Exhibit 10.14
GUARANTY AGREEMENT
(Reading & Xxxxx)
THIS GUARANTY AGREEMENT (this "Guaranty") is dated as of November 10,
1997 and is by READING & XXXXX CORPORATION ("R&B Corp."), a Delaware
corporation, READING & XXXXX DRILLING CO. ("R&B Drilling"), an Oklahoma
corporation, READING & XXXXX EXPLORATION CO. ("R&B Exploration"), an
Oklahoma corporation, READING & XXXXX (A) PTY. LTD. ("R&B (A) Pty"), a
Western Australian corporation, READING AND XXXXX BORNEO DRILLING CO., LTD.
("RB Borneo"), an Oklahoma corporation, READING & XXXXX OFFSHORE, LIMITED
("R&B Offshore"), an Oklahoma corporation, and RB RIG CORPORATION ("RB"),
an Oklahoma corporation (each, a "Guarantor" and collectively, the
"Guarantors"), is in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (in such capacity, the "Administrative
Agent") for its benefit and for the ratable benefit of the Documentation
Agent and the financial institutions (the "Banks") now or hereafter party
to that certain Credit Agreement dated as of November 10, 1997 (as the same
may be amended, modified or restated from time to time and at any time, the
"Credit Agreement"), among DEEPWATER DRILLING II L.L.C (the "Borrower"),
the Banks, the Administrative Agent, and NATIONAL WESTMINSTER BANK Plc, as
Documentation Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Credit Agreement, the Banks have
agreed to extend credit to the Borrower;
WHEREAS, the obligation of the Banks to extend credit is conditioned
upon, among other things, the execution and delivery by the Guarantors of
this Guaranty;
WHEREAS, R&B Corp., through its wholly-owned indirect subsidiary, RB
Deepwater Exploration II Inc. ("R&BII"), owns a sixty percent (60%) equity
interest in the Borrower, and the other Guarantors parties hereto are
wholly-owned subsidiaries of R&B Corp.;
WHEREAS, the Guarantors are members of the same consolidated group of
companies; and
WHEREAS, the Borrower was formed for the purposes of constructing and
operating the Drillship (and for the other incidental purposes set forth in
the Limited Liability Company Agreement pursuant to which the Borrower was
formed), and it is intended that the Drillship will be used in part in
connection with the exploration or development activities of R&B Corp. and
its subsidiaries, and therefore, the Guarantors will derive substantial
direct and indirect economic benefit from the extensions of credit pursuant
to the Credit Agreement;
NOW, THEREFORE, (i) in consideration of the premises and to induce the
Banks to enter into the Credit Agreement and to extend credit, (ii) at the
special insistence and request of the Administrative Agent and the Banks,
and (iii) for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each Guarantor, for the
benefit of the Administrative Agent, the Documentation Agent and the Banks,
hereby agrees as follows:
Section 1. Defined Terms.
(a) Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.
(b) The following terms used herein shall have the meanings set
forth below:
"Consolidated Capital Expenditures" shall mean, for any period,
the aggregate of all expenditures (whether paid in cash or accrued as
liabilities and including in all events all amounts expended or
capitalized under Capital Leases) by R&B Corp. and its subsidiaries
during that period that, in conformity with GAAP, are or are required
to be included in the property, plant or equipment reflected in the
consolidated balance sheet of R&B Corp. and its subsidiaries; provided
that Consolidated Capital Expenditures shall in any event include the
purchase price paid in connection with the acquisition of any Person
(including through the purchase of all of the capital stock or other
ownership interests of such Person or through merger or consolidation)
to the extent allocable to "drilling and other property and equipment;
provided further, that Consolidated Capital Expenditures shall only
include the amount thereof actually paid in cash during such period.
As used in this definition, "Capital Lease" means any lease of any
property by a Person, which, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of such Person.
"Guarantor Default" means any event or circumstance which, with
the giving of notice, the lapse of time, or both, would (if not cured
or remedied during such time) constitute a Guarantor Event of Default.
"R&B Credit Amendment" means any amendment, modification,
replacement, termination (a "change") of any terms of any documents
governing the R&B Credit Facility if, in the opinion of the
Administrative Agent (acting upon direction of the Majority Banks),
such change could be construed to have a material adverse effect on
the Majority Banks.
