EXHIBIT 10.8
[FALCON 100]
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SENIOR SECURED LOAN AGREEMENT
Dated as of
March 26, 1999
between
R&B FALCON CORPORATION,
as Borrower
and
RBF FINANCE CO.,
as Lender
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TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS 1
1.1.Certain Defined Terms 1
1.2.Other Defined Terms 5
1.3.Accounting Terms 5
1.4.Other Definitional Provisions 5
SECTION ▇.▇▇▇▇ COMMITMENT AND LOAN 5
2.1.Termination of Loan Commitment 7
2.2.Termination of Loan Commitment 7
2.3.Interest on the Loans 7
2.4.Redemptions 8
2.5.Excess Proceeds Offers 10
2.6.Use of Proceeds 12
2.7.Commitment Fee 12
SECTION 3.CONDITIONS 12
3.1.Conditions to Initial Advances on the Loan 12
3.2.Conditions to Subsequent Advance on the Loan 14
SECTION 4.REPRESENTATIONS AND WARRANTIES 14
4.1.Organization and Good Standing; Capitalization 15
4.2.Authorization and Power 15
▇.▇.▇▇ Conflicts or Consents 15
4.4.Enforceable Obligations 15
4.5.Properties; Liens 16
▇.▇.▇▇ Default 16
4.7.Use of Proceeds; Margin Stock, etc 16
4.8.Survival of Representations and Warranties 16
SECTION 5.COVENANTS 16
5.1.Indenture Covenants 16
5.2.Reports of Defaults, Etc 17
5.3.Payments in U.S. Dollars 17
5.4.Performance and Enforcement Under the Loan Documents 17
5.5.Liens 17
5.6.Transfer of Mortgage Rig to a Restricted Subsidiary 17
▇.▇.▇▇▇▇▇▇▇▇ Interest and Lien on Equipment 17
SECTION ▇.▇▇▇▇▇▇ OF DEFAULT 18
6.1.Failure To Make Payments When Due 18
6.2.Default Under The Indenture 18
6.3.Other Loan Agreement 18
6.4.Breach of Certain Covenants 18
6.5.Breach of Warranty 18
6.6.Other Defaults Under Agreement or Loan Documents 18
6.7.Involuntary Bankruptcy; Appointment of Custodian, etc 18
6.8.Voluntary Bankruptcy; Appointment of a Custodian; etc 19
SECTION 7.MISCELLANEOUS 20
7.1.Pledges and Assignments of Loan and Note 20
7.2.Expenses 20
7.3.Indemnity 20
7.4.Additional Amounts 21
7.5.Taxes and Other Taxes 22
7.6.Amendments and Waivers 23
7.7.Independence of Covenants 23
7.8.Notices 23
7.9.Survival of Warranties and Certain Agreements 23
7.10.Failure or Indulgence Not Waiver; Remedies Cumulative 24
7.11.Severability 24
7.12.Headings 24
7.13.Applicable Law 24
7.14.Successors and Assigns; Subsequent Holders of Notes 24
7.15.Counterparts; Effectiveness 24
7.16.Consent to Jurisdiction; Venue; Waiver of Jury Trial 25
7.17.Waiver of Stay, Extension or Usury Laws 25
7.18.Usury Savings Clause 25
EXHIBITS
I FORM OF NOTE
II FORM OF NOTICE OF BORROWING
III FORM OF OPINION OF GARDERE & ▇▇▇▇▇ - SPECIAL COUNSEL FOR THE BORROWER
IV FORM OF MORTGAGE
V SCHEDULE OF EQUIPMENT
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This Senior Secured Loan Agreement is dated as of March 26, 1999,
and entered into by and among R&B Falcon, Inc., a Delaware corporation
(the "Company") and RBF Finance Co., a Delaware corporation (the
"Lender").
RECITALS
WHEREAS, the Lender has entered into an Indenture of even date
herewith (as the same may be amended, or supplemented or otherwise
modified from time to time, the "Indenture") with United States Trust
Company of New York as Trustee (the "Trustee"), pursuant to which the
Lender will issue in two series up to $400,000,000 aggregate principal
amount of its 11% Senior Secured Notes due 2006 (the "7-year Secured
Notes") and up to $400,000,000 aggregate principal amount of its
11 3/8% Senior Secured Notes due 2009 (the "10-year Secured Notes;" the
7-year Secured Notes and the 10-year Secured Notes being hereinafter
collectively called the "Secured Notes"); and
WHEREAS, the Indenture provides that the Lender may utilize the
proceeds of the Secured Notes to make loans to the Company, each for
the purpose of either (i) financing all or a portion of the cost of
acquiring, constructing, altering, improving or repairing a drilling
rig or drillship (a "Rig") or improvements used or to be used in
connection with such a Rig, or (ii) financing all or any part of the
purchase price of the Rig or improvements used or to be used in
connection with such Rig, which indebtedness is incurred prior to or
within one year after the date of the completion of construction,
alteration, improvement or repair or the commencement of commercial
operations thereof; and
WHEREAS, the Company desires that the Lender extend senior secured
credit facilities to the Company for such purposes herein; and
WHEREAS, the Indenture provides that the Lender will enter into a
Senior Secured Note Security and Pledge Agreement of even date
herewith (the "Issuer Security Agreement") between the Lender, the
Trustee and United States Trust Company of New York as Collateral
Agent (in such capacity, the "Collateral Agent"), pursuant to which
the Lender will pledge and grant a security in the loans made with the
proceeds of the Secured Notes which are or will be secured by Rigs;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties
hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings:
"Agreement" means this Senior Secured Loan Agreement dated as of
March 26, 1999, as it may be amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.
"Board of Directors" means, with respect to any Person, the Board
of Directors of such Person or any duly authorized committee of that
Board.
"Board Resolution" means a duly adopted resolution of the Board of
Directors of the Company in full force and effect at the time of
determination and certified as such by the Secretary or Assistant
Secretary of the Company.
"Business Day" means any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of New York, New York or
is a day on which banking institutions therein located are authorized
or required by law or other governmental action to close.
"Cash Equivalents" means (i) U.S. Governmental Obligations with a
maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-
1" from S&P or at least "P-1" by Moody's; (iii) certificates of
deposit, bankers' acceptances, time deposits, Eurocurrency Deposits
and similar types of Investments routinely offered by commercial banks
with final maturities of one year or less issued by commercial banks
having combined capital and surplus in excess of $100,000,000; and
(iv) shares in money market mutual or similar funds having assets in
excess of $100,000,000.
"Closing Date" means the date on or before March 26, 1999 on which
the initial advance of the Loan is made and the conditions set forth
in Section 3.1 are satisfied or waived in accordance with Section 7.7.
"Collateral" means the Mortgaged Rig and any other property
subject to the Lien created under a Mortgage or a Loan Document.
"Commission" means the Securities and Exchange Commission.
"Company" has the meaning ascribed to such term in the
introduction to this Agreement.
"Collateral Agent" has the meaning assigned to such term in the
recitals to this Agreement.
"Contractual Obligation," as applied to any Person, means any
provision of any Security issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is
subject.
"Dollars" or the sign "$" means the lawful money of the United
States of America.
"Equipment" means all items of equipment of the Borrower used in
connection with the Mortgaged Rig, whether currently owned or
hereafter acquired, and whether on board the Mortgaged Rig or not,
including but not limited to the items set forth on Schedule V
attached hereto.
"Event of Default" means each of the events set forth in
Section 6.
"indemnified liabilities" has the meaning ascribed to such term in
Section 7.3.
"Indemnitees" has the meaning ascribed to such term in
Section 7.3.
"Indenture" has the meaning ascribed to such term in the recitals
of this Agreement.
"Laws" means all applicable statutes, laws, ordinances,
regulations, rules, orders, judgments, writs, injunctions or decrees
of any state, commonwealth, nation, territory, possession, province,
county, parish, town, township, village, municipality or Tribunal, and
"Law" means each of the foregoing.
"Lender" has the meaning ascribed to that term in the introduction
of this Agreement and shall include any assignee of the Loan or the
Note or Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional
sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any
option, trust or other preferential arrangement having the practical
effect of any of the foregoing.
"Loan" means, collectively, the loans made by the Lender pursuant
to Section 2.1.
"Loan Documents" means this Agreement, the Note and the Mortgage.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
"Material Adverse Effect" means (i) a material adverse effect upon
the business, property, assets, nature of assets, liabilities
condition (financial or otherwise), results of operation or prospects
of the Company and its Restricted Subsidiaries, taken as a whole, or
(ii) the impairment of the ability of the Company or any of its
Restricted Subsidiaries to perform, or the impairment of the ability
of Lender to enforce, any material right or remedy under the
Obligations.
