Exhibit 10.1
Execution Copy
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R&B GUARANTY
from
R&B FALCON CORPORATION
Dated as of July 30, 1998
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R&B GUARANTY
THIS GUARANTY (this "Guaranty"), dated as of July 30, 1998, made by
R&B FALCON CORPORATION (the "Guarantor") in favor of the Beneficiaries
named below;
W I T N E S S E T H:
WHEREAS, pursuant to the terms of (i) a Participation Agreement,
dated as of the date hereof (the "Participation Agreement"), among
Deepwater Investment Trust 1998-A, a Delaware business trust (the
"Investment Trust"), Wilmington Trust FSB, a Maryland corporation, not in
its individual capacity except as expressly stated therein, but solely as
Investment Trustee (the "Investment Trustee"), Wilmington Trust Company,
a Delaware banking corporation, not in its individual capacity except as
expressly stated therein, but solely as Charter Trustee (the "Charter
Trustee"), Deepwater Drilling L.L.C., a Delaware limited liability
company ("Deepwater"), ABN AMRO Bank N.V., as Administrative Agent (the
"Administrative Agent"), BA Leasing & Capital Corporation, as
Documentation Agent (the "Documentation Agent"), The Bank of Nova Scotia,
as Syndication Agent (the "Syndication Agent"), RB Deepwater Exploration
Inc., a Nevada corporation, Conoco Development Company, a Delaware
corporation, and other financial institutions listed as Certificate
Purchasers on the signature pages of the Participation Agreement, and
(ii) a Charter, dated as of the date hereof (the "Charter"), between the
Charter Trustee and Deepwater, the Charter Trustee has agreed to charter
to Deepwater and Deepwater agreed to charter from the Charter Trustee all
of the Charter Trustee's interest in the Drillship;
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Participation Agreement and other
Transaction Documents that Guarantor execute and deliver this Guaranty
and that Conoco execute and deliver the Conoco Guaranty; and
WHEREAS, this Guaranty is offered by Guarantor, and the Conoco
Guaranty is offered by Conoco, as an inducement to the Participants to
consummate the transactions contemplated in the Participation Agreement,
which transactions, if consummated, will be of benefit to Guarantor and
Conoco;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged
by Guarantor, Guarantor hereby agrees as follows:
SECTION 1. Defined Terms. Capitalized terms used but not
otherwise defined in this Guaranty shall have the respective meanings
specified in Appendix 1 to the Participation Agreement. The obligations
guaranteed under Section 2(a) below are collectively referred to as the
"Guaranteed Obligations" and individually referred to as a "Guaranteed
Obligation". Each of the Investment Trust, the Investment Trustee, the
Charter Trustee, the Administrative Agent, the Documentation Agent, the
Syndication Agent, the Certificate Purchasers, the Hedging Agreement
Counterparties and the other Indemnified Parties is referred to as a
"Beneficiary" and are collectively referred to as the "Beneficiaries".
SECTION 2. Guaranteed Obligations.
(a) Subject to the terms hereof, the Guarantor does hereby
irrevocably and unconditionally guarantee to the Beneficiaries entitled
thereto, as a primary obligor and not as a surety, until such time as
final and indefeasible payment thereof has been made, the due and
punctual payment by Deepwater, when due, whether by acceleration or
otherwise, of (i) fifty percent (50%) of the Purchase Option Price due by
Deepwater under Sections 20.1 or 16.2(h) of the Charter, (ii) fifty
percent (50%) of the Residual Guarantee Amount due by Deepwater under
Section 20.3 of the Charter, (iii) fifty percent (50%) of the amount of
any premium payable under any policy of insurance required to be
maintained by Deepwater under Section 14.1 of the Charter, (iv) fifty
percent (50%) of any Claims and Tax Claims due by Deepwater pursuant to
Section 10 of the Participation Agreement, (v) fifty percent (50%) of the
amount due by Deepwater to the Charter Trustee under the Deepwater
Hedging Agreements (if any) upon the occurrence of an "Early Termination
Date" (as defined in the Deepwater Hedging Agreements) in connection with
an Event of Loss during the Charter Term and (vi) fifty percent (50%) of
any installment of Basic Hire due by Deepwater under Section 3.1 of the
Charter during the period after the Scheduled Charter Expiration Date
(or, if the Charter Term has been extended pursuant to Section 19.1 of
the Charter after the end of such extension period) until the earlier of
(A) the transfer of the risk of loss with respect to the Drillship to a
purchaser under an agreement for sale of the Drillship and (B) the
redelivery of the Drillship in accordance with Section 18.1 of the
Charter.