"R&B Credit Facility" means (a) the credit arrangements evidenced
by the Amended and Restated Credit Agreement dated as of July 3, 1997
among Reading & Xxxxx Corporation, Reading & Xxxxx Drilling Co. and
the Documentation Agents, and the Administrative Agent, Arranger and
Security Trustee therein named, as the same may be further amended
(with the consent of the Majority Banks, if such consent is required
pursuant to Section 7(b) of this Guaranty), and (b) any credit
arrangement or Indebtedness entered into or incurred in renewal,
extension, replacement or restatement thereof.
"Subsidiary Guarantors" means R&B Drilling, R&B Exploration, R&B
(A) Pty., RB Borneo, R&B Offshore, and RB, and each other direct and
indirect subsidiary of R&B Corp. that becomes a party to this Guaranty
Agreement.
Section 2. Guaranty.
(a) Each Guarantor hereby, jointly and severally,
unconditionally and irrevocably, guarantees the prompt performance and
payment in full in Dollars when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations, and each Guarantor further
agrees to pay all costs, fees and expenses (including, without limitation,
counsel fees of outside counsel, and the allocated cost of in-house
counsel) incurred by the Administrative Agent or any Bank in enforcing any
rights under this Guaranty.
(b) Notwithstanding anything herein or in any other Loan
Document to the contrary, the maximum aggregate liability of the Guarantors
under this Guaranty at any time shall not exceed an amount equal to sixty
percent (60%) of the dollar amount of the Obligations then outstanding.
Such amount shall be calculated without giving effect to payments made by
any guarantor of any part of the Obligations other than payments by
Guarantors who are parties to this Guaranty.
Section 3. Guaranty Absolute.
(a) The obligations of the Guarantors hereunder are those of a
primary obligor, and not merely a surety, and are independent of the
Obligations. A separate action or actions may be brought against one or
more Guarantors whether or not an action is brought against the Borrower,
any other guarantor or other obligor in respect of the Obligations or
whether the Borrower, any other guarantor or any other obligor in respect
of the Obligations are joined in any such action or actions.
(b) Subject to the limitation set forth in Section 2(b) above,
each Guarantor guarantees that the Obligations will be paid and performed
strictly in accordance with the terms of the Credit Agreement and the other
Loan Documents regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of
the Administrative Agent or the Banks with respect thereto. Each Guarantor
agrees that its guarantee constitutes a guarantee of payment when due and
not of collection. The liability of each Guarantor under this Guaranty
shall be absolute and unconditional irrespective of:
(i) any lack of genuineness, validity, legality or
enforceability of the Credit Agreement, any other Loan Document
or any other document, agreement or instrument relating thereto
or any assignment or transfer of any thereof;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations
(including, without limitation, the possible extension of the
Revolving Termination Date and increase of the amount of the
Commitments all on the terms and conditions set forth in the
Credit Agreement), or any waiver, indulgence, compromise,
renewal, extension, amendment, modification of, or addition,
consent, supplement to, or consent to departure from, or any
other action or inaction under or in respect of, the Credit
Agreement or any other Loan Document or any document, instrument
or agreement relating to the Obligations or any other instrument
or agreement referred to therein or any assignment or transfer of
any thereof;
(iii) any release or partial release of any other
guarantor or other obligor in respect of the Obligations;
(iv) any exchange, release or non-perfection of any
collateral for all or any of the Obligations, or any release, or
amendment or waiver of, or consent to departure from, any
guaranty or security, for all or any of the Obligations;
(v) any furnishing of any security for any of the
Obligations;
(vi) the liquidation, bankruptcy, insolvency or
reorganization of the Borrower, any other guarantor or other
obligor in respect of the Obligations or any action taken with
respect to this Guaranty by any trustee or receiver, or by any
court, in any such proceeding;
(vii) any modification or termination of any
intercreditor or subordination agreement pursuant to which the
claims of other creditors of the Borrower or the Guarantors are
subordinated to those of the Banks; or
(viii) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable
discharge of, the Borrower or any Guarantor.
(c) This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment or performance of
the Obligations, or any part thereof, is, upon the insolvency, bankruptcy
or reorganization of the Borrower or any Guarantor or otherwise pursuant to
applicable law, rescinded or reduced in amount or must otherwise be
restored or returned by the Administrative Agent or any Bank, all as though
such payment or performance had not been made.