"Maturity" means the date on which the principal of the Loan,
whether the 7-year Tranche or 10-year Tranche or both, becomes due and
payable as provided in this Agreement whether at Stated Maturity, upon
redemption, by declaration of acceleration or otherwise.
"Mortgage" means a mortgage substantially in the form of Exhibit
IV covering the Mortgaged Rig.
"Mortgaged Rig" means the Falcon 100.
"Notes" has the meaning ascribed to such term in Section 2.1C.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit II annexed hereto with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lender under the Loan Documents, whether
for principal, reimbursements, interest (including post-petition
interest), fees, expenses, indemnities or otherwise, and whether
primary, secondary, direct, indirect, contingent, fixed or otherwise
(including obligations of performance).
"Officer" means the Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Chief
Accounting Officer, any Vice President, the Treasurer or the Secretary
of the Company.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two officers;
provided, however, that every Officers' Certificate with respect to
the compliance with a condition precedent to the making of the Loans
hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition
and any definitions or other provisions contained in this Agreement
relating thereto, (ii) a statement that, in the opinion of the
signers, they have made or have caused to be made such examination or
investigation as is necessary to enable them to express an informed
opinion as to whether or not such condition has been complied with,
and (iii) a statement as to whether, in the opinion of the signers,
such condition has been complied with.
"Other Loan" means a loan made pursuant to an Other Loan Agreement
by the Lender with the proceeds of the Secured Notes which is secured
by a Mortgaged Rig.
"Other Loan Agreement" means a loan agreement among the Lender,
the Company and the Trustee pursuant to which the Lender will utilize
the proceeds of the Secured Notes to make an Other Loan for the
purposes specified in the second recital of this Agreement
"Other Mortgaged Rig" means a Rig which has been mortgaged to
secure an Other Loan or which is the subject of a construction
contract which has been pledged to secure an Other Loan.
"Other Taxes" has the meaning ascribed to such term in
Section 7.6.
"Payment Office" shall mean the office of United States Trust
Company of New York located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office in the State of New York as
the Lender may designate to the Company and the Trustee from time to
time.
"Potential Event of Default" means a condition or event which,
after notice or lapse of time or both, would constitute an Event of
Default if that condition or event were not cured or removed within
any applicable grace or cure period.
"Purchase Agreement" means the Purchase Agreement dated March 19,
1999 among the Lender, the Company and the Initial Purchaser relating
to the Secured Notes.
"Securities" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation
in any profit sharing agreement or arrangement, bonds, debentures,
options, warrants, notes, or other evidences of indebtedness, secured
or unsecured, convertible, subordinated or otherwise, or in general
any instruments commonly known as "securities" or any certificates of
interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.
"7-year Tranche" means advances on the Loan aggregating up to
$52,650,000 and having a final Loan Maturity of March 15, 2006.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, penalties, deductions, liabilities, withholdings or other
charges of any nature whatsoever, including interest penalties, from
time to time or at any time imposed by any Law or any Tribunal.
"10-year Tranche" means advances on the Loan aggregating up to
$52,650,000 and having a final Maturity of March 15, 2009.
"Transaction Costs" means the fees, costs and expenses payable by
the Company pursuant hereto and other fees, costs and expenses payable
by the Company in connection with the Transactions.
"Transactions" shall mean, collectively, (i) the issuances and
sale of the Secured Notes, (ii) the incurrence of the Loan hereunder
on the Closing Date, (iii) the incurrence of the Other Loans under the
Other Loan Agreements, (iv) any other transaction on the Closing Date
contemplated in relation to the foregoing and (v) the payment of fees
and expenses in connection with the foregoing.
"Tranches" means collectively the 7-year Tranche and the 10-year
Tranche.
"Tribunal" means any governmental, any arbitration panel, any
court or any governmental department, commission, board, bureau,
agency, authority or instrumentality of the United States or any
state, province, commonwealth, nation, territory, possession, county,
parish, town, township, village or municipality, whether now or
hereafter constituted and/or existing.
"Trustee" has the meaning ascribed to such term in the
introduction of this Agreement and shall include any successor Trustee
appointed pursuant to terms of the Indenture.
"U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for
the payment of public and private debts.
1.2 Other Defined Terms. Any capitalized term used in this Agreement
and not defined herein shall have the meaning assigned to such term in
the Indenture.
1.3 Accounting Terms. For the purposes of this Agreement, all
accounting terms to otherwise defined herein shall have the meanings
assigned to them in conformity with GAAP.
1.4 Other Definitional Provisions. Any of the terms defined in
Section 1.1 may, unless the context otherwise requires, be used in the
singular or the plural depending on the reference.
SECTION 2 LOAN COMMITMENT AND LOAN
2.1 The Loan and Notes.
A. Loan Commitment. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of
the Company herein set forth, the Lender hereby agrees to lend to the
Company on the Closing Date and thereafter up to $105,300,000 in the
aggregate (the "Loan") consisting of $52,650,000 of 7-year Tranche
advances and $52,650,000 of 10-year Tranche advances. The Lender's
commitment to make the Loan to the Company pursuant to this
Section 2.1 is herein called the "Loan Commitment."
B. Notice of Borrowing. When the Company desires to borrow under
this Agreement, it shall deliver to the Collateral Agent a Notice of
Borrowing no later than 11:00 a.m. (New York time), at least one
Business Day in advance of the Closing Date or such other date as
shall be agreed to by the Lender and the Trustee. The Notice of
Borrowing shall specify the amount of each Tranche and the applicable
date of borrowing (which shall be a Business Day).
C. Disbursement of Funds. No later than 3:00 p.m. (New York time) on
the Closing Date, the Lender promptly will make available to the
Company by depositing to its account at the Payment Office the
aggregate of the amount of the Loan to be made on such Closing Date.
D. Notes. The Company shall execute and deliver to the Lender on the
Closing Date two Notes dated the Closing Date, one substantially in
the form of Exhibit I annexed hereto with appropriate insertions to
evidence the maximum amount of the 7-year Tranche of Loan which may be
made hereunder by the Lender and the other substantially in the form
of Exhibit I annexed hereto with appropriate insertions to evidence
the maximum amount of 10-year Tranche of the Loan which may be made by
the Lender hereunder.
E. Scheduled Payments of Loan.
(i)One of the Other Loan Agreements relates to the Mortgaged Rig
Deepwater IV, which Mortgaged Rig is presently under construction
pursuant to a construction contract and which has an expected
completion date during the third calendar quarter of 2000. Upon
completion of the Mortgaged Rig Deepwater IV, the Company is required
to ▇▇▇▇▇ ▇ ▇▇▇▇ on such Mortgaged Rig pursuant to a Mortgage. Upon
the filing of the Mortgage for the Mortgaged Rig Deepwater IV, the
Company and the Lender agree that the $16,000,000 of the 7-year
Tranche and $16,000,000 of the 10-year Tranche will be exchanged for
additional advances under the Other Loan Agreement relating to the
Mortgaged Rig Deepwater IV in an aggregate principal amount of
$32,000,000.
(ii)The Company shall pay on or before 10:00 a.m. on the date of the
final Maturity of the 7-year Tranche of the Loan all of the principal
amount of the 7-year Tranche remaining outstanding, which amount will
be $52,650,000 principal amount of the Loan, reduced by any previous
prepayments of principal made on the 7-year Tranche of the Loan to the
extent that such payments have been allocated pursuant to the
provisions of Section 2.3 hereof and the Indenture to the 7-year
Secured Notes, together with accrued and unpaid interest, fees and a
pro rata portion of the amount of the Special Interest and Additional
Amounts, if any, due on the 7-year Secured Notes. The Company shall
pay on or before 10:00 a.m. on the date of the final Maturity of the
10-year Tranche all of the principal amount of the 10-year Tranche
then remaining outstanding, reduced by any previous prepayments of
principal made on the 10-year Tranche of the Loan to the extent that
such payments have been allocated pursuant to the provisions of
Section 2.3 hereof and the Indenture to the 10-year Secured Notes,
together with accrued and unpaid interest fees and a pro rata portion
of the amount of the Special Interest and Additional Amounts, if any,
due on the 10-year Secured Notes. Such payments shall be made
directly to the Trustee for deposit in the Issuer Escrow Account
established pursuant to the Issuer Escrow Agreement.
F. Termination of Loan Commitment. The Loan Commitment hereunder shall
terminate on the earlier (i) the Stated Maturity (whether by
acceleration, redemption, purchase or otherwise) of the Secured Notes
pursuant to the terms of the Indenture or (ii) May 14, 1999, if no
portion of the Loan has been made on or before such date (other than
as a result of failure of the Lender to fulfill its obligations
hereunder).
