Common use of Collateral Disposition Clause in Contracts

Collateral Disposition. (i) If any Collateral Disposition occurs with respect to any Mortgaged Revolving Credit Facility Rig and the Security Maintenance Ratio is at least 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and both with and without giving effect to or credit for the Mortgaged Revolving Credit Facility Rig affected by such Collateral Disposition or any related Collateral Disposition Proceeds), then the Total Revolving Commitments shall be reduced by an amount equal to (A) the Total Revolving Commitments in effect immediately prior to such Collateral Disposition multiplied by (B) the Appraised Value Percentage of the affected Mortgaged Revolving Credit Facility Rig, effective on the 90th day following the occurrence of such Collateral Disposition, unless on or before the 90th day following such Collateral Disposition, the Parent Company or one of its Subsidiaries shall have replaced such disposed Mortgaged Revolving Credit Facility Rig with an offshore drilling rig of the same or superior type, class and value (as verified by a written appraisal report prepared by an Approved Rigbroker setting forth the Market Value of such replacement rig) as the disposed Mortgaged Revolving Credit Facility Rig or with another offshore drilling rig reasonably acceptable to the Collateral Agent (acting on the instruction of the Required Revolving Lenders) and for which the Collateral Agent has received a written appraisal report prepared by an Approved Rigbroker setting forth the Market Value of such replacement rig and granted an Acceptable Security Interest pursuant to a Rig Mortgage in relation thereto (together with any required amendments to any applicable Security Agreement and such evidence of corporate authority to enter into and such legal opinions in relation to such Security Documents as the Collateral Agent may reasonably request). (ii) If any Collateral Disposition occurs with respect to any Mortgaged Revolving Credit Facility Rig and the Security Maintenance Ratio is at least 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and with giving effect to or credit for the Mortgaged Revolving Credit Facility Rig affected by such Collateral Disposition or any related Collateral Disposition Proceeds) but the Security Maintenance Ratio is less than 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and without giving effect to or credit for the Mortgaged Revolving Credit Facility Rig affected by such Collateral Disposition or any related Collateral Disposition Proceeds), then the Total Revolving Commitments shall be reduced by an amount equal to (A) the Total Revolving Commitments in effect immediately prior to such Collateral Disposition multiplied by (B) the Appraised Value Percentage of the affected Mortgaged Revolving Credit Facility Rig, effective on the 30th day following the occurrence of such Collateral Disposition, unless on or before the 30th day following such Collateral Disposition, the Parent Company or one of its Subsidiaries shall have replaced such disposed Mortgaged Revolving Credit Facility Rig in the manner described in Clause 10.2(b)(i)(1) above and complied with the ancillary matters referred to therein. (iii) If any Collateral Disposition occurs with respect to any Mortgaged Revolving Credit Facility Rig and the Security Maintenance Ratio is less than 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and both with and without giving effect to or credit for the Mortgaged Revolving Credit Facility Rig affected by such Collateral Disposition or any related Collateral Disposition Proceeds), then the Total Revolving Commitments shall first be reduced pursuant to Clause 10.2(a)(ii) above and then be reduced by an amount equal to (A) the Total Revolving Commitments in effect after giving effect to the reduction pursuant to Clause 10.2(a)(ii) multiplied by (B) the Appraised Value Percentage of the affected Mortgaged Revolving Credit Facility Rig, each effective on the 30th day following the occurrence of such Collateral Disposition, unless on or before the 30th day following such Collateral Disposition, the Parent Company or one of its Subsidiaries shall have replaced such disposed Mortgaged Revolving Credit Facility Rig in the manner described in Clause 10.2(b)(i) above and complied with the ancillary matters referred to therein. (iv) Any reduction in the Revolving Commitments under this Clause 10.2(b) shall be reinstated if, on or before the 360th day following such Collateral Disposition, the Parent Company or one of its Subsidiaries shall have replaced such disposed Mortgaged Revolving Credit Facility Rig in the manner described in Clause 10.2(b)(i) above and complied with the ancillary matters referred to therein. (v) Notwithstanding the foregoing, if any Collateral Disposition occurs with respect to any Mortgaged Revolving Credit Facility Rig and the Security Maintenance Ratio is less than 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and either with or without giving effect to or credit for the Mortgaged Revolving Credit Facility Rig affected by a Collateral Disposition or any related Collateral Disposition Proceeds) and an Event of Default (other than any Event of Default as a result of the failure to maintain a Security Maintenance Ratio of at least 2.0 to 1.0 as a result of such Collateral Disposition) has occurred and is continuing, the reduction of the Total Revolving Commitments referred to in Clause 10.2(b) shall take effect immediately upon the receipt of the related Additional Appraisal Report required to be delivered as a result of such Collateral Disposition.