(d) If an event permitting the acceleration of any of the
Obligations shall at any time have occurred and be continuing and such
acceleration shall at such time be prevented by reason of the pendency
against the Borrower of a case or proceeding under any bankruptcy or
insolvency law, each Guarantor agrees that, for purposes of this Guaranty
and its obligations hereunder, the Obligations shall be deemed to have been
accelerated and, subject to the limitation set forth in Section 2(b) above,
the Guarantors, jointly and severally, agree to forthwith pay such
Obligations (including, without limitation, interest which but for the
filing of a petition in bankruptcy with respect to the Borrower, would
accrue on such Obligations), and the other obligations hereunder, without
any further notice or demand.
Section 4. Waivers. Each Guarantor hereby waives promptness,
diligence, notice of intention to accelerate, notice of acceleration,
notice of acceptance and any and all other notices with respect to any of
the Obligations and this Guaranty and any requirement that the
Administrative Agent or any Bank protect, secure, perfect or insure any
security interest in or any Lien on any property subject thereto or exhaust
any right or take any action against the Borrower, any other guarantor or
any other Person or any collateral or security or to any balance of any
deposit accounts or credit on the books of any Bank in favor of the
Borrower or any Guarantor.
Section 5. Subrogation. Each Guarantor agrees that it will not
exercise any rights of subrogation, reimbursement or contribution,
contractual statutory or otherwise which it may acquire by way of
subrogation under this Guaranty, by any payment hereunder or otherwise,
until all of the Obligations have been paid in full in cash and all
Commitments have terminated.
Section 6. Representations and Warranties. The following
representations and warranties are hereby made to the Administrative Agent
and the Banks:
(a) R&B Corp. represents and warrants that it is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Each Subsidiary Guarantor (other than R&B (A) Pty)
represents and warrants that it is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma. R&B
(A) Pty represents and warrants that it is a company duly incorporated and
existing under the laws of the State of Western Australia and the
Commonwealth of Australia, and that its registered office is located at 00
Xxxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxx Xxxxxxxxx.
(b) Each Guarantor represents and warrants that it: (i) is duly
qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where qualification or licensing is required by the
nature of its business except where the absence of such qualification has
no reasonable likelihood of having a Material Adverse Effect on the
business, properties, assets or conditions (financial or otherwise) of such
Guarantor; (ii) has all requisite corporate power and authority and the
legal right to own, pledge, mortgage and operate its properties, and to
conduct its business as now or currently proposed to be conducted; (iii) is
in compliance with its certificate of incorporation and bylaws; (iv) is not
in default under any material agreement; and (v) is in compliance with all
applicable law except if such noncompliance has no reasonable likelihood of
having a Material Adverse Effect on the business, operations, properties,
assets or conditions (financial or otherwise) of such Guarantor or on its
ability to perform its obligations under this Guaranty.
(c) Each Guarantor represents and warrants that the execution,
delivery, and performance by such Guarantor of this Guaranty (i) are within
such Guarantor's corporate powers; (ii) have been duly authorized by all
necessary corporate action; (iii) do not contravene such Guarantor's
certificate of incorporation or bylaws; and (iv) do not result in or
require the creation of any Lien upon or with respect to any of its
properties.
(d) Each Guarantor represents and warrants that no authorization
or approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery and
performance by such Guarantor of this Guaranty.
(e) Each Guarantor represents and warrants that this Guaranty is
a legal, valid and binding obligation of such Guarantor enforceable against
such Guarantor in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency or similar laws relating to
creditors' rights generally, as such laws would apply in the event of
bankruptcy, insolvency or other similar occurrence with respect to such
Guarantor, and except as may be limited by equitable principles (whether
enforcement is sought in equity or law).
(f) Each Guarantor represents and warrants that there is no
pending or threatened action or proceeding affecting such Guarantor before
any Governmental Authority which has any reasonable likelihood of having a
Material Adverse Effect on the business, operations, properties, assets or
conditions (financial or otherwise) of such Guarantor, the Liens created by
any Loan Document or the ability of such Guarantor to perform its
obligations under this Guaranty.