G. Satisfaction by Payments on the Guarantee. Pursuant to the
Indenture, the Company will guarantee the due and punctual payment of
the principal of, premium, if any, and interest on, and all other
amounts payable under, the Secured Notes (including any Additional
Amounts payable upon redemption, in respect thereof) when and as the
same shall become due and payable, whether at Stated Maturity, by
declaration of acceleration or otherwise. To the extent that the
Company makes a payment on the Guarantee, it will be deemed to have
made a payment on the Issuer Loans then outstanding, such payments to
be allocated pro rata to each of Tranches of the Loan and pro rata to
the Loan and the Other Loans.
2.2 Interest on the Loans.
A. Rate of Interest. The 7-year Tranche of the Loan shall bear interest
on the unpaid principal amount thereof from the date made through
Maturity for the 7-year Tranche (whether by prepayment, acceleration
or otherwise) at a rate equal to 11% per annum plus 2 basis points per
annum and the 10-year Tranche of the Loan shall bear interest on the
unpaid principal amount thereof from the date made through Maturity
for the 10-year Tranche (whether by prepayment, acceleration or
otherwise) at a rate equal to 11 3/8% per annum plus 2 basis points per
annum.
B. Special Interest. The Lender and the Company have entered into a
Registration Rights Agreement (the "Registration Rights Agreement")
dated March 26, 1999 with ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities
Corporation for the benefit of the Holders of the Secured Notes, in
which the Lender and the Company have agreed to: (A) file a
registration statement within 60 days after the closing date of the
offering of Secured Notes for an offer to exchange Secured Notes of
each series for debt securities of that series with identical terms
(except for transfer restrictions); (B) use their best efforts to
cause the registration statement to become effective within 150 days
after the closing date of the offering of the Secured Notes; and
(C) complete the registered exchange offer within 180 days after the
closing date of the offering of the Secured Notes. Under certain
circumstances, the Lender and the Company may be required to file a
shelf registration statement for the Secured Notes registering the
resale of the Secured Notes. If the Lender and the Company do not
comply with their obligations under the Registration Rights Agreement,
the Lender will be required to pay additional interest ("Special
Interest") specified in Section 5 of the Registration Rights
Agreement. The Company will pay on each date that the Lender pays
Special Interest to the Holders of the Secured Notes as Special
Interest on the Loan an amount equal to the percentage of Special
Interest, if any, which the Lender owes to the Holders of the Secured
Notes that the principal amount of the Loan bears to the total
aggregate principal amount of the Loan and all Other Loans then
outstanding. Such payment shall be paid directly to the Trustee for
deposit into the Issuer Escrow Account.
Notwithstanding any provisions of this Section 2.2 or any
other provision herein, in no event will the combined sum of interest
(cash or otherwise) on the Loan exceed the maximum amount permitted by
applicable law.
C. Interest Payments. Interest (including Special Interest, if any,
and Additional Amounts, if any) shall be payable semi-annually on
March 15 and September 15 of each year, commencing September 15, 1999
but in no event to exceed the maximum permitted by applicable law.
All payments of interest on the Loan shall be made on or before 10:00
a.m. (New York time) on the date of payment and shall be paid directly
to the Trustee for deposit into the Issuer Escrow Account.
D. Post-Maturity Interest. Any principal payments on the Loan not paid
when due and, to the extent permitted by applicable law, any interest
payment on the Loan not paid when due, in each case whether at Stated
Maturity, by notice of prepayment, by acceleration or otherwise, shall
thereafter bear interest payable upon demand at a rate of interest
otherwise payable under this Agreement for the Loan but in no event to
exceed the maximum interest rate permitted by applicable law.
E. Computation of Interest. Interest on the Loan shall be computed on
the basis of a 360-day year of twelve 30-day months.
2.3 Redemptions.
A. Redemption upon Loss of the Mortgaged Rig. If an Event of Loss
occurs at any time with respect to the Mortgaged Rig attributable to
the Loan, the Company shall apply funds in an amount (the "Loss
Redemption Amount") equal to the principal amount of the Loan
outstanding on the date (the "Loss Date") on which such Event of Loss
was deemed to have occurred, together with all accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) thereon, to the prepayment of the Loan. If an Event of Loss
occurs at any time with respect to any Other Mortgaged Rig, the
Indenture and the applicable Other Loan Agreement require that the
Company shall apply funds to the principal amount of the applicable
Other Loan secured by the Other Mortgaged Rig outstanding on the Loss
Date for such other Mortgaged Rig, together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any) thereon, to the payment of such Other Loan. If a
Default under the Indenture shall have occurred and be continuing at
the time of the receipt of the Event of Loss Proceeds with respect to
such Other Mortgaged Rig, the Indenture requires, and the Company
hereby agrees, that it shall prepay the Loan and the remaining Other
Loans on a pro rata basis in an aggregate amount equal to the excess
of the Net Event of Loss Proceeds over the Loss Redemption Amount, if
any, together with all accrued and unpaid interest (including Special
Interest, if any, and Additional Amounts, if any) thereon for the
Other Loan which is secured by such Other Mortgaged Rig. All payments
on the Loan shall be allocated on a pro rata basis between the
Tranches and shall be made directly to the Trustee for deposit into
the Issuer Escrow Account.
B. Redemption upon Sale of the Mortgaged Rig. If the Mortgaged Rig or
the Capital Stock of a Subsidiary Guarantor then owning the Mortgaged
Rig is sold in compliance with the terms of the Indenture, the Company
shall apply funds in an amount (the "Sale Redemption Amount") equal to
the principal amount of the Loan secured by the Mortgaged Rig on the
date of such sale (the "Sale Date"), together with all accrued and
unpaid interest (including Special Interest, if any, and Additional
Amounts, if any thereon, plus any additional amounts required by the
Lender to redeem the Secured Notes to the extent required by
Section 3.9 of the Indenture, to the prepayment of the Loan. If any
Other Mortgaged Rig or the Capital Stock of a Subsidiary Guarantor
then owning an Other Mortgaged Rig is sold in compliance with the
terms of the Indenture, the Company shall apply funds equal to the
applicable Other Loan secured by the Other Mortgaged Rig outstanding
on the Sale Date for such Other Mortgaged Rig, together with all
accrued and unsecured interest (including Special Interest, if any,
and Additional Amounts, if any) thereon, to the payment of such Other
Loan. If a Default under the Indenture shall have occurred and be
continuing at the time of receipt of the cash consideration with
respect to such Other Mortgaged Rig or Capital Stock of the Subsidiary
Guarantor owning such Other Mortgaged Rig, the Indenture requires, and
the Company hereby agrees, that it shall also be required to prepay
the Loan and the remaining Other Loans on a pro rata basis in an
aggregate amount equal to the excess of such Net Available Cash
attributable to such Sold Mortgaged Rig over such Sale Redemption
Amount. Such payments on the Loan and the Other Loans pursuant hereto
shall be respectively allocated between the Tranches of the Loan and
the Other Loans on a pro rata basis and shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
C. Other Redemptions.
(i)Redemptions to Fund Optional Redemptions of the 10-year Secured
Notes. Under the terms of the Indenture, on or after March 15, 2004,
the 10-year Secured Notes will be redeemable, at the Lender's option,
in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice to the Holders of the 10-
year Secured Notes, at the following Redemption Prices (expressed in
percentages of principal amount), plus accrued and unpaid interest
(including Special Interest, if any, and Additional Amounts, if any)
to the Redemption Date, if redeemed during the 12-month period
commencing on March 15 of the years set forth below.
Redemption
Period Price
2004 105.6875%
2005 103.7917
2006 101.8958
2007 and thereafter 100.0000
The Company shall prepay the 10-year Tranche of the Loan and of
the Other Loans, in whole or in part, to provide funds for such
redemption. Any prepayments by the Company on the Loan and the
Other Loans required to be made to provide funds for the Lender to
make such a redemption shall be made on this Loan and the Other
Loans on a pro rata basis. All payments on the Loan and the Other
Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
(ii)Redemptions to Fund Optional Redemptions of the 7-year Secured
Notes. Under the terms of the Indenture, the 7-year Secured Notes
will be redeemable, at the Lender's option at any time in whole or
from time to time in part upon not less than 30 and not more than
60 days' prior notice mailed by first class mail to the Holders of the
7-year Secured Notes, on any date prior to Maturity at a price equal
to 100% of the principal amount thereof plus accrued and unpaid
interest (including Special Interest, if any, and Additional Amounts,
if any) to the Redemption Date plus the Make-Whole Premium applicable
to the 7-year Secured Notes determined in the manner provided for in
Section 3.7 of the Indenture. The Company shall prepay the 7-year
Tranche of the Loan and of the Other Loans in whole or in part to
provide funds for such redemption. Any prepayments by the Company on
the Loan and the Other Loans required to be made to provide funds for
the Lender to make such a redemption shall be made on the Loan and the
Other Loans on a pro rata basis. All payments on the Loan and the
Other Loans pursuant hereto shall be made directly to the Trustee for
deposit into the Issuer Escrow Account.