Collateral Disposition. Without prejudice to Section 2.6(c)(i) above, (iA) Following any Collateral Disposition, all Collateral Disposition Proceeds payable to or received by the Credit Parties shall on the date of receipt by such Credit Party be deposited with the Collateral Agent as security for the Obligations and applied in accordance with this Agreement. (B) If any no Event of Default has occurred and is continuing, then the Collateral Agent shall apply 100% of such Collateral Disposition occurs with respect Proceeds to any Mortgaged Revolving Credit Facility Rig and prepay the Term Loans unless: (1) if the Security Maintenance Ratio is at least 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and both with and without giving effect to or credit for the Mortgaged Revolving Credit Term Loan Facility Rig affected by such Collateral Disposition or any related Collateral Disposition Proceeds), then the Total Revolving Commitments shall be reduced by an amount equal to (A) the Total Revolving Commitments in effect immediately prior to such Collateral Disposition multiplied by (B) the Appraised Value Percentage of the affected Mortgaged Revolving Credit Facility Rig, effective on the 90th day following the occurrence of such Collateral Disposition, unless on or before the 90th day following such Collateral Disposition, either (x) the Parent Company or one of its Subsidiaries shall have replaced replace such disposed Mortgaged Revolving Credit Term Loan Facility Rig with an offshore drilling rig of the same or superior type, class and value (as verified by a written appraisal report prepared by an Approved Rigbroker setting forth the Market Value of such replacement rig) as the disposed Mortgaged Revolving Credit Term Loan Facility Rig or with another offshore drilling rig reasonably acceptable to the Collateral Agent (acting on the instruction of the Required Revolving Term Lenders) and for which the Collateral Agent has received a written appraisal report prepared by an Approved Rigbroker setting forth the Market Value of such replacement rig and granted an Acceptable Security Interest pursuant to a Rig Mortgage in relation thereto (together with any required amendments to any applicable Security Agreement and such evidence of corporate authority to enter into and such legal opinions in relation to such Security Documents as the Collateral Agent may reasonably request).) or (y) the Borrower shall deposit with the Collateral Agent into the Cash Collateral Account an amount of cash (including, without limitation, cash constituting Collateral Disposition Proceeds) equal to 50% of the Market Value of the disposed Mortgaged Term Loan Facility Rig; (ii2) If any Collateral Disposition occurs with respect to any Mortgaged Revolving Credit Facility Rig and if the Security Maintenance Ratio is at least 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and with giving effect to or credit for the Mortgaged Revolving Credit Term Loan Facility Rig affected by such Collateral Disposition or any related Collateral Disposition Proceeds) but the Security Maintenance Ratio is less than 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and without giving effect to or credit for the Mortgaged Revolving Credit Term Loan Facility Rig affected by such Collateral Disposition or any related Collateral Disposition Proceeds), then the Total Revolving Commitments shall be reduced by an amount equal to (A) the Total Revolving Commitments in effect immediately prior to such Collateral Disposition multiplied by (B) the Appraised Value Percentage of the affected Mortgaged Revolving Credit Facility Rig, effective on the 30th day following the occurrence of such Collateral Disposition, unless on or before the 30th day following such Collateral Disposition, either (x) the Parent Company or one of its Subsidiaries shall have replaced replace such disposed Mortgaged Revolving Credit Term Loan Facility Rig in the manner described in Clause 10.2(b)(i)(1Section 2.6(c)(ii)(B)(1)(x) above and complied with the ancillary matters referred to therein.therein or (y) the Borrower shall deposit with the Collateral Agent into the Cash Collateral Account an amount of cash (including, without limitation, cash constituting Collateral Disposition Proceeds) equal to 50% of the Market Value of the disposed Mortgaged Term Loan Facility Rig; (iii3) If any Collateral Disposition occurs with respect to any Mortgaged Revolving Credit Facility Rig and if the Security Maintenance Ratio is less than 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and both with and without giving effect to or credit for the Mortgaged Revolving Credit Term Loan Facility Rig affected by such Collateral Disposition or any related Collateral Disposition Proceeds), then ) and the Total Revolving Commitments shall first be reduced Term Loans have been prepaid pursuant to Clause 10.2(a)(iiSection 2.6(c)(i)(B) above and then be reduced by an amount equal to (A) the Total Revolving Commitments in effect after giving effect to the reduction pursuant to Clause 10.2(a)(ii) multiplied by (B) the Appraised Value Percentage of the affected Mortgaged Revolving Credit Facility Rigabove, each effective on the 30th day following the occurrence of such Collateral Disposition, unless on or before the 30th day following such Collateral Disposition, either (x) the Parent Company or one of its Subsidiaries shall have replaced replace such disposed Mortgaged Revolving Credit Term Loan Facility Rig in the manner described in Clause 10.2(b)(iSection 2.6(c)(ii)(B)(1)(x) above and complied with the ancillary matters referred to thereintherein or (y) the Borrower shall deposit with the Collateral Agent into the Cash Collateral Account an amount of cash (including, without limitation, cash constituting Collateral Disposition Proceeds) equal to 50% of the Market Value of the disposed Mortgaged Term Loan Facility Rig. (ivC) Any reduction in the Revolving Commitments under this Clause 10.2(bIf (1) shall be reinstated if, on or before the 360th day following such Collateral Disposition, the Parent Company or one no Event of its Subsidiaries shall have replaced such disposed Mortgaged Revolving Credit Facility Rig in the manner described in Clause 10.2(b)(iDefault has occurred and is continuing and (2) above and complied with the ancillary matters referred to therein. (v) Notwithstanding the foregoing, if any Collateral Disposition occurs with respect to a replacement for any Mortgaged Revolving Credit Facility Rig and the Security Maintenance Ratio is less than 2.0 to 1.0 (calculated with respect to the Market Values set forth in the related Additional Appraisal Report and either with or without giving effect to or credit for the Mortgaged Revolving Credit Term Loan Facility Rig affected by a Collateral Disposition or any related other arrangement permitted by Section 2.6(c)(ii)(B) shall have been made within the time periods provided for therein following such Collateral Disposition Proceedsin accordance with Section 2.6(c)(ii)(B), then the Collateral Agent shall refund such Collateral Disposition Proceeds (together with accrued interest thereon) and to the Borrower or any other Credit Party as appropriate. (D) If an Event of Default (other than any Event of Default as a result of the failure to maintain a Security Maintenance Ratio of at least 2.0 to 1.0 as a result of such Collateral Disposition) has occurred and is continuing, the reduction of the Total Revolving Commitments referred to in Clause 10.2(b) Collateral Agent shall take effect immediately upon the receipt of the related Additional Appraisal Report required to be delivered as a result of apply such Collateral DispositionDisposition Proceeds in accordance with Section 7.6.