(g) R&B Corp. represents and warrants that: (i) the
consolidated financial statements of R&B Corp. and its subsidiaries dated
December 31, 1996, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal year ended
on that date, and its unaudited financial statements dated September 30,
1997: (A) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein, subject to ordinary, good faith year-end audit adjustments; and
(B) fairly present the financial condition of R&B Corp. and its
subsidiaries as of the date thereof and results of operations for the
period covered thereby; and (ii) since September 30, 1997, there has been
no Material Adverse Effect with respect to R&B Corp.
Section 7. Certain Covenants.
(a) Information Covenants. R&B Corp. shall deliver to the
Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Majority Banks, with sufficient copies for each Bank:
(i) Annual Financial Statements. As soon as
available, but not later than 90 days after the end of each
fiscal year, a copy of the consolidated balance sheet of R&B
Corp. and its subsidiaries as at the end of such year and the
related consolidated statements of operations and of cash flows
for such year, including the amount of Consolidated Capital
Expenditures made during such fiscal year, setting forth
comparative consolidated figures for the previous fiscal year,
and accompanied by the opinion of a nationally-recognized
independent public accounting firm ("Independent Auditor") which
report shall state that such consolidated financial statements
present fairly the financial position for the periods indicated
in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because of
a restricted or limited examination by the Independent Auditor of
any material portion of the subject companies;
(ii) Quarterly Financial Statements. As soon as
available, but not later than 45 days after the end of each of
the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of R&B Corp. and its
subsidiaries as of the end of such quarter and the related
consolidated statements of operations and of cash flows for the
period and for the elapsed portion of the fiscal year ended with
the last day of such quarterly period, including the amount of
Consolidated Capital Expenditures made during such quarter, and
in each case setting forth the comparative consolidated figures
for the related period in the prior fiscal year, and certified by
the chief financial officer or controller of R&B Corp. as fairly
presenting, in accordance with GAAP, subject to changes resulting
from audit and normal year-end audit adjustments;
(iii) Rig Status Report. As soon as available and
in any event within 60 days after the end of each of the first
three fiscal quarters of R&B Corp., and within 90 days after the
end of the fourth fiscal quarter, a report (in the same form as
provided to the lenders pursuant to the documents governing the
R&B Credit Facility) detailing (i)(A) the then current location
of each of the offshore drilling rigs owned or leased by R&B
Corp. and its Subsidiaries, (B) the then current term of and
parties to any contract of any such offshore drilling rig, and
(C) the then current day rate with respect to any such contract,
and (ii) for the previous fiscal quarter, the average day rates
and utilization for each such offshore drilling rig;
(iv) Forecast; etc. Not more than 60 days after the
commencement of each fiscal year of R&B Corp., a forecast which
includes an income statement, balance sheet and cash flow
statement of R&B Corp. for each of the four fiscal quarters of
such fiscal year, including a breakdown of revenues, operating
expenses, utilizations and Consolidated Capital Expenditure
assumptions for each offshore drilling rig owned or leased by R&B
Corp. and its subsidiaries;
(v) Compliance Certificate. At the time of the
delivery of the financial statements provided for in Sections
7(a)(i) and (ii), a certificate signed by a Responsible Officer
of R&B Corp., stating that (A) the financial statements being
delivered present fairly the financial position of R&B Corp. as
of the date thereof, (B) as of the date of such certificate, no
Guarantor Default or Guarantor Event of Default exists (or if it
does exist, an explanation of same and of the action R&B Corp.
intends to take to remedy same), (C) the representations and
warranties of the Guarantors set forth in this Guaranty are true
and correct in all material respects as of the date of such
certificate except those which relate solely to an earlier date,
(D) as of the date of such certificate, no actions, suits or
proceedings are pending or, to the best knowledge of R&B Corp.
threatened, at law, in equity, in arbitration or before any
Government Authority, against any Guarantor or any of their
respective properties which: (x) purport to or do restrain the
performance by a Guarantor under this Guaranty, or (y)
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect with respect to R&B Corp. and its
subsidiaries taken as a whole, and (E) since the date of the
financial statements being delivered, there has been no Material
Adverse Effect with respect to R&B Corp. and its subsidiaries
taken as a whole;
(vi) SEC Reports. Promptly upon transmission thereof,
copies of any material filings and registration with, and reports
to, the SEC by R&B Corp. or its subsidiaries and copies of all
financial statements, proxy statements, notices and reports as
R&B Corp. or any of its subsidiaries shall generally send to
analysts or all holders of their capital stock in their capacity
as such holders (in each case to the extent not theretofore
delivered to the Banks pursuant to this Guaranty); and
(vii) Additional Information. Promptly, such
additional information regarding the business, financial or
corporate affairs of any Guarantor or any subsidiary of any
Guarantor as any Bank, acting through the Administrative Agent,
may from time to time reasonably request.
(b) Amendments to R&B Credit Agreement. Prior to agreeing to
any R&B Credit Amendment, R&B Corp. and R&B Drilling Co. agree to deliver a
copy thereof to the Administrative Agent. R&B Corp. and R&B Drilling agree
not to consent to or permit any R&B Credit Amendment without the prior
written consent of the Majority Banks acting through the Administrative
Agent.
Section 8. Further Assurances. Each Guarantor agrees that at any
time and from time to time, at the expense of such Guarantor, such
Guarantor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable,
as the Administrative Agent may reasonably request, to enable the
Administrative Agent to protect and to exercise and enforce its rights and
remedies hereunder.
Section 9. Application of Payments. Any payment received by the
Administrative Agent from a Guarantor (or from any Bank pursuant to Section
14 below), shall be applied by the Administrative Agent as follows:
First, to the payment of costs and expenses of
collection and all expenses (including without limitation
Attorney Costs), liabilities and advances made or incurred by the
Administrative Agent in connection therewith;
Next, to the Banks pro rata, based on the then
outstanding amount of the Obligations owed to each in payment in
full of the Obligations; and
Finally, after payment in full of all Obligations and
the termination of the Commitments, the payment to the
Guarantors, or their successors and assigns, or to whomsoever may
be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining
from such proceeds;
provided, however, that nothing contained in this Section 9 shall expand or
modify the limitation on the Guarantor's liability set forth in Section
2(b) of this Guaranty.
Section 10. Decisions Relating to Exercise of Remedies.
Notwithstanding anything in this Guaranty to the contrary, the
Administrative Agent may exercise, and at the request of the Majority Banks
shall exercise or refrain from exercising, all rights and remedies provided
for herein and provided by law.
Section 11. No Waiver. No failure on the part of the
Administrative Agent or any Bank to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 12. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty, nor consent to any departure by any Guarantor
herefrom, shall in any event be effective unless the same shall be in
writing and signed, in the case of amendments, by the Guarantors and by the
Administrative Agent (acting with the consent of the Majority Banks or all
the Banks, as may be required pursuant to Section 10.01 of the Credit
Agreement) and, in the case of consent or waiver, by the Administrative
Agent (acting with the consent of the Majority Banks or all the Banks, as
may be required pursuant to Section 10.01 of the Credit Agreement) and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which made or given.
Section 13. Notices. All notices, requests and other
communications provided for hereunder shall be in writing and given as
provided in Section 10.02 of the Credit Agreement. The address for notices
to Guarantors shall be the address set forth below its signature to this
Guaranty, or such other address as shall be designated by Guarantor(s) in a
written notice to the Administrative Agent.
Section 14. Right to Set-off.
(a) Upon the occurrence and during the continuance of any Event
of Default under the Credit Agreement, each Bank is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to
set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Bank to or for the credit or the account of any Guarantor
against any and all of the Obligations (subject to the limitation set forth
in Section 2(b) above), irrespective of whether or not such Bank shall have
made any demand under this Guaranty and although such Obligations may be
contingent and unmatured. Each Bank which sets-off pursuant to this
Section 14(a) shall give prompt notice to the applicable Guarantor and the
Administrative Agent following the occurrence thereof; provided that the
failure to give such notice shall not affect the validity of the set-off.
(b) Any payment obtained pursuant to Section 14(a) above (or in
any other manner directly from any Guarantor) by any Bank shall be remitted
to the Administrative Agent and distributed among the Banks in accordance
with the provisions of Section 9 above.
Section 15. Continuing Guaranty. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the
indefeasible payment (after the termination of the Commitments) in full
(subject to Section 2(b) above) of the Obligations and all other amounts
payable under this Guaranty; (b) be binding upon each Guarantor, its
successors and assigns; and (c) inure to the benefit of the Administrative
Agent, the Banks and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Bank may
assign or otherwise transfer its rights and obligations under the Credit
Agreement to any other Person or entity, and such other Person or entity
shall thereupon become vested with all the benefits in respect thereof
granted to the Bank herein or otherwise, all as provided in, and to the
extent set forth in, Sections 10.07 and 10.08 of the Credit Agreement.
Section 16. Subordination of the Credit Parties' Obligations to the
Guarantor. Each Guarantor hereby expressly covenants and agrees for the
benefit of the Administrative Agent and the Banks that all obligations and
liabilities of the Borrower and all obligations and liabilities of all
other guarantors of the Obligations (or any part thereof) ("Other
Guarantors"), to such Guarantor ("Such Guarantor") of whatsoever
description (including, without limitation, all rights of contribution)
(the "Subordinated Obligations") shall be subordinated and junior in right
of payment to the Obligations. In the case of any Insolvency Proceeding
wherein the obligor of Subordinated Obligations (an "Obligor") is debtor,
the Obligor and any assignee, trustee in bankruptcy, receiver or other
similar Person, debtor in possession or other Person(s) in charge are
hereby directed to pay to the Administrative Agent (for the benefit of the
Banks) the full amount of the Obligations (including interest to date of
payment and including without limitation interest accrued after the filing
of a petition initiating an Insolvency Proceeding) before making any
payment in respect of the Subordinated Obligations to Such Guarantor, and
insofar as may be necessary for that purpose, Such Guarantor hereby assigns
and transfers to the Administrative Agent all rights to such payments.
Notwithstanding the foregoing provisions of this Section 16:
(a) with respect to obligations and liabilities of the Borrower to
Such Guarantor ("Borrower/Guarantor Obligations"), Such Guarantor
may receive payments in respect of Borrower/Guarantor Obligations
so long as there has not occurred a Default or Event of Default;
(b) with respect to obligations and liabilities of one more of the
Guarantors hereunder to Such Guarantor ("R&B Intra-Company
Obligations"), Such Guarantor may receive payments in respect of
R&B Intra-Company Obligations so long as there has not occurred
an Event of Default and there is not pending any Insolvency
Proceeding involving as debtor the Obligor of the R&B Intra-
Company Obligations;
(c) with respect to obligations and liabilities of one or more of the
Other Guarantors who are not signatories to this Guaranty
("Unrelated Guarantors") which obligations or liabilities are
related to the Borrower, the Drillship, or R&BII's interest in
the Borrower ("Drillship-Related R&B/Conoco Obligations"), Such
Guarantor may receive payments in respect of Drillship-Related
R&B/Conoco Obligations so long as there has been no acceleration
of the Obligations under the Credit Agreement and there is not
pending any Insolvency Proceeding involving as debtor the
Borrower or the Obligor of the Drillship-Related R&B Conoco
Obligations; and
(d) obligations and liabilities of Unrelated Guarantors to Such
Guarantor, if such obligations and liabilities are unrelated to
the Borrower and the Drillship ("Unrelated R&B/Conoco
Obligations"), shall not be subject to the provisions of this
Section 16.
If Such Guarantor shall receive any payment in respect of the Subordinated
Obligations in contravention of the terms of this Section, such payments
shall be collected and received by Such Guarantor as trustee for the
Administrative Agent and the Banks and paid over to the Administrative
Agent and the Banks on account of the Obligations.
Section 17. Severability; Entire Agreement.
(a) If for any reason any provision or provisions hereof are
determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of
this Guaranty which are valid.
(b) This Guaranty, together with the other Loan Documents,
embodies the entire agreement and understanding among the Guarantor and the
other parties to the Loan Documents, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
Section 18. Taxes.
(a) Any and all payments by a Guarantor to each Bank or the
Administrative Agent under this Guaranty and any other Loan Document shall
be made free and clear of, and without deduction or withholding for, any
Taxes. In addition, each Guarantor shall pay all Other Taxes with respect
to amounts owed by it.
(b) If a Guarantor shall be required by law to deduct or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of any
sum payable hereunder to any Bank or the Administrative Agent, then: (i)
the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) such Bank or the
Administrative Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been
made; (ii) such Guarantor shall make such deductions and withholdings;
(iii) such Guarantor shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable
law; and (iv) such Guarantor shall also pay to each Bank or the
Administrative Agent for the account of such Bank, at the time interest is
paid, all additional reasonable amounts which the respective Bank
specifies, in a Certificate Regarding Taxes (as defined in Section 18(e)
below) as necessary to preserve the after-tax yield the Bank would have
received if such Taxes, Other Taxes or Further Taxes had not been imposed.
(c) Each Guarantor agrees to indemnify and hold harmless each
Bank and the Administrative Agent for the full amount of Taxes, Other Taxes
and Further Taxes in the amount that the respective Bank specifies, in a
Certificate Regarding Taxes (as defined in Section 18(e) below) as
necessary to preserve the after-tax yield the Bank would have received if
such Taxes, Other Taxes or Further Taxes had not been imposed, and any
liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such Taxes, Other
Taxes or Further Taxes were correctly or legally asserted. Payment under
this indemnification shall be made within 30 days after the date the Bank
or the Administrative Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by a Guarantor
of Taxes, Other Taxes or Further Taxes, such Guarantor shall furnish to the
Administrative Agent and each Bank the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment reasonably
satisfactory to the Administrative Agent.
(e) As used in this Section 18, a "Certificate Regarding Taxes"
means a Certificate executed on behalf of the applicable Bank setting forth
in reasonable detail the amount payable to such Bank hereunder. Such
certificate shall be conclusive and binding on the Guarantor in the absence
of manifest error.
Section 19. Contribution.
(a) At any time a payment in respect of the guaranteed
Obligations is made under this Guaranty, the right of contribution, if any,
of each Guarantor against any other Guarantor required to make any payment
to such Guarantor pursuant to this Section 19 (a "Contributor") shall be
determined as provided in the immediately following sentence, with the
right of contribution of each Guarantor to be revised and restated as of
each date on which a payment (a "Relevant Payment") is made on the
guaranteed Obligations under this Guaranty. At any time that a Relevant
Payment is made by a Guarantor that results in the aggregate payments made
by such Guarantor in respect of the guaranteed Obligations to and including
the date of the Relevant Payment exceeding such Guarantor's Contribution
Percentage (as hereinafter defined) of the aggregate payments made by all
Guarantors in respect of the guaranteed Obligations to and including the
date of the Relevant Payment (such excess, the "Aggregate Excess Amount"),
each such Guarantor shall have a right of contribution against each
Contributor who has made payments in respect of the guaranteed Obligations
to and including the date of the Relevant Payment in an aggregate amount
less than such Contributor's Contribution Percentage of the aggregate
payments made to and including the date of the Relevant Payment by all
Guarantors in respect to the guaranteed Obligations (the aggregate amount
of such deficit, the "Aggregate Deficit Amount") in an amount equal to (x)
a fraction the numerator of which is the Aggregate Excess Amount of such
Guarantor and the denominator of which is the Aggregate Excess Amount of
all Guarantors multiplied by (y) the Aggregate Deficit Amount of such
Contributor. A Guarantor's right of contribution, if any, pursuant to the
preceding sentences shall arise at the time of each computation, subject to
adjustment to the time of any subsequent computation; provided, that no
Guarantor may take any action to enforce such right until the guaranteed
Obligations have been paid in full and all Commitments have been
terminated, it being expressly recognized and agreed by all parties hereto
that any Guarantor's right of contribution arising pursuant to this Section
19 against any Contributor shall be expressly junior and subordinate to
such Contributor's obligations and liabilities in respect of the guaranteed
Obligations and any other obligations owing under this Guaranty. As used
in this Agreement, (i) each Contributor's "Contribution Percentage" shall
mean the percentage obtained by dividing (x) the Adjusted Net Worth of such
Contributor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii)
the "Adjusted Net Worth" of each Guarantor shall mean the greater of (x)
the Net Worth of such Guarantor or (y) zero; and (iii) the "Net Worth" of
each Guarantor shall mean the amount by which the fair salable value of
such Guarantor's assets on the initial Borrowing Date exceeds its existing
debts and other liabilities (including contingent liabilities, but without
giving effect to any Guaranteed Obligations arising under this Guaranty),
in each case after giving effect to all transactions occurring on the
initial Borrowing Date.
(b) Each Guarantor recognizes and agrees that, except for any
right of contribution arising pursuant to this Section 19, until the
guaranteed Obligations have been paid in full, each Guarantor who makes any
payment in respect of the guaranteed Obligations shall have no right of
contribution or subrogation against any other Guarantor in respect of such
payment, any such right of contribution or subrogation arising under law or
otherwise being expressly waived by all Guarantors until the guaranteed
Obligations have been paid in full.
(c) Each Guarantor recognizes and acknowledges that the rights
to contribution arising hereunder shall constitute an asset in favor of the
party entitled to such contribution. In this connection, each Guarantor
has the right to waive its contribution right against any other Guarantor
to the extent that after giving effect to such waiver such Guarantor would
remain Solvent, in the determination of the Majority Banks.
Section 20. Event of Default. As used in this Guaranty and in the
other Loan Documents, a "Guarantor Event of Default" shall mean the
occurrence of any of the following events:
(a) the Guarantor shall fail to observe or perform any term or
covenant contained in this Guaranty; provided, however if such default is
capable of being cured or remedied, then such default shall not constitute
a Guarantor Event of Default unless it shall continue unremedied for a
period of twenty (20) days; or
(b) R&B Corp. or a Subsidiary Guarantor (A) fails to make any
payment in respect of any Indebtedness or Contingent Obligation having an
aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than $5,000,000 when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or
otherwise) and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such
failure, or (B) fails to perform or observe any other condition or
covenant, or any other event shall occur or condition exist, under any
agreement or instrument relating to any such Indebtedness or Contingent
Obligation, and such failure continues after the applicable grace or notice
period, if any, specified in the relevant document on the date of such
failure, if the effect of such failure, event or condition is to result in
acceleration of all or any part of such Indebtedness or renegotiation of
the material payment terms of any such Indebtedness to become due prior to
its scheduled maturity, or to result in such Contingent Obligation
becoming payable or cash collateral in respect thereof being demanded; or
(c) An R&B Credit Amendment shall be made or done without the
prior written consent of the Administrative Agent (acting upon direction of
the Majority Banks).
SECTION 21. GOVERNING LAW AND JURISDICTION.
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS); PROVIDED THAT THE ADMINISTRATIVE AGENT
AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
OR ANY OTHER 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 GUARANTY, EACH GUARANTOR CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. EACH GUARANTOR HEREBY IRREVOCABLY DESIGNATES, APPOINTS
XXXXXXXX-XXXX CORPORATION, WITH OFFICES ON THE DATE HEREOF AT 00 XXXXX
XXXXXX, XXXXXX, XXX XXXX, 00000, AS ITS DESIGNEE, APPOINTEE AND
ADMINISTRATIVE AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS
BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL
PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH
ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND
ADMINISTRATIVE AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, THE
GUARANTOR AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND ADMINISTRATIVE
AGENT IN NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE ADMINISTRATIVE AGENT. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH BELOW ITS SIGNATURE
TO THIS GUARANTY AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE TEN DAYS AFTER
MAILING SUCH AGREEMENT. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST THE GUARANTOR IN ANY OTHER JURISDICTION. EACH GUARANTOR WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
(c) EACH GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY OR
ANY DOCUMENT RELATED HERETO.
SECTION 22. WAIVER OF JURY TRIAL. EACH GUARANTOR WAIVES ITS RIGHTS
TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS GUARANTY, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY
OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GUARANTOR
AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH GUARANTOR
FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS GUARANTY OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
SECTION 23. ENTIRE AGREEMENT. THIS WRITTEN GUARANTY AND OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be
duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
READING & XXXXX CORPORATION
By
Name:
Title:
Address for Notices:
Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxx
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq .
General Counsel
Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
READING & XXXXX DRILLING CO.
By
Name:
Title:
Address for Notices:
c/o Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxx
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
General Counsel
Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
READING & XXXXX EXPLORATION CO.
By
Name:
Title:
Address for Notices:
c/o Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxx
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
General Counsel
Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
READING & XXXXX (A) PTY. LTD.
By
Name:
Title:
Address for Notices:
c/o Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxx
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
General Counsel
Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
READING AND XXXXX BORNEO
DRILLING CO., LTD.
By
Name:
Title:
Address for Notices:
c/o Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxx
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
General Counsel
Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
READING & XXXXX OFFSHORE,
LIMITED
By
Name:
Title:
Address for Notices:
c/o Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxx
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
General Counsel
Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
RB RIG CORPORATION
By
Name:
Title:
Address for Notices:
c/o Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxx
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq.
General Counsel
Reading & Xxxxx Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