(b) The Guarantor hereby indemnifies and holds harmless each
of the Beneficiaries for any and all costs and expenses (including
reasonable attorney's fees and expenses) incurred by such Beneficiary in
enforcing any rights under this Guaranty.
SECTION 3. Nature of Obligations. This Guaranty shall
constitute a guaranty of prompt payment and not of collection, and the
Guarantor specifically agrees that it shall not be necessary, and that
the Guarantor shall not be entitled to require, before or as a condition
of enforcing the liability of the Guarantor under this Guaranty or
requiring payment or performance of the Guaranteed Obligations by the
Guarantor as provided herein, or at any time thereafter, that any Person:
(a) file suit or proceed to obtain or assert a claim for personal
judgment against Deepwater or any other Person that may be liable for any
Guaranteed Obligation; (b) make any other effort to obtain payment or
performance of any Guaranteed Obligation from Deepwater or any other
Person that may be liable for such Guaranteed Obligation; (c) foreclose
against or seek to realize upon any security now or hereafter existing
for such Guaranteed Obligation; (d) exercise or assert any other right or
remedy to which any Beneficiary is or may be entitled in connection with
any Guaranteed Obligations or any security or other guaranty therefor; or
(e) assert or file any claim against the assets of Deepwater or any other
Person liable for any Guaranteed Obligation. Notwithstanding the
foregoing, the provisions of this Section 3 shall not be construed to
avoid any notices or demands or the lapse of any time periods available
to Deepwater under the Transaction Documents.
SECTION 4. Continuing Guaranty. This Guaranty shall in all
respects be a continuing, primary, absolute and unconditional guaranty of
prompt and complete payment and shall remain in full force and effect
until the full and final payment and performance of the Guaranteed
Obligations and Guarantor's obligations hereunder. The Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Participation Agreement and each other
Transaction Document under which they arise, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Beneficiaries with
respect thereto. The liability of the Guarantor under this Guaranty
shall be absolute, unconditional and irrevocable, irrespective of:
(1) any lack of validity, legality or enforceability of the
Participation Agreement, any Certificate or any other
Transaction Document;
(2) the failure of any Beneficiary
(a) to assert any claim or demand or to enforce any right or
remedy against Deepwater or any other Person (including
any guarantor (including the Guarantor)) under the
provisions of the Participation Agreement, any
Certificate, any other Transaction Document or otherwise,
or
(b) to exercise any right or remedy against any guarantor
(including the Guarantor) of, or collateral securing, any
obligations of Deepwater or any other Person;
(3) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or
the obligations of any guarantor (including the Guarantor), or
any other extension, compromise or renewal of any Guaranteed
Obligation or the obligations of any guarantor (including the
Guarantor);
(4) any reduction, limitation, impairment or termination of any
Guaranteed Obligations or the obligations of any guarantor
(including the Guarantor) for any reason, including any claim
of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and the Guarantor hereby waives any
right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or
occurrence affecting, any Guaranteed Obligations or the
obligations of any guarantor (including the Guarantor) or
otherwise, other than the payment in full in cash or
satisfaction or discharge in full of such Guaranteed
Obligation;
(5) any amendment to, rescission, waiver, or other modification of,
or any consent to departure from, any of the terms of the
Participation Agreement, any Certificate or any other
Transaction Document;
(6) any addition, exchange, release, surrender or non-perfection of
any collateral, or any amendment to or waiver or release or
addition of, or consent to departure from, any other guaranty
held by any Beneficiary securing any of the Guaranteed
Obligations or the obligations of any guarantor (including the
Guarantor); or
(7) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of,
Deepwater, any surety or any guarantor.
SECTION 5. Reinstatement. If at any time all or any part
of any payment theretofore applied to any of the Guaranteed Obligations
is rescinded or returned for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of Deepwater),
such Guaranteed Obligations shall, for the purposes of this Guaranty, to
the extent that such payment is or must be rescinded or returned, be
deemed to have continued in existence, notwithstanding such application,
and this Guaranty shall continue to be effective or be reinstated, as the
case may be, as to such Guaranteed Obligations, all as though such
application had not been made.
SECTION 6. Amendments to Transaction Documents; Demands.