D. Excess Proceeds Offers. The Indenture provides in Section 3.10
thereof that if, as of the first day of any calendar month, the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds
exceeds 10% of consolidated total assets of the Company, and if the
aggregate amount of Sale Excess Proceeds and Loss Excess Proceeds in
excess of 10% of consolidated total assets of the Company that has not
theretofore been subject to an Excess Proceeds Offer (as defined
below) (the "Excess Proceeds Offer Amount"), totals at least $10
million, the Lender must, not later than the fifteenth Business Day of
such month, make an offer ( an "Excess Proceeds Offer") to purchase
from the Holders of the Secured Notes, pursuant to and subject to the
conditions contained in the Indenture, and from Holders of the New
Senior Notes, pursuant to provisions of the New Senior Note Indenture,
Secured Notes at a purchase price equal to 100% of their principal
amount, plus any accrued interest (including Additional Amounts and
Special Interest, if any) to the date of purchase and New Senior Notes
at a purchase price equal to 100% of their principal amount, plus any
accrued interest (including Special Interest, if any) to the date of
purchase in an aggregate principal amount equal to the Excess Proceeds
Offer Amount (an "Excess Proceeds Payment"). If the Lender is ever
required pursuant to Section 3.10 of the Indenture to make an Excess
Proceeds Offer to the Holders of the Secured Notes to purchase from
such Holders their Secured Notes, and to the Holders of Senior Notes
to purchase from such Holders their New Senior Notes, the Indenture
provides, and the Company agrees, that the Company will prepay the
Loan and the Other Loans on a pro rata basis to permit the Lender to
purchase any Secured Notes validly tendered pursuant to an Excess
Proceeds Offer. All payments on the Loan shall be allocated between
the appropriate Tranches of the Loan; and all payments on the Loan and
the Other Loans pursuant hereto shall be made directly to the Trustee
for deposit into the Issuer Escrow Account.
E. Change of Control. If the Lender is ever required to make pursuant
to the provisions of Section 4.8 of the Indenture a Change of Control
Offer to the Holders of the Secured Notes at a purchase price in cash
equal to 101% of the principal amount thereof plus accrued and unpaid
interest (including Additional Amounts and Special Interest, if any)
thereon, the Indenture provides, and Company agrees, that the Company
will prepay the Loan and the Other Loans on a pro rata basis at a
redemption price equal to 101% of the principal amount hereof being
repaid, plus accrued and unpaid interest, Special Interest, if any,
and Additional Amounts, if any, thereon, in order to provide funds
sufficient to permit the Lender to purchase any Secured Notes validly
tendered pursuant to the foregoing offer to purchase Secured Notes
upon a Change of Control. All payments on the Loan shall be allocated
between the appropriate Tranches of the Loans and all payments on the
Loan and the Other Loans pursuant hereto shall be made directly to the
Trustee for deposit into the Issuer Escrow Account.
F. Notice. The Company shall notify the Lender and the Trustee of any
prepayment to be made pursuant to this Section 2.3 at least two
Business Days prior to such prepayment date.
G. Determination of Amounts of the Tranches Subject to Such
Redemptions. The Lender will submit a written determination to the
Trustee for its approval of the amount (including the pro rata
allocations between the Tranches of the Loan and between the Loan and
the Other Loans) with respect to any such redemption. The Trustee
shall approve or disapprove such allocations in its sole discretion
and such decision shall be conclusive, absent manifest error. A
certificate of the Lender setting forth such determination, with the
written approval of the Trustee thereon, shall be delivered to the
Company at least one Business Day prior to the payment date.
H. Company's Mandatory Prepayment Obligation; Application of
Prepayments. All prepayments shall include payment of accrued
interest (including Special Interest and Additional Amounts, if
applicable) on the principal amount so prepaid and shall be applied to
payment of interest before application to principal.
I. Manner and Time of Payment. Unless otherwise expressly set forth
herein, all payments of principal and interest hereunder and under the
Notes by the Company shall be made without defense, set-off or
counterclaim and in same-day funds and delivered to the Trustee for
deposit into the Issuer Escrow Account, unless otherwise specified,
not later than 10:00 a.m. (New York time) on the date due at the
Payment Office; funds received by the Trustee after that time shall be
deemed to have been paid by the Company on the next succeeding
Business Day.
J. Payments on Non-Business Days. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which
is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Loan.
2.4 Use of Proceeds.
A. Loan. The proceeds of the Loan may be applied by the Company to
finance certain costs of acquiring, constructing, repairing and
improving the Mortgaged Rig and, to the extent that such costs have
already been paid, for general corporate purposes.
B. Margin Regulations. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to
violate the applicable requirements of Regulation U, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System
or any other regulation of the Board or to violate the Exchange Act,
in each case as in effect on the date or dates of such borrowing and
such use of proceeds.
2.5 Commitment Fee. The Company agrees to pay a commitment fee for the
period from and including the Closing Date to and including the date
of termination specified in Section 2.1.F. on the undrawn portion of
the Loan equal to the average of the daily excess of the Loan
Commitment over the aggregate principal amount of the Loan outstanding
multiplied by 7% per annum, such commitment fee to be calculated on
the basis of a 360-day year consisting of twelve 30-day months and to
be payable semi-annually in arrears on each March 15 and September 15,
commencing September 15, 1999.
SECTION 3 CONDITIONS
3.1 Conditions to Initial Advances on the Loan. The obligation of the
Lender to make the initial advance on the Loan is subject to prior or
concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings
taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto not previously found
acceptable by the Lender and the Trustee shall be reasonably
satisfactory in form and substance to the Lender and the Trustee, and
the Lender and the Trustee shall have received the following items,
each of which shall be in form and substance satisfactory to the
Lender and the Trustee and, unless otherwise noted, dated the Closing
Date:
(i) a certified copy of the Company's charter, together with a
certificate of status, compliance, good standing or like certificate
with respect to the Company issued by the appropriate government
officials of the jurisdiction of its incorporation and of each
jurisdiction in which it owns any material assets or carries on any
material business, each to be dated a recent date prior to the Closing
Date;
(ii) a copy of the Company's bylaws, certified as of the Closing Date
by its Secretary or one of its Assistant Secretaries;
(iii) resolutions of the Company's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement,
the Notes, the Mortgage, each of the other Loan Documents, the
Indenture and any other documents, instruments and certificates
required to be executed by the Company in connection herewith and
therewith and approving and authorizing the execution, delivery and
payment of the Loan, each certified as of the Closing Date by its
Secretary or one of its Assistant Secretaries as being in full force
and effect without modification or amendment;
(iv) signature and incumbency certificates of the Company's officers
executing this Agreement, the Other Loan Documents and the Notes;
(v) executed copies of this Agreement and the Notes substantially in
the form of Exhibit I annexed hereto executed in accordance with
Section 2.1C drawn to the order of the Lender and with appropriate
insertions;
(vi) an originally executed Notice of Borrowing substantially in the
form of Exhibit II annexed hereto, signed by the President or a Vice
President of the Company on behalf of the Company and delivered to the
Lender; and
(vii) originally executed copies of one or more favorable written
opinions of Gardere & ▇▇▇▇▇, special counsel for the Company,
substantially in the form of the Exhibit III hereto and addressed to
the Lender, the Trustee and the Initial Purchaser, and such other
opinions of counsel and such certificates or opinions of accountants,
appraisers or other professionals as the Lender, the Trustee or the
Initial Purchaser shall have reasonably requested.
B. The Lender shall have received a fully executed Mortgage in
the form of Exhibit IV hereto, which has been filed in all appropriate
jurisdictions, and the Lien provided in Section 5.7 shall have been
perfected in all appropriate United States jurisdictions.
C. On or before the Closing Date, all authorizations, consents and
approvals necessary in connection with the Transactions shall have
been obtained and remain in full force and effect and all applicable
waiting periods, if any, under law applicable to the Transactions
shall have expired without any action being taken by any competent
authority (including without limitation, any Tribunal) which
restrains, prevents or imposes materially adverse conditions upon the
completion of the Transactions or the financing thereof and evidence
of the receipt of such authorizations, consents and approvals
satisfactory to the Lender and the Trustee shall have been delivered
to the Lender and the Trustee.
D. On or before the Closing Date, the Indenture and the Purchase
Agreement shall have been executed and delivered by all parties
thereto. No default or event of default shall have occurred under the
Indenture and the Purchase Agreement, all conditions to the execution
delivery and authentication of the Secured Notes thereunder shall have
been satisfied under the Indenture, and all conditions to the purchase
of the Secured Notes by the Initial Purchaser under the Purchase
Agreement have been satisfied or waived by the Initial Purchaser.
E. Simultaneously with the making of the Loan by the Lender, the
Company shall have delivered to the Lender and the Trustee an
Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations ad warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the Closing
Date to the same extent as though made on and as of that date, and
(ii) on or prior to the Closing Date, the Company has performed and
complied with in all material respects all covenants and conditions to
be performed and observed by the Company on or prior to the Closing
Date and
F. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute and Event of Default, a Potential
Event of Default or a Default.
G. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
H. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
3.2 Conditions to Subsequent Advance on the Loan. The obligation of
the Lender to make a subsequent advance on the Loan is subject to the
prior or concurrent satisfaction of each of the following conditions:
A. The Lender and the Trustee shall have received in form and substance
satisfactory to the Lender and the Trustee and dated the date of such
advance an originally executed Notice of Borrowing substantially in
the form of Exhibit II annexed hereto, signed by the President or a
Vice President of the Company on behalf of the Company and delivered
to the Lender.
B. No event shall have occurred and be continuing or would result from
the consummation of the borrowing contemplated by the Notice of
Borrowing which would constitute an Event of Default, a Potential
Event of Default or a Default.
C. No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain the Lender
from making the Loan.
D. The making of the Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve Board or any other
regulation of the Board.
E. Simultaneously with the making of the advance on the Loan by the
Lender, the Company shall have delivered to the Lender and the Trustee
an Officers' Certificate from the Company in form and substance
satisfactory to the Lender and the Trustee to the effect that (i) the
representations and warranties of the Company in Section 4 are true,
correct and complete in all material respects on and as of the date of
such advance to the same extent as though made on and as of that date,
and (ii) on or prior to the date of such advance, the Company has
performed and complied with in all material respects all covenants and
conditions to be performed and observed by the Company on or prior to
the date of such advance.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lender to enter into this Agreement and to
make the Loan, the Company represents and warrants to the Lender that,
at the time of execution hereof and after consummation of the making
of the Loan and the Transactions, the following statements are true,
correct and complete:
4.1 Organization and Good Standing; Capitalization. The Company is a
corporation duly organized and existing and in good standing under the
laws of its jurisdiction of incorporation. The Company has the
corporate power and authority to own and operate its properties and to
carry on its business as now conducted and as proposed to be conducted
and is duly qualified as a foreign corporation and in good standing in
all jurisdictions in which it is doing business, except where failure
to be so qualified or in good standing, singly or in the aggregated,
has not had and will not have a Material Adverse Effect.
4.2 Authorization and Power. The Company has the corporate power and
requisite authority, and has taken all corporate action necessary, to
consummate the Transactions and to execute, deliver and perform its
obligations under this Agreement, the Mortgage, the other the Loan
Documents, Indenture and each other document and instrument to be
delivered in connection with the Transactions executed or to be
executed by it and to issue the Notes.
4.3 No Conflicts or Consents.
(A) The execution and delivery of the Loan Agreement, the Notes,
the Mortgage, the other Loan Documents and each other document to be
executed and delivered in connection with the Transactions, the
consummation of each of the transactions herein or therein
contemplated, the compliance with each of the terms and previsions
hereof or thereof, and the issuance, delivery and performance of the
Notes, this Agreement, the Mortgage and the Indenture, do not and will
not (i) violate any provision of any law or any governmental rule or
regulation applicable to the Company, its Certificate of Incorporation
or Bylaws or any order, judgment or decree of any court or other
agency of government binding on it, (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any Contractual Obligation of the Company which could
reasonably be expected to result in a Material Adverse Effect, (iii)
result in or require the creation or imposition of any Lien upon any
of the properties or assets of the Company (other than any Liens
created under this Agreement and the Other Loan Agreements), (iv)
require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Company except for such
approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lender, the Trustee and the Initial
Purchaser or such approvals or consents the failure to obtain which
could not reasonably be expected to singly or in the aggregate result
in a Material Adverse Effect.
(B) No consent, approval, authorization or order of any
Tribunal or other Person is required in connection with the execution
and delivery by the Company of this Agreement, the Loan Documents or
any other document or instrument to be delivered in connection with
the Transactions or the consummation of the transactions contemplated
hereby or thereby, other than any such consent, approval,
authorization or order which has been obtained and remains in full
force and effect or which has been waived in writing by the Lender or
the failure of which to obtain would not, singly or in the aggregated,
have a Material Adverse Effect.
4.4 Enforceable Obligations. Each of this Agreement, the Notes, the
Mortgage, the other Loan Documents, and each other document or
instrument to be delivered in connection therewith has been duly
authorized; each of this Agreement, the Notes, the Mortgage, the Other
Loan Documents and each other document or instrument to be delivered
in connection therewith to be executed and delivered on or prior to
the Closing Date has been duly executed and delivered by the Company
and each of this Agreement, the Notes, the Mortgage, the Other Loan
Documents and each other document or instrument to be delivered in
connection therewith to be executed and delivered on or prior to the
Closing Date is, and each of this Agreement, the Notes, the Mortgage
and the other Loan Documents to be executed and delivered after the
Closing Date will be, upon such execution and delivery, the legal,
valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law)
4.5 Properties; Liens. The Company has good and marketable title to
the Mortgaged Rig, the equipment purchased and paid for by the Company
to be installed or used thereon and the Other Mortgaged Rigs to the
extent specified in such Other Loan Agreement. Except as specified in
Schedule 4.5 or as permitted by this Agreement, the Mortgaged Rig and
such equipment are so owned free and clear of Liens.
4.6 No Default. No event has occurred and is continuing which
constitutes a Default, a Potential Event of Default or an Event of
Default.
4.7 Use of Proceeds; Margin Stock, etc. The proceeds of the Loan will
be used solely for the purposes specified herein. None of such
proceeds will be used for the purpose of purchasing or carrying any
Margin Stock within the meaning of the applicable provisions of
Regulation T, U or X, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry a
Margin Stock or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of the applicable
provisions of Regulation T, U or X. The Company has not taken nor
will it take any action which might cause any of the Loan Documents to
violate the applicable provisions of Regulation T, U or X, or any
other regulation of the Board of Governors of the Federal Reserve
System.
4.8 Survival of Representations and Warranties. All representations
and warranties in the Loan Documents shall survive delivery of the
Notes and the making of the Loan and shall continue until one year
after repayment of the Notes and the Obligations, and any
investigation at any time made by or on behalf of the Lender shall not
diminish the Lender's right to rely thereon.
SECTION 5 COVENANTS
5.1 Indenture Covenants. Each of the covenants conferred in the
Indenture applicable to the Company and its Restricted Subsidiaries
are incorporated herein by reference. The Company covenants and
agrees that, until the Loan and the Notes and all other amounts due
under this Agreement have been indefeasibly paid in full it shall
perform all covenants applied to it or any of its Restricted
Subsidiaries which are contained in the Indenture.
5.2 Reports of Defaults, Etc. The Company will deliver to each Lender
and the Trustee promptly upon, but in no event more than five (5)
Business Days after, any Officer's obtaining knowledge of any
condition or event which constitutes a Default, an Event of Default or
a Potential Event of Default, an Officer's Certificate specifying the
nature and period of existence of any such condition or event, or
specifying the notice given or the claim of Default, Event of Default,
Potential Event of Default, or the event or condition, and what action
the Company has taken, is taking and proposes to take with respect
thereto;
5.3 Payments in U.S. Dollars. All payments of any Obligations to be
made hereunder or under the Note by the Company or any other obligor
with respect thereto shall be made solely in U.S. Dollars or such
other currency as is then legal tender for public and private debts in
the United States of America.
5.4 Performance and Enforcement Under the Loan Documents. The Company
shall promptly perform all of its obligations under the Loan Documents
and each document and instrument related thereto or delivered in
connection with any thereof, in each case, to the extent within its
control. The Company shall (A) diligently and in good faith promptly
pursue the performance of each other party to each such document, and
(B) diligently seek the enforcement of all rights and remedies under
each such document.
5.5 Liens. The Company shall not, nor shall it cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist, any Lien on or with respect to any property
or asset (including the Mortgaged Rig) of the Company or of any of its
Restricted Subsidiaries, whether now owned or hereafter acquired, or
assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in
effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the
Uniform Commercial Code of any State or under any similar recording or
notice statute, except Liens permitted by the Indenture and Liens
permitted by the Loan Documents.
5.6 Transfer of Mortgage Rig to a Restricted Subsidiary. The Company
shall not, nor shall the Company cause or permit any of its Restricted
Subsidiaries to, directly or indirectly, transfer the Mortgaged Rig to
any Subsidiary of the Company unless (i) such Subsidiary guarantees
all Obligations of the Company under this Agreement and executes a
Mortgage and a Security Agreement, (ii) the Liens of the Subsidiary's
Mortgage and Security Agreement are perfected and enforceable, and
(iii) such Subsidiary executes a Subsidiary Guarantee pursuant to the
Indenture.
5.7 Security Interest and Lien on Equipment. The Borrower hereby
grants a security interest and Lien in favor of the Lender and unto
the Lender's successors and assigns for the benefit of the Lender's
own proper use and benefit, as security for the Obligations now or in
the future, in and to the Equipment and the Mortgaged Rig.
SECTION 6 EVENTS OF DEFAULT
If any of the following conditions of events ("Events of Default")
shall occur and be continuing:
6.1 Failure To Make Payments When Due. Failure to pay any installment
of principal including Premium of the Loan when due, whether at stated
maturity, by acceleration, by notice of prepayment or otherwise; or
failure to pay any interest (including Special Interest and Additional
Amounts) on the Loan or any other amount due under this Agreement
continued for 30 days; or
6.2 Default Under The Indenture. An Event of Default occurs and is
continuing under the Indenture; or
6.3 Other Loan Agreement. An Event of Default (as defined in an other
Loan Agreement) occurs and is continuing under such Other Loan
Agreement; or
6.4 Breach of Certain Covenants. Failure of the Company to perform or
comply with any covenant, term or condition contained in Sections 5.2
through 5.7 and Sections 7.3 through 7.5 of this Agreement; or
6.5 Breach of Warranty. Any representation, warranty or certification
made by the Company in any Loan Document or in any statement or
certificate at any time given by the Company in writing pursuant
hereto or thereto or in connection herewith or therewith shall be
false or incorrect in any material respect on the date as of which
made or deemed made; or
6.6 Other Defaults Under Agreement or Loan Documents. The Company
shall default in the performance of or compliance with any covenant,
term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Sections 5.2 through 5.7 and
such default shall not have been remedied or waived in accordance with
Section 7.6 of this Agreement within 30 days after the date of written
notice of such default from the Lender, the Collateral Agent, the
Trustee or the Holder or Holders of not less than 25% in aggregate
principal amount of the Secured Notes then outstanding; or
6.7 Involuntary Bankruptcy; Appointment of Custodian, etc. The entry
by a court having jurisdiction in the premises of (i) a decree or
order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under U.S. bankruptcy
laws, as now or hereafter constituted, or any other applicable
Federal, state, or foreign bankruptcy, insolvency, or other similar
law or (ii) a decree or order adjudging the Company or any Significant
Subsidiary a bankruptcy or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant
Subsidiary under U.S. bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal, state or foreign
bankruptcy, insolvency, or similar law, or appointing a custodian,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial
part of the Property or assets of the Company or any Significant
Subsidiary, or ordering the winding up or liquidation of the affairs
of the Company or any Significant Subsidiary, and the continuance of
any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days; or
6.8 Voluntary Bankruptcy; Appointment of a Custodian, etc. The
commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under the U.S. bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal, state or
foreign bankruptcy, insolvency or other similar law or of any other
case or proceeding to be adjudicated a bankrupt or insolvent; or
(ii) the consent by the Company or any Significant Subsidiary to the
entry of a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under U.S.
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state, or foreign bankruptcy, insolvency or other
similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Significant Subsidiary;
or (iii) the filing by the Company or any Significant Subsidiary of a
petition or answer or consent seeking reorganization or relief under
U.S. bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal, state or foreign bankruptcy, insolvency or other
similar law; or (iv) the consent by the Company or any Significant
Subsidiary to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or similar official of the Company or any
Significant Subsidiary or of any substantial part of the property or
assets of the Company or any Significant Subsidiary, or the making by
the Company or any Significant Subsidiary of an assignment for the
benefit of creditors; or (v) the admission by the Company or any
Significant Subsidiary in writing of its inability to pay its debts
generally as they become due; or (vi) the taking of corporate action
by the Company or any Significant Subsidiary in furtherance of such
action;
THEN (i) upon the occurrence of any Event of Default described in
the foregoing Section 6.7 or 6.8, all of the unpaid principal amount
of and accrued interest on the Loan and all other outstanding
Obligations shall automatically become immediately due and payable,
without presentment, demand, protest, waiver of notice of intent to
accelerate and waiver of notice of such acceleration or notice of any
other kind or other requirements of any kind, all of which are hereby
expressly waived by the Company, and Obligations and the Loan
Commitment of the Lender hereunder shall thereupon terminate, and
(ii) upon the occurrence of any other Event of Default, the Lender
shall, upon written notice of the Lender, to the Company, upon written
notice of the Trustee or the Collateral Agent to the Company and the
Lender, or upon written notice of a Holder or Holders of the Secured
Note or Notes, to the Company, the Lender, the Collateral Agent and
the Trustee, declare all of the unpaid principal amount of and accrued
interest on the Loan and all other outstanding Obligations to be, and
the same shall forthwith become, due and payable, and the obligations
and Loan Commitments of the Lender hereunder shall thereupon
terminate; provided, however, that upon the occurrence of an Event of
Default described in Section 6.4 of this Agreement or an "event of
default" under Section 6.4 of any Other Loan Agreement, the Lender
shall not declare the Obligations hereunder to be due and payable for
a period of 60 days after notice of the occurrence of such Event of
Default or "event of default." Nevertheless, if at any time after
acceleration of the Maturity of the Loan, the Company shall pay all
arrears of interest and all payments on account of the principal
thereof which shall have become due otherwise than by acceleration
(with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the
Notes) and all Events of Default and Potential Events of Default
(other than non-payment of principal of and accrued interest on the
Loan and the Notes due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 7.6, then the Lender
shall, upon receipt of the written notice from the Collateral Agent
and the Trustee of such remedy or waiver, by written notice to the
Company rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent Default, Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 7 MISCELLANEOUS
7.1 Pledges and Assignments of Loan and Note. The Lender shall have
the right at any time to sell, pledge, assign, transfer or negotiate
all or any portion of the Note or its Loan Commitment. The Company
acknowledges that the Lender will pledge its rights under this
Agreement, the Notes, the Mortgage and the Other Loan Documents to the
Collateral Agent pursuant to the Issuer Security Agreement to secure
the Lender's obligations under the Indenture and the Secured Notes.
7.2 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company, its successors and assigns agrees
to promptly pay (i) all the actual costs and expenses of preparation
of the Loan Documents and all the costs of furnishing all opinions by
counsel for the Company (including without limitation any opinions
requested by the Lender as to any legal matters arising hereunder),
and of the Company's performance of and compliance with all agreements
and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of
counsel to the Lender and the Trustee and the Collateral Agent, their
successors and assigns (including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents
to departures from the terms hereof and thereof; and (iii) after the
occurrence of an Event of Default, all costs and expenses (including
reasonable attorneys fees, including allocated costs of internal
counsel, and costs of settlement) incurred by the Lender, its
successors and assigns in enforcing any Obligations of or in
collecting any payments due from the Company hereunder or under the
Notes by reason of such Event of Default or in connection with any
refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or
bankruptcy proceedings.
7.3 Indemnity. In addition to the payment of expenses pursuant to
Section 7.2, whether or not the transactions contemplated hereby shall
be consummated, the Company agrees to indemnify, pay and hold the
Lender, the Collateral Agent, the Trustee and any Holder of the
Secured Notes and holder of the Notes, and each of their officers,
directors, employees, and agents, (collectively called the
"Indemnitees"), harmless from and against any all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements
of counsel for such Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether
or not such Indemnitee shall be designated as a party thereto), which
may be suffered by imposed on, incurred by, or asserted against that
Indemnitee, in any manner resulting from, connected with, in respect
of, relating to or arising out of this Agreement, the Notes, the
Mortgage, the Lender's agreement to make the Loan or the use or
intended use of any of the proceeds of the Loan hereunder or the
Transactions (the "indemnified liabilities"); provided, however, that
the Company shall have no obligation to an Indemnitee hereunder with
respect to indemnified liabilities (i) to the extent such is finally
judicially determined to have resulted solely from (A) the gross
negligence or willful misconduct of that Indemnitee or (B) the failure
of such Indemnitee to perform its obligations under any Loan Document
or (C) such Indemnitee's violation of law or (ii) in connection with
the obligations of any Indemnitee under any Loan Document. To the
extend that the undertaking to indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Company shall contribute
the maximum portion which it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all indemnified
liabilities incurred by the Indemnitees or any of them.
7.4 Additional Amounts. Except to the extent required by any applicable
law, regulation law, regulation or governmental policy, any and all
payments of, or in respect of the Loan, this Agreement, the Notes, any
Loan Document or any Secured Note shall be made free and clear of and
without deduction for or on account of any and all present or future
taxes, levies, imposts, deduction, charges or withholdings and all
liabilities with respect thereto imposed by Panama, The Bahamas, The
▇▇▇▇▇▇▇▇ Islands or any other jurisdiction with which the Company or
any Subsidiary has some connection (including any jurisdiction (other
than the United States of America) from or through which payments
under this Agreement, the Notes, any Loan Document, the Guarantee or
the Secured Notes are made) or any political subdivision of or any
taxing authority in any such jurisdiction ("Panamanian Taxes,"
"Bahamian Taxes," "MI Taxes," or "Other Taxes," respectively). If the
Lender, the Company or any Subsidiary Guarantor shall be required by
law to withhold or deduct any Panamanian Taxes, Bahamian Taxes, MI
Taxes, or Other Taxes from or in respect of any sum payable under this
Agreement, the Notes, any Loan Document, the Guarantee or the Secured
Notes, the sum payable by the Company or such Subsidiary Guarantor, as
the case may be, thereunder shall be increased by the amount
("Additional Amounts") necessary so that after making all required
withholdings and deductions, Lender or any Holder or beneficial owner
of Secured Notes shall receive an amount equal to the sum that it
would have received had not such withholdings and deductions been
made; provided that any such sum shall not be paid in respect of any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes to a Holder
(an "Excluded Holder") (i) resulting from the beneficial owner of such
Secured Note carrying on business or being deemed to carry on business
in or through a permanent establishment or fixed base in the relevant
taxing jurisdiction or having any other connection with the relevant
taxing jurisdiction or any political subdivision thereof or any taxing
authority therein other than the mere holding or owning of such
Secured Note, being a beneficiary of the Guarantee or any applicable
Subsidiary Guarantee, the receipt of any income or payments in respect
of such Secured Note, the Loan, the Guarantee or any applicable
Subsidiary Guarantee or the enforcement of such Secured Note, the
Loan, the Guarantee or any applicable Subsidiary Guarantee, or (ii)
that would not have been imposed but for the presentation (where
presentation is required) of such Secured Note for payment more than
180 days after the date such payment became due and payable or was
duly provided for, whichever occurs later. The Lender, the Company or
the Subsidiary Guarantors, as applicable, will also (i) make such
withholding or deduction and (ii) remit the full amount deducted or
withheld to the relevant authority in accordance with applicable law,
and, in any such case, the Lender is required to furnish under the
Indenture to each Holder on whose behalf an amount was so remitted,
within 30 calendar days after the date the payment of any Panamanian
Taxes, Bahamian Taxes, MI Taxes or Other Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such
payment by the Lender, the Company or the Subsidiary Guarantors, as
applicable. The Company will, upon written request of each Holder
(other than an Excluded Holder), reimburse each such holder for the
amount of (i) any Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes so levied or imposed and paid by such Holder as a result of
payments made under or with respect to any Secured Notes, and (ii) any
Panamanian Taxes, Bahamian Taxes, MI Taxes or Other Taxes so levied or
imposed with respect to any reimbursement under the foregoing clause
(i) so that the net amount received by such Holder (net of payments
made under or with respect to such Secured Notes, the Loan, the
Guarantee or the applicable Subsidiary Guarantees) after such
reimbursement will not be less than the net amount the Holder would
have received if Panamanian Taxes, Bahamian Taxes, MI Taxes or Other
Taxes on such reimbursement had not been imposed.
At least 30 calendar days prior to each date on which any payment
under or with respect to the Secured Notes is due and payable, if the
Lender, the Company or the Subsidiary Guarantors, as applicable, will
be obligated to pay Additional Amounts with respect to such payment,
the Lender, the Company or the Subsidiary Guarantors, as applicable,
will deliver to the Trustee an officer's certificate stating the fact
that such Additional Amounts will be payable and the amounts will be
payable and the amounts so payable and will set forth such other
information necessary to enable the Trustee to pay such Additional
Amounts to Holders on the payment date.
7.5 Taxes and Other Taxes.
A. Any and all payments by the Company hereunder or under any of the
other Loan Documents shall be made free and clear of and without
deduction or withholding for any and all present or future Taxes,
unless such Taxes are required by law or the administration thereof to
be deducted or withheld and excluding (a) in the case of each Lender,
Taxes imposed on its net income and franchise taxes or taxes on gross
receipts and capital imposed on it by the jurisdiction under the laws
of the United States or any political subdivision thereof (all such
nonexcluded Taxes being hereinafter referred to as "Covered Taxes").
If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum
payable hereunder or under any other Loan Documents, the sum payable
shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or
withholdings applicable to additional amounts paid under this
paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made;
(b) the Company shall make such deductions or withholdings; and
(c) the Company forthwith shall pay the full amount deducted or
withheld to the relevant taxation or other authority in accordance
with applicable Law.
B. The Company agrees to pay forthwith any present or future stamp
documentary taxes or any other excise or property taxes charges or
similar levies (all such taxes, charges and levies being herein
referred to as "Other Taxes") imposed by any jurisdiction (or any
political subdivision or taxing authority thereof or therein) which
arise from any payment made by the Company hereunder or under any of
the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any
of the other Loan Documents.
C. The Company agrees to indemnify the Lender for the full amount of
Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Section 7.5(A) and (B) to the relevant
taxation or other authority and any Taxes other than Covered Taxes or
Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 7.5 paid by the Lender and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were
correctly or legally asserted. Payment under this indemnification
shall be made within 30 days from the date the Lender makes written
demand therefor. A certificate as to the amount of such Taxes or
Other Taxes and evidence of payment thereof submitted to the Company
shall be prima facie evidence, absent manifest error, of the amount
due from the Company to the Lender.
D. The Company shall furnish to the Lender the original or a certified
copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. The provisions of this Section 7.5 shall survive the termination of
the Agreement and repayment of all Obligations.
7.6 Amendments and Waivers. No amendment, modification, termination or
waiver of any term or provision of this Agreement, of the Note, the
Mortgage or any Other Loan Document or consent to any departure by the
Company therefrom, shall in any event be effective without the prior
written concurrence of the Company, the Lender, the Collateral Agent
and the Trustee, and, upon the request of the Lender, the Collateral
Agent or the Trustee, the receipt of a written opinion of counsel of
the Company addressed to the Lender, the Collateral Agent and the
Trustee to the effect that such amendment, modification, termination,
waiver or consent does not violate or conflict with any of the terms
and provisions of the Indenture or any Contractual Obligations of the
Company.
7.7 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation
of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
7.8 Notices. Unless otherwise provided herein, any notice or other
communications herein required or permitted to be given shall be in
writing and may be personally served, telecopied or sent by mail and
shall be deemed to have been given when delivered in person, upon
receipt of telecopy against receipt of answer back or four Business
Days after depositing it in the mail, registered or certified, with
postage prepaid and properly addressed; provided, however, that
notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (unless notice of a change
thereof is delivered as provided in this Section 7.8) shall be set
forth under each party's name on the signature pages hereto.
7.9 Survival of Warranties and Certain Agreements. All agreements,
representations and warranties made herein and in the other Loan
Documents shall survive the execution and delivery of this Agreement
and in the other Loan Documents, the making of the Loan hereunder and
the execution and delivery of the Notes or the Loan Documents and,
notwithstanding the making of the Loan, the execution and delivery of
the Notes and the other Loan Documents or any investigation made by or
on behalf of any party, shall continue in full force and effect. The
closing of the transactions herein contemplated shall not prejudice
any right of one party against any other party in respect of anything
done or omitted hereunder or in respect of any right to damages or
other remedies.
7.10 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure
or delay on the part of the Lender or the holder of the Notes or the
Trustee in the exercise of any power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor
shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under
this Agreement, the Notes or any other Loan Document are cumulative to
and not exclusive of any rights or remedies otherwise available.
7.11 Severability. In case any provision in or obligation under this
Agreement, under a Guarantee or the Notes shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
7.12 Headings. Section and Section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given
any substantive effect.
7.13 Applicable Law. THIS AGREEMENT, EACH LOAN DOCUMENT OTHER THAN THE
MORTGAGE AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
7.14 Successors and Assigns; Subsequent Holders of Notes. This
Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of
the parties hereto and the successors and assigns of the Lenders. The
terms and provisions of this Agreement and each Loan Document shall
inure to the benefit of any assignee or transferee of the Notes
pursuant to Section 7.1, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lender
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. The
Company's rights or any interest therein hereunder may not be assigned
without the prior express written consent of the Lender and the
Trustee.
7.15 Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon
the execution of a counterpart hereof by each of the parties hereto.
7.16 Consent to Jurisdiction; Venue; Waiver of Jury Trial.
A. Any legal action or proceeding with respect to this Agreement, any
Note or any Loan Document may be brought in the courts of the State of
New York or of the United States for the Southern District of New
York, and, by execution and delivery of this Agreement, each of the
parties to this Agreement hereby irrevocably accepts for itself and in
respect of its respective property, generally and unconditionally, the
jurisdiction of the aforesaid courts. Each of the parties to this
Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over itself, and agrees not to plead or
claim, in any legal action or proceeding with respect to this
Agreement, the Notes or Loan Documents brought in any of the aforesaid
courts, that any such court lacks jurisdiction over such party. Each
of the parties to this Agreement irrevocably consents to the service
of process in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to such
party, at its respective address for notices pursuant to Section 7.8,
such service to become effective 30 days after such mailing. To the
extent permitted by law, each of the parties to this Agreement hereby
irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any
action or proceeding commenced hereunder or under the Notes or any
Loan Document that service of process was in any way invalid or
ineffective. Nothing herein shall affect the right of any party to
this Agreement to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any
party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid any of actions or proceedings arising out of or
in connection with this Agreement, the Notes or any of the Loan
Documents brought in the courts referred to in clause A above and
hereby further irrevocably waives and agrees not to plead or claim in
any such court that any such action or proceeding brought in any such
court has been brought in an inconvenient forum.
C. Each of the parties to this Agreement hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement, the Notes or the Loan
Documents or the transactions contemplated hereby or thereby.
7.17 Waiver of Stay, Extension or Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all
or any portion of the principal of or interest on the Loan as
contemplated herein, wherever enacted, now or at the time hereafter in
force, or which may affect the covenants or the performance of this
Agreement and (to the extent that it may lawfully do so), the Company
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Lender, but will suffer and permit the
execution of every such power as though no such law had been enacted.
7.18 Usury Savings Clause. It is the intention of the parties hereto
to comply with applicable usury laws (now or hereafter enacted);
accordingly, notwithstanding any provision to the contrary in this
Agreement, any Note, any of the other Loan Documents or any other
document related hereto or thereto, in no event shall this Agreement
or any such other document require the payment or permit the
collection of interest in excess of the maximum amount permitted by
such laws. If from any circumstances whatsoever, fulfillment of any
provision of this Agreement, any Note, any of the other Loan Documents
or of any other document pertaining hereto or thereto, shall involve
transcending the limit of validity prescribed by applicable law for
the collection or charging of interest, then, ipso facto, the
obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the Lender shall ever
receive anything of value as interest or deemed interest by applicable
law under this Agreement, any Note, any of the other Loan Documents or
any other document pertaining hereto or otherwise an amount that would
exceed the highest lawful rate, such amount that would be excessive
interest shall be applied to the reduction of the principal amount
owing under the Loan or on account of any other indebtedness of the
Company, and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal of such indebtedness,
such excess shall be refunded to the Company. In determining whether
or not the interest paid or payable with respect to any indebtedness
of the Company to Lender under any specified contingency, exceeds the
highest lawful rate, the Company and the Lender shall, to the maximum
extent permitted by applicable law, (a) characterize any non-principal
payment as an expense, fee or premium rather than as interest,
(b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of
interest thereon does not exceed the maximum amount permitted by
applicable laws, and/or (d) allocate interest throughout the full term
of such indebtedness so that interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a
rate greater than that permitted by applicable law.
WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
R&B FALCON CORPORATION
By:
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
LENDER:
RBF FINANCE CO.
By:
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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Exhibit I
R&B FALCON CORPORATION
SENIOR SECURED ___- YEAR TRANCHE PROMISSORY NOTE
New York, New York
$______________ March 26, 1999
FOR VALUE RECEIVED, R&B FALCON CORPORATION (the "Company"),
promises to pay to the order of RBF FINANCE CO. ("Payee"), the
principal amount of _________________________ Dollars ($_____________)
(or such lesser amount as shall equal the aggregate unpaid principal
amount of the __-year Tranche advances of the Loan) at the times
specified by the provisions of the Senior Secured Credit Agreement
dated as of March 26, 1999, as the same may at any time be amended,
modified or supplemented and in effect (the "Loan Agreement") between
the Company and the Lender.
The Company also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and
at the times which shall be determined in accordance with the
provisions of the Loan Agreement.
This Note is issued pursuant to and entitled to the benefits of
the Loan Agreement, to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loan
evidenced hereby was made and is to be repaid. Capitalized terms used
herein without definition shall have the meanings set forth in the
Loan Agreement.
The Senior Secured Credit Agreement dated as of March 26, 1999,
as the same may at any time be amended, modified or supplemented and
in effect (the "Loan Agreement") between the Company, the Lender named
therein, and United States Trust Company of New York, as Trustee.
All payments of principal and interest in respect of this Note
shall be made in lawful money of the United States of America in same
day funds to Payee at the office of United States Trust Company of New
York located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, 25th Floor, New York, New York,
or at such other place in the State of New York as shall be designated
in writing for such purpose in accordance with the terms of the Loan
Agreement. Each of Payee and any subsequent holder of this Note
agrees, by its acceptance hereof, that before disposing of this Note
or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Company hereunder with respect to
payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a
day which is not a Business Day, such payment shall be made on the
next succeeding Business Day and such extension of time shall be
included in the computation of the payment of interest on this Note.
This Note is subject to mandatory prepayment as provided in the
Loan Agreement and prepayment at the option of the Company as provided
in the Loan Agreement.
THE LOAN AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO THE PRINCIPALS OF CONFLICTS OF LAWS.
Upon the occurrence of an Event of Default, the unpaid balance of
the principal amount of this Note, together with all accrued but
unpaid interest thereon, may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect
provided in the Loan Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement.
No reference herein to the Loan Agreement and no provision of
this Note or the Loan Agreement shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective
times, and in the currency herein prescribed.
The Company promises to pay all costs and expenses, including all
attorneys' fees, all as provided in Section 7.2 of the Loan Agreement,
incurred in the collection and enforcement of this Note. The Company
and endorsers of this Note hereby consent to renewals and extensions
of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind
and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand hereunder.
IN WITNESS WHEREOF, the Company has caused this Note to be
executed and delivered by its duly authorized officer, as of the day
and year and at the place first above written.
R&B FALCON CORPORATION
By:
Title:
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EXHIBIT II
NOTICE OF BORROWING
The undersigned hereby certifies that he is the __________________ of
R&B Falcon Corporation, a Delaware corporation ( the "Company"), and
that as such he is authorized to execute this Notice of Borrowing on
behalf of the Company. With reference to that certain Loan Agreement
dated as of _______________, 1999 (as same may be amended, modified,
increased, supplemented and/or restated from time to time, the
"Agreement") entered into by and between the Company and RBF Finance
Co., and any other future holder of any Note issued pursuant to the
Agreement ("Lender"), the undersigned further certifies, represents
and warrants on behalf of the Company that all of the foregoing
statements are true and correct (each capitalized term used herein
having the same meaning given to it in the Agreement unless otherwise
specified):
(a)The Company requests that the Lender make an advance to the Company
on the 7-year Tranche of the Loan in the aggregate principal amount of
$_________________ and an advance to the Company on the 10-year
Tranche of the Loan in the aggregate principal amount of $__________
by no later than _______________. Immediately following such advance,
the aggregate outstanding balance of advances made on the 7-year
Tranche and the 10-year Tranche Loan shall equal $_______________ and
$___________, respectively.
(b)As of the date hereof, and as a result of the making of the
requested advance, no event shall have occurred and be continuing or
would result from the consummation of the borrowing contemplated by
the Notice of Borrowing which would constitute an Event of Default, a
Potential Event of Default or a Default.
(c)Borrower has performed and complied with all agreements and
conditions contained in the Agreement which are required to be
performed or complied with by Borrower before or on the date hereof
and, except as waived in writing or otherwise agreed to in writing by
the Lender, all of the conditions precedent set forth in Section 3.1
or 3.2, as applicable, of the Agreement under Conditions to Loan have
been satisfied.
(d)The representations and warranties of the Company contained in
Section 4 of the Agreement are true, correct and complete in all
material respects on and as of the date hereof to the same extent as
though made on and as of that date, and (ii) on or prior to the date
hereof, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by
the Company on or prior to the date hereof.
EXECUTED AND DELIVERED this _______ day of _____________, _____.
R&B FALCON CORPORATION
By:
Name:
Title:
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EXHIBIT III
FORM OF LEGAL OPINION
Opinions of Counsel that (i) the Company has duly authorized,
executed and delivered the Mortgage; (ii) the Mortgage constitutes a
legally binding obligation of the Company enforceable against the
Company in accordance with its terms (except as (i) the enforceability
thereof may be limited bankruptcy, insolvency or other similar laws
affecting creditors' rights, generally, and (ii) the enforceability
thereof may be limited by right of acceleration and the availability
of enforceable remedies may be limited by equitable principles of
general applicability, and subject to such other exceptions,
limitations or qualifications that are usual and customary for such
opinions) and (iii) the Mortgage constitutes a valid and perfected
first mortgage lien on the Mortgaged Rig.
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SCHEDULE 4.5
Title/Lien Exceptions
1.Statutory or inchoate liens for amounts not more than 30 days past
due or that are being contested in good faith.
