
to commence business.
* 3. A copy of the certificate of authorization of the
trustee to exercise corporate trust powers issued by the
Board of Governors of the Federal Reserve System under date
of January 21, 1948.
+ 4. A copy of the existing bylaws of the trustee.
5. Not applicable.
6. The consent of the United States institutional
trustees required by Section 321(b) of the Act.
[]7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements of
its supervising or examining authority.
<PAGE> 8
8. Not applicable.
9. Not applicable.
NOTE REGARDING INCORPORATED EXHIBITS
Effective January 20, 1998, the name of the Trustee was changed from
Texas Commerce Bank National Association to Chase Bank of Texas, National
Association. The exhibits incorporated herein by reference, except for Exhibit
7, were filed under the former name of the Trustee.
o Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as exhibits to the
Form S-3 File No. 33-56195.
# Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as exhibits to the
Form S-3 File No. 33-42814.
* Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as exhibits to the
Form S-11 File No. 33-25132.
+ Incorporated by reference to exhibit bearing the same designation and
previously filed with the Securities and Exchange Commission as exhibits to the
Form S-3 File No. 33-65055.
[] Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits to
the Form S-3 File No. 333-52197.
NOTE
In as much as this Form T-1 is filed prior to the
ascertainment by the trustee of all facts on which to base responsive answers to
Items 2 and 13, the answers to said Items are based on incomplete information.
Such Items may, however, be considered as correct unless amended by an amendment
to this Form T-1.
<PAGE> 9
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939 THE
TRUSTEE, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, FORMERLY KNOWN AS TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED THIS
STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO AUTHORIZED, ALL IN THE CITY OF HOUSTON, AND STATE OF TEXAS, ON THE 8th
DAY OF FEBRUARY, 1999.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, AS TRUSTEE
By: /s/ MAURI COWEN
--------------------------------
Mauri Cowen
Vice President and Trust Officer
<PAGE> 10
EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is to be the trustee under an Indenture between Noble
Drilling Corporation, a Delaware corporation (the "Company"), and Chase Bank of
Texas, National Association, as Trustee, to be entered into in connection with
the issuance of the Company's Senior Debt Securities.
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned hereby consents that reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By: /s/ MAURI COWEN
---------------------------
Mauri Cowen
Vice President and Trust Officer
<PAGE> 1
EXHIBIT 25.2
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ____
-----------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
74-0800980
(I.R.S. Employer Identification Number)
712 MAIN STREET, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip code)
LEE BOOCKER, 712 MAIN STREET, 26TH FLOOR
HOUSTON, TEXAS 77002 (713) 216-2448
(Name, address and telephone number of agent for service)
NOBLE DRILLING CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 73-0374541
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10370 RICHMOND AVENUE
HOUSTON, TEXAS 77042
(Address of principal executive offices) (Zip code)
SUBORDINATED DEBT SECURITIES
(Title of indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
The obligor is not an affiliate of the trustee. (See Note on
Page 7.)
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING
SECURITIES OF THE TRUSTEE.
COL. A COL. B
TITLE OF CLASS AMOUNT OUTSTANDING
-------------- ------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER
WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY
OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING
INFORMATION:
(a) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH
OTHER INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
<PAGE> 3
ITEM 4. (CONTINUED)
(b) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS
FOR THE CLAIM THAT NO CONFLICTING INTEREST WITHIN THE MEANING
OF SECTION 310(b)(1) OF THE ACT ARISES AS A RESULT OF THE
TRUSTEESHIP UNDER ANY SUCH OTHER INDENTURE, INCLUDING A
STATEMENT AS TO HOW THE INDENTURE SECURITIES WILL RANK AS
COMPARED WITH THE SECURITIES ISSUED UNDER SUCH OTHER
INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH
OBLIGOR OR UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICER OF
THE TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR
REPRESENTATIVE OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY
EACH SUCH PERSON HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH
CONNECTION.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES
OF THE TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
------------- -------------- ------------ -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
<PAGE> 4
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR
THEIR OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES
OF THE TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
------------- -------------- ------------ -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO THE SECURITIES OF THE
OBLIGOR OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN
DEFAULT BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
WHETHER THE BENEFICIALLY OR PERCENT OF
SECURITIES HELD AS COLLATERAL CLASS
ARE VOTING SECURITY FOR REPRESENTED BY
OR NONVOTING OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS SECURITIES DEFAULT IN COL. C
-------------- ------------ ------------------ ---------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
<PAGE> 5
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE
OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF
SUCH UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
-------------- ------------ ------------------ ------------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF
CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE
KNOWLEDGE OF THE TRUSTEE (1) OWNS 10% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR OR (2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH
THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
-------------- ------------ ------------------ ------------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
<PAGE> 6
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A
PERSON OWNING 50% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE
KNOWLEDGE OF THE TRUSTEE, OWNS 50% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OR
SUCH PERSON ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
-------------- ------------ ------------------ ------------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS
INDEBTED TO THE TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
<TABLE>
<CAPTION>
COL. A COL. B COL. C
NATURE OF AMOUNT
INDEBTEDNESS OUTSTANDING DATE DUE
------------ ----------- --------
<S> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(a) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not, nor has there been, a default with respect to the
securities under this indenture. (See Note on Page 7.)
<PAGE> 7
ITEM 13. (CONTINUED)
(b) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There has not been a default under any such indenture or series. (See
Note on Page 7.)
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
Not applicable by virtue of Form T-1 General Instruction B and response
to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE QUALIFIED
UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
o 1. A copy of the articles of association of the trustee now in
effect.
# 2. A copy of the certificate of authority of the trustee to
commence business.
* 3. A copy of the certificate of authorization of the trustee
to exercise corporate trust powers issued by the Board of Governors
of the Federal Reserve System under date of January 21, 1948.
+ 4. A copy of the existing bylaws of the trustee.
5. Not applicable.
6. The consent of the United States institutional trustees
required by Section 321(b) of the Act.
[ ] 7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
<PAGE> 8
8. Not applicable.
9. Not applicable.
NOTE REGARDING INCORPORATED EXHIBITS
Effective January 20, 1998, the name of the Trustee was changed from
Texas Commerce Bank National Association to Chase Bank of Texas, National
Association. The exhibits incorporated herein by reference, except for Exhibit
7, were filed under the former name of the Trustee.
o Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits to
the Form S-3 File No. 33-56195.
# Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits to
the Form S-3 File No. 33-42814.
* Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits to
the Form S-11 File No. 33-25132.
+ Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits to
the Form S-3 File No. 33-65055.
[ ] Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits to
the Form S-3 File No. 333-52197.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the trustee of all facts on which to base responsive answers to Items 2 and 13,
the answers to said Items are based on incomplete information. Such Items may,
however, be considered as correct unless amended by an amendment to this Form
T-1.
<PAGE> 9
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939 THE
TRUSTEE, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, FORMERLY KNOWN AS TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED THIS
STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO AUTHORIZED, ALL IN THE CITY OF HOUSTON, AND STATE OF TEXAS, ON THE 8th
DAY OF FEBRUARY, 1999.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, AS TRUSTEE
By: /s/ MAURI COWEN
------------------------------------
Mauri Cowen
Vice President and Trust Officer
<PAGE> 10
EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is to be the trustee under an Indenture between Noble
Drilling Corporation, a Delaware corporation (the "Company"), and Chase Bank of
Texas, National Association, as Trustee, to be entered into in connection with
the issuance of the Company's Subordinated Debt Securities.
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned hereby consents that reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By: /s/ MAURI COWEN
-----------------------------------
Mauri Cowen
Vice President and Trust Officer