Guarantor shall remain obligated under this Guaranty notwithstanding
that, without any reservation of rights against Guarantor and without
notice to or further consent by Guarantor, the obligations or the
liability of any other party, upon or for any part of the obligations
under the Transaction Documents, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, waived, surrendered or
released by the Beneficiaries (or anyone acting through or on behalf of
the Beneficiaries) and any of the other Transaction Documents may be
amended, modified, supplemented or terminated, in whole or in part;
provided, however, that notwithstanding anything contained in this
Section 6 to the contrary, to the extent that the obligations of
Deepwater constituting the Guaranteed Obligations are expressly released
or waived in writing, such release or waiver shall be deemed to extend to
Guarantor. For the purposes of this Guaranty, any reference to the
Transaction Documents shall mean such documents as they now exist and as
they may be modified, amended, supplemented, renewed or extended from
time to time. When making any demand against Deepwater, a Beneficiary
(or anyone acting through or on behalf of such Beneficiary) may, but
shall be under no obligation to, make a similar demand on Guarantor and
any failure by a Beneficiary (or anyone acting through or on behalf of
such Beneficiary) to make any such demand or to collect any payments from
Deepwater shall not relieve Guarantor of any of its liabilities under
this Guaranty and shall not impair or affect the rights and remedies of
the Beneficiaries (or anyone acting through or on behalf of the
Beneficiaries) against Guarantor.
SECTION 7. Payments; No Subrogation. Guarantor hereby
agrees that payments under this Guaranty will be paid to the Beneficiary
entitled thereto in immediately available funds in accordance with the
terms of the applicable Transaction Documents. Until all of the
Guaranteed Obligations are indefeasibly paid in full, Guarantor hereby
agrees that no payment made by or for the account of Guarantor pursuant
to this Guaranty shall entitle Guarantor by subrogation, indemnification,
exoneration, contribution, reimbursement or otherwise to any payment by
Deepwater or from or out of any property of Deepwater in respect of
payments made hereunder, and Guarantor hereby expressly waives, to the
fullest extent possible, and shall not exercise, any right or remedy
against Deepwater or any property of Deepwater by reason of any
performance by Guarantor of this Guaranty unless and until all of the
Guaranteed Obligations are fully and finally performed, indefeasibly paid
or discharged.
SECTION 8. Waiver. Guarantor hereby expressly waives: (a)
notice of the acceptance of this Guaranty; (b) notice of the existence or
creation or non-payment of all or any of the Guaranteed Obligations; (c)
presentment, demand, notice of dishonor, protest, and, to the fullest
extent permitted by Applicable Law, any notice not required herein, and
all other notices whatsoever; and (d) any right to require marshalling of
its assets in connection with the satisfaction of the Guaranteed
Obligations. When making any demand hereunder against Guarantor, a
Beneficiary may, but shall be under no obligation to, make a similar
demand on Deepwater and any failure by a Beneficiary to make any such
demand or to collect any payments from Deepwater shall not relieve
Guarantor of its obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a
matter of law, of the Beneficiaries against Guarantor.
SECTION 9. Assignment. This Guaranty shall be binding upon
Guarantor and upon Guarantor's successors and permitted assigns and shall
inure to the benefit of the Beneficiaries and their respective successors
and permitted assigns. The Guarantor may not delegate any of its
obligations hereunder without the prior written consent of the
Certificate Purchasers. The Guarantor hereby consents and agrees to the
Charter Trustee's assignment of its rights under this Guaranty to the
Investment Trust pursuant to the Charter Trust Assignment.
SECTION 10. Guarantor's Liabilities Not Affected. The duties and
obligations of Guarantor under this Guaranty shall remain in full force
and effect, without the necessity of any reservation of rights against
Guarantor or further assent by Guarantor, and without regard to, and
shall not be impaired or affected by:
(a) any limitation of the remedies of the Beneficiary under
any of the Transaction Documents or the rejection or disaffirmance
thereof which may now or hereafter be imposed by any Applicable Law or
the occurrence of any Event of Default;
(b) any merger or consolidation of Deepwater or Guarantor into
or with any other Person, or any sale, lease or transfer of any or all of
the capital stock or assets of Deepwater or Guarantor to any other
Person;
(c) any claim, counterclaim, set-off, deduction or defense
(other than payment in full) that Guarantor or Deepwater may have against
any Beneficiary, whether hereunder or under any Transaction Document or
independent of or unrelated to the transactions contemplated by the
Transaction Documents; or
(d) any extension of the Charter Term.
SECTION 11. Bankruptcy of Deepwater. Guarantor agrees that, so
long as there are any Guaranteed Obligations outstanding, it shall not
(i) commence any case, proceeding or other action under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, arrangement, winding-up,
liquidation, dissolution, composition or other relief with respect to
Deepwater or its debts; (ii) seek appointment of a receiver, trustee,
custodian or other similar official for Deepwater or for all or any
substantial part of its property; (iii) cause, or permit RBF Deepwater
Exploration Inc., as a Member of Deepwater, to vote to permit, Deepwater
to file a voluntary petition in bankruptcy, insolvency or similar laws or
an answer admitting the material obligations of a petition filed against
Deepwater in any such proceeding; or (iv) if Deepwater becomes a debtor-
in-possession under applicable bankruptcy laws, cause, or permit RBF
Deepwater Exploration Inc., as a Member of Deepwater, to vote to permit,
Deepwater to reject the Drilling Contract.
SECTION 12. No Material Adverse Change. Guarantor represents and
warrants to the Beneficiaries that as of the date hereof, there has been
no material adverse change in the consolidated assets, liabilities,
operations, business or financial condition of the Guarantor from that
set forth in its financial statements for the fiscal quarter ended March
31, 1998 included in its report on Form 10-Q filed with the Securities
and Exchange Commission with respect to such period.
SECTION 13. Financial Statements. The Guarantor shall deliver to
the Administrative Agent, with sufficient copies for each Certificate
Purchaser, copies of its annual and quarterly reports on Form 10-K and
Form 10-Q, respectively, filed with the Securities and Exchange
Commission promptly after such filings have been made.
SECTION 14. Miscellaneous. No delay in the exercise of any right
or remedy shall operate as a waiver thereof, and no single or partial
exercise of any right or remedy shall preclude other or further exercise
thereof or the exercise of any other right or remedy. No modification or
waiver of any of the provisions of this Guaranty shall be binding upon
the Trust or Guarantor unless such modification or waiver is by an
instrument in writing and signed by Guarantor and the Beneficiaries. No
action permitted hereunder shall in any way affect or impair the rights
of any Beneficiary or Guarantor's obligations under this Guaranty. This
Guaranty is effective upon delivery.
This Guaranty is a Transaction Document which is being executed
pursuant to the Participation Agreement and in connection with the
transactions contemplated therein.
Wherever possible each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under Applicable
Law, but if any provision of this Guaranty shall be prohibited by or
invalid thereunder, such provision shall be ineffective only to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Guaranty.
All notices, demands, declarations, consents, directions, approvals,
instructions, requests and other communications required or permitted by
this Guaranty shall be in writing and shall be deemed to have been duly
given when addressed to the appropriate Person and delivered (in the case
of the Beneficiaries) in the manner specified in Section 12.3 of the
Participation Agreement and (in the case of the Guarantor) when delivered
in the manner specified in Section 12.3 of the Participation Agreement
and addressed as set forth below:
R&B Falcon Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attn: Chief Executive Officer
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS GUARANTY (INCLUDING ALL MATTERS OF CONSTRUCTION VALIDITY AND
PERFORMANCE) SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTIONS 5-
1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, BUT EXCLUDING,
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, ALL OTHER CHOICE OF
LAW RULES). THIS GUARANTY HAS BEEN DELIVERED IN THE STATE OF NEW YORK.
All judicial actions, suits or proceedings brought against Guarantor
with respect to its obligations, liabilities or any other matter under or
arising out of or in connection with this Guaranty or any transaction
contemplated or for recognition or enforcement of any judgment rendered
in any such proceedings may be brought in any state or federal court of
competent jurisdiction in The City of New York. By execution and delivery
of this Guaranty, Guarantor accepts, generally and unconditionally, the
nonexclusive jurisdiction of such courts and irrevocably agrees to be
bound by any final judgment rendered in connection with this Guaranty or
any transaction contemplated hereby from which no appeal has been taken
or is available. Guarantor irrevocably agrees that all process in any
proceeding or any court arising out of or in connection with this
Guaranty may be effected by mailing a copy by registered or certified
mail or any substantially similar form of mail, postage prepaid, to
Guarantor at its address as designated in this Guaranty. Guarantor
irrevocably waives trial by jury and any objections which it now or
subsequently may have to the bringing of any such action or proceeding in
any such jurisdiction.
Upon request of any Beneficiary, Guarantor shall execute and deliver
such further assurances as such Beneficiary may determine in its
reasonable judgment to be necessary or desirable to confirm the
obligations of Guarantor under this Guaranty.
The section headings used in this Guaranty are for convenience of
reference only and are not to affect the construction of the terms of
this Guaranty.
[The Remainder of this Page is Left Intentionally Blank]
IN WITNESS WHEREOF, Guarantor has caused this R&B GUARANTY to be
executed and delivered under seal by its duly authorized officer as of
the date first above written.
R&B FALCON CORPORATION
By:___________________________
Name:
Title:
