EXHIBIT 10.9
Execution Copy
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PARTICIPATION AGREEMENT
dated as of August 31, 1999
among
DEEPWATER DRILLING II L.L.C.,
DEEPWATER INVESTMENT TRUST 1999-A, as Investment Trust
WILMINGTON TRUST FSB, not in its individual capacity
except as expressly stated herein, but solely as Investment Trustee
WILMINGTON TRUST COMPANY,
not in its individual capacity except as expressly
provided herein, but solely as Charter Trustee,
BA LEASING & CAPITAL CORPORATION,
as Documentation Agent,
THE OTHER FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF OR THAT MAY
HEREAFTER BECOME PARTY HERETO,
as Certificate Purchasers,
solely with respect to Sections 2.15, 6.9, 9.4(a) and 12.13(b)
R&B FALCON CORPORATION and
CONOCO INC.,
and
solely with respect to Sections 5.2 and 6.4,
RBF DEEPWATER EXPLORATION II INC. and
CONOCO DEVELOPMENT II INC.
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SECTION 1
DEFINITIONS; INTERPRETATION
SECTION 2
COMMITMENTS OF THE PARTIES
SECTION 2.1 Certain Closing Date Events. . . . . . . . . . . . . .2
SECTION 2.2 Certain Delivery Date Events . . . . . . . . . . . . .3
SECTION 2.3 Advances by Certificate Purchasers and Investment
Trust . . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 2.4 Certificates and Payments; Certificate Margin. . . . .4
SECTION 2.5 Limitations on Advances. . . . . . . . . . . . . . . .5
SECTION 2.6 Fundings; Application of Proceeds. . . . . . . . . . .6
SECTION 2.7 [Intentionally Omitted]. . . . . . . . . . . . . . . .6
SECTION 2.8 Postponement of Advance. . . . . . . . . . . . . . . .6
SECTION 2.9 Records. . . . . . . . . . . . . . . . . . . . . . . .7
SECTION 2.10 [Intentionally Omitted]. . . . . . . . . . . . . . . .8
SECTION 2.11 Timing of Fundings to Investment Trustee and Payments
to Certificate Purchasers . . . . . . . . . . . . . . 8
SECTION 2.12 Computations . . . . . . . . . . . . . . . . . . . . .8
SECTION 2.13 Conditions to each Advance . . . . . . . . . . . . . .9
SECTION 2.14 Fees . . . . . . . . . . . . . . . . . . . . . . . . .9
SECTION 2.15 Payments Under the Ship Mortgage;
Limitation on Foreclosure. . . . . . . . . . . . . . .9
SECTION 3
EFFECTIVE DATE; CLOSING DATE; CONDITIONS PRECEDENT
SECTION 3.1 Closing Date . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.2 Conditions Precedent to Closing Date . . . . . . . . 10
SECTION 4
DELIVERY DATE; CONDITIONS PRECEDENT
SECTION 4.1 Conditions Precedent to Delivery Date. . . . . . . . 14
SECTION 4.2 Head Lease Transaction . . . . . . . . . . . . . . . 17
SECTION 4.3 Replacement Conditions . . . . . . . . . . . . . . . 17
SECTION 4.4 Accounting Changes . . . . . . . . . . . . . . . . . 18
SECTION 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of Deepwater. . . . . 18
SECTION 5.2 Representations and Warranties of Members. . . . . . 23
SECTION 5.3 Representations and Warranties of the Investment Trust25
SECTION 5.4 Representations and Warranties of Certificate
Purchasers . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.5 Representations and Warranties of the Trustees . . . 28
SECTION 6
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.1 Covenants of Deepwater . . . . . . . . . . . . . . . 29
SECTION 6.2 Certain Covenants of the Charter Trustee, the
Investment Trustee and the Investment Trust . . . . .34
SECTION 6.3 Covenants of the Certificate Purchasers. . . . . . . 36
SECTION 6.4 Covenants of the Members . . . . . . . . . . . . . . 37
SECTION 6.5 Hedging Agreements . . . . . . . . . . . . . . . . . 38
SECTION 6.6 [Intentionally Omitted]. . . . . . . . . . . . . . . 38
SECTION 6.7 Charter Extension Option . . . . . . . . . . . . . . 38
SECTION 6.8 Excessive Use Indemnity. . . . . . . . . . . . . . . 39
SECTION 6.9 Letter of Credit . . . . . . . . . . . . . . . . . . 39
SECTION 7
CERTAIN PROCEDURES
SECTION 7.1 Illegality.. . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.2 Increased Costs and Reduction of Return. . . . . . . 40
SECTION 7.3 Funding Losses . . . . . . . . . . . . . . . . . . . 41
SECTION 7.4 Inability to Determine Rates . . . . . . . . . . . . 42
SECTION 7.5 Reserves on Base Rate Advances . . . . . . . . . . . 42
SECTION 7.6 Certificates of Certificate Purchasers . . . . . . . 42
SECTION 7.7 Substitution of Certificate Purchasers; Change in
Applicable Office; Prepayments. .. . . . . . . . . . 43
SECTION 7.8 Legal and Tax Representation . . . . . . . . . . . . 43
SECTION 7.9 Failure of a Certificate Purchaser to Fund . . . . . 44
SECTION 8
PAYMENT OF CERTAIN EXPENSES
SECTION 8.1 Transaction Expenses . . . . . . . . . . . . . . . . 45
SECTION 8.2 Transaction Expenses if Closing does not Occur . . . 45
SECTION 8.3 On-Going Expenses. . . . . . . . . . . . . . . . . . 46
SECTION 9
RESTRICTIONS ON TRANSFERS; CHANGE OF CONTROL
SECTION 9.1 Restrictions on the Certificate Purchasers . . . . . 46
SECTION 9.2 Restrictions on Trustees . . . . . . . . . . . . . . 48
SECTION 9.3 Expenses . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 9.4 Change of Control. . . . . . . . . . . . . . . . . . 48
SECTION 10
INDEMNIFICATION
SECTION 10.1 General Indemnity. . . . . . . . . . . . . . . . . . 51
SECTION 10.2 General Indemnity Exclusions . . . . . . . . . . . . 52
SECTION 10.3 Proceedings in Respect of Claims . . . . . . . . . . 53
SECTION 10.4 General Tax Indemnity. . . . . . . . . . . . . . . . 54
SECTION 11
AGENT
SECTION 11.1 Appointment of Documentation Agent; No Duties. . . . 64
SECTION 11.2 Delegation of Duties . . . . . . . . . . . . . . . . 65
SECTION 11.3 Exculpatory Provisions . . . . . . . . . . . . . . . 65
SECTION 11.4 Reliance by Agent. . . . . . . . . . . . . . . . . . 65
SECTION 11.5 [Intentionally Omitted]. . . . . . . . . . . . . . . 65
SECTION 11.6 Non-Reliance on Agent and Other Certificate
Purchasers . . . . . . . . . . . . . . . . . . . . . 66
SECTION 11.7 Indemnification. . . . . . . . . . . . . . . . . . . 66
SECTION 11.8 Agent. . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 11.9 Successor Agent. . . . . . . . . . . . . . . . . . . 67
SECTION 12
MISCELLANEOUS
SECTION 12.1 Survival of Agreements . . . . . . . . . . . . . . . 68
SECTION 12.2 No Broker; etc . . . . . . . . . . . . . . . . . . . 68
SECTION 12.3 Notices. . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 12.4 Counterparts . . . . . . . . . . . . . . . . . . . . 71
SECTION 12.5 Amendments, Waivers and Consents . . . . . . . . . . 71
SECTION 12.6 Confidentiality. . . . . . . . . . . . . . . . . . . 73
SECTION 12.7 Headings; etc. . . . . . . . . . . . . . . . . . . . 73
SECTION 12.8 Parties in Interest. . . . . . . . . . . . . . . . . 73
SECTION 12.9 Governing Law. . . . . . . . . . . . . . . . . . . . 73
SECTION 12.10 Severability . . . . . . . . . . . . . . . . . . . . 74
SECTION 12.11 Further Assurances . . . . . . . . . . . . . . . . . 74
SECTION 12.12 Waiver of Jury Trial . . . . . . . . . . . . . . . . 74
SECTION 12.13 Limitations on Recourse. . . . . . . . . . . . . . . 74
SECTION 12.14 Applicable Laws. . . . . . . . . . . . . . . . . . . 76
SECTION 12.15 Right to Inspect . . . . . . . . . . . . . . . . . . 76
SECTION 12.16 Accounts, Distribution of Payments and Flow of Funds 76
SECTION 12.17 Attorneys-in-Fact. . . . . . . . . . . . . . . . . . 76
SECTION 12.18 Successor Trustees; Jurisdiction of Trust. . . . . . 76
SECTION 12.19 Third-Party Beneficiaries. . . . . . . . . . . . . . 77
SECTION 12.20 Consent to Jurisdiction. . . . . . . . . . . . . . . 77
SECTION 12.21 Deepwater Acknowledgment With Respect to Charter Trust
Agreement. . . . . . . . . . . . . . . . . . . . . . 77
SECTION 12.22 Appointment of Wilmington Trust FSB as
Attorney-in-Fact on behalf of the Beneficial
Owners; Powers of Attorney . . . . . . . . . . . . . 78
SECTION 12.23 Non-Defaulting Drilling Party's Right to Pursue
Contests . . . . . . . . . . . . . . . . . . . . . . 78
EXHIBITS
EXHIBIT A - Form of Funding Indemnity Letter
EXHIBIT B - Opinion of White & Case LLP, special counsel to
Deepwater
EXHIBIT C - [Intentionally Omitted]
EXHIBIT D - Opinion of Xxxxx X. Anderson, in-house counsel to
Conoco
EXHIBIT E - Opinion of Xxxxx X. Xxxxxx, counsel to R&B Falcon
EXHIBIT F - Officer's and Manager's Certificate
EXHIBIT G - Officer's Certificate
EXHIBIT H-1 - Amended and Restated Drilling Contracts
EXHIBIT H-2 - Amended and Restated Drilling Contract Guaranties
EXHIBIT I - Drilling Consent
EXHIBIT J - [Intentionally Omitted]
EXHIBIT K - [Intentionally Omitted]
EXHIBIT L - [Intentionally Omitted]
EXHIBIT M - Xxxx of Sale
EXHIBIT N - Form of Advance Request
EXHIBIT O - Opinion of Haight, Gardner, Holland & Knight
EXHIBIT P - Opinion of Xxxxx, Xxxxxxx & Xxxxxxx, Panamanian
Counsel
EXHIBIT Q - Form of Notice of Certificate Return Rate
EXHIBIT R - Certificate Purchaser Assignment and Assumption
Agreement
EXHIBIT S-1 - Form of Hedging Agreements
EXHIBIT S-2 - Form of Deepwater Hedging Agreements
EXHIBIT T - Form of Ship Mortgage
EXHIBIT U - Opinions of Xxxxxxx X. Xxxxxxx, Vice President and
Trust Counsel of Wilmington Trust Company and
Xxxxxxxx, Xxxxxx & Finger
EXHIBIT V - Form of Subcharter
EXHIBIT W-1 - Special Power of Attorney for Executing the
Charter Trust Agreement and Ship Mortgage on
Behalf of Wilmington Trust FSB and the Beneficial
Owners
EXHIBIT W-2 - Special Power of Attorney for Executing the
Charter Trust Agreement and Ship Mortgage on
Behalf of Wilmington Trust Company
EXHIBIT X - Form of Letter of Credit
SCHEDULES
SCHEDULE 1 - List of Transaction Documents
SCHEDULE 2 - Facility Fee Rate
SCHEDULE 3 - List of UCC and Other Necessary Security Filings
SCHEDULE 4 - Information Relied Upon by Appraiser
SCHEDULE 5 - Certificate Purchaser Notice Addresses, Payment
Instructions and Responsible Officers
SCHEDULE 6 - [Intentionally Omitted]
SCHEDULE 7 - Terms of Subordination for Subordinated Debt
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of August 31, 1999 (this
"Agreement" or "Participation Agreement"), is entered into by and among
DEEPWATER DRILLING II L.L.C., a Delaware limited liability company
("Deepwater"), WILMINGTON TRUST FSB, a Federal savings bank, not in its
individual capacity except as expressly provided herein, but solely as
trustee under the Investment Trust Agreement (the "Investment Trustee"),
DEEPWATER INVESTMENT TRUST 1999-A, a Delaware business trust (the
"Investment Trust"), WILMINGTON TRUST COMPANY, a Delaware banking
corporation, not in its individual capacity except as expressly provided
herein, but solely as trustee under the Charter Trust Agreement (the
"Charter Trustee"), BA LEASING & CAPITAL CORPORATION, a California
corporation, as documentation agent (the "Documentation Agent"), each of
the financial institutions listed on the signature pages hereto, or that
may hereafter become a party hereto, as a certificate purchaser (each, a
"Certificate Purchaser" and collectively, the "Certificate Purchasers")
(each of the foregoing parties, a "Participant"), solely with respect to
Sections 2.15, 6.9, 9.4(a) and 12.13(b), R&B FALCON CORPORATION and CONOCO
INC., and solely with respect to Sections 5.2 and 6.4, RBF DEEPWATER
EXPLORATION II INC., a Nevada corporation, and CONOCO DEVELOPMENT II INC., a
Delaware corporation (each, a "Member").
WITNESSETH
WHEREAS, the Charter Trustee contemplates acquiring title to the
Drillship from Deepwater or chartering the Drillship from the Head Lessor,
and Deepwater contemplates chartering or subchartering the Drillship from
the Charter Trustee;
WHEREAS, Deepwater supervised the construction of the Vessel pursuant to
the Construction Contract and the acquisition and installation of the OFE
(the Vessel and the OFE, collectively, the "rillship");
WHEREAS, Deepwater, the Charter Trustee and the Investment Trust wish to
arrange financing for the cost of the acquisition of OFE, the construction
of the Vessel and the transfer of the completed Drillship to the Charter
Trustee and delivery to Deepwater;
WHEREAS, Deepwater and the Drilling Parties are parties to certain
Drilling Contracts providing for drilling services utilizing the Drillship
from Deepwater, and payments to Deepwater by the Drilling Parties of the
Day Rate and other amounts referred to in the Drilling Contracts; and
WHEREAS, the Certificate Purchasers have agreed to make Advances to the
Charter Trustee and the Investment Trust, as applicable, in an aggregate
amount not to exceed the Maximum Certificate Purchaser Commitment to fund
the acquisition of the Drillship and certain other costs.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
SECTION 1
DEFINITIONS; INTERPRETATION
Unless the context otherwise requires, capitalized terms used and not
otherwise defined in this Agreement have the meanings given to them in
Appendix 1 of this Agreement and, for all purposes of this Agreement, the
rules of interpretation set forth in such Appendix 1 apply.
SECTION 2
COMMITMENTS OF THE PARTIES
Subject to the terms and conditions of this Agreement (including
Sections 3 and 4) and the other Transaction Documents, each of the parties
hereto agrees to participate in the transactions contemplated by this
Agreement and the other Transaction Documents and, among other things, to
take each of the actions to be taken by it on the Closing Date and
thereafter, as more fully described in this Section 2.
SECTION 2.1 Certain Closing Date Events. On the Closing Date,
subject to the terms and conditions of this Agreement and the other
Transaction Documents:
(a) the Certificate Purchasers shall make Advances to the Charter
Trustee pursuant to Section 2.3 in an aggregate amount equal to the Series
A Portion of the Maximum Certificate Purchaser Commitment;
(b) each Certificate Purchaser shall purchase, and the Charter Trustee
shall issue to each Certificate Purchaser, (i) one Conoco Series A Trust
Certificate (which together with all other Conoco Series A Trust
Certificates shall have, in the aggregate, a principal amount equal to 40%
of the Series A Portion of the Maximum Certificate Purchaser Commitment)
and (ii) one R&B Falcon Series A Trust Certificate (which together with all
other R&B Falcon Series A Trust Certificates shall have, in the aggregate,
a principal amount equal to 60% of the Series A Portion of the Maximum
Certificate Purchaser Commitment);
(c) the Certificate Purchasers shall make Advances to the Investment
Trust pursuant to Section 2.3 in an aggregate amount equal to the
Investment Portion of the Maximum Certificate Purchaser Commitment;
(d) each Certificate Purchaser shall purchase, and the Investment
Trustee shall issue to each Certificate Purchaser, (i) one Conoco
Investment Trust Certificate (which together with all other Conoco
Investment Trust Certificates shall have, in the aggregate, a principal
amount equal to 40% of the Investment Portion of the Maximum Certificate
Purchaser Commitment) and (ii) one R&B Falcon Investment Trust Certificate
(which together with all other R&B Falcon Investment Trust Certificates
shall have, in the aggregate, a principal amount equal to 60% of the
Investment Portion of the Maximum Certificate Purchaser Commitment);
(e) the Investment Trust shall make advances to the Charter Trustee
pursuant to Section 2.3 in an aggregate amount equal to the Investment
Portion of the Maximum Certificate Purchaser Commitment;
(f) the Investment Trust shall purchase, and the Charter Trustee shall
issue, the Series B Trust Certificates in the aggregate principal amount
of the Investment Portion of the Maximum Certificate Purchaser Commitment;
(g) the Charter Trustee shall advance to Deepwater (as directed by
Deepwater) the amounts received from the Certificate Purchasers in
accordance with Sections 2.3 and 2.6;
(h) the Transaction Expenses and the Facility Fees shall be paid to the
Persons entitled to receive such payments on the Closing Date pursuant to
Section 8.1 by the Person responsible therefor;
(i) Intentionally Omitted;
(j) Deepwater and the Charter Trustee shall enter into the Master
Charter and each Charter Supplement, pursuant to which Deepwater shall
charter the Drillship from the Charter Trustee effective as of the Delivery
Date; and
(k) the parties shall enter into the other Transaction Documents
indicated on Schedule 1 hereto as being entered into as of the Closing
Date.
SECTION 2.2 Certain Delivery Date Events. On the Delivery Date,
subject to the terms and conditions of this Agreement (including Section
4.1) and the other Transaction Documents:
(a) Intentionally Omitted;
(b) if the Head Lease Transaction is being entered into in accordance
with Section 4.2, Deepwater shall transfer and convey, or cause to be
transferred and conveyed, to the Head Lessor all of its right, title and
interest in and to the Drillship and, immediately upon such transfer and
conveyance, the Charter Trustee shall enter into the Head Lease with the
Head Lessor;
(c) if the Head Lease Transaction is not being entered into, Deepwater
shall transfer all of its right, title and interest in and to the Drillship
and the Construction Contract to the Charter Trustee;
(d) Deepwater, on behalf of the Head Lessor or the Charter Trustee, as
applicable, shall cause the Drillship and the Ship Mortgage to be duly
provisionally registered under the laws of the Republic of Panama;
(e) the Charter Term shall commence; and
(f) the parties shall enter into the other Transaction Documents
indicated on Schedule 1 hereto as being entered into as of the Delivery
Date.
SECTION 2.3 Advances by Certificate Purchasers and Investment Trust.
Subject to the terms and conditions of this Agreement (including Sections
2.5, 3 and 4), the Depository Agreement and the Trust Agreements, and in
reliance on the representations and warranties of the other parties
contained herein or made pursuant hereto, upon receipt of an Advance
Request, on the Advance Date specified in such Advance Request, each
Certificate Purchaser shall advance (each an Advance ) to the Charter
Trustee and to the Investment Trust, as applicable, in immediately
available funds the Series A Portion and the Investment Portion,
respectively, of its Commitment Percentage of an amount equal to the
Maximum Drillship Cost, as set forth in a written request from Deepwater
to the Charter Trustee and the Investment Trust delivered at least three
Business Days prior to the Closing Date (the Advance Request ). Further,
the Investment Trust shall thereafter forward all such moneys received by
it from the Certificate Purchasers pursuant to the previous sentence to the
Charter Trustee as provided in Section 2.6.
SECTION 2.4 Certificates and Payments; Certificate Margin.
(a) Payments to Certificate Purchasers. An Advance made available by
a Certificate Purchaser pursuant to Section 2.3 shall be evidenced by the
Certificates issued by the Investment Trust and the Charter Trustee,
respectively, on the Advance Date to such Certificate Purchaser. Each
Certificate Purchaser shall be entitled to receive on the last day of any
Return Period as of which there is a Certificate Purchaser Balance greater
than zero (as measured before giving effect to any amounts paid in
reduction of the Certificate Purchaser Balance on the last day of such
Return Period), a return on its Certificate Purchaser Amount at the
Certificate Return Rate. Any payment required to be made to the
Certificate Purchasers by the Charter Trustee or the Investment Trust
pursuant to any Transaction Document shall be made in accordance with the
Depository Agreement and Article IV of the Investment Trust Agreement and
Article IV of the Charter Trust Agreement, as applicable.
(b) Payments to Investment Trust. Each advance made available by the
Investment Trust to the Charter Trustee pursuant to Section 2.6 shall be
evidenced by the Series B Trust Certificate issued by the Charter Trustee
on the Closing Date to the Investment Trust. The Investment Trust shall
be entitled to receive on the last day of any Return Period as of which
there is an Investment Balance greater than zero (as measured before giving
effect to any amounts paid in reduction of the Certificate Purchaser
Balance on the last day of such Return Period), a return on its Investment
Trust Amount at the Certificate Return Rate. Any payment required to be
made to the Investment Trust by the Charter Trustee pursuant to any
Transaction Document shall be made in accordance with the Depository
Agreement and Article IV of the Charter Trust Agreement.
(c) Certificate Margin. The certificate margin ("Certificate Margin")
shall be 150.0 basis points per annum adjusted as follows:
(i) prior to the Initial Certificate Margin Adjustment Date,
plus zero (0) basis points per annum; or
(ii) as of the most recent Adjustment Date on or preceding the
date of determination, for the Return Period which begins
on such Adjustment Date and for each subsequent Return
Period until the next succeeding Adjustment Date occurs:
(1) if the R&B Usage Ratio is less than 0.5, the product of
the Inverse R&B Usage Ratio and five (5.0) basis points
per annum (which product shall be a negative number)
applied in reduction of the 150 basis points in clause
(A) above;
(2) if the R&B Usage Ratio is equal to 0.5, plus zero (0)
basis points per annum; or
(3) if the R&B Usage Ratio is greater than 0.5, plus the
product of the R&B Usage Ratio and 12.5 basis points per
annum.
(d) Counterpart Certificates. Series A Trust Certificates shall only
be issued by the Charter Trustee in pairs consisting of one R&B Falcon
Series A Trust Certificate and one Conoco Series A Trust Certificate (each,
in relation to the other, a Counterpart Series A Trust Certificate ).
Investment Trust Certificates shall only be issued by the Investment Trust
in pairs consisting of one R&B Falcon Investment Trust Certificate and one
Conoco Investment Trust Certificate (each, in relation to the other, a
"Counterpart Investment Trust Certificate"). Each Series A Trust
Certificate and Investment Trust Certificate shall bear an indication of
the number assigned to its Counterpart Series A Trust Certificate and
Counterpart Investment Trust Certificate, respectively.
SECTION 2.5 Limitations on Advances.
(a) Limitation on Disbursements and Capitalizations. The aggregate
amount of Advances made by the Certificate Purchasers hereunder, shall not
exceed the Maximum Certificate Purchaser Commitment, and the aggregate
amount of Advances made by any Certificate Purchaser hereunder, shall not
exceed such Certificate Purchaser's Commitment.
(b) One Advance. During the Charter Term, Deepwater shall be entitled
to one and only one Advance, which shall occur on the Advance Date or as
otherwise permitted pursuant to Section 2.8.
(c) Obligations Several. The obligations of the Certificate
Purchasers, the Agent, the Depository and the Trustees under this Agreement
and the other Transaction Documents shall be several and not joint
obligations, and no Participant shall be liable or responsible for the acts
or defaults of any other Participant under any Transaction Document.
SECTION 2.6 Fundings; Application of Proceeds.
(a) Advance. On the Advance Date, upon (i) receipt by the Charter
Trustee and the Investment Trust of the Advances by the Certificate
Purchasers pursuant to Section 2.3 and (ii) the satisfaction or waiver of
each of the applicable conditions set forth in Sections 3.2 and 4.1,
(x) the Investment Trust shall advance in immediately available funds to
the Charter Trustee on the Advance Date the amount of the Advances received
by it from the Certificate Purchasers with respect to the Advance Date and
(y) the Charter Trustee shall advance to Deepwater (or as directed by
Deepwater) that portion of the Maximum Drillship Cost equal to the
aggregate of (1) the amounts in clauses (i), (ii) and (v) of the definition
of Construction Costs; (2) all costs of mobilizing the Drillship to the
port designated pursuant to the Drilling Contracts and the Rig Sharing
Agreement; and (3) all other costs, expenses, and fees incurred by, or on
behalf of, Deepwater in connection with the Drillship or the transactions
contemplated by the Transaction Documents. The balance of the Maximum
Drillship Cost not advanced to Deepwater pursuant to the foregoing sentence
shall be deposited by the Charter Trustee to the Deferred Construction
Costs Reserve Account.
(b) [Intentionally Omitted]
(c) [Intentionally Omitted]
(d) [Intentionally Omitted]
SECTION 2.7 [Intentionally Omitted]
SECTION 2.8 Postponement of Advance. If the Certificate Purchasers
have made Advances requested on the Closing Date or any Postponed Advance
Date and the conditions precedent to such Advance have not been satisfied
or waived on such date (as such, a "Postponed Advance"), Deepwater shall
pay to the Charter Trustee and the Investment Trust, for the benefit of
each Certificate Purchaser which has made a Postponed Advance, yield (the
"Postponement Yield") on the Advance funded by such Certificate Purchaser
at a rate equal to the Certificate Return Rate. Neither the Investment
Trust nor the Charter Trustee shall be required to invest such funds in
interest-bearing accounts, but the Charter Trustee shall, upon the
direction of Deepwater (or, if an Event of Default exists, the Required
Certificate Purchasers), invest such funds in Permitted Investments to the
extent it is able to do so. Amounts held by the Charter Trustee and the
Investment Trust may be pooled for this purpose. The Postponement Yield
shall be due and payable by Deepwater upon the occurrence of the postponed
Advance Date and such payment shall be an additional condition precedent
to such Advance Date. On such postponed Advance Date, the Charter Trustee
is hereby directed to liquidate any Permitted Investments then held
pursuant to this Section 2.8, to distribute the Postponed Advances in
accordance with Section 2.6 and to distribute any proceeds of Permitted
Investments held pursuant to this Section 2.8 in excess of the amount of
the Postponed Advances to each Certificate Purchaser pro rata (based on the
relation that such Certificate Purchaser's Postponed Advance bears to the
aggregate of all such Postponed Advances) for application to Deepwater's
obligation to pay Postponement Yield. Any accrued Postponement Yield
thereafter remaining unpaid shall be deemed to be Certificate Return and
shall be capitalized and the amount thereof shall be added to the
Certificate Purchaser Amount of each Certificate Purchaser entitled
thereto. No additional Advance Request shall be required if an Advance
Date is postponed and thereafter timely consummated. If the Advance Date
has not occurred by the third Business Day following the date specified in
the Advance Request in respect thereof, then all Postponement Yield shall
be due and payable on such third Business Day (and shall not be capitalized
pursuant to this Section), the Charter Trustee is hereby directed to
liquidate any Permitted Investments then held pursuant to this Section 2.8
and to pay to each Certificate Purchaser on such third Business Day (i) the
Postponed Advance funded by such Certificate Purchaser and (ii) the
proceeds of any Permitted Investments held pursuant to this Section 2.8 in
excess of the amount of the Postponed Advances refunded to such Certificate
Purchaser pro rata based on the relation that such Certificate Purchaser's
Postponed Advance bears to the aggregate of all such Postponed Advances to
be applied to Deepwater's obligation to pay Postponement Yield.
If the Advance Date has not occurred by the third Business Day following
the date specified in the Advance Request in respect thereof, upon
satisfaction or waiver of the conditions to the Advance Date, and upon
payment in full of all Postponement Yield due and payable to the
Certificate Purchasers, Deepwater shall have the right upon delivery of a
new Advance Request to the Certificate Purchasers and Trustee to set a new
date for the advances (the Postponed Advance Date ) which shall for all
purposes be deemed the Advance Date under the Transaction Documents.
Notwithstanding the foregoing, in no event shall Deepwater have the right
to set any Postponed Advance Date to be a date later than ten Business Days
after the Closing Date.
SECTION 2.9 Records. Upon the making of its Advance, each
Certificate Purchaser shall make a notation in its records indicating the
amount of such Advance and the Certificate Purchaser Amount of such
Certificate Purchaser as of such Advance Date. Each Certificate Purchaser
is hereby authorized to record the date and amount of its Advance made by
such Certificate Purchaser, each continuation thereof, the date and amount
of each payment or capitalization of Certificate Return with respect
thereto, the date and amount of each payment or repayment of Certificate
Purchaser Amount of such Certificate Purchaser and the length of each
Return Period with respect thereto, in its records, and any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded. The failure to make any recordation described in
this Section 2.9 or any error in such recordation shall not affect the
obligation of the Charter Trustee or the Investment Trust with respect of
such Certificates, or the obligation of Deepwater to pay Charter Hire in
accordance with the Transaction Documents.
SECTION 2.10 [Intentionally Omitted]
SECTION 2.11 Timing of Fundings to Investment Trustee and Payments to
Certificate Purchasers. The Advance Date specified in the Advance Request
shall be not less than three (3) Business Days after the date of delivery
of such Advance Request to the Charter Trustee. Any Advance Request
delivered by Deepwater to the Charter Trustee later than 4:00 p.m., New
York time, on any day shall be deemed to have been delivered on the next
Business Day. Subject to timely delivery of the Advance Request (together
with a funding indemnity letter from each of Conoco and R&B Falcon in the
form attached hereto as Exhibit A) and the other terms and conditions of
the Transaction Documents, each Certificate Purchaser shall make its
Commitment Percentage of the requested aggregate Advances available to the
Charter Trustee and the Investment Trust in an account at the Charter
Trustee's corporate trust department designated by the Charter Trustee by
12:00 noon, New York time, on the requested Advance Date, and the Charter
Trustee and the Investment Trust will transfer any such amounts so received
into the Trustee's Account, not later than 3:00 p.m., New York time, on
such Advance Date in accordance with Section 2.6.
Charter Hire shall be paid by or on behalf of Deepwater in immediately
available funds in accordance with the Depository Agreement and the
Charter. All such payments shall be paid by the Depository to the
Trustees, the Investment Trust or the Certificate Purchasers, as
applicable, not later than 2:00 p.m., New York time, on the date due.
Funds received after such time shall for all purposes of the Transaction
Documents be deemed to have been received on the next succeeding Business
Day.
SECTION 2.12 Computations.
(a) Determination of Certificate Return Rate and Fees. All
computations of accrued amounts pursuant to the Transaction Documents shall
be made on the basis of the actual number of days elapsed in a 360-day
year; provided, that Certificate Return on any Advance that is an Alternate
Rate Advance shall be calculated on the basis of the actual number of days
elapsed in a 365-day or 366-day year, as applicable. The Charter Trustee
shall, as soon as practicable, but in no event later than 11:00 a.m., New
York time, on the date two (2) Business Days before the effectiveness of
each Certificate Return Rate, cause to be determined such Certificate
Return Rate and notify each Certificate Purchaser and Deepwater thereof by
delivery of a notice of Certificate Return Rate in substantially the form
of Exhibit Q hereto; provided, however, that the Documentation Agent shall
have the right to determine the Certificate Return Rate and to deliver
notice of such Certificate Return Rate instead of Charter Trustee in
connection with the Return Period beginning on the Advance Date.
(b) Disbursement Information. The Charter Trustee shall deliver the
Disbursement Information to Deepwater and the Depository in accordance with
Section 4.3 of the Depository Agreement.
(c) Conclusive Determinations. All information provided by the Charter
Trustee pursuant to this Section 2.12 for the purposes of any Transaction
Document shall be conclusive and binding on the Charter Trustee, the
Investment Trust, Deepwater and the Certificate Purchasers in the absence
of manifest error.
SECTION 2.13 Conditions to each Advance. The obligation of each
Certificate Purchaser to make its Advance in accordance with this Section
2 and the obligations of the Charter Trustee and the Investment Trust to
disburse the proceeds of the Advances in connection with any Advance
Request and in accordance with this Section 2 shall be subject to
satisfaction or waiver of the following conditions precedent:
(a) no Material Default or Event of Default shall have occurred and be
continuing; and
(b) the representations and warranties of Deepwater set forth in
Section 5.1 shall be true and correct in all material respects on the date
of such Advance as though made on and as of such date, except to the extent
such representations or warranties relate solely to an earlier date, in
which case such representations and warranties shall have been true and
correct in all material respects on and as of such earlier date.
SECTION 2.14 Fees.
(a) Facility Fee. On the Closing Date, Deepwater shall pay to each
Certificate Purchaser a nonrefundable upfront fee (the "Facility Fee")
equal to such Certificate Purchaser's Commitment multiplied by the Facility
Fee rate applicable to such Certificate Purchaser as set forth in Schedule
2.
(b) [Intentionally Omitted]
SECTION 2.15 Payments Under the Ship Mortgage; Limitation on
Foreclosure.
Notwithstanding anything to the contrary in any Transaction Document,
all proceeds from any foreclosure under the Ship Mortgage shall not reduce
the maximum amount owed under the Conoco Guaranty and the R&B Falcon
Guaranty unless such maximum amount payable thereunder is greater than the
Certificate Purchaser Balance (excluding any Purchasing Party Amounts) at
the time such proceeds are distributed to the Certificate Purchasers, in
which case such a reduction shall be permitted only to the extent of such
excess; provided, however, that in no event shall the Charter Trustee, the
Investment Trust or the Certificate Purchasers seek to foreclose upon the
Drillship pursuant to the terms of the Ship Mortgage unless the Charter
Trustee shall first make a demand against Deepwater (and under the R&B
Falcon Guaranty and Conoco Guaranty to the extent the obligations owed by
Deepwater are guaranteed thereunder) for any amounts then due and owing
under the Transaction Documents; and provided, further, that in no event
shall the Charter Trustee, the Investment Trust or the Certificate
Purchasers seek to foreclose upon the Drillship pursuant to the terms of
the Ship Mortgage following the receipt in full by such Persons of the
Purchase Option Price (whether paid pursuant to the exercise of the Special
Purchase Right under Section 16.4 of the Master Charter or otherwise).
SECTION 3
EFFECTIVE DATE; CLOSING DATE; CONDITIONS PRECEDENT
SECTION 3.1 Closing Date.
(a) [Intentionally Omitted]
(b) All documents and instruments required to be delivered on the
Closing Date shall be delivered at the offices of Xxxxx, Xxxxx & Xxxxx,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other location as may
be determined by the Documentation Agent and Deepwater.
SECTION 3.2 Conditions Precedent to Closing Date. The
obligations of the parties hereto to enter into the transactions
contemplated by this Agreement and the other Transaction Documents and to
take the actions to be taken by each such party which are contemplated by
Section 2.1 to occur on the Closing Date shall be subject to satisfaction
or waiver as of the Closing Date of the following conditions precedent
(provided, that the obligations of any party shall not be subject to any
conditions contained in this Section 3.2 which are required to be performed
or caused to be performed by such party or any of its respective
Affiliates):
(a) Each Certificate Purchaser shall have funded the Advance to be made
by it on the Closing Date in accordance with Section 2.3.
(b) Each Certificate Purchaser shall have received its respective
Certificates in accordance with Section 2.4.
(c) Deepwater shall have given the Agent not less than three (3)
Business Days prior written notice of the Closing Date, which notice may
be included in the Advance Request delivered in accordance with Section 2.3
and each Certificate Purchaser shall have received a funding indemnity
letter from R&B Falcon and Conoco in the form of Exhibit A hereto not less
than three (3) Business Days prior to the Closing Date.
(d) All parties thereto shall have executed and delivered each of the
Transaction Documents to be entered into on the Closing Date, as indicated
on Schedule 1 hereto.
(e) Deepwater shall have delivered to the Charter Trustee (with copies
for each Certificate Purchaser) copies of the Services Agreements, the
Construction Contract, the Drilling Contracts, and the Drilling Contract
Guaranties, copies of all purchase orders and other documents relating to
the purchase of the OFE, together with any amendments thereto, in each case
certified by an authorized representative of Deepwater to be true, complete
and correct copies thereof as of the Closing Date and each of the Services
Agreements, the Construction Contract, the Drilling Contracts and the
Drilling Contract Guaranties shall be in full force and effect and no
default or material breach shall exist thereunder.
(f) The Documentation Agent and each Certificate Purchaser shall have
received the Appraisal in form and substance satisfactory to the
Documentation Agent and Deepwater shall have received a copy thereof.
(g) All Taxes, fees and other charges due in connection with the
execution, delivery, performance, recording, filing and registration of the
Transaction Documents on the Closing Date shall have been paid.
(h) (i) White & Case LLP, special counsel to Deepwater, shall have
issued its opinion to the effect and in the form set forth in Exhibit B;
(ii) Xxxxx X. Anderson, in-house counsel to Conoco, shall have delivered
his opinion to the effect and in the form set forth in Exhibit D;
(iii) Xxxxx X. Xxxxxx, counsel to R&B Falcon, shall have delivered his
opinion to the effect and in the form set forth in Exhibit E; (iv) Xxxxx,
Fabrega & Fabrega, Panamanian counsel, shall have delivered its opinion to
the effect and in the form set forth in Exhibit P; and (v) Xxxxxxx X.
Xxxxxxx, Vice President and Trust Counsel of Wilmington Trust Company, and
Xxxxxxxx, Xxxxxx & Finger, counsel to the Charter Trustee and Investment
Trust, shall have delivered their opinions to the effect and in the form
set forth in Exhibit U.
(i) All actions required to have been taken by any Government Authority
on or prior to the Closing Date in connection with the transactions
contemplated by this Participation Agreement and the other Transaction
Documents shall have been taken and all Government Actions required to be
in effect on or prior to the Closing Date in connection with the
transactions contemplated by this Participation Agreement and the other
Transaction Documents shall have been issued or made, and all such
Government Actions shall be in full force and effect on the Closing Date.
All necessary consents, approvals and authorizations of all non-Government
Authorities required on the part of Deepwater, the Investment Trust, the
Trustees or third parties to be obtained, given or made on or prior to the
Closing Date in connection with the execution and delivery of the
Transaction Documents and transactions contemplated hereby and thereby
shall have been obtained, given or made and shall be in full force and
effect.
(j) No action shall have been instituted, nor shall any action or
proceeding be threatened, before any Government Authority, nor shall any
order, judgment or decree have been issued or proposed to be issued by any
Government Authority (i) to set aside, restrain, enjoin or prevent the
performance of this Participation Agreement, any other Transaction Document
or any transaction contemplated hereby or thereby or (ii) which would have
a Material Adverse Effect.
(k) The transactions contemplated by the Transaction Documents do not
and will not (i) violate any Applicable Law, (ii) contravene any charter,
by-laws or other organizational document of Deepwater, the Members, Conoco,
R&B Falcon, the Investment Trust, the Trustees, the Agent or any
Certificate Purchaser, (iii) contravene any contract, agreement or other
arrangement to which Deepwater, the Investment Trust, the Trustees, the
Agent or any Certificate Purchaser is a party or by which any of their
respective properties or assets are bound, or (iv) subject Deepwater, any
Member, the Investment Trust, the Trustees, the Agent or any Certificate
Purchaser to any regulations to which such party had not been subject prior
to entering into such Transaction Documents and which would be materially
adverse to such party.
(l) Deepwater, each Member, Conoco and R&B Falcon shall have each
delivered, or shall have caused to be delivered, to the Agent, and the
Trustees the following, in each case in form and substance satisfactory to
the Documentation Agent (with copies for each Certificate Purchaser):
(i) Organizational Documents. Copies of its articles of
incorporation or other organizational documents, certified to be true
and complete as of a recent date by the appropriate Government Authority
of the state, province or country of its incorporation or formation.
(ii) Resolutions. Copies of resolutions of its Members or Board of
Directors, as applicable, that, specifically or generally (as part of a
general enabling resolution), approve and adopt the Transaction
Documents and the transactions contemplated therein, and that,
specifically or generally (as part of a general enabling resolution),
authorize execution and delivery thereof, certified by an appropriate
officer or representative as of the Closing Date to be true and correct
and in full force and effect as of such date.
(iii) Bylaws. A copy of its operating agreement or bylaws
certified by an appropriate officer or representative as of the Closing
Date to be true and correct and in full force and effect as of such
date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent, certified as of a recent date by the
appropriate government authorities of the state, province or country of
its incorporation or formation.
(v) Officer's or Manager's Certificate. An officer's certificate
or manager's certificate, dated the Closing Date, substantially in the
form of Exhibit F.
(m) Each of the Trustees shall have delivered, or shall have caused to
be delivered, to Deepwater, the Members, and each Certificate Purchaser the
following:
(i) Organizational Documents. Copies of its articles of
association or other organizational documents and a copy of the Charter
Trustee's and Investment Trust's certificate of trust (or, if
certificates of trust are not issued in the Charter Trustee's or
Investment Trust's jurisdiction of organization, other similar
organizational documents), together with all amendments in each case
certified to be true and complete as of a recent date by the appropriate
Government Authority.
(ii) Resolutions. Copies of resolutions of its board of directors,
approving and adopting the Transaction Documents and the transactions
contemplated therein, and authorizing execution and delivery thereof,
certified by an appropriate officer as of the Closing Date to be true
and correct and in full force and effect as of such date.
(iii) Good Standing. Copies of certificates of good standing
(or, if certificates of good standing are not issued in the Trustees' or
Investment Trust's jurisdiction of organization, some other similar
certificate), existence or its equivalent with respect to the Trustees
and the Investment Trust, in each case certified as of a recent date by
the appropriate Government Authorities.
(iv) Officer's Certificate. An officer's certificate, dated the
Closing Date, substantially in the form of Exhibit G.
(n) Closing Date. The Closing Date shall occur on or prior to August
31, 1999.
(o) No Material Adverse Change. As of the Closing Date, there shall
not have occurred any material adverse change in the consolidated assets,
liabilities, operations, business or financial condition of: (i) Deepwater
from that set forth in its financial statements for the fiscal year ended
December 31, 1998, (ii) R&B Falcon from that set forth in its financial
statements for the fiscal year ended December 31, 1998 or (iii) Conoco from
that set forth in its financial statements for the fiscal year ended
December 31, 1998.
(p) Transaction Expenses. All Transaction Expenses then due and owing
for which Deepwater has received an invoice at least two (2) Business Days
prior to the Closing Date and which will not be paid from the proceeds of
the Advance shall have been paid by Deepwater.
(q) Tax and Accounting. Deepwater shall have received (x) a
satisfactory tax opinion of White & Case LLP and (y) confirmation from its
auditors of the accounting treatment for the transactions contemplated
hereby satisfactory in all respects to Deepwater.
(r) Representations. The representations and warranties of each party
set forth in Section 5 and in any other Transaction Document entered into
on or prior to the Closing Date shall be true and correct as of the Closing
Date.
(s) Filings. All UCC and other applicable filings listed on Schedule
3 shall have been duly made at the locations set forth beside the filing
on such schedule. All other filings or recordings of any document in any
jurisdiction which are required to establish the perfected security
interests of the Charter Trustee and the Investment Trust in the Accounts
shall have been made.
(t) No Defaults under Transaction Documents. All Transaction Documents
shall be in full force and effect as to all of the parties thereto and no
Default, Event of Default or Event of Loss shall exist under any such
Transaction Document.
(u) Insurance Report. The Charter Trustee, the Investment Trust and
each Certificate Purchaser shall have received a satisfactory report from
J&H Xxxxx & XxXxxxxx with respect to the insurance to be carried by
Deepwater pursuant to Article XIV of the Master Charter.
(v) Drilling Contracts. The Drilling Parties and Deepwater shall have
entered into the Drilling Contracts in a form substantially similar to the
form attached hereto as Exhibit H and the Drilling Parties shall have
delivered the Drilling Consent in a form substantially similar to the form
attached hereto as Exhibit I.
(w) Securities Act Representation. Bank of America shall have delivered
to the Charter Trustee (with copies for each Certificate Purchaser), the
Investment Trust and Deepwater a certificate, in form substantially similar
to the form attached hereto as Exhibit J.
(x) Letter of Credit Established. R&B Falcon shall have obtained a
Letter of Credit complying with the terms of Section 6.9.
SECTION 4
DELIVERY DATE; CONDITIONS PRECEDENT
SECTION 4.1 Conditions Precedent to Delivery Date. The obligations
of the parties hereto to enter into the transactions to be entered into and
take the actions to be taken by each such party which are contemplated by
Section 2.2 to occur on the Delivery Date, taking into account Section 4.2,
shall be subject to satisfaction or waiver on the Delivery Date of the
following conditions precedent; provided, that the obligations of any party
shall not be subject to any condition contained in this Section 4.1 which
is required to be performed or caused to be performed by such party or any
of its respective Affiliates:
(a) The following events shall have occurred with respect to the
delivery and documentation of the Drillship:
(i) The Drillship (including the OFE) shall have been delivered by
Charter Trustee or Head Lessor, as applicable, to Deepwater and
Deepwater shall have accepted the same, and a Protocol of Delivery and
Acceptance substantially in the form set forth in Exhibit A to the
Master Charter (the "Protocol of Delivery and Acceptance") shall have
been executed by Deepwater and the Head Lessor or Charter Trustee, as
applicable, and each shall have been delivered to the Head Lessor or the
Charter Trustee, as the case may be.
(ii) Copies of the Xxxx of Sale substantially in the form set forth
in Exhibit M, respectively, a copy of the interim class certificate
(showing that the Drillship shall have been recommended for
classification with the Classification Society with the highest
classification and rating for vessels of the same age and type), and all
other documents required to be delivered by Builder under the
Construction Contract shall be delivered to Charter Trustee by Deepwater
(with copies to the Head Lessor (if applicable) and the Agent).
(iii) The Drillship shall have been duly provisionally
registered in the name of the Head Lessor or the Charter Trustee, as the
case may be, under Panamanian law free and clear of all Liens of record
and a provisional patente (the "Provisional Patente") shall have been
issued.
(iv) The Ship Mortgage shall have been duly provisionally recorded
under Panamanian Law.
(v) The Charter Trustee shall have received a Certificate of
Ownership and Encumbrance from the Panamanian registry, showing the Head
Lessor or the Charter Trustee, as the case may be, to be the owner of
the Drillship, free and clear of all recorded Liens, other than the Ship
Mortgage.
(vi) The Charter Trustee, the Investment Trust and the Certificate
Purchasers shall have received an opinion of Panamanian counsel in
substantially the form of Exhibit P.
(vii) Title to the Drillship shall have been transferred from
Deepwater to the Head Lessor or the Charter Trustee, as the case may be.
(b) [Intentionally Omitted]
(c) The parties shall have received opinions of counsel with respect to
the transactions to be consummated on the Delivery Date substantially in
the forms as set forth in Exhibits O, P and U and letters from the
appropriate Persons affirming the validity of the opinions of counsel
substantially in the forms of Exhibits B, D and E hereto as if the opinions
expressed therein were delivered as of the Delivery Date; provided,
however, that, to the extent that any of the opinions listed in Section
3.2(h) were delivered on the Closing Date, these same opinions shall be
deemed to have satisfied any requirement to deliver such opinions under
this paragraph (c).
(d) All Transaction Documents shall have been executed and delivered by
each of the parties thereto.
(e) All Transaction Expenses (including registration and recordation
fees under Panamanian Law) then due and owing shall have been paid on or
prior to the Delivery Date.
(f) The Charter Trustee and the Documentation Agent shall have received
(i) a report from J&H Xxxxx & XxXxxxxx confirming that the insurance then
in effect satisfies the insurance requirements set forth in Article XIV of
the Master Charter, such report being satisfactory in form and substance
to the Documentation Agent and (ii) certificates of insurance from
Deepwater's insurance broker(s) evidencing that all insurance required
under Article XIV of the Master Charter is in effect and that all premiums
have been paid; provided, however, that nothing in the Transaction
Documents shall be deemed to prohibit the acceptance by the Charter Trustee
and Documentation Agent of a single report satisfying both the condition
set forth in this paragraph (f) and the condition set forth in Section
3.2(u) hereof.
(g) Each of the Charter Trustee, the Investment Trust and the
Certificate Purchasers shall have received an Officer's Certificate of
Deepwater stating that the representations and warranties of Deepwater
listed in Section 5.1 or in any other Transaction Document are true and
correct as of the Delivery Date (except to the extent that such
representations and warranties relate solely to an earlier or to a later
date, in which event such representations and warranties shall be true on
and as of such earlier or later date); provided, however, that if the
Delivery Date occurs within seven (7) days of the Closing Date, the
delivery by Deepwater of the certificate listed in Section 3.2(l)(v) shall
be deemed to have satisfied its requirement under this paragraph (g);.
(h) [Intentionally Omitted]
(i) All necessary approvals, orders, permits, authorizations, and
consents which are required as of the Delivery Date on the part of
Deepwater, the Certificate Purchasers, the Agent, the Investment Trust, the
Trustees or other third parties (except to the extent that such approvals,
orders, permits, authorizations and consents are required as a result of
such Person's status as a trust company or a regulated depository or
banking institution) in connection with any of the transactions
contemplated by this Agreement or in connection with the ownership, use or
operation of the Drillship as of the Delivery Date shall have been duly
obtained, and Deepwater shall have provided evidence thereof reasonably
satisfactory to the Documentation Agent.
(j) All actions, if any, required to have been taken by any Government
Authority as of the Delivery Date in connection with the transactions
contemplated by this Agreement shall have been taken and all Government
Actions required to be in effect as of the Delivery Date in connection with
the transactions contemplated by this Agreement shall have been issued and
all such Government Actions shall be in full force and effect.
(k) [Intentionally Omitted]
(l) The Charter Trustee and the Certificate Purchasers shall have
received a report from the Independent Marine Surveyor stating that the
Drillship meets the Minimum Specifications.
SECTION 4.2 Head Lease Transaction. Deepwater shall, with the
consent of the Certificate Purchasers, be permitted to enter into, and to
require the Charter Trustee to enter into, the following transactions
(collectively, the "Head Lease Transaction") on or after the Delivery Date:
(i) title to the Drillship shall be transferred to the Head Lessor; (ii)
the Head Lessor shall charter (directly or through a sub-charter) the
Drillship to the Charter Trustee; (iii) the Head Lessor shall finance its
acquisition of title to the Drillship, in part, through a loan (the "Head
Lease Loan"); (iv) the Head Lessor and the Charter Trustee shall enter into
arrangements whereby the Charter Trustee's payment obligations under the
Head Lease are defeased (the "Head Lease Defeasance Arrangements"); (v) the
economic benefit of entering into the Head Lease Transaction shall be paid
over to, or otherwise accrue to the benefit of, Deepwater; and (vi) if the
Head Lease Transaction is entered into on or after the Delivery Date or any
Certificate Purchaser reasonably deems it necessary for the protection of
its rights in the Drillship, the Head Lessor shall enter into the Ship
Mortgage. If Deepwater shall have requested the Certificate Purchasers to
consent to the Head Lease Transaction not less than 45 days prior to the
proposed closing date of the Head Lease Transaction (which request shall
be accompanied by drafts of the documents relating thereto), the
Certificate Purchasers agree to consider such request in good faith.
Thereafter, Deepwater shall promptly provide the Certificate Purchasers
with the drafts of the Head Lease Documents to the extent such drafts are
distributed to the other parties to the Head Lease Transaction. If each
Certificate Purchaser in its sole discretion approves the Head Lease
Transaction, the Charter Trustee shall enter into the Head Lease
Transaction on the date proposed by Deepwater. Notwithstanding the
provisions of this Section 4, neither the consummation nor the failure to
consummate the Head Lease Transaction on or before the Delivery Date shall
be a condition to the obligation of any party hereto to enter into the
other transactions contemplated by this Agreement to occur on the Delivery
Date or to execute and deliver the Transaction Documents to be executed and
delivered on the Delivery Date (other than those transactions or documents
reflecting only the Head Lease Transaction).
SECTION 4.3 Replacement Conditions. Deepwater may, in its sole
discretion, elect to replace any Certificate Purchaser that does not
consent to the Head Lease Transaction or to an amendment proposed under
Section 4.4 hereof or that rejects Deepwater s offer to extend the Charter
Term by having another financial institution that meets the conditions set
forth in this Section 4.3 (a "Replacement Certificate Purchaser") purchase
such non-consenting Certificate Purchaser's interest in accordance with
this Section 4.3. Replacement of a Certificate Purchaser by a Replacement
Certificate Purchaser shall be subject to the following conditions
precedent (collectively, the "Certificate Purchaser Replacement
Conditions"):
(i) such replacement does not conflict with any Applicable Law;
(ii) the Replacement Certificate Purchaser shall pay to the
Certificate Purchaser being replaced the amount of its outstanding
Certificate Purchaser Amount and accrued and unpaid Certificate Return
with respect thereto plus, any funding losses incurred by the
Certificate Purchaser pursuant to Section 7.3 as a result of the
transfer, plus any other accrued and unpaid amounts owed by Deepwater to
such Certificate Purchaser under the Transaction Documents, including
any reasonable expenses relating to its replacement; if the Replacement
Certificate Purchaser does not provide sufficient funds to allow the
Certificate Purchaser being replaced to receive such amount, Deepwater
may provide funds sufficient to cover the shortfall;
(iii) the Replacement Certificate Purchaser shall have agreed
to execute the Assignment and Assumption Agreement in substantially the
form of Exhibit R hereto; and
(iv) the requirements set forth in Section 9.1 shall have been
satisfied.
SECTION 4.4 Accounting Changes. In the event that Deepwater, or its
accountants, shall determine that any change in the applicable rules and
interpretations of the Financial Accounting Standards Board and/or the
Securities Exchange Commission (the "Lease Accounting Rules") will preclude
Deepwater (or raise a substantial question as to whether Deepwater is
precluded) from continuing to account for the Charter as an operating lease
with substantially the same financial accounting benefits as before the
change in the Lease Accounting Rules, then Deepwater and the Certificate
Purchasers agree to review in good faith any proposal submitted by
Deepwater, or its accountants, and to negotiate in good faith the structure
of the transaction contemplated by the Transaction Documents.
If each Certificate Purchaser in its sole discretion approves the
proposed amendment or amendments to the Transaction Documents submitted by
Deepwater, or its acountants, the Charter Trustee shall enter into such
amendments to the Transaction Documents on the date proposed by Deepwater.
Deepwater may, in its sole discretion, elect to replace any Certificate
Purchaser that does not consent to the proposed amendment with a
Replacement Certificate Purchaser in accordance with Section 4.3 hereof.
SECTION 5
REPRESENTATIONS AND WARRANTIES
SECTION 5.1 Representations and Warranties of Deepwater. Deepwater
represents and warrants to each of the other parties hereto as of the date
hereof as follows:
(a) Due Organization, etc. Deepwater is a limited liability company
duly organized, validly existing and in good standing under the laws of
Delaware and has the power and authority and has all requisite government
licenses, permits and other approvals that are required as of the date
hereof to enter into and perform its obligations under the Transaction
Documents to which it is or will be a party and each other agreement,
instrument and document to be executed and delivered by it in connection
with, or as contemplated by, each such Transaction Document to which it is
or will be a party. Deepwater is duly qualified to transact business and
is in good standing as a foreign limited liability company in every
jurisdiction where the nature of its business requires such qualification.
(b) Authorization; No Conflict. The execution, delivery and
performance by Deepwater of each Transaction Document to which it is or
will be a party (i) is within its company powers under Delaware law and its
Certificate of Formation and LLC Agreement (collectively, the
"Organizational Documents"); (ii) has been duly authorized by all necessary
company action on the part of Deepwater and its Members; (iii) requires no
Government Action by, or filing with, any Government Authority which is
required to be obtained, given or made by Deepwater or its Members as of
the date hereof (other than such Government Action as has been duly
obtained, given or made); (iv) does not and will not contravene, or
constitute a default under, any Applicable Law or its Organizational
Documents, or of any material agreement, judgment, injunction, order,
decree or other instrument binding upon or affecting Deepwater or the
Drillship; and (v) does not and will not result in the creation, imposition
or violation of any Lien on any asset of Deepwater other than as
contemplated or permitted by the terms hereof or of the other Transaction
Documents. Deepwater has obtained all Government Actions necessary to
carry on its business as now conducted, except for those Government Actions
that are normally obtained at a later time and with respect to which
Deepwater does not anticipate any problems in obtaining.
(c) Enforceability, etc. Each of the Services Agreements, the Drilling
Contracts, the Rig Sharing Agreement and the Transaction Documents, to
which Deepwater is or will be a party has been, or on or before the date
on which such document is to be signed will be, duly executed and delivered
by Deepwater and each such document to which Deepwater is a party
constitutes, or upon execution and delivery will constitute, assuming the
due authorization, execution and delivery thereof by the other parties
thereto, a legal, valid and binding obligation enforceable against
Deepwater in accordance with the terms thereof, except as such
enforceability may be limited or denied by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights and the enforcement of debtors' obligations generally, and (ii)
general principles of equity, regardless of whether enforcement is pursuant
to a proceeding in equity or at law.
(d) Financial Information. The balance sheet of Deepwater for the
fiscal year ended December 31, 1998 fairly presents, in conformity with
GAAP consistently applied, the financial position of Deepwater as of such
date. Since December 31, 1998, no event has occurred with respect to the
assets, liabilities, operations, business or financial condition of
Deepwater which would have a Material Adverse Effect.
(e) Litigation. There is no litigation, action, proceeding, or labor
controversy to which Deepwater is a party which, if adversely determined,
would adversely affect the financial condition, operations, assets,
business, properties or prospects of Deepwater or which purports to affect
the legality, validity or enforceability of any of the Transaction
Documents, the Services Agreements, the Drilling Contracts or the Rig
Sharing Agreement.
(f) Ownership of Properties. Deepwater has good title to all of its
properties and assets, real and personal, tangible and intangible, of any
nature whatsoever (including patents, trademarks, tradenames, service marks
and copyrights) which it purports to own, free and clear of all Liens
(including infringement claims with respect to patents, trademarks,
copyrights and the like), except for Permitted Liens.
(g) Taxes. Deepwater has filed all tax returns and reports required by
law to have been filed by it and has paid all Taxes thereby shown to be
owing, except for any Taxes which are not yet due or are being contested
pursuant to a Permitted Contest.
(h) Pension and Welfare Plans. As of the date hereof, Deepwater does
not maintain any Plan for the benefit of its employees. Except as provided
in Section 6.1(o) hereof, Deepwater will not maintain any Plan for the
benefit of its employees.
(i) Investment Company Act and Public Utility Holding Company Act.
Deepwater is not an investment company or a company controlled by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the
Public Utility Holding Act of 1935, as amended.
(j) Securities Act. Neither Deepwater nor any Person authorized by
Deepwater to act on its behalf has offered or sold any interest in the
Certificates, or in any similar security relating to the transactions
contemplated by the Transaction Documents, or in any security the offering
of which for the purposes of the Securities Act would be deemed to be part
of the same offering as the offering thereof, or solicited any offer to
acquire any of the same from, any Person other than the parties hereto and
not more than 70 other Institutional Investors, and neither Deepwater nor
any Person authorized by Deepwater to act on its behalf will take any
action which would subject the issuance or sale of any interest in the
Trust Estate, the Charter Trust, the Investment Trust or the Certificates
or in any similar security relating to the Drillship to the provisions of
Section 5 of the Securities Act or require the qualification of any
Transaction Document under the Trust Indenture Act of 1939, as amended.
The only Person which has been authorized to act on behalf of Deepwater for
this purpose is Bank of America National Trust and Savings Association.
The representation in this paragraph (j) is being given in reliance on the
certificate delivered pursuant to Section 3.2(w) hereof.
(k) Chief Place of Business. Deepwater's chief place of business,
chief executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each other
Transaction Document is kept and is located at 000 Xxxxxxxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxx 00000.
(l) Business of Deepwater. (i) Deepwater has engaged in no business
activity other than as contemplated by, or in connection with, the
Construction Contract, the Drilling Contracts, the Rig Sharing Agreement,
the Services Agreements, the Drilling Contract Guaranties and the
Transaction Documents; (ii) Deepwater has no subsidiaries; (iii) as of the
Closing Date, all of the membership interests in Deepwater are owned by the
Members; and (iv) from and after the Closing Date, Deepwater will have no
Indebtedness except for Permitted Indebtedness.
(m) Bankruptcy. Deepwater has not filed a voluntary petition in
bankruptcy or been adjudicated as bankrupt or insolvent, or filed any
petition or answer seeking any reorganization, liquidation, dissolution or
similar relief under any federal or state bankruptcy, insolvency or other
law relating to relief for debtors, or sought or consented to or acquiesced
in the appointment of any trustee, receiver, conservator or liquidator of
all or any part of its properties or its interest in the Drillship. No
court of competent jurisdiction has entered an order, judgment or decree
approving a petition filed against Deepwater seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under federal bankruptcy or insolvency act or other law relating to
relief for debtors, and no other liquidator has been appointed for
Deepwater or of all or any part of its properties or its interest in the
Drillship and no such action is pending. Deepwater has not given notice
to any Government Authority of insolvency or pending insolvency, or
suspension or pending suspension of operations.
(n) Certain Contracts. From and after the Closing Date, the Services
Agreements, the Drilling Contracts, the Drilling Contract Guaranties, the
Rig Sharing Agreement and the Warranties arising under the Construction
Contract are in full force and effect and have not been amended except as
permitted or contemplated by the Transaction Documents. Deepwater is not
in default under, and, to the knowledge of Deepwater, no other Person is
in default under, any of the Construction Contract, the Services
Agreements, the Drilling Contracts, the Drilling Contract Guaranties or the
Rig Sharing Agreement. The execution, delivery and performance by
Deepwater of its obligations under the Construction Contract, the Services
Agreements, the Drilling Contracts, the Rig Sharing Agreement, this
Agreement and the other Transaction Documents to which it is a party, will
not violate in any material respect any provisions of any Applicable Law.
(o) Federal Reserve Regulations. Deepwater is not engaged in, and does
not have as one of its activities, the business of extending credit for the
purpose of purchasing or carrying any margin stock, and no proceeds of any
Advances will be used for a purpose which violates, or would be
inconsistent with, the rules and regulations of the Federal Reserve Board.
Terms for which meanings are provided in Federal Reserve Board Regulations
U or X or any regulations substituted therefor, as from time to time in
effect, are used in this clause (o) with such meanings.
(p) Absence of Events. No Default or Event of Default has occurred and
is continuing and Deepwater is not in default in, nor has any non-permanent
waiver been granted to Deepwater with respect to, the performance,
observance or fulfillment of any of the obligations, conditions or
covenants contained in the Construction Contract, the Drilling Contracts,
the Rig Sharing Agreement or the Services Agreements.
(q) Subject to Government Regulation. None of the Investment Trust,
the Trustees, the Agent or any Certificate Purchaser, solely by reason of
entering into the Transaction Documents or the consummation of the
transactions contemplated thereby, will become subject to ongoing
regulation of its operations by any Government Authority having
jurisdiction over the ownership or operations of the Drillship solely by
reason of any of Deepwater's business activities or the nature of the
Drillship.
(r) Solvency. Deepwater does not have capital unreasonably small in
relation to its business, will not be rendered insolvent by the execution,
delivery and performance of its obligations under the Transaction
Documents, and does not intend to hinder, delay or defraud its creditors
by or through the execution, delivery and performance of the Transaction
Documents to which it is a party, including the Charter. As of the date
hereof and as of the Closing Date, there are no outstanding unsatisfied
judgments, liens for Taxes or bankruptcy proceedings against Deepwater.
(s) Appraisal Disclosure. As of the date hereof, the information
listed on Schedule 4 and provided by Deepwater or any Affiliates thereof
in writing to the Appraiser in connection with the Appraisal, when taken
as a whole, does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not materially misleading under the circumstances in
which such statements were made.
(t) Accuracy of Information. The cash flow projections contained in
Appendix 5 of the Offering Memorandum, dated as of November 1998, were
prepared by Deepwater in good faith on the basis of reasonable
investigation, information, assumptions and procedures which Deepwater
believed were reasonable under the facts and circumstances then existing,
and since the date of such projections there has been no change in any of
the facts on which such projections were based that would result in a
material adverse change in such projections.
(u) Title to the Drillship; Documentation; Condition. On the Delivery
Date, after giving effect to the transactions to be effected on the
Delivery Date, the Charter Trustee (or the Head Lessor) will have valid
title to the Drillship (including the OFE) and the Drillship will be duly
provisionally documented in the name of the Charter Trustee (or the Head
Lessor) under the laws of the Republic of Panama free and clear of all
liens, charges, encumbrances and security interests other than Permitted
Liens.
(v) Recording of Ship Mortgage. On the Delivery Date, after giving
effect to the transactions to be effected on the Delivery Date, (i) the
Ship Mortgage shall have been duly provisionally recorded with the
appropriate Panamanian authorities in Panama City, Republic of Panama
(which office is the only place in which such recording is necessary), (ii)
the Ship Mortgage shall constitute a first naval mortgage on the Drillship
in favor of the Investment Trust, the Hedging Agreement Counterparties, if
any, and, if the Head Lessor is the mortgagor under the Ship Mortgage, the
Charter Trustee, and (iii) no other recordings or periodic rerecording or
filing or periodic filing of the Ship Mortgage is necessary under existing
law to constitute the lien of the Ship Mortgage on the Drillship (including
the OFE), except final recordation of the Ship Mortgage following the
granting of the Permanent Patente by the Panamanian authorities within six
(6) months of the provisional recording of the Ship Mortgage.
(w) Other Recordings and Filings. On the Delivery Date, all filings
and recordings (including all filings of financing statements under the
Uniform Commercial Code) will have been duly made in each jurisdiction in
which such filings and recordings are required or reasonably requested by
the Charter Trustee or the Investment Trust in order to perfect the
security interests granted by the Deepwater Assignment, the Ship Mortgage
and the other Security Documents and to make such security interests valid
and enforceable; provided, that Deepwater makes no representation or
warranty with respect to any security interest in the Construction Contract
or any Construction Document.
(x) Drillship Construction. Deepwater has in all material respects
caused the Drillship to be constructed in accordance with the Construction
Contract and the other Construction Documents and, subject to any Permitted
Contests, in compliance in all material respects with Applicable Laws.
(y) Mobilization Complete. "Mobilization" of the Drillship, as such
term is used in Section 4.1 of each of the Drilling Contracts, has been
completed in all respects.
SECTION 5.2 Representations and Warranties of Members. Each Member,
severally and not jointly, represents and warrants to each of the other
parties hereto as of the date hereof as follows:
(a) Due Organization, etc. Such Member is a corporation duly
organized, validly existing and in good standing under the laws of the
respective jurisdiction of its organization and has the power and authority
and has all requisite government licenses, permits and other approvals
currently necessary to enter into and perform its obligations under the
Transaction Documents to which it is or will be a party and each other
agreement, instrument and document to be executed and delivered by it in
connection with, or as contemplated by, each such Transaction Document to
which it is or will be a party. Such Member is duly qualified to transact
business in every jurisdiction where the nature of its business requires
such qualification.
(b) Authorization; No Conflict. The execution, delivery and
performance by such Member of each Transaction Document to which it is or
will be a party (i) is within its corporate powers; (ii) has been duly
authorized by all necessary corporate action; (iii) requires no Government
Action by, or filing with, any Government Authority; (iv) does not
contravene, or constitute a default under, any Applicable Law or its
organizational documents, or of any material agreement, judgment,
injunction, order, decree or other instrument binding upon or affecting it;
and (v) does not result in the creation, imposition or violation of any
Lien on any of its assets. Such Member possesses all government licenses,
authorizations, consents and approvals required to carry on its business
as now conducted.
(c) Enforceability, etc. Each Transaction Document to which the Member
is or will be a party has been, or on or before the Closing Date or the
Delivery Date on which such Transaction Document is to be signed will be,
duly executed and delivered by such Member and each such Transaction
Document to which such Member is a party constitutes, or upon execution and
delivery will constitute, assuming the due authorization, execution and
delivery thereof by the other parties thereto, a legal, valid and binding
obligation of such Member enforceable against such Member in accordance
with the terms thereof, except as such enforceability may be limited or
denied by (i) applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws effecting creditors' rights and the enforcement of debtors'
obligations generally, and (ii) general principles of equity, regardless
of whether enforcement is pursuant to a proceeding in equity or at law.
(d) Securities Act. Neither such Member nor any Person authorized by
such Member to act on its behalf has offered or sold any interest in
Deepwater, or in any security relating to the Drillship, or in any security
the offering of which for the purposes of the Securities Act would be
deemed to be part of the same offering as the offering thereof, or
solicited any offer to acquire any of the same from, any Person other than
the parties hereto and not more than 70 other Institutional Investors, and
neither such Member nor any Person authorized by such Member to act on its
behalf will take any action which would subject the issuance or sale of any
interest in Deepwater to the provisions of Section 5 of the Securities Act
or require the qualification of any Transaction Document under the Trust
Indenture Act of 1939, as amended. The representation in this paragraph
(d) is being given in reliance on the certificate delivered pursuant to
Section 3.2(w) hereof.
(e) Litigation. To such Member's Actual Knowledge, there is no action
or proceeding pending or threatened to which the Charter Trustee or the
Investment Trust is or will be a party before any court or arbitrator or
Government Authority that, if adversely determined, would reasonably be
expected to have a material adverse effect on the property, operations or
financial condition of Deepwater.
(f) Assignment. From and after the Closing Date, such Member will not
assign or transfer to any Person that is not a party hereto, any of its
right, title or interest in or under Deepwater, the Charter, the Drillship,
or the Collateral or any other Transaction Document, except as contemplated
by the Transaction Documents.
(g) Absence of Events. To such Member's Actual Knowledge, no Default
or Event of Default has occurred and is continuing, and Deepwater is not
in default in, nor has any non-permanent waiver been granted to Deepwater
with respect to, the performance, observance or fulfillment of any of the
obligations, conditions or covenants contained in the Construction
Contract, Drilling Contracts, the Rig Sharing Agreement or the Services
Agreements.
(h) Compliance With Laws. To such Member's Actual Knowledge, Deepwater
is currently in compliance, in all material respects, with all Applicable
Laws with respect to the conduct of its business and the ownership of its
properties.
SECTION 5.3 Representations and Warranties of the Investment Trust.
The Investment Trust represents and warrants to each of the other parties
hereto as of the date hereof as follows:
(a) Due Organization, etc. It is a business trust duly formed and
validly existing and in good standing under the laws of the jurisdiction
of its organization and has the power and authority to enter into and
perform its obligations under the Transaction Documents to which it is or
will be a party and each other agreement, instrument and document to be
executed and delivered by it in connection with, or as contemplated by,
each such Transaction Document to which it is or will be a party.
(b) Authorization; No Conflict. The execution, delivery and
performance by it of each Transaction Document to which it is or will be
a party (i) is within its powers; (ii) has been duly authorized by all
necessary action; (iii) requires no Government Action by, or filing with,
any Government Authority; (iv) does not contravene, or constitute a default
under, any Applicable Law or its organizational documents, or of any
material agreement, judgment, injunction, order, decree or other instrument
binding upon it; and (v) does not result in the creation, imposition or
violation of any Lien on any of its assets. It possesses all government
licenses, authorizations, consents and approvals required to carry on its
business as now conducted.
(c) Enforceability, etc. Each Transaction Document to which it is or
will be a party has been, or on or before the date on which such
Transaction Document is to be signed will be, duly executed and delivered
by it and each such Transaction Document to which it is a party
constitutes, or upon execution and delivery will constitute, assuming the
due authorization, execution and delivery hereof and thereof by the other
parties hereto and thereto, a legal, valid and binding obligation
enforceable against it in accordance with the terms thereof, except as such
enforceability may be limited or denied by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights and the enforcement of debtors' obligations generally, and (ii)
general principles of equity, regardless of whether enforcement is pursuant
to a proceeding in equity or at law.
(d) Assignment. It has not assigned or transferred any of its right,
title or interest in or under the Charter, the Drillship, or the Collateral
or any other Transaction Document, except as expressly contemplated by the
Transaction Documents.
(e) Securities Act. Neither it nor any Person authorized by it to act
on its behalf has offered or sold any interest in the Trust Estate, the
Charter Trust, the Investment Trust or the Certificates, or in any similar
security relating to the Drillship, or in any security the offering of
which for the purposes of the Securities Act would be deemed to be part of
the same offering as the offering thereof, or solicited any offer to
acquire any of the same from, any Person other than the parties hereto, and
neither it nor any Person authorized by it to act on its behalf will take
any action which would subject the issuance or sale of any interest in the
Trust Estate, the Charter Trust, the Investment Trust or the Certificates
or in any similar security related to the Drillship to the provisions of
Section 5 of the Securities Act or require the qualification of any
Transaction Document under the Trust Indenture Act of 1939, as amended.
(f) Chief Place of Business. The Investment Trust's chief place of
business, chief executive office and office where the documents, accounts
and records relating to the transactions contemplated by this Agreement and
each other Transaction Document are and will be kept is located at Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000.
(g) No Other Activities. It does not hold any assets, conduct any
business nor is it party to any document, agreement or instrument other
than the Transaction Documents to which it is, or will be, a party.
SECTION 5.4 Representations and Warranties of the Certificate
Purchasers. Each Certificate Purchaser, individually and not jointly,
represents and warrants to each of the other parties hereto as of the date
hereof as follows:
(a) Due Organization, etc. Such Certificate Purchaser is duly
organized, validly existing and in good standing (to the extent relevant
under Applicable Law) in the jurisdiction of its organization and has the
power and authority to enter into and perform its obligations under the
Transaction Documents to which it is or will be a party and each other
agreement, instrument and document to be executed and delivered by it in
connection with, or as contemplated by, each such Transaction Document to
which it is or will be a party.
(b) Authorization; No Conflict. The execution, delivery and
performance by such Certificate Purchaser of each Transaction Document to
which it is or will be a party (i) is within its powers; (ii) has been duly
authorized by all necessary action; (iii) requires no Government Action by,
or filing with, any Government Authority (it being understood that such
Certificate Purchaser makes no representation or warranty relating to the
Drillship or the Applicable Laws pertaining thereto); (iv) does not
contravene, or constitute a default under, any Applicable Law or its
organizational documents, or of any material agreement, judgment,
injunction, order, decree or other instrument binding upon such Certificate
Purchaser; and (v) does not result in the creation, imposition or violation
of any Lien on any asset of such Certificate Purchaser.
(c) Enforceability, etc. Each Transaction Document to which such
Certificate Purchaser is or will be a party has been, or on or before the
Closing Date will be, duly executed and delivered by such Certificate
Purchaser and each such Transaction Document to which such Certificate
Purchaser is a party constitutes, or upon execution and delivery will
constitute, assuming the due authorization, execution and delivery hereof
and thereof by the other parties hereto and thereto, a legal, valid and
binding obligation enforceable against such Certificate Purchaser in
accordance with the terms thereof, except as such enforceability may be
limited or denied by (i) applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws effecting creditors' rights and the enforcement
of debtors' obligations generally, and (ii) general principles of equity,
regardless of whether enforcement is pursuant to a proceeding in equity or
at law.
(d) ERISA. Either (x) such Certificate Purchaser is not and will not
be making any Advance with the assets of an "employee benefit plan" (as
defined in Section 3(3) of ERISA) which is subject to Title I of ERISA or
a "plan" (as defined in Section 4975(e)(1) of the Code) or (y) the source
of funds for any Advance made by such Certificate Purchaser is an insurance
company general account (as such term is defined in PTE 95-60 (issued July
12, 1995) in respect of which the reserves and liabilities (as defined by
the annual statement for life insurance companies approved by the National
Association of Insurance Commissioners) (the "NAIC Annual Statement")) for
the general account contract(s) held by or on behalf of any employee
benefit plan, together with the amount of the reserves and liabilities for
the general account contract(s) held by or on behalf of any other employee
benefit plans maintained by the same employer (or affiliate thereof as
defined in PTE 95-60) or by the same employee organization in the general
account, do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus
as set forth in the NAIC Annual Statement filed with such Certificate
Purchaser's state of domicile.
(e) Securities Act. Neither such Certificate Purchaser nor any Person
authorized by such Certificate Purchaser to act on its behalf has offered
or sold any interest in the Trust Estate, the Charter Trust, the Investment
Trust or the Certificates, or in any similar security relating to the
Drillship, or in any security the offering of which for the purposes of the
Securities Act would be deemed to be part of the same offering as the
offering thereof, or solicited any offer to acquire any of the same from,
any Person other than the parties hereto, and neither such Certificate
Purchaser nor any Person authorized by such Certificate Purchaser to act
on its behalf will take any action which would subject the issuance or sale
of any interest in the Trust Estate, the Charter Trust, Investment Trust
or the Certificates or in any similar security relating to the Drillship
to the provisions of Section 5 of the Securities Act or require the
qualification of any Transaction Document under the Trust Indenture Act of
1939, as amended.
(f) Litigation. To such Certificate Purchaser's Actual Knowledge,
there is no action or proceeding pending or threatened to which the Charter
Trustee, the Trust Estate or the Investment Trust is or will be a party
before any court or arbitrator or Government Authority that, if adversely
determined, would reasonably be expected to have a material adverse effect
on the property, operations or financial condition of the Charter Trustee
or the Investment Trust.
(g) No Other Documents. Such Certificate Purchaser has not authorized,
or voted to authorize, the Charter Trustee or the Investment Trust to
execute any document, agreement or instrument other than the Transaction
Documents to which either the Charter Trustee or the Investment Trust is
or will be a party.
SECTION 5.5 Representations and Warranties of the Trustees. Each of
the Trustees in their respective individual capacities (and where
indicated, as trustee) represents and warrants, severally and not jointly,
to each of the other Participants as of the date hereof as follows:
(a) Due Organization, etc. It is a banking corporation or a Federal
savings bank (as applicable), duly organized, validly existing and in good
standing under the laws of the state of its incorporation or the United
States (as applicable), has full corporate power and authority to enter
into and perform its obligations under the Transaction Documents to which
it (individually or as trustee, as the case may be) is or will be a party
and each other agreement, instrument and document to be executed and
delivered by it (individually or as trustee, as the case may be) in
connection with, or as contemplated by, each such Transaction Document to
which it is or will be a party.
(b) Authorization; No Conflict. The execution, delivery and
performance by it of each Transaction Document to which it (individually
or as trustee, as the case may be) is or will be a party (i) is within its
powers; (ii) has been duly authorized by all necessary action; (iii)
requires no Government Action by, or filing with, any Government Authority;
(iv) does not contravene, or constitute a default under, any Applicable Law
or its organizational documents, or of any material agreement, judgment,
injunction, order, decree or other instrument binding upon it (individually
or as trustee); and (v) does not result in the creation, imposition or
violation of any Lien on any of its assets (individually or as trustee).
(c) Enforceability, etc. Each Transaction Document to which it is or
will be a party (individually or as trustee, as the case may be) has been,
or on or before the Closing Date or the Delivery Date on which such
Transaction Document is to be signed will be, duly executed and delivered
by it and each such Transaction Document to which it is a party
constitutes, or upon execution and delivery will constitute, assuming the
due authorization, execution and delivery hereof and thereof by the other
parties hereto and thereto, a legal, valid and binding obligation
enforceable against it in accordance with the terms thereof, except as such
enforceability may be limited or denied by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights and the enforcement of debtors' obligations generally, and (ii)
general principles of equity, regardless of whether enforcement is pursuant
to a proceeding in equity or at law.
(d) Litigation. There is no action, suit or proceeding pending or, to
its knowledge (individually or as trustee, as the case may be) threatened
to which it (individually or as trustee), or, in the case of the Investment
Trustee, the Investment Trust is or will be a party, before any court or
arbitrator or any Government Authority that, if adversely determined, would
reasonably be expected to materially and adversely affect the ability of
it (individually or as trustee, as the case may be), or, in the case of the
Investment Trustee, the Investment Trust to perform their respective
obligations under each of the Transaction Documents to which it
(individually or as trustee, as the case may be), or, in the case of the
Investment Trustee, the Investment Trust is or is to be a party.
(e) Assignment. It has not assigned or transferred any of its right,
title or interest in or under the Charter, the Drillship or the Collateral,
except as expressly contemplated by the Transaction Documents.
(f) Securities Act. Neither it (individually or as trustee) nor any
Person authorized by it (individually or as trustee) to act on its behalf
has offered or sold any interest in the Trust Estate, the Investment Trust
or the Certificates, or in any similar security relating to the Drillship,
or in any security the offering of which for the purposes of the Securities
Act would be deemed to be part of the same offering as the offering
thereof, or solicited any offer to acquire any of the same from, any Person
other than the parties hereto, and neither it (individually or as trustee)
nor any Person authorized by it (individually or as trustee) to act on its
behalf will take any action which would subject the issuance or sale of any
interest in the Trust Estate, the Investment Trust or the Certificates to
the provisions of Section 5 of the Securities Act or require the
qualification of any Transaction Document under the Trust Indenture Act of
1939, as amended.
(g) Chief Place of Business. The Charter Trustee's chief place of
business and the office where the documents, accounts and records relating
to the Drillship and the transactions contemplated by this Agreement and
the other Transaction Documents are and will be kept is located at Xxxxxx
Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000.
The Investment Trustee's chief place of business, chief executive office
and the office where the documents, accounts and records relating to the
Drillship and the transactions contemplated by this Agreement and the other
Transaction Documents are and will be kept is located at 0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 000 Xxxxx, Xxx Xxxxx, Xxxxxx 00000.
(h) No Other Documents. The Charter Trustee has not executed, and the
Investment Trustee has not authorized, or voted to authorize, the
Investment Trust to execute, any document, agreement or instrument other
than the Transaction Documents to which either the Charter Trustee or the
Investment Trust is or will be a party.
SECTION 6
CERTAIN COVENANTS AND AGREEMENTS
SECTION 6.1 Covenants of Deepwater.
(a) No Other Business. From the date hereof to the expiration or
termination of the Charter Term, Deepwater shall not (i) engage in any
business other than as expressly contemplated by the Transaction Documents,
the Head Lease Documents (if any), the Drilling Contracts, the Rig Sharing
Agreement or the Services Agreements; (ii) become a party to any agreement
other than this Agreement, the other Transaction Documents, the Drilling
Contracts, the Rig Sharing Agreement, the Drilling Contract Guaranties, the
Services Agreements, the Construction Contract, the Construction Documents,
the Head Lease Documents (if any), and any other agreements incidental to
the performance of its obligations hereunder or thereunder; (iii) amend,
modify or supplement the Drilling Contracts, the Rig Sharing Agreement, the
Drilling Contract Guaranties, or the Services Agreements in any manner that
would have an adverse effect on the rights or interests of the Charter
Trustee, the Investment Trust or the Certificate Purchasers without the
prior written consent of the Majority Certificate Purchasers; (iv) make any
distributions to its Members so long as an Event of Loss has occurred or
a Material Default or Event of Default has occurred and is continuing; or
(v) incur any Indebtedness other than Permitted Indebtedness. Deepwater
shall provide the Charter Trustee with substantially final drafts of any
amendments, modifications or supplements to the Drilling Contracts, the Rig
Sharing Agreement, the Drilling Contract Guaranties or the Services
Agreements at least ten (10) Business Days prior to the effectiveness of
such amendments, modifications or supplements.
(b) No Profit-Sharing. From the date hereof to the expiration or
termination of the Charter Term, Deepwater shall not enter into any
partnership, profit-sharing or royalty arrangement or other similar
arrangement whereby Deepwater's income or profits are, or might be, shared
with any other Person, or enter into any management contract or similar
arrangement whereby its business or operations are managed by any other
Person, in each case other than as provided in the Transaction Documents,
the Head Lease Documents, the LLC Agreement, the Drilling Contracts, the
Rig Sharing Agreement, the Services Agreements or any other agreement
incidental to the performance of its obligations under the Transaction
Documents; provided that, notwithstanding the foregoing, this Section
6.1(b) shall not prohibit profit-sharing arrangements made pursuant to a
Plan maintained by Deepwater in accordance with Section 6.1(o).
(c) No Merger. Deepwater shall not, from the date hereof to the
expiration or termination of the Charter Term, merge with any other entity
or sell all or substantially all of its assets.
(d) No Subsidiaries. Deepwater shall not, from the date hereof to the
expiration or termination of the Charter Term, form, or cause to be formed,
or own any interest in, any Subsidiaries.
(e) No Abandonment. Deepwater shall not, from the date hereof to the
expiration or termination of the Charter Term, abandon or agree to abandon
the Drillship other than a tender of an abandonment to an insurer in
connection with obtaining payment from such insurer for an Event of Loss.
(f) Corporate Existence, Etc. Deepwater shall, from the date hereof to
the expiration or termination of the Charter Term, do or cause to be done,
in all material respects, all things necessary to preserve and keep in full
force and effect its rights and powers and franchises as a limited
liability company and its power and authority to perform its obligations
under the Transaction Documents, the Drilling Contracts and the Rig Sharing
Agreement, including any necessary qualification or licensing in any
foreign jurisdiction.
(g) Compliance With Laws. Deepwater shall, from the date hereof to the
expiration or termination of the Charter Term, comply in all material
respects with all Applicable Laws with respect to the conduct of its
business and the ownership of its properties except in connection with a
Permitted Contest.
(h) Change of Name or Location. Deepwater shall, from the date hereof
to the expiration or termination of the Charter Term, furnish to the
Charter Trustee and each Certificate Purchaser notice before any relocation
of its chief executive officer, principal place of business or the office
where it keeps its records concerning its accounts or change of its name,
identity or limited liability structure.
(i) No Disposition of the Drillship. Deepwater shall, from the date
hereof to the expiration or termination of the Charter Term, not sell,
contract to sell, assign, transfer, convey or otherwise dispose of or
permit to be sold, assigned, leased, transferred, conveyed or otherwise
disposed of the Drillship or any part thereof except as otherwise
contemplated by the Transaction Documents.
(j) Brokers Fees. Deepwater shall hold the Charter Trustee, the
Investment Trust and each Certificate Purchaser harmless from and against
any claim, demand or liability for any brokers, finders, or placement fees
or commissions incurred as a result of any action by Deepwater in
connection with the transactions contemplated by the Transaction Documents,
except for any such fee or commission included in Construction Costs;
provided, that the covenant contained in this Section 6.1(j) shall not
apply to any claim, demand or liability for any brokers, finders or
placement fees or commissions: (i) due and payable to Bank of America in
connection with the transactions contemplated by the Transaction Documents;
(ii) due and payable to any broker engaged by the Trustees, Investment
Trust, Certificate Purchasers or Affiliate thereof; or (iii) due and
payable to any broker retained after Deepwater's election of the Return
Option pursuant to Section 20.3 of the Master Charter.
(k) Notice of Material Default, Event of Default or Environmental
Claim; Other Certificates. If a Responsible Officer of Deepwater has
Actual Knowledge of a Material Default, Event of Default or Environmental
Claim with respect to the Drillship (to the extent that Deepwater
reasonably expects the cost to remediate or liability to be incurred with
respect to all such Environmental Claims then outstanding to exceed
$2,000,000 individually or in the aggregate), Deepwater shall promptly give
notice thereof to each other party to this Agreement.
Deepwater shall, upon the request of the Charter Trustee, (i) advise the
Charter Trustee in writing in reasonable detail of its response to any
Environmental Claim with respect to the Drillship and (ii) provide to the
Charter Trustee prompt notice of the date and location of the next
scheduled dry-docking, if any, of the Drillship prior to such date.
If a default occurs and is continuing with respect to Deepwater's
obligations under any Permitted Indebtedness of the type specified in
clause (iii) of the definition of Permitted Indebtedness, Deepwater shall
notify the Trustees of such default promptly after Deepwater obtains Actual
Knowledge of such default and, upon receiving such notice, either of the
Trustees may cure such default at Deepwater's expense.
Deepwater shall furnish to the Charter Trustee and the Investment Trust
(with copies for the Certificate Purchasers) within ninety (90) days after
each anniversary of the Delivery Date, the annual confirmation of
classification of the Drillship issued by the Classification Society, and
at any other time upon the request of the Charter Trustee, copies of all
certificates issued by the U.S. Coast Guard or the Classification Society
with respect to the Drillship.
(l) Documentation of Drillship and Ship Mortgage. Deepwater shall
obtain a Permanent Patente from the Panamanian authorities and shall cause
the Drillship to be duly permanently documented and the Ship Mortgage to
be duly permanently recorded under the laws of Panama at least ten (10)
Business Days before the end of six (6) months following the issuance of
the Provisional Patente. In the event that a successor trustee to the
Charter Trustee shall have been appointed pursuant to Section 5.10 of the
Charter Trust Agreement and Section 12.18, or the Charter Trustee shall
merge or consolidate with any Person in accordance with Section 5.12 of the
Charter Trust Agreement and Section 12.18, Deepwater, at its sole expense,
shall cause the Drillship to be provisionally documented (if the Head Lease
Transaction has not been entered into) and the Ship Mortgage to be
provisionally recorded under the laws of Panama in the name of any
successor trustee within fifteen (15) Business Days of the receipt of
written notice of any such appointment, merger or consolidation; provided
that Deepwater shall not be deemed to be in violation of the covenant
contained in this sentence to the extent that any delay in procuring such
provisional documentation or recordation results from the failure of any
of the Participants to execute any necessary documents or instruments
promptly upon receipt from Deepwater or to take any other action necessary
to effectuate such documentation or recording promptly upon request by
Deepwater. Deepwater, at its sole expense, shall thereafter cause the
Drillship to be duly permanently documented (if the Head Lease Transaction
has not been entered into) and the Ship Mortgage to be duly permanently
recorded at least 10 Business Days prior to the end of the six (6) months
following the issuance of the provisional documentation.
(m) Financial Statements. Deepwater shall, from the date hereof to the
expiration or termination of the Charter Term, provide to the Charter
Trustee and each Certificate Purchaser financial statements as follows:
(i) for each fiscal year ended on and after December 31, 1999,
within 90 days after the end of such fiscal year, annual financial
statements including a statement of earnings, a statement of cash flows
and a balance sheet of Deepwater for the fiscal year then ended prepared
in conformity with GAAP, consistently applied, and audited by its
independent outside auditors;
(ii) for each fiscal quarter of Deepwater, within 45 days after the
end of such fiscal quarter, unaudited financial statements, including a
statement of earnings, a statement of cash flows and a balance sheet of
Deepwater for the fiscal quarter then ended prepared in conformity with
GAAP, consistently applied; and
(iii) together with the financial statements required to be
delivered under clauses (i) and (ii) above, a certificate from a
member's representative of Deepwater certifying that no Material Default
or Event of Default has occurred and is then continuing.
(n) Subordinated Operating Expenses. Deepwater shall, from the date
hereof to the expiration or termination of the Charter Term, maintain the
Services Agreements in effect and shall ensure that to the extent that
Operation and Maintenance Expenses incurred during each Return Period of
the Charter Term (or portion thereof) exceed the total Unsubordinated
Operating Expense Amount for such period, such expenses shall be payable
by Deepwater under the Services Agreements as Subordinated Operating
Expenses. In the event that on any Charter Hire Payment Date there are
insufficient funds in the Operating Account to pay all Subordinated
Operating Expenses then due and payable in accordance with Section 3.4(b)
of the Depository Agreement, Deepwater shall be entitled to issue
Subordinated Debt to the Person to whom such Subordinated Operating
Expenses are due in the amount of such shortfall.
(o) Plans. Deepwater shall not, from the date hereof to the expiration
or termination of the Charter Term, maintain any Plan for the benefit of
its employees; provided, however, that, notwithstanding the foregoing,
Deepwater may adopt one or more Plans for the benefit of its employees
which are, in the aggregate, comparable to the Plans maintained by other
employers engaged in the same or similar industry. With respect to any
such Plan adopted by Deepwater:
(i) such Plan shall be operated and administered by Deepwater in
compliance with its terms and with the requirements of any and all
Applicable Laws, in all material respects;
(ii) no material liability pursuant to Titles I or IV of ERISA or
the penalty or excise tax provisions of the Code shall be incurred; and
(iii) no lien pursuant to Titles I or IV of ERISA or Section
412 of the Code shall be imposed on any of the rights, properties or
assets of Deepwater.
(p) Y2K Compliance. Deepwater shall use its best efforts to cause the
computer programs used as part of the OFE, when used in accordance with the
pertinent user documentation and when the input to them is formatted in
accordance with such documentation, to comply with the following: (i) such
programs shall accurately and completely process (including but not limited
to calculation, comparison and sequencing, and including without limitation
leap year calculations) date-related data for dates prior to the year 2000,
date-related data for dates after the year 1999, and date-related data for
dates both before the year 2000 and after the year 1999; and (ii) such
programs shall not, as a consequence of the change of centuries or the fact
that data from more than one century is being processed, cause an abnormal
termination of execution, an endless loop, incorrect values or invalid
results, or otherwise fail to perform accurately and completely those
functions set forth in such user documentation. All date-related data
generated by or embodied in such programs shall include an indication of
century.
(q) Punch List. Deepwater shall deliver a punch list to the Charter
Trustee within a reasonable period of time after the Delivery Date and use
reasonable good faith efforts to complete (or cause to be completed) the
items on the punch list in all material respects as soon as commercially
reasonable.
SECTION 6.2 Certain Covenants of the Charter Trustee, the Investment
Trustee and the Investment Trust. Each of the Charter Trustee, the
Investment Trustee and the Investment Trust, severally and not jointly,
covenants as follows:
(a) Maintenance of Existence. The Investment Trust shall maintain its
existence as a Delaware business trust and its qualification to do business
in each jurisdiction in which the failure to have such a qualification may
have a material adverse effect on the performance of its obligations under
the Transaction Documents. The Charter Trustee and the Investment Trustee
shall each maintain its existence and its qualification to do business in
each jurisdiction in which the failure to have such qualification may have
a material adverse effect on the performance of its obligations under the
Transaction Documents.
(b) Indebtedness; Other Business. Neither the Investment Trust nor the
Trustees shall contract for, create, incur or assume any Indebtedness, or
enter into any business or other activity, other than pursuant to, or as
contemplated by, the Transaction Documents and the Head Lease Documents.
(c) Change of Chief Place of Business. Each of the Trustees in their
respective individual capacities shall give prompt notice to Deepwater if
any of the Investment Trust's or Trustees' chief place of business or chief
executive office or the office where the records concerning the accounts
or contract rights relating to the Drillship are kept, shall cease to be
located at the address set forth in Section 12.3.
(d) No Voluntary Bankruptcy by Investment Trust. The Investment Trust
shall not (i) commence any case, proceeding or other action under any
existing or future law, relating to bankruptcy, insolvency, reorganization,
arrangement, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, (ii) seek appointment of a
receiver, trustee, custodian or other similar official for them or for all
or any substantial part of its assets or property or (iii) take any action
in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in this Section 6.2.
(e) No Voluntary Bankruptcy by Charter Trustee. The Charter Trustee,
in its individual capacity or as trustee, shall not (i) commence any case,
proceeding or other action under any existing or future law, relating to
bankruptcy, insolvency, reorganization, arrangement, winding-up,
liquidation, dissolution, composition or other relief with respect to it,
its debts, (ii) seek appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets
or property or (iii) take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
this Section 6.2.
(f) No Voluntary Bankruptcy by Investment Trustee. The Investment
Trustee, in its individual capacity or as trustee, shall not (i) commence
any case, proceeding or other action under any existing or future law,
relating to bankruptcy, insolvency, reorganization, arrangement, winding-
up, liquidation, dissolution, composition or other relief with respect to
it, its debts, the Investment Trust or the Investment Trust's debts, (ii)
seek appointment of a receiver, trustee, custodian or other similar
official for all or any substantial part of its or the Investment Trust's
assets or property or (iii) take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in this Section 6.2.
(g) No Sale of Drillship. Neither the Trustees nor the Investment
Trust shall transfer all or any of its interest in the Drillship or the
Transaction Documents except as expressly permitted in the Transaction
Documents.
(h) Trust Agreements. Without prejudice to any right of either of the
Trustees under the Trust Agreements to resign as trustee, or the right of
the Certificate Purchasers under the Trust Agreements to remove either of
the Trustees as trustee, and in each case subject to the terms of the
Transaction Documents, neither the Trustees nor the Investment Trust shall
(i) terminate or revoke the trusts created by the Trust Agreements before
the later of the expiration or termination of the Charter or the payment
in full of the obligations under the Certificates, (ii) amend, modify,
supplement, terminate or revoke or otherwise modify any provision of any
Transaction Document (other than the Ship Mortgage) or any Head Lease
Document in any manner that would have an adverse effect on the rights or
interests of Deepwater without the prior written consent of Deepwater, or
(iii) amend, modify or supplement the Ship Mortgage without Deepwater's
prior written consent.
(i) Liens. Neither Trustee (in its individual capacity or as trustee)
shall create or suffer to exist (and shall discharge promptly) any Trust
Lien; provided, however, that such Trustee shall not be required to remove
a Trust Lien if it is being contested pursuant to a Permitted Contest and
is bonded to the satisfaction of Deepwater.
(j) Change of Jurisdiction of the Trustees. Neither Trustee (in its
individual capacity) shall (i) without sixty (60) days' prior written
notice to Deepwater and the Participants, change its jurisdiction of
incorporation or organization (individually or as trustee) or (ii) change
the jurisdiction of the Investment Trust or the trust created by the
Charter Trust Agreement, in any case, without the consent of Deepwater and
the Documentation Agent.
(k) Quiet Enjoyment. So long as no Charter Event of Default shall have
occurred and be continuing and Deepwater shall have received no notice
thereof, neither the Investment Trustee (in its individual and trustee
capacities) nor the Investment Trust shall take any action to interfere
with or otherwise disturb Deepwater's, its agents' or its permitted
subcharterers' full use and possession of the Drillship or do or cause to
be done any act which would deprive Deepwater, its agents, or its permitted
subcharterers of the full use and possession of the Drillship on the terms
provided for in the Transaction Documents.
(i) Notices. The Charter Trustee shall deliver a copy of any notices,
financial statements or any other documents, received by the Charter
Trustee from Deepwater, any guarantor under the R&B Falcon Guaranty or
Conoco Guaranty or any Drilling Party, to each Certificate Purchaser at its
address set forth in Schedule 5.
SECTION 6.3 Covenants of the Certificate Purchasers.
Each Certificate Purchaser, individually and not jointly, covenants as
follows:
(a) Trust Agreements. Without prejudice to any right of the Trustees
under the Trust Agreements to resign as Trustees, or the right of the
Certificate Purchasers under the Trust Agreements to remove the Trustees,
and in each case subject to the terms of the Transaction Documents, such
Certificate Purchaser hereby agrees with Deepwater (i) not to terminate or
revoke the trusts created by the Trust Agreements before the later of the
expiration or termination of the Charter Term or the payment in full of the
obligations under the Certificates, and (ii) not to amend, modify,
supplement, terminate or revoke or otherwise modify any provision of any
Transaction Document or any Head Lease Document in any manner that would
have an adverse effect on the rights or interests of Deepwater without the
prior written consent of Deepwater; provided, however, that the consent
requirement contained in clause (ii) of this Section 6.3(a) shall only
apply to amendments, supplements revocations or other modifications which
can be made legally effective without Deepwater's execution.
(b) Compliance by Charter Trustee and Investment Trust. Subject to the
terms of Section 12.13, each of the Certificate Purchasers agrees that it
shall not instruct, or vote to instruct, the Charter Trustee or the
Investment Trust to take any action inconsistent with, contrary to or in
violation of the Transaction Documents or the Charter Trustee's or the
Investment Trust's obligations thereunder, and each of the Certificate
Purchasers agrees that it shall instruct, or vote to instruct, the
Investment Trust and the Charter Trustee to take any affirmative action
necessary to satisfy the Investment Trust's and the Charter Trustee's
obligations under the Drilling Consent (including any obligation to enter
into an assumption agreement, replacement drilling contracts or similar
arrangement and with respect to a Non-Defaulting Drilling Party, the Cross-
Default cure provision and the assignment of rights and interests upon
election and satisfaction of the Purchase Option, all in accordance with
the terms of the Drilling Consent).
(c) Each of the Certificate Purchasers agrees that it shall not create
or suffer to exist (and shall discharge promptly) any Certificate Purchaser
Lien attributable to it; provided, however, that no Certificate Purchaser
shall be required to remove a Certificate Purchaser Lien attributable to
it if it is being contested pursuant to a Permitted Contest and is bonded
to the satisfaction of Deepwater.
(d) No Voluntary Bankruptcy. Each of the Certificate Purchasers agrees
that it shall not (i) commence any case, proceeding or other action under
any existing or future law, relating to bankruptcy, insolvency,
reorganization, arrangement, winding-up, liquidation, dissolution,
composition or other relief with respect to the Charter Trustee's or
Investment Trust's debts, or (ii) seek appointment of a receiver, trustee,
custodian or other similar official for the Charter Trustee or the
Investment Trust or for all or any substantial part of either or both of
their assets or property and each of the Certificate Purchasers shall not
take any action in furtherance of, or indicating its consent to, approval
of, any of the acts set forth in this Section 6.3(d).
(e) Quiet Enjoyment. Each of the Certificate Purchasers agrees that so
long as no Charter Event of Default shall have occurred and be continuing
and Deepwater shall have received no notice thereof, such Certificate
Purchaser shall not take any action to interfere with or otherwise disturb
Deepwater's, its agents' or its permitted subcharterers' full use and
possession of the Drillship or do or cause to be done any act which would
deprive Deepwater, its agents, or its permitted subcharterers of the full
use and possession of the Drillship on the terms provided for in the
Transaction Documents.
SECTION 6.4 Covenants of the Members. As the sole obligation of the
Members under this Agreement, each of the Members, severally and not
jointly, covenants as follows:
(a) Bankruptcy. Such Member agrees that it shall not (i) commence any
case, proceeding or other action under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, arrangement, winding-up, liquidation, dissolution,
composition or other relief with respect to Deepwater or its debts; (ii)
seek appointment of a receiver, trustee, custodian or other similar
official for Deepwater or for all or any substantial part of its property;
or (iii) vote its interest as a member of Deepwater to, or to otherwise,
cause Deepwater to file a voluntary petition in bankruptcy or an answer
seeking reorganization in a proceeding under any bankruptcy, insolvency or
similar laws or an answer admitting the material obligations of a petition
filed against Deepwater in any such proceeding.
(b) No Amendment to LLC Agreement. Other than in connection with a
transfer of an ownership interest permitted by Section 6.4(c) or a
transaction permitted by Section 6.1(c), such Member agrees that it will
not amend the LLC Agreement as in effect on the Closing Date, in a manner
that has an adverse effect on the rights or interests of the Trustees, the
Investment Trust, the Certificate Purchasers, or their respective rights
under the Transaction Documents or the obligations of Deepwater thereunder,
in each case, without the prior written consent of the Charter Trustee,
such consent not to be unreasonably withheld.
(c) Maintenance of Membership Interests. Such Member agrees that it
shall not sell, assign or transfer any of its interest in Deepwater if the
result of such sale, assignment or transfer is to cause the aggregate
membership interests in Deepwater of such Member and its Affiliates to be
less than 40% of all of the Membership interests in Deepwater.
(d) Compliance by Deepwater. Subject to the terms of Section 12.13,
such Member agrees that it shall not instruct Deepwater to take any action
inconsistent with, contrary to or in violation of the Transaction Documents
or Deepwater's obligations thereunder.
SECTION 6.5 Hedging Agreements. At any time after the Delivery Date,
if Deepwater has arranged for one or more interest rate swaps in an
aggregate notional principal amount of up to $195,000,000 in substantially
the form of Exhibit S-1 hereto (the "Hedging Agreements") to be entered
into by one or more Hedging Agreement Counterparties, then upon the written
request from Deepwater the Charter Trustee shall enter into such Hedging
Agreements and, concurrently therewith, Deepwater and the Charter Trustee
shall enter into one or more matching interest rate swaps in substantially
the form of Exhibit S-2 hereto (the "Deepwater Hedging Agreements");
provided that, at the time the Hedging Agreements are entered into, each
of the Hedging Agreement Counterparties shall be a Certificate Purchaser
or an Affiliate thereof and each of the Hedging Agreement Counterparties
shall have executed acknowledgments to the Depository Agreement, the
Charter Trustee Assignment and any other appropriate Transaction Document.
The Charter Trustee is hereby instructed and agrees to deposit all amounts
owed to Deepwater under the Deepwater Hedging Agreements (the "Deepwater
Hedge Payments") and all amounts paid to the Charter Trustee under the
Hedging Agreements (x) into the Trustee's Account pursuant to Section 2.10
or (y) with the Depository to be applied pursuant to the Depository
Agreement, as applicable. All Deepwater Hedge Payments deposited pursuant
to the preceding sentence shall satisfy, to the extent so deposited, the
obligations of the Charter Trustee under the Deepwater Hedging Agreements.
All payments made to the Hedging Agreement Counterparties of amounts owed
to the Hedging Agreement Counterparties under the Hedging Agreements
pursuant to the Depository Agreement shall satisfy the corresponding
obligations of Deepwater under the Deepwater Hedging Agreements. If a
Responsible Officer of Deepwater has Actual Knowledge of an Event of
Default or Event of Loss, Deepwater shall promptly give notice thereof to
each of the Hedging Agreement Counterparties. In addition, Deepwater shall
provide to each of the Hedging Agreement Counterparties a copy of any
notice of its election to exercise its Special Purchase Right under Section
16.4 of the Master Charter. The Charter Trustee shall provide to each of
the Hedging Agreement Counterparties a copy of any notice given to
Deepwater under Article XVI of the Master Charter.
SECTION 6.6 [Intentionally Omitted]
SECTION 6.7 Charter Extension Option. In the event that Deepwater
elects the Charter Extension Option in accordance with Section 20.2 of the
Master Charter, Deepwater may, in its sole discretion, elect to replace any
Certificate Purchaser that does not submit an offer to extend or whose
offer to extend is rejected by Deepwater by having a Replacement
Certificate Purchaser purchase such non-consenting Certificate Purchaser's
interest in accordance with this Agreement. Replacement of a Certificate
Purchaser by a Replacement Certificate Purchaser shall be accomplished in
accordance with Section 4.3 hereto.
SECTION 6.8 Excessive Use Indemnity. In the event that (a) Deepwater
elects the Return Option and (b) after paying to the Charter Trustee all
amounts due under Section 20.3 of the Master Charter, including Net Sales
Proceeds and the Residual Guaranty Amount, the Charter Trustee has not
received sufficient funds to reduce the Certificate Purchaser Balance
(excluding any Purchasing Party Amount) to zero, then Deepwater shall
deliver a report from an independent appraiser acceptable to the Required
Certificate Purchasers establishing whether or not the decline in the fair
market value of the Drillship from the anticipated fair market value of the
Drillship as of the Scheduled Charter Expiration Date in the Appraiser's
report delivered pursuant to Section 3.2(f) was due to wear and tear on the
Drillship in excess of ordinary wear and tear. Deepwater shall pay to the
Charter Trustee promptly after receipt of such report an amount equal to
the amount, if any, of the decline in the fair market value of the
Drillship that the appraiser has attributed to such excess wear and tear;
provided, however, that the amount owed by Deepwater pursuant to this
Section 6.8 shall in no event exceed the amount of funds necessary to
reduce the Certificate Purchaser Balance (excluding any Purchasing Party
Amount) to zero and to pay all accrued and unpaid Certificate Return after
Deepwater's payment of all amounts due under Section 20.3 of the Master
Charter. The appraiser's determination shall be absolute and final and not
contested by any of the parties hereto, absent manifest error.
SECTION 6.9 Letter of Credit. R&B Falcon covenants that, at all
times from the Closing Date until the twentieth (20th) Business Day
following the last day of the Charter Term, it shall maintain a Letter of
Credit in favor of the Charter Trustee (on behalf of the Certificate
Purchasers) to secure the obligations of Deepwater under the R&B Falcon
Charter in an aggregate stated amount not less than $50 million minus any
amounts then held in the Letter of Credit Collateral Account or which have
been transferred from such Letter of Credit Collateral Account to the Event
of Loss Proceeds Account or the Termination Proceeds Account in accordance
with the terms of the Depository Agreement.
In the event the issuer of any Letter of Credit ceases to be a Qualified
Bank, R&B Falcon shall not be deemed in violation of the covenant contained
in this Section if it obtains a Letter of Credit (otherwise meeting the
requirements of this Section) from a Qualified Bank within thirty (30) days
of a Responsible Officer of R&B Falcon having Actual Knowledge of such
event at which time the prior Letter of Credit shall be cancelled and
surrendered by the Charter Trustee to R&B Falcon.
Each Letter of Credit used to satisfy the obligations of R&B Falcon
under this Section shall be drawable where a demand shall have been made
under the R&B Falcon Guaranty or the R&B Falcon Drilling Contract Guaranty,
which demand shall not have been satisfied within five (5) Business Days
of the receipt thereof (the "Drawing Condition").
If any such Letter of Credit shall be drawable pursuant to the terms of
the preceding paragraph, the Certificate Purchasers hereby authorize and
require the Charter Trustee to, and the Charter Trustee shall immediately,
draw on such Letter of Credit and remit the proceeds thereof to the
Depository for deposit into the Letter of Credit Collateral Account.
SECTION 7
CERTAIN PROCEDURES
SECTION 7.1 Illegality. If after the date of this Agreement the
adoption of any Applicable Law, or any change in any Applicable Law, or in
the interpretation or administration by any central bank or other
Government Authority of any Applicable Law, has made it unlawful, or it is
asserted by any central bank or other Government Authority that it is
unlawful, for any Certificate Purchaser or its Applicable Office to make
Base Rate Advances (an "Illegality Event") then, on written notice thereof
by such Certificate Purchaser to Deepwater and the Charter Trustee, any
obligation of such Certificate Purchaser to make Base Rate Advances shall
be suspended to the extent necessary to comply with any such Applicable Law
until such Certificate Purchaser notifies the Charter Trustee and Deepwater
that such Illegality Event no longer exists.
If an Illegality Event occurs, upon written notice of such Illegality
Event from the affected Certificate Purchaser to Deepwater (with a copy to
the Charter Trustee), all Base Rate Advances of that Certificate Purchaser
then outstanding shall automatically be converted to an Alternate Rate
Advance, either on the last day of the Return Period thereof, if the
Certificate Purchaser may lawfully continue to maintain such Base Rate
Advances to such day, or immediately, if the Certificate Purchaser may not
lawfully continue to maintain such Base Rate Advance.
If the obligation of any Certificate Purchaser to make or maintain Base
Rate Advances has been terminated or suspended in accordance with this
Section 7.1, Deepwater may elect, by giving notice to such Certificate
Purchaser through the Charter Trustee or the Investment Trust that all
Advances which would otherwise be made by such Certificate Purchaser as
Base Rate Advances shall be made instead as Alternate Rate Advances.
Before giving any notice to Deepwater, the Charter Trustee or the
Investment Trust under this Section 7.1, the affected Certificate Purchaser
shall designate a different Applicable Office with respect to its Base Rate
Advances if such designation will avoid or cure the Illegality Event and
will not, in the judgment of the Certificate Purchaser, be illegal or
otherwise disadvantageous to the Certificate Purchaser.
SECTION 7.2 Increased Costs and Reduction of Return. (a) If due to
either (i) the adoption of or any change in or in the interpretation by any
Government Authority of any law or regulation or (ii) the compliance by any
Certificate Purchaser with any guideline or request from any central bank
or other Government Authority (whether or not having the force of law), any
Certificate Purchaser becomes subject to any Tax, duty or other charge
(other than Taxes for which indemnification is provided under Section 10.4)
such that there shall be any increase in the cost to any Certificate
Purchaser of agreeing to make or making, funding or maintaining any Base
Rate Advances, then, subject to Section 7.6, Deepwater shall be liable for,
and shall from time to time, upon written demand from such Certificate
Purchaser (with a copy of such demand to be sent to the Charter Trustee),
pay to the Charter Trustee for the account of such Certificate Purchaser,
additional amounts equal to the amount of such increased costs.
(b) If (i) the adoption of any Applicable Law relating to the adequacy
of the Certificate Purchaser's capital, (ii) any change in any such
Applicable Law, (iii) any change in the interpretation or administration
of any such Applicable Law by any central bank or other Government
Authority charged with the interpretation or administration thereof, or
(iv) compliance by the Certificate Purchaser (or its Applicable Office) or
any corporation controlling the Certificate Purchaser with any such
Applicable Law, affects or would affect the amount of capital required or
expected to be maintained by the Certificate Purchaser or any corporation
controlling the Certificate Purchaser such that the return on capital of
such Certificate Purchaser is reduced as a consequence of such Certificate
Purchaser's Commitment or obligations under this Agreement to a level below
that which such Certificate Purchaser could have achieved but for such
adoption or change (taking into consideration such Certificate Purchaser's
or such corporation's policies with respect to capital adequacy and such
Certificate Purchaser's reasonably expected return on capital), then upon
written notice from such Certificate Purchaser to Deepwater (with a copy
to the Charter Trustee) Deepwater shall, subject to Section 7.6, pay to the
Certificate Purchaser additional amounts sufficient to compensate the
Certificate Purchaser for such reduction in return.
(c) A Certificate Purchaser affected by a change as described in
subparagraphs (a) or (b) shall, pursuant to Section 7.6, deliver to
Deepwater and the Charter Trustee as promptly as practicable a certificate
setting forth in reasonable detail the amount actually imposed or assessed
on payments made under the Certificates in the case of the occurrence of
an event described in Section 7.2(a) or (b), setting forth in reasonable
detail such increased amounts or the amount required to compensate such
Certificate Purchaser for such reduced return and the basis for the
determination of such amounts.
SECTION 7.3 Funding Losses. Deepwater shall reimburse each
Certificate Purchaser and hold each Certificate Purchaser harmless from any
direct loss or expense (as opposed to consequential loss or expense) which
the Certificate Purchaser may sustain or incur as a consequence of: (a) the
failure of Deepwater to make on a timely basis any payment which it is
required to make under the Transaction Documents which is to be applied to
the payment of principal of any Base Rate Advance; (b) the failure of
Deepwater to accept the proceeds of any Advance; (c) the failure of
Deepwater to accept, continue or convert the proceeds of an Advance paid
to the Charter Trustee by a Certificate Purchaser after Deepwater has given
(or is deemed to have given) an Advance Request; (d) the failure of
Deepwater to make any payment which it is required to make under the
Transaction Documents which is to be applied to the prepayment of an
Advance in accordance with any notice delivered pursuant to this Agreement
or any Transaction Document; (e) the prepayment or other payment (including
after acceleration thereof) of a Base Rate Advance on a day that is not the
last day of the relevant Return Period; (f) the sale or transfer of a
Certificate pursuant to Sections 4.3, 7.7 or 9.4(a), or (g) the automatic
conversion of any Base Rate Advance to an Alternate Rate Advance on a day
that is not the last day of the relevant Return Period, including any such
loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain its Base Rate Advances or from fees payable to
terminate the deposits from which such funds were obtained. For purposes
of calculating amounts payable by Deepwater to the Certificate Purchasers
under this Section 7.3 and under Sections 2.4 and 2.8, each Base Rate
Advance made by the Certificate Purchaser (and each related reserve,
special deposit or similar requirements) shall be conclusively deemed to
have been funded at the LIBOR used in determining the Certificate Return
Rate for such Base Rate Advance by a matching deposit or other borrowing
in the interbank Eurodollar market for a comparable amount and for a
comparable period, whether or not such Base Rate Advance is in fact so
funded.
SECTION 7.4 Inability to Determine Rates. If the Charter Trustee or
the Required Certificate Purchasers determine that for any reason adequate
and reasonable means do not exist for determining the Base Rate for any
requested Return Period with respect to a proposed Base Rate Advance by
reason of any changes arising after the date of this Agreement affecting
the interbank Eurodollar market, the Charter Trustee will promptly so
notify Deepwater and each Certificate Purchaser. Thereafter, the
obligation of the Certificate Purchasers to make or maintain Base Rate
Advances hereunder shall be suspended until the Charter Trustee, upon the
instruction of the Required Certificate Purchasers, revokes such notice in
writing. Upon receipt of such notice, Deepwater may revoke any Advance
Requests then submitted by it. If Deepwater does not revoke any such
Advance Request, the Certificate Purchasers shall make, convert or continue
the Advances, as proposed by Deepwater, in the amount specified in the
applicable notice submitted by Deepwater, but such Advances shall be made,
converted or continued as Alternate Rate Advances instead of Base Rate
Advances.
SECTION 7.5 Reserves on Base Rate Advances. If after the date hereof
any Certificate Purchaser shall be required under regulations of the
Federal Reserve Board or any other applicable Government Authority to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), Deepwater shall pay to such Certificate Purchaser additional
costs on the unpaid principal amount of each Base Rate Advance equal to the
actual costs of such reserves maintained and allocated to such Advance by
the Certificate Purchaser, payable on each date on which interest is
payable on such Advance, provided Deepwater shall have received at least
15 days' prior written notice (with a copy to the Charter Trustee) of such
additional Certificate Return from the Certificate Purchaser. If a
Certificate Purchaser fails to give notice 15 days prior to the relevant
Payment Date, such additional Certificate Return shall be payable 15 days
from receipt of such notice.
SECTION 7.6 Certificates of Certificate Purchasers. Any Certificate
Purchaser claiming reimbursement or compensation under this Section 7 shall
deliver to Deepwater (with a copy to the Charter Trustee) a certificate
setting forth in reasonable detail the amount payable to the Certificate
Purchaser hereunder and the basis for the determination of such amount and
such certificate shall be conclusive and binding on Deepwater in the
absence of manifest error. Deepwater shall not be obligated to compensate
any Certificate Purchaser for any costs incurred more than 120 days before
the date on which such Certificate Purchaser first notifies Deepwater of
its intent to make such a claim or it notifies Deepwater of an event that
entitles it to compensation.
SECTION 7.7 Substitution of Certificate Purchasers; Change in
Applicable Office; Prepayments. Upon the receipt by Deepwater from any
Certificate Purchaser (an "Affected Certificate Purchaser") of a claim for
compensation under Section 7.2, Deepwater may: (i) request the Affected
Certificate Purchaser to use its commercially reasonable efforts to obtain
a replacement bank or financial institution satisfactory to Deepwater (a
"Substitute Certificate Purchaser") to acquire and assume all or a ratable
part of all of such Affected Certificate Purchaser's Advances and
Commitment so long as the Affected Certificate Purchaser is paid its
Certificate Purchaser Amount, accrued and unpaid Certificate Return, any
funding losses incurred by it pursuant to Section 7.3 as a result of the
substitution and any other accrued and unpaid amount owed to it by
Deepwater under the Transaction Documents; (ii) request one or more of the
other Certificate Purchasers to acquire and assume all or part of such
Affected Certificate Purchaser's Advances and Commitment; (iii) designate
a Substitute Certificate Purchaser and require the Affected Certificate
Purchaser to sell all of its interests in its Advances and Commitments to
such Substitute Certificate Purchaser for an amount equal to its
Certificate Purchaser Amount, accrued and unpaid Certificate Return, any
funding losses incurred by it pursuant to Section 7.3 as a result of the
substitution and all other accrued and unpaid amounts owed to it by
Deepwater under the Transaction Documents; (iv) request the Affected
Certificate Purchaser to designate a different Applicable Office if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not be illegal or otherwise disadvantageous to the
Affected Certificate Purchaser; or (v) make payments to the Charter Trustee
which are equal to the amounts necessary for the Charter Trustee to prepay
all or a portion of the Certificate Purchaser Amount of the Affected
Certificate Purchaser, together with accrued and unpaid Certificate Return
attributable to the amount being prepaid and any funding losses incurred
by the Affected Certificate Purchaser pursuant to Section 7.3 as a result
of the prepayment. The Affected Certificate Purchaser shall take any
commercially reasonable actions necessary to carry out a request or
election made by Deepwater in accordance with this Section 7.7 at
Deepwater's sole cost and expense. Any designation of a Substitute
Certificate Purchaser under this Section 7.7 shall be subject to the prior
written consent of the Charter Trustee which consent shall not be
unreasonably withheld, delayed or conditioned.
SECTION 7.8 Legal and Tax Representation. Deepwater acknowledges and
agrees that none of the Trustees, the Investment Trust, the Agent or any
Certificate Purchaser has made any representation or warranty concerning
the tax, accounting or legal characteristics of the Charter or any of the
other Transaction Documents, and that Deepwater has obtained and relied on
such tax, accounting and legal advice regarding the Charter and the other
Transaction Documents as its deems appropriate. Each of the Charter
Trustee, Investment Trust and each Certificate Purchaser acknowledges and
agrees that it has obtained and relied on the Transaction Documents and the
various items delivered in connection therewith, and on such tax,
accounting and legal advice regarding the Charter and the other Transaction
Documents as it deems appropriate.
SECTION 7.9 Failure of a Certificate Purchaser to Fund. If an
Advance is to be made in accordance with the terms and conditions hereof
and if the Charter Trustee determines that any Certificate Purchaser (each
such Certificate Purchaser a "Defaulting Certificate Purchaser") will not
make available all or a portion of its Commitment Percentage of such
Advance (the "Defaulted Amount"), the Charter Trustee shall promptly so
notify Deepwater and each other Certificate Purchaser (each, a "Non-
Defaulting Certificate Purchaser") and shall specify the additional amounts
required to be funded by each such Non-Defaulting Certificate Purchaser
pursuant to this Section 7.9. Each such Non-Defaulting Certificate
Purchaser as soon as practical after receipt of notice but not before the
Advance Date, shall transfer to the Charter Trustee and the Investment
Trust, as applicable, in immediately available funds, its pro rata share
of the Defaulted Amount, determined in the same proportion that such Non-
Defaulting Certificate Purchaser's Commitment bears to the aggregate
Commitments of all such Non-Defaulting Certificate Purchasers; provided,
that such amount, together with all amounts previously funded by each such
Non-Defaulting Certificate Purchaser, shall not exceed such Non-Defaulting
Certificate Purchaser's Commitment; provided, further, that any funds
advanced to the Investment Trust by any Certificate Purchaser pursuant to
this Section 7.9 shall be advanced to the Charter Trustee. If the
Defaulted Amount cannot be fully funded by the Non-Defaulting Certificate
Purchasers, the Charter Trustee shall so notify Deepwater and the Non-
Defaulting Certificate Purchasers and give to all such Non-Defaulting
Certificate Purchasers the opportunity to increase their respective
Commitments by notice in writing to the Charter Trustee; provided, that
should the aggregate proposed increased Commitments by one or more Non-
Defaulting Certificate Purchasers exceed the Defaulted Amount, the Charter
Trustee shall increase the Commitments of the participating Non-Defaulting
Certificate Purchasers on a pro-rata basis in accordance with the
respective amounts by which such Non-Defaulting Certificate Purchasers have
offered to participate, it being understood that in no event shall the
aggregate amount funded by any Certificate Purchaser exceed the amount of
such Certificate Purchaser's Commitment after giving effect to any increase
in such Commitment pursuant to this sentence. If the Non-Defaulting
Certificate Purchasers do not increase their commitments by an amount
sufficient to fund the entire Defaulted Amount, then Deepwater shall have
the right to elect to fund any such shortfall and shall thereafter be
deemed to be a Certificate Purchaser for all purposes of the Transaction
Documents and shall be entitled to receive yield on the amount so funded
in an amount equal to the applicable Certificate Return; provided, however,
that Deepwater shall not be deemed to be a Certificate Purchaser for
purposes of the definitions of "Required Certificate Purchasers" or
"Majority Certificate Purchasers".
In the event of any funding of all or a portion of the Defaulted Amount
by the Non-Defaulting Certificate Purchasers, the following rules shall
apply notwithstanding any other provision in any Transaction Document:
(i) The Commitment of the Defaulting Certificate Purchaser shall
be decreased in an amount equal to the total aggregate increase, if any,
in the Commitments of the Non-Defaulting Certificate Purchasers pursuant
to this Section 7.9 and the Commitment Percentages of the Certificate
Purchasers shall be revised accordingly; provided, that nothing shall
preclude any party from pursuing any rights or remedies it may have
against the Defaulting Certificate Purchaser in connection with its
failure to make an Advance;
(ii) [Intentionally Omitted];
(iii) A Defaulting Certificate Purchaser shall not have the
right to fund its Defaulted Amount without the written consent of
Deepwater and then only to the extent such Defaulted Amount has not been
funded by the Non-Defaulting Certificate Purchasers in a manner that
resulted in a decrease in such Defaulting Certificate Purchaser's
Commitment Percentage;
(iv) If and to the extent that the Defaulted Amount is not funded
in full by the Non-Defaulting Certificate Purchasers, the Charter
Trustee, after providing written notice thereof to Deepwater, may delete
funds from the Advance Request so that the total Advance specified in
the Advance Request equals the aggregate revised fundings for the
Advance Date and shall so notify all Certificate Purchasers thereof; and
(v) The Non-Defaulting Certificate Purchasers shall not be
responsible for any damages suffered by Deepwater or any of Deepwater's
Affiliates as a result of the Defaulting Certificate Purchaser's failure
to so fund. The Defaulting Certificate Purchasers shall not be
responsible for any consequential or special damages suffered by
Deepwater or any of Deepwater's Affiliates as a result of its failure to
fund.
SECTION 8
PAYMENT OF CERTAIN EXPENSES
SECTION 8.1 Transaction Expenses. If the transactions contemplated
by this Agreement to occur on the Closing Date are consummated, Deepwater
shall pay promptly all Transaction Expenses incurred in connection with the
negotiation, execution and delivery of this Agreement and the other
Transaction Documents on the Closing Date and the consummation of the other
transactions contemplated hereby and thereby to occur on (or in connection
with) the Closing Date or Delivery Date as and when they become due.
Deepwater may pay any such Transaction Expenses out of the proceeds of
Advances made available to Deepwater in accordance with Section 2. Any
Transaction Expenses submitted to Deepwater which were not paid on the
Closing Date shall be paid by Deepwater promptly after receipt of an
invoice therefor.
SECTION 8.2 Transaction Expenses if Closing does not Occur. If the
transactions contemplated by this Agreement to occur on the Closing Date
are not consummated for any reason Deepwater shall promptly pay all of the
Transaction Expenses submitted to Deepwater as they become due.
SECTION 8.3 On-Going Expenses. Deepwater shall, promptly upon
demand, pay or reimburse the Charter Trustee, the Investment Trust, the
Certificate Purchasers, the Agent or the other Persons entitled thereto for
all other out-of-pocket expenses (including counsel fees) reasonably
incurred in connection with: (a) entering into, or the giving or
withholding of, any future amendments, supplements, waivers or consents
with respect to the Transaction Documents, to the extent required by the
terms of the Transaction Documents, the Head Lease Documents, the Services
Agreements, the Drilling Contracts, the Rig Sharing Agreement or the
Drilling Contract Guaranties, or requested or consented to by Deepwater
(whether or not consummated); (b) the negotiation and documentation of any
restructuring or "workout" whether or not consummated, of any Transaction
Document to the extent requested or consented to by Deepwater; (c) the
enforcement, attempted enforcement or preservation of the rights or
remedies under the Transaction Documents, the Services Agreements, the
Drilling Contracts, the Rig Sharing Agreement or the Drilling Contract
Guaranties; (d) further assurances requested by Deepwater pursuant to
Section 12.11; (e) any transfer by the Charter Trustee, the Investment
Trust or any Certificate Purchaser of any interest in the Transaction
Documents during the continuance of an Event of Default; (f) the ongoing
fees (if any) and expenses of the Agent, the Trustees and the Depository
pursuant to separate agreements entered into by Deepwater with such
Persons; and (g) the costs and expenses associated with the Delivery Date
or the Advance Date, including fees and expenses of U.S. and Panamanian
counsel, recordation and recording fees and all other out-of-pocket
expenses of the parties hereto in connection with the Delivery Date and the
transactions contemplated herein (provided, that Deepwater shall only be
responsible for fees and expenses of one U.S. counsel and one Panamanian
counsel for all of the Certificate Purchasers, the Agent, the Trustees and
the Investment Trust).
SECTION 9
RESTRICTIONS ON TRANSFERS; CHANGE OF CONTROL
SECTION 9.1 Restrictions on the Certificate Purchasers. A
Certificate Purchaser, including a Purchasing Party, may transfer all or
a portion of its interest in its Series A Trust Certificates and its
Investment Trust Certificates in the following circumstances: (i) in the
case of a Certificate Purchaser that is not a Purchasing Party, such
Certificate Purchaser obtains the prior written consent of Deepwater and
transfers to a transferee that has executed an Assignment and Assumption
Agreement in substantially the form of Exhibit R hereto, by which such
transferee assumes the duties and obligations of the transferring
Certificate Purchaser under the Transaction Documents and (ii) in the case
of any Certificate Purchaser, including any Purchasing Party, such Person
transfers all or a portion of its interest in its Series A Trust
Certificates and its Investment Trust Certificates and the following
conditions are satisfied:
(a) such transfer is in respect of an aggregate outstanding Certificate
Purchaser Amount at least equal to the lesser of $5,000,000 and such
Certificate Purchaser's then outstanding Certificate Purchaser Amount;
(b) if the transferee is an Affiliate of a Certificate Purchaser and
does not otherwise qualify under clause (c) below, such Certificate
Purchaser has unconditionally and irrevocably guaranteed the payment and
performance obligations of the transferee;
(c) if the transferee is an Affiliate of a Certificate Purchaser, such
transferee has a capital and surplus of at least $250 million or a tangible
net worth at least equal to $100 million; or
(d) if the transferee is not an Affiliate of a Certificate Purchaser,
the transferee, or a party unconditionally and irrevocably guaranteeing the
payment and performance obligations of the transferee pursuant to a
guaranty in form and substance satisfactory to Deepwater, meets the
following criteria:
(i) the transferee or guarantor has a capital and surplus of at
least $400 million or a net worth of at least $150 million;
(ii) each of the transferee and the guarantor of the payment and
performance obligations of the transferee, if any, is an institutional
investor;
(iii) Deepwater, Conoco and R&B Falcon have not previously been
involved in material litigation with the proposed transferee or
guarantor, if any, and are not currently involved in material litigation
proceedings with the proposed transferee or guarantor, if any;
(iv) on the date of such transfer the transferee provides evidence
satisfactory to Deepwater that it is not subject to or is exempt from
United States withholding taxes;
(v) neither such transferee nor any of its Affiliates is a
Competitor; and
(vi) on the date of such transfer, the transferee certifies, in
writing, that no facts exist that would permit such transferee to make
a claim against Deepwater for increased costs, indemnities or other
additional amounts under Section 7.
Any transfer of an interest in a Series A Trust Certificate or an
Investment Trust Certificate by a Certificate Purchaser in violation of the
foregoing restrictions shall be null and void, and the transferor and any
guarantor thereof shall remain liable under the Transaction Documents. A
Certificate Purchaser that intends to transfer an interest in its Series
A Trust Certificates or Investment Trust Certificates (including a sale of
a participation in any such Certificate pursuant to Section 3.8(h) of the
Trust Agreement or Section 3.8(h) of the Investment Trust Agreement,
respectively, or a pledge thereof) must transfer the same percentage
interest in both its Series A Trust Certificates and Investment Trust
Certificates together to the same purchaser or transferee in a single
transaction.
Notwithstanding any other provision in this Section 9.1, any Certificate
Purchaser may at any time create a security interest in, or pledge, all or
any portion of its rights under its Investment Trust Certificate and its
Series A Trust Certificate, together with the rights evidenced by such
certificates, in favor of any Federal Reserve Bank in accordance with
Regulation A of the FRB or U.S. Treasury Regulation 31 C.F.R. Section
203.14, and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under Applicable Law.
SECTION 9.2 Restrictions on Trustees. The Charter Trustee shall not
resign as Charter Trustee and the Investment Trustee shall not resign as
Investment Trustee, unless and until a successor has been appointed which
is a Person who has agreed to act as Charter Trustee or Investment Trustee,
as applicable, and is reasonably acceptable to Deepwater.
SECTION 9.3 Expenses. All reasonable and documented costs and
expenses (including counsel fees and disbursements) of the parties thereto
in connection with any transfer permitted by Sections 9.1 or 9.2 shall be
the responsibility of the transferor.
SECTION 9.4 Change of Control.
(a) If a Prepayment Change of Control Trigger Event occurs, (i) the
Person suffering such Prepayment Change of Control Trigger Event must
notify, within ten (10) days of the occurrence such event, each Certificate
Purchaser and the Charter Trustee of the occurrence of such Prepayment
Change of Control Trigger Event and (ii) each Certificate Purchaser shall
have the right, by written notice (the "Prepayment Notice") delivered to
Deepwater, the relevant Purchasing Party, the Charter Trustee and the
Investment Trust within 10 days of receipt of the notice specified in (i)
above, to require such Purchasing Party to purchase the selling Certificate
Purchaser s Conoco Certificates (where Conoco is the Purchasing Party) or
R&B Falcon Certificates (where R&B Falcon is the Purchasing Party) on a
date set forth in the Prepayment Notice which shall be no more than 7
Business Days from the delivery of the Prepayment Notice to the Purchasing
Party. On the date set forth in the Prepayment Notice, the Purchasing
Party shall make payments to the Charter Trustee in its individual
capacity, as agent for the Purchasing Party, which will remit such amounts
to the selling Certificate Purchaser(s) in an aggregate amount equal to (i)
where R&B Falcon is Purchasing Party, in exchange for the R&B Falcon
Certificates of such Certificate Purchaser, the outstanding principal
balance of the R&B Falcon Certificates of such Certificate Purchaser,
together with the accrued and unpaid Certificate Return thereon and any
funding losses incurred by such Certificate Purchaser pursuant to Section
7.3 as a result of the prepayment of such R&B Falcon Certificates and (ii)
where Conoco is Purchasing Party, in exchange for the Conoco Certificates
of such Certificate Purchaser, the outstanding principal balance of the
Conoco Certificates of such Certificate Purchaser, together with the
accrued and unpaid Certificate Return thereon and any funding losses
incurred by such Certificate Purchaser pursuant to Section 7.3 as a result
of the prepayment of such Conoco Certificates (the amounts specified in
clauses (i) and (ii) each being, respectively, the "Change of Control
Prepayment Amount"). The Purchasing Party shall make payment to the
Charter Trustee in its individual capacity, in immediately available funds,
in the amount of the Change of Control Prepayment Amount. Upon receipt of
such payment from the Purchasing Party, the Charter Trustee, as agent for
the Purchasing Party, shall pay the Series A Portion of the Change of
Control Prepayment Amount to the Certificate Purchaser requiring prepayment
pursuant to this Section 9.4 and shall pay the Investment Portion of the
Change of Control Prepayment Amount to the Investment Trust, which, in
turn, shall pay the Investment Portion of the Change of Control Prepayment
Amount to such Certificate Purchaser.
The Commitments and any outstanding Certificate Purchaser Amounts of any
Purchasing Party receiving its interest in the Certificates pursuant to
this Section 9.4(a) shall not be counted in determining any actions which
require the vote of the "Majority Certificate Purchasers" or "Required
Certificate Purchasers," nor shall a Purchasing Party, to the extent its
interest is acquired pursuant to this Section 9.4, be considered a
Certificate Purchaser for purposes of any voting provisions of the
Transaction Documents. In addition, a Purchasing Party, to the extent it
receives its interest in the Certificates pursuant to this Section 9.4(a),
shall not be considered a "Certificate Purchaser" for the purposes of
receiving distributions under the Depository Agreement but shall instead
receive payments thereunder in respect of the Purchased Interest only as
a "Purchasing Party" thereunder. As a point of clarification only, except
to the extent provided above, the outstanding Certificate Purchaser Amounts
relating to the Certificates purchased by the Purchasing Party shall
continue to be deemed "Certificate Purchaser Amounts" and shall be included
as a part of the Certificate Purchaser Balance and, as such, shall be
included in the calculation of any Purchase Option Price, Termination
Value, Residual Guaranty Amount, or other amount having the Certificate
Purchaser Balance as a component thereof. The foregoing restrictions and
limitations with respect to voting rights and the receipt of distributions
under the Depository Agreement are applicable only in so far as the
Purchasing Party (or any of its Affiliates) remains the holder of such
Purchased Interest. Any transferee of a Purchasing Party (other than a
transferee which is, or is an Affiliate of, Conoco, R&B Falcon or
Deepwater) of its Purchased Interest shall become a "Certificate Purchaser"
for all purposes under the Transaction Documents, shall not be deemed to
be a "Purchasing Party" and shall not be subject to any such restrictions
or limitations not otherwise applicable to a Certificate Purchase.
Transferees which are Affiliates of Conoco, R&B Falcon or Deepwater
following the transfer of all or any portion of a Purchased Interest shall
be deemed to be Purchasing Parties to the extent of the interest
transferred.
If either Conoco or R&B Falcon is required to purchase all of the then
outstanding Conoco Certificates or R&B Falcon Certificates, respectively,
held by the Certificate Purchasers (excluding any Purchasing Party) then
the following events shall automatically be deemed to have occurred
immediately after such purchases:
(i) the Rig Sharing Agreement and (a) if R&B Falcon is the Purchasing
Party, the R&B Falcon Charter, the R&B Falcon Drilling Contract and
the R&B Falcon Drilling Contract Guaranty shall terminate or (b) if
Conoco is the Purchasing Party, the Conoco Charter, the Conoco
Drilling Contract and the Conoco Drilling Contract Guaranty shall
terminate;
(ii) the non-purchasing party will be treated as having entered into a
subcharter, substantially in the form attached hereto as Exhibit V,
with the Purchasing Party imposing on the Purchasing Party the
same obligations it had under the terminated Drilling Contract and
Rig Sharing Agreement;
(iii) the non-purchasing party shall have the right to exclusive
possession of the Drillship for the remainder of the Charter
Term; and
(iv) The obligations of such Purchasing Party listed in Sections
2(a)(i)(x)(A), 2(a)(i)(y)(A), 2(a)(ii)(A)(1), 2(a)(ii)(B)(1),
2(a)(vi) and 2(a)(v) of (a) the R&B Falcon Guaranty, if R&B Falcon
is the Purchasing Party or (b) the Conoco Guaranty, if Conoco is
the Purchasing Party, shall be terminated.
The rights and obligations imposed under this Section 9.4(a) shall at all
times be subject to the Special Purchase Right of Deepwater pursuant to
Section 16.4 of the Master Charter.
(b) If a Pricing Change of Control Trigger Event occurs, the
Certificate Return Rate used to determine Basic Hire due with respect to
Charter Supplement No. 1 shall increase effective as of the date of such
Pricing Change of Control Trigger Event (with such increase to be based on
the rating of R&B Falcon or the Acquiror of R&B Falcon, and in the case of
ratings that are not equivalent, the lower of the two ratings) in
accordance with the following schedule:
Credit Rating of R&B Falcon Increase of Certificate Return
or Acquiror of R&B Falcon Rate
Greater than or equal to no change
Ba1/BB+
Less than or equal to Ba2/BB additional 25 basis points
(c) If a Pricing Change of Control Trigger Event occurs and the
Certificate Return Rate has been increased as set forth in Section 9.4(b),
in the event that R&B Falcon or the Acquiror of R&B Falcon at any time
thereafter obtains upgraded ratings of at least Baa3 from Xxxxx'x and at
least BBB- from S&P, then the Certificate Return Rate used to calculate
Basic Hire under Charter Supplement No. 1 shall be adjusted downward to the
Certificate Return Rate that would have been in effect on the date such
upgraded ratings were released to the public as if no Pricing Change of
Control Trigger Event had ever occurred. Such decrease in the Certificate
Return Rate, subject to any adjustments under Section 2.4(c) hereof, if
any, shall be effective as of the first day of the Return Period which next
succeeds the date of such adjustment.
SECTION 10
INDEMNIFICATION
SECTION 10.1 General Indemnity. Deepwater hereby agrees to indemnify,
on an After-Tax Basis, each of the Trustees (in their trust and individual
capacities, respectively), the Investment Trust, the Certificate
Purchasers, the Depository, the Agent (in their agent and individual
capacities), the Hedging Agreement Counterparties (if any) and their
respective officers, directors, employees, agents and Affiliates (each an
"Indemnified Party" and, collectively, the "Indemnified Parties") from and
against any and all claims, damages, losses, liabilities, demands, suits,
judgments, causes of action, legal proceedings, whether civil or criminal,
penalties, fines and other sanctions, and any reasonable and documented
costs and expenses in connection with any of the foregoing ( Claims ),
which may be asserted against such Indemnified Party arising out of:
(a) the condition, ownership, construction, purchase, delivery,
nondelivery, subcharter, charter, acceptance, rejection, possession,
return, abandonment, disposition, use or operation of the Drillship;
(b) any defect in the Drillship arising from the material or any
articles used therein or from the design, testing, or use thereof or from
any maintenance, service, repair, overhaul or testing of the Drillship;
(c) any failure by Deepwater or either Member to perform or observe any
covenant, condition or agreement contained in any of the Transaction
Documents, or the falsity of any of Deepwater's or either Member's
representations and warranties;
(d) the transactions contemplated by the Transaction Documents;
(e) any Environmental Claims arising from or relating to the
construction, use, operation, ownership, maintenance, chartering or return
of the Drillship;
(f) the exercise by such Indemnified Party of remedies in the event of
a default under the Transaction Documents and the enforcement of any
security or other rights with respect thereto;
(g) any violation of Applicable Law by Deepwater or a Member with
respect to the transactions contemplated by the Transaction Documents;
(h) any Liens which Deepwater or any Member is required to remove; or
(i) any obligation asserted to be owed by the Indemnified Party under
any Assigned Contract as a result of the assignment of such Assigned
Contract pursuant to the Deepwater Assignment.
SECTION 10.2 General Indemnity Exclusions. Notwithstanding the
provisions of Section 10.1, Deepwater shall not be obligated to indemnify
an Indemnified Party under Section 10.1 for any Claim that is attributable
to any of the following:
(a) acts, events or circumstances occurring after the expiration or
earlier termination of the Charter and the return of the Drillship, when
required in accordance with the Charter;
(b) Taxes, loss of tax benefits and the cost and expense of tax
controversies (whether or not indemnified by Deepwater under Section 10.4
and other provisions of the Transaction Documents) (except (A) Taxes,
penalties, interest or charges of any nature whatsoever to the extent
necessary to make any required payment on an After Tax Basis, (B) Taxes
that are governmental charges incidental to any Government Action or
proceeding that is in the nature of court costs, filing fees, recording
fees, postage, stamps, duties, license fees and other similar charges);
(c) increased costs, losses or expenses for which compensation is
provided under Sections 2.8, 2.14, 6.8, 7.1, 7.2, 7.3, 7.4, 7.5, 8.1, 8.2,
8.3, 9.3 and 9.4;
(d) the gross negligence, willful misconduct or breach of any covenant,
representation or warranty under any Transaction Document by such
Indemnified Party to the extent that such Claim arises out of or is caused
by an act, misrepresentation, breach or omission of such Indemnified Party
where such act, misrepresentation, breach or omission (x) is in breach or
violation of the express covenants, representations or warranties of such
Indemnified Party under the Transaction Documents, (y) constitutes gross
negligence or willful misconduct of such Indemnified Party (other than
gross negligence or willful misconduct imputed as a matter of law to such
Indemnified Party solely by reason of entering into the Transaction
Documents or consummation of the transactions contemplated thereby) or (z)
is in violation of any Applicable Law and such violation causes such Claim;
(e) transfers (direct or indirect) by: (i) the Charter Trustee or the
Investment Trust of either of their interests in the Drillship or any
portion thereof (other than any such transfer pursuant to Sections 15.2,
16.4, 20.1 or 20.3 of the Master Charter, Sections 4.2 or 4.4 of either
Charter Supplement No. 1 or Charter Supplement No. 2 or (ii) a Certificate
Purchaser of all or any portion of its interest in the Trust Estate, the
Investment Trust or the Transaction Documents, other than a transfer upon
an exercise of remedies after a Charter Event of Default has occurred and
is continuing and either Charter Supplement No. 1 or Charter Supplement No.
2 has been declared in default;
(f) any amount for which such Indemnified Party has agreed to make
payment without a right of reimbursement from Deepwater;
(g) any Claim resulting from the imposition of any Lien which such
Indemnified Party is responsible for or is required to lift and discharge;
(h) any Claim arising out of or related to an inspection of the
Drillship by or on behalf of an Indemnified Party, unless at the time of
such inspection a Charter Event of Default has occurred and is continuing
or unless and to the extent such Claim arises from the gross negligence or
willful misconduct of Deepwater or its agents; and
(i) any Claim for an amount of Basic Hire, Termination Value,
Certificate Return, Certificate Purchaser Balance, Residual Guaranty
Amount, or Postponement Yield, or an amount due under the Deepwater Hedging
Agreements or the Hedging Agreements.
SECTION 10.3 Proceedings in Respect of Claims. With respect to any
amount that Deepwater is requested by an Indemnified Party to pay by reason
of Section 10.1, such Indemnified Party shall, if so requested by Deepwater
and prior to any payment, submit such additional information to Deepwater
as Deepwater may reasonably request and which is in the possession of such
Indemnified Party to substantiate properly the requested payment. In case
any action, suit or proceeding shall be brought against any Indemnified
Party in respect of any Claim, such Indemnified Party shall notify
Deepwater of the commencement thereof, and Deepwater shall be entitled, at
its expense, to participate in, and, to the extent that Deepwater desires
to, assume and control the defense thereof; provided, however, that
Deepwater shall have acknowledged in writing its obligation to indemnify
such Indemnified Party in respect of such action, suit or proceeding under
Section 10.1, such acknowledgment to be conditioned on the accuracy,
timeliness and completeness of the information provided to Deepwater by
such Indemnified Party with respect to the Claim; and, provided further,
that Deepwater shall not be entitled to assume and control the defense of
any such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of such Indemnified Party (x) such action, suit or
proceeding involves any possibility of imposition of criminal liability or
any material risk of material civil liability on such Indemnified Party or
(y) the control of such action, suit or proceeding would involve a conflict
of interest (in which case each Indemnified Party may retain separate
counsel at the expense of Deepwater), (B) such proceeding involves Claims
not indemnified by Deepwater which Deepwater and the Indemnified Party have
been unable to sever from the indemnified claim(s), or (C) an Event of
Default has occurred and is continuing. Deepwater shall keep such
Indemnified Party fully apprised of the status of such action, suit or
proceeding and shall provide such Indemnified Party with all information
with respect to such action suit or proceeding as such Indemnified Party
shall reasonably request. The Indemnified Party may participate in a
reasonable manner at its own expense and with its own counsel in any
proceeding conducted by Deepwater in accordance with the foregoing.
No Indemnified Party shall enter into any settlement or other compromise
with respect to any Claim which is entitled to be indemnified under Section
10.1 without the prior written consent of Deepwater, which consent shall
not be unreasonably withheld, unless such Indemnified Party waives its
right to be indemnified under Section 10.1 with respect to such Claim.
Upon payment in full of any Claim by Deepwater pursuant to Section 10.1
to or on behalf of an Indemnified Party, Deepwater, without any further
action, shall be subrogated to any and all claims that such Indemnified
Party may have relating thereto to the extent of such payment, and such
Indemnified Party shall execute such instruments of assignment and
conveyance, evidence of claims and payment and such other documents,
instruments and agreements as may be reasonably necessary to preserve any
such claims and otherwise cooperate with Deepwater and give such further
assurances as are reasonably necessary or advisable to enable Deepwater
vigorously to pursue such claims.
Any amount payable to an Indemnified Party pursuant to Section 10.1
shall be paid to such Indemnified Party promptly upon receipt of a written
demand therefor from such Indemnified Party accompanied by a written
statement describing in reasonable detail the basis for such indemnity and
the computation of the amount so payable.
SECTION 10.4 General Tax Indemnity. (a) Without regard to any of the
exclusions set forth in Section 10.4(b), if any amount payable by Deepwater
as Charter Hire (or by the Charter Trustee to the Investment Trust or any
Certificate Purchaser) under the Transaction Documents or otherwise payable
by Deepwater under the Head Lease Documents becomes subject to any Tax
imposed by way of withholding at the source, Deepwater shall hold harmless
the Indemnified Party against such Tax, and, if such withholding is
required, shall, at the same time that any such payment is due and payable,
either (i) pay such Tax directly to the appropriate taxing authority, (ii)
indemnify such Person for such Tax, or (iii) pay an additional amount, such
that the net amount actually received by each Indemnified Party entitled
thereto, free and clear of, and without deduction for, any and all Taxes
imposed by withholding will equal the amount then due absent such
withholding and shall pay any additional Taxes payable in respect of such
payment, indemnity or additional amount, as the case may be, by each
Indemnified Party. In the event Deepwater is required to make any payment
or indemnity pursuant to this paragraph in respect of withholding Taxes on
any payment made to any Indemnified Party, Deepwater shall not be treated
as responsible for such withholding Taxes (1) if such withholding Taxes
would not have been imposed but for (x) the failure of the Indemnified
Party or a Related Indemnified Party to be incorporated in the United
States or any state in the United States (it being understood that, for
this purpose, the Charter Trust shall not be treated as failing to be
incorporated in the United States or any state in the United States merely
as a result of the organization of the Charter Trust under the laws of
Panama) or (y) the amount payable to such Indemnified Party being
attributable to a permanent establishment of the Indemnified Party or a
Related Indemnified Party in any jurisdiction other than the United States
(unless such permanent establishment results solely from the location of
all or any part of the Drillship in, such jurisdiction) (it being
understood that, for this purpose, amounts payable to the Charter Trustee
shall not be treated as attributable to a permanent establishment of the
Charter Trust in Panama merely as a result of the organization of the
Charter Trust under the laws of Panama and/or the making of payments and
the performance of its obligations by the Charter Trustee in accordance
with, and as contemplated by, the Transaction Documents ("Permitted Charter
Trustee Acts")), (2) if such withholding Tax results from a breach of any
covenant or undertaking in Section 10.4(i) of such Indemnified Party or any
of its Related Indemnified Parties, (3) with respect to any such Tax
imposed in respect of any transferee of such Indemnified Party to the
extent of the excess of such Taxes over the amount of such Taxes that would
have been imposed and indemnified hereunder had such original Indemnified
Party from which such Indemnified Party derives its interest not sold,
assigned, transferred or otherwise disposed of all or a portion of its
interest in the Drillship or Transaction Documents (unless such transferee
acquired its interest pursuant to the transferor's exercise of remedies),
(4) if such withholding Tax results from (x) the gross negligence, willful
misconduct or fraud of such Indemnified Party or any of its Related
Indemnified Parties or (y) the inaccuracy or breach of a representation,
warranty, covenant or any undertaking of such Indemnified Party or any of
its Related Indemnified Parties, (5) if such withholding Taxes are imposed
by a taxing authority of or in a country other than the United States or
Panama and would not have been imposed but for activities, property or
operations of the Indemnified Party or any of its Related Indemnified
Parties that are unrelated to the transactions contemplated by the
Transaction Documents, or (6) if such withholding Taxes are imposed by a
taxing authority in Panama as a result of the Indemnified Party's (or a
Related Indemnified Party's) direction that Deepwater make payments to an
account located in Panama (except if such direction is made while an Event
of Default exists). If, for any reason, Deepwater is required to make any
payment to an Indemnified Party or to a taxing authority on behalf of any
Indemnified Party pursuant to this Section 10.4(a) with respect to, or as
a result of, any withholding Tax imposed with respect to any payment of
Charter Hire by Deepwater (or by the Charter Trustee to the Investment
Trust or any Certificate Purchaser) pursuant to the Transaction Documents
or other payment by Deepwater under the Head Lease Documents, which
withholding Tax is not the responsibility of Deepwater under this Section
10.4(a), then such Indemnified Party shall pay to Deepwater on written
demand an amount which equals on an After-Tax Basis such additional amount
paid by Deepwater with respect to, or as a result of, such withholding Tax
plus interest at (i) the Certificate Return Rate during the period
commencing on the date Deepwater shall have paid an amount pursuant to the
first sentence of this paragraph and ending on the date Deepwater demands
in writing payment of such amount pursuant to this sentence and (ii) the
Overdue Rate from the period commencing five Business Days following the
date Deepwater shall have demanded in writing such payment to the date
Deepwater actually receives such payment.
(b) Except as provided in Section 10.4(a) and 10.4(c) hereof, Deepwater
agrees to indemnify, defend and hold harmless on an After-Tax Basis each
Indemnified Party against any and all Taxes, imposed against or payable by,
or imposed on payments to or from, Deepwater or any Indemnified Party, or
imposed against all or any part of, or interest in, the Drillship by any
federal, state or local taxing authority of or within the United States and
by any jurisdiction outside of the United States if the Drillship or
Deepwater is located in such jurisdiction, upon or with respect to or in
connection with, based upon or measured by, in whole or in part:
(i) the Drillship or any part thereof or interest therein;
(ii) the manufacture, purchase, financing, refinancing, ownership,
delivery, redelivery, transport, location, leasing, subleasing,
possession, registration, use, operation, condition, maintenance,
repair, return, abandonment, preparation, storage, transfer of title,
sale, acceptance, importation, exportation, rejection or other
disposition of or action or event with respect to the Drillship or any
part thereof or interest therein;
(iii) the hire, receipts, income or earnings arising from the
purchase, financing, ownership, delivery, redelivery, leasing,
subleasing, possession, use, operation, return, storage, transfer of
title, sale or other disposition of the Drillship or any part thereof or
interest therein;
(iv) the Advances, Certificates, their issuance, modification,
refinancing or acquisition, or the payments of any amounts thereon or
with respect thereto;
(v) the Transaction Documents or the Head Lease Documents or
amendments or supplements thereto, their execution or the transactions
contemplated thereby or any proceeds or payments under any thereof; or
(vi) otherwise with respect to or in connection with the
transactions contemplated or effected by or resulting from the
Transaction Documents or the Head Lease Documents or the exercise of
rights and remedies thereunder or the enforcement thereof.
(c) Exclusions. Except as provided in Section 10.4(a), the indemnity
provided for in Section 10.4(b) above shall not apply to any of the
following:
(i) Taxes (other than Taxes that are sales, use or rental Taxes)
imposed by the United States federal government on, based on, or
measured by or with respect to the gross or net income, or gross or net
receipts or that are in the nature of, or are imposed with respect to,
capital, net worth, excess profits, accumulated earnings, capital gains,
franchise or conduct of business of such Indemnified Party; provided,
that this Section 10.4(c)(i) shall not be interpreted to exclude any
amounts necessary to make any payment on an After-Tax Basis;
(ii) Taxes imposed by (x) any state or local taxing authority in
the United States (other than Taxes that are sales, use, rental, stamp,
property (tangible or intangible) or similar Taxes imposed as a result
of a Deepwater Person's activities in (including being incorporated in,
or making payments from), or the location of the Drillship or any
portion thereof in, such state or local jurisdiction) or (y) any
jurisdiction outside of the United States other than any Taxes imposed
as a result of a Deepwater Person's activities in (including being
incorporated in, having a permanent establishment or other residence in,
or making payments from), or the location of the Drillship or any
portion thereof in, such jurisdiction outside of the United States or
Taxes imposed by Panama merely as a result of the organization of the
Charter Trust under the laws of Panama and/or the performance by the
Charter Trustee of Permitted Charter Trustee Acts; provided, that this
Section 10.4(c)(ii) shall not be interpreted to exclude any amounts
necessary to make any payment on an After-Tax Basis;
(iii) Taxes imposed on or against or payable by such
Indemnified Party to the extent of the excess of such Taxes over the
amount of such Taxes that would have been imposed and indemnified
hereunder had there not been a transfer by the original Indemnified
Party (from which such Indemnified Party derives its interest) of any
interest in the Drillship, the Certificates, the Trust Estate, the
Investment Trust, any Indemnified Party or the Transaction Documents or
the Head Lease Documents; except (x) if such transferee acquired its
interest in connection with the exercise of remedies with respect to a
Charter Event of Default or (y) to the extent necessary to make
indemnity payments to the transferee on an After-Tax Basis;
(iv) Taxes imposed with respect to any period (except during the
exercise of remedies pursuant to the Charter in connection with the
occurrence and continuance of a Charter Event of Default) more than one
year after the expiration or earlier termination of the Charter and,
where required, the return of the Drillship pursuant to Section 20.3 of
the Master Charter (but not to the extent attributable to events
occurring on or prior to such date);
(v) Taxes resulting from (x) the gross negligence, willful
misconduct or fraud of the Indemnified Party or any of its Related
Indemnified Parties (except as solely attributed to such Party by virtue
of its having executed the Transaction Documents), (y) the inaccuracy or
breach of a representation, warranty or covenant under the Transaction
Documents or the Head Lease Documents or any undertaking required by the
Transaction Documents or the Head Lease Documents of such Indemnified
Party or any of its Related Indemnified Parties (unless such inaccuracy
or breach is caused by Deepwater's breach of any representation,
warranty or covenant under the Transaction Documents or a breach by
Deepwater or an Affiliate of Deepwater under the Head Lease Documents),
or (z) in the case of any Indemnified Party, any Liens attributable to
such Indemnified Party or a Related Indemnified Party;
(vi) Taxes that result from (x) a voluntary transfer or other
voluntary disposition by the Indemnified Party or a Related Indemnified
Party of all or any portion of its interest in the Drillship, the Trust
Estate, the Investment Trust, any Indemnified Party, the Certificates,
the Transaction Documents or the Head Lease Documents (other than a
transfer or disposition resulting from (A) any Charter, substitution, or
maintenance of, or any modification to the Drillship or any portion
thereof, (B) Deepwater's exercise of any purchase or termination option,
(C) an Event of Loss or (D) the exercise of remedies under the Charter
following a Charter Event of Default) or (y) an involuntary transfer or
other involuntary disposition by the Indemnified Party or a Related
Indemnified Party of all or any part of an interest in the Drillship,
the Trust Estate, the Investment Trust, any Indemnified Party, the
Certificates, the Transaction Documents or the Head Lease Documents
(other than any such transfer or disposition that occurs while an Event
of Default has occurred and is continuing) in connection with any
bankruptcy or other proceeding for the relief of debtors in which an
Indemnified Party is the debtor or any foreclosure by a creditor of an
Indemnified Party that is in each case unrelated to the transactions
contemplated by the Transaction Documents or the Head Lease Documents;
(vii) Taxes imposed on the Charter Trustee in its individual
capacity with respect to any fees received by or payable to the Charter
Trustee for services rendered;
(viii) Taxes that would not have been imposed but for an
amendment to any Transaction Document or Head Lease Document not
requested or consented to or acquiesced in by Deepwater in writing,
other than any amendment (A) that may be necessary or appropriate to,
and is in conformity with, any amendment to any Transaction Document or
Head Lease Document initiated or requested by or consented to by any
Deepwater Person in writing, (B) to any Transaction Document or Head
Lease Document due to, or in connection with there having occurred, an
Event of Default or (C) that is required by Applicable Law or the terms
of the Transaction Documents or the Head Lease Documents or is executed
in connection with any other amendment to the Transaction Documents or
the Head Lease Documents that is required by Applicable Law;
(ix) Taxes to the extent actually utilized on a current basis by an
Indemnified Party or an Affiliate of such Indemnified Party as a credit
against Taxes not indemnifiable by Deepwater hereunder;
(x) Taxes to the extent resulting from or measured by income,
assets, activities, or other matters of or relating to the Indemnified
Party or a Related Indemnified Party that are unrelated to the
transactions contemplated by the Transaction Documents (except to the
extent necessary to make a payment on an After-Tax Basis (which shall be
calculated assuming the Indemnified Party is taxable at the highest
marginal rate in the applicable jurisdiction));
(xi) any Taxes, while such Taxes are being contested in accordance
with the contest provisions of Section 10.4(f);
(xii) any interest, penalties or additions to Tax that result
from the failure of an Indemnified Party to file any return properly and
timely, unless such failure is caused by the failure of Deepwater to
fulfill its obligations, if any, under this Agreement with respect to
such return (including the provision of information sufficient to enable
such Indemnified Party to file such return);
(xiii) Taxes that would not have been imposed but for the
Indemnified Party or a Related Indemnified Party having its tax
residence, place of business, situs of organization, place of management
or controls, permanent establishment or other presence in the taxing
jurisdiction (unless such tax residence, place of business, situs of
organization, place of management or control, permanent establishment or
other presence results from the presence or activities of Deepwater or
any Deepwater Person (including the making of payments unless directed
by the Charter Trustee or any Certificate Holder to make payment to an
account located in Panama (except if such direction is made while an
Event of Default exists)) in such jurisdiction it being understood that,
for this purpose, the Charter Trustee shall not be treated as having any
such presence in Panama merely as a result of the trust being formed
pursuant to the Charter Trust Agreement under the laws of Panama and/or
the performance by the Charter Trustee of Permitted Charter Trustee
Acts).
(d) Calculation of Payments. Any payment that Deepwater shall be
required to make to or for the account of any Indemnified Party with
respect to any Tax that is subject to indemnification under this Section
10.4 shall be paid on an After-Tax Basis. If an Indemnified Party or any
Affiliate of such Indemnified Party who files any tax return on a combined,
consolidated, unitary or similar basis with such Indemnified Party shall
actually realize any saving of any Tax not indemnified by Deepwater
pursuant to the Transaction Documents (by way of credit (including any
foreign tax credit), deduction, exclusion from income or otherwise) by
reason of any amount with respect to which Deepwater has indemnified such
Indemnified Party pursuant to this Section 10.4, and such tax saving was
not taken into account in determining the amount payable by Deepwater on
account of such indemnification, such Indemnified Party shall pay to
Deepwater, so long as no Event of Default shall have occurred and be
continuing (but shall be required to make such payment at such time as the
Event of Default shall have been cured or at the time Deepwater shall have
fulfilled all of its obligations arising upon such Event of Default),
within 30 days after such Indemnified Party shall have actually realized
such tax saving, the amount of such saving, together with the amount of any
tax saving resulting from any payment pursuant to this sentence; provided,
that Deepwater shall not be entitled to receive an amount in excess of all
amounts previously paid by Deepwater pursuant to this Section 10.4, to such
Indemnified Party or to the relevant taxing authority on behalf of such
Indemnified Party (less the aggregate amount of all prior payments by such
Indemnified Party to Deepwater under this Section 10.4(d)) (but any excess
amount described in this proviso shall reduce pro tanto any amount that
Deepwater is subsequently obligated to pay to such Indemnified Party
pursuant to Section 10.4).
(e) Payment. Deepwater shall pay any Tax for which it is liable
pursuant to this Section 10.4 directly to the appropriate taxing authority
or upon demand of an Indemnified Party to such Indemnified Party in
immediately available funds within 30 days of a written demand, but in no
event more than two Business Days prior to the date such Tax is due
(including all extensions), or, in the case of Taxes which are being
contested, more than two Business Days prior to the time such contest is
finally resolved. Any such demand shall specify in reasonable detail the
calculation of the payment and the facts upon which the right to payment
is based. Each Indemnified Party shall promptly forward to Deepwater any
notice, xxxx or advice received by it from the relevant taxing authority
concerning any Tax against which Deepwater may be required to indemnify
hereunder. Deepwater upon the reasonable written request of an Indemnified
Party shall furnish such Indemnified Party with the original or a certified
copy of a receipt (if any is reasonably available to Deepwater) for
Deepwater's payment of any Tax that is subject to indemnification pursuant
to this Section 10, or such other evidence of payment of such Tax as is
reasonably acceptable to such Indemnified Party (and reasonably available
to Deepwater).
(f) Contest. If a written claim is made against an Indemnified Party
or if any proceeding shall be commenced against any Indemnified Party
(including a written notice of such proceeding), for any Taxes with respect
to which Deepwater may be liable for payment or indemnity hereunder or if
any Indemnified Party shall determine that any Tax as to which Deepwater
may have an indemnity obligation hereunder shall be payable, such
Indemnified Party shall promptly notify Deepwater in writing and shall not
take any action with respect to such claim, proceeding or Tax without the
consent of Deepwater for 30 days after the receipt of such notice by
Deepwater; provided, however, that, in the case of any such claim or
proceeding, if action shall be required by law or regulation to be taken
prior to the end of such 30-day period, such Indemnified Party shall, in
such notice to Deepwater, so inform Deepwater, and no action shall be taken
with respect to such claim or Tax without the consent of Deepwater before
the end of such shorter period. If, within 30 days of receipt of such
notice from the Indemnified Party (or such shorter period as the
Indemnified Party has notified Deepwater is required by law or regulation
for the Indemnified Party to commence such contest), Deepwater shall
request in writing that such Indemnified Party contest the imposition of
such Tax, the Indemnified Party shall, at the expense of Deepwater, in good
faith contest (including, without limitation, by pursuit of appeals), and
shall not settle without Deepwater's good faith consent (or (i) if such
contest can be pursued in the name of Deepwater and independently from any
other proceeding involving a tax liability, other than a net income or
withholding Tax, of such Indemnified Party, the Indemnified Party shall,
at Deepwater's sole discretion, allow Deepwater to contest, (ii) if such
contest involves a Tax, other than a net income or withholding Tax, which
must be pursued in the name of the Indemnified Party, but can be pursued
independently from any other proceeding involving a tax liability of such
Indemnified Party, the Indemnified Party shall allow Deepwater to contest
in the name of the Indemnified Party unless, in the good faith judgment of
the Indemnified Party, such contest by Deepwater could have a material
adverse impact on the business or operations of the Indemnified Party, in
which case the Indemnified Party may control such contest or (iii) in the
case of any contest, the Indemnified Party may request Deepwater to
contest) the validity, applicability or amount of such Taxes by, in the
sole discretion of the Person conducting such contest, (i) resisting
payment thereof, (ii) not paying the same except under protest, if protest
is necessary and proper, (iii) if the payment be made, using reasonable
efforts to obtain a refund thereof in appropriate administrative and
judicial proceedings; or (iv) taking such other action as is reasonably
requested by Deepwater from time to time.
Notwithstanding the foregoing provisions of this Section 10.4(f), such
Indemnified Party shall not be required to take any administrative or
judicial or other action and Deepwater shall not be able to contest such
claim in its own name or that of the Indemnified Party unless (A) Deepwater
shall have agreed to pay, and shall pay, to such Indemnified Party on
demand all reasonable out-of-pocket costs, losses and expenses that such
Indemnified Party may incur in connection with contesting such Taxes,
including all reasonable legal, accounting and investigatory fees and
disbursements (including reasonable allocated time charges of internal
counsel of such Indemnified Party), (B) the action to be taken will not
result in any material imminent danger of sale, forfeiture or loss of the
Drillship or any part thereof or interest therein or risk of criminal
liability, (C) if such contest shall involve the payment of the Tax prior
to the contest, Deepwater shall, at its option, either (x) pay or reimburse
the Indemnified Party for such Taxes or (y) provide to the Indemnified
Party an interest-free advance in an amount equal to the Tax which the
Indemnified Party is required to pay (with no additional net after-tax cost
to such Indemnified Party), (D) Deepwater shall have provided to such
Indemnified Party an opinion of independent tax counsel selected by
Deepwater, and reasonably satisfactory to the Indemnified Party that a
Reasonable Basis exists to contest such claim, and (E) if such contest is
controlled by Deepwater, Deepwater shall have acknowledged, in writing, its
liability for such indemnity in the event such contest is unsuccessful.
In no event shall an Indemnified Party be required to appeal an adverse
judicial determination to the United States Supreme Court. The Indemnified
Party shall consult in good faith with Deepwater regarding the conduct of
any contest controlled by such Indemnified Party and shall allow Deepwater
to participate in the conduct of any such contest unless the Indemnified
Party shall in good faith determine that allowing Deepwater to participate
in the conduct of such contest could have a material adverse impact on the
business or operations of the Indemnified Party. The parties agree that
an Indemnified Party may at any time decline to take further action with
respect to the contest of any claim for a Tax and may settle such claim,
if such Indemnified Party shall waive its rights to any indemnity from
Deepwater that otherwise would be payable in respect of such claim (or any
logically related claim) and shall pay to Deepwater any amount previously
paid or advanced by Deepwater pursuant to this Section 10.4(f) other than
clause (A) of this paragraph (by way of indemnification or advance for the
payment of a Tax) with respect to such Taxes.
If an Indemnified Party shall fail to perform its obligations under this
Section 10.4(f), such failure shall not discharge, diminish or relieve
Deepwater of any liability for indemnification that it may have to such
Indemnified Party hereunder, unless the contest of a claim is precluded as
a result of such failure; provided, that any payment by Deepwater to such
Indemnified Party pursuant hereto shall not be deemed to constitute a
waiver or release of any right or remedy (including any remedy of damages)
that Deepwater may have against such Indemnified Party.
(g) Refund. If an Indemnified Party shall receive a refund of (or
receive a credit against, or any other current reduction in, any Tax not
indemnified by Deepwater under this Section 10.4, in respect of) all or
part of any Taxes which Deepwater shall have paid on behalf of such
Indemnified Party or for which Deepwater shall have reimbursed, advanced
funds to or indemnified such Indemnified Party (or would have received such
a refund, credit or reduction but for a counterclaim or other claim not
indemnified by Deepwater hereunder (a "deemed refund")), within 30 days of
such receipt (or, in the case of a deemed refund, within 30 days of the
final determination of such deemed refund), such Indemnified Party shall
pay or repay to Deepwater an amount equal to the amount of such refund or
deemed refund, plus any net tax benefit (taking into account any Taxes
incurred by such Indemnified Party by reason of the receipt of such refund,
credit or reduction or deemed refund) realized by such Indemnified Party
as a result of any payment by such Indemnified Party made pursuant to this
sentence; provided, however, that such Indemnified Party shall not be
obligated to make any payment pursuant to this sentence to the extent that
the amount of such payment would exceed (x) the amount of all prior
payments made by Deepwater to such Indemnified Party pursuant to this
Section 10.4 less (y) the amount of all prior payments by such Indemnified
Party to Deepwater pursuant to this Section 10.4(g); provided, further,
however, that such Indemnified Party shall not be obligated to make any
payment to Deepwater pursuant to this sentence while an Event of Default
is continuing, but shall be required to make such payment at such time as
the Event of Default is cured or at the time Deepwater shall have fulfilled
all its obligations arising upon such Event of Default. If, in addition
to such refund, credit or reduction or deemed refund, as the case may be,
such Indemnified Party shall receive (or would have received but for a
counterclaim or other claim not indemnified by Deepwater hereunder) an
amount representing interest on the amount of such refund, credit or
reduction, or deemed refund, as the case may be, such Indemnified Party
shall pay to Deepwater within 30 days of such receipt or, in the case of
a deemed refund, within 30 days of the final determination of such deemed
refund, that proportion of such interest that shall be fairly attributable
to Taxes paid, reimbursed or advanced by Deepwater prior to the receipt of
such refund or deemed refund.
(h) Reports. Deepwater will provide such information as may be
available to it and reasonably requested in writing by an Indemnified Party
that is required to enable an Indemnified Party to fulfill its tax filing
requirements with respect to the transactions contemplated by the
Transaction Documents. If any return, statement or report is required to
be made or filed with respect to any Tax imposed on or indemnified against
by Deepwater under this Section 10.4, Deepwater shall promptly notify the
appropriate Indemnified Party of such requirement and (i) to the extent
permitted by law (unless otherwise requested by the Indemnified Party) or
required by law, make and file in its own name such return, statement or
report and furnish the relevant Indemnified Party with a copy of such
return, statement or report, (ii) where such return, statement or report
is required to be in the name of or filed by such Indemnified Party or the
Indemnified Party otherwise requests that such return, statement or report
be filed in its name, prepare and furnish such return, statement or report
for filing by such Indemnified Party in such manner as shall be
satisfactory to such Indemnified Party and send the same to the Indemnified
Party for filing no later than 15 days prior to the due date or (iii) where
such return, statement or report is required to reflect items in addition
to Taxes imposed on or indemnified against under this Section 10.4 as
determined by such Indemnified Party, provide such Indemnified Party with
information within a reasonable time, sufficient to permit such return,
statement or report to be properly made and timely filed with respect
thereto. If an Indemnified Party fails to file a return after it has been
properly prepared by Deepwater in accordance with this Section 10.4(h) and
furnished to such Indemnified Party at least 15 days prior to the due date
of such return, Deepwater shall not be liable for Taxes imposed as a result
of the failure to file. Each Indemnified Party shall furnish Deepwater,
at the request and expense of Deepwater, with such information, not within
the control of Deepwater, as is in such Indemnified Party's control and is
reasonably available to such Indemnified Party and necessary for Deepwater
to comply with its obligations under this Section 10.4(h).
(i) Forms, etc. Each Indemnified Party agrees to furnish to Deepwater
from time to time, at Deepwater's timely made written request and expense,
such duly executed and properly completed forms as may be necessary or
appropriate in order to claim any reduction of or exemption from any
withholding or other Tax imposed by any taxing authority in respect of any
payments otherwise required to be made by Deepwater pursuant to the
Transaction Documents, which reduction or exemption may be available to
such Indemnified Party. Each Indemnified Party agrees that it will use its
reasonable best efforts to the extent permitted by Applicable Law (and to
the extent such Indemnified Party is entitled to do so) to file returns or
tax declarations that would minimize any indemnity payable by Deepwater;
provided, that Deepwater shall indemnify the Indemnified Party for any cost
resulting from such Indemnified Party's filing of such return or
declaration. Notwithstanding the foregoing, no Indemnified Party shall be
required to furnish any form or file any return or tax declaration if it
has determined in its reasonable good faith judgment that furnishing the
form or filing the return or tax declaration could have a material adverse
impact on the business or operations of such Indemnified Party or any
Related Indemnified Party, unless the Indemnified Party is indemnified in
a manner reasonably satisfactory to such Indemnified Party by Deepwater for
such material adverse impact.
(j) Records. In addition to its obligations under the first sentence
of Section 10.4(h), Deepwater shall make available for inspection and
copying by an Indemnified Party such records that are regularly maintained
by Deepwater in the ordinary course of its business as may be reasonably
necessary to enable such Indemnified Party to fulfill its tax return filing
obligations, subject to reasonable confidentiality requirements of
Deepwater.
(k) Non-Parties. If an Indemnified Party is not a party to this
Agreement, Deepwater may require the Indemnified Party to agree in writing,
in a form reasonably acceptable to Deepwater, to the terms of this Section
10.4 prior to making any payment to such Indemnified Party under this
Section 10.4.
(l) Verification. The results of all computations required under this
Section 10.4, together with a statement describing in reasonable detail the
manner in which such computations were made, shall be delivered to
Deepwater in writing. If Deepwater so requests within 30 days after
receipt of such computations, any determination shall be reviewed by a
nationally recognized independent public accounting firm mutually
acceptable to the relevant Indemnified Party and Deepwater who shall be
asked to verify, after consulting with Deepwater and the relevant
Indemnified Party whether the relevant Indemnified Party's computations are
correct, and to report its conclusions to both Deepwater and the relevant
Indemnified Party. Subject to satisfactory confidentiality agreements, the
relevant Indemnified Party and Deepwater hereby agree to provide such
accountants with all information and materials as shall be reasonably
necessary or desirable in connection herewith. The fees of the accountants
in verifying an adjustment pursuant to this Section 10.4 shall be paid by
Deepwater, unless such verification discloses an error adverse to Deepwater
in an amount greater than 4.0% of the amount of the indemnity payment as
determined by the accounting firm, in which case such fees shall be paid
by the relevant Indemnified Party. Any information provided to such
accountants by any Person shall be and remain the exclusive property of
such Person and shall be deemed by the parties to be (and the accountants
will confirm in writing that they will treat such information as) the
private, proprietary and confidential property of such Person, and no
Person other than such Person and the accountants shall be entitled
thereto, and all such materials shall be returned to such Person. Such
accounting firm shall be requested to make its determination within 30 days
of Deepwater's request to such accounting firm for review. In the event
such independent public accounting firm shall determine that such
computations are incorrect, then such firm shall determine what it believes
to be the correct computations. The computations of the independent public
accounting firm shall be final, binding and conclusive upon, Deepwater and
the relevant Indemnified Party and Deepwater shall not have any right to
inspect the books, records, tax returns or other documents of or relating
to the relevant Indemnified Party to verify such computations or for any
other purpose. The parties hereby agree that the independent public
accounting firm's sole responsibility shall be to verify the computation
of any amounts payable under this Section 10.4 and that matters of
interpretation of this Agreement and the other Transaction Documents are
not within the scope of such independent public accounting firm's
responsibilities.
(m) Restructuring For Withholding Taxes. Each party covered by this
Section 10.4 agrees to use reasonable efforts to investigate alternatives
for reducing any withholding Taxes that are indemnified against hereunder
or imposed on Charter Hire (or payments by the Charter Trustee to the
Investment Trust or any Certificate Purchaser) (whether or not
indemnifiable hereunder) and to use reasonable efforts to reduce any
withholding Taxes that are indemnified against hereunder, including,
without limitation, negotiating in good faith to relocate or restructure
the Advance (which relocation or restructuring shall be at Deepwater's
expense) or the domicile of the Investment Trust or the Charter Trustee,
but no Party shall be obligated to take any such action as such Party
determines will be adverse to its business or financial or commercial
interest.
SECTION 11
AGENT
SECTION 11.1 Appointment of Documentation Agent; No Duties. Each
Certificate Purchaser hereby irrevocably (subject to Section 11.9)
designates, authorizes and appoints BA Leasing & Capital Corporation, as
Documentation Agent of such Certificate Purchaser under the Transaction
Documents, and each such Certificate Purchaser irrevocably authorizes BA
Leasing & Capital Corporation to act as the Documentation Agent for such
Certificate Purchaser, to take such action on its behalf under the
provisions of the Transaction Documents and to exercise such powers and
perform such duties as are expressly delegated to such Agent by the terms
of this Agreement and the other Transaction Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary herein or elsewhere in the Transaction Documents,
the Agent shall not have any duties or responsibilities except those
expressly set forth herein or therein, or any fiduciary relationship with
any Certificate Purchaser, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the
Transaction Documents or otherwise exist against the Agent.
SECTION 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and the other Transaction Documents by or
through agents or attorneys-in-fact, and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
SECTION 11.3 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action taken or omitted to be taken by it or
such Person under or in connection with the Transaction Documents (except
for its or such Person's own gross negligence or willful misconduct), or
(ii) except as expressly set forth in the Transaction Documents,
responsible in any manner to any of the Certificate Purchasers for any
recitals, statements, representations or warranties made by Deepwater or
any officer thereof contained in the Transaction Documents or in any
certificate, report, statement or other document referred to or provided
for in, or received by such Agent under or in connection with, the
Transaction Documents, or for the validity, effectiveness, genuineness,
enforceability or sufficiency of the Transaction Documents, including the
Certificates, or for any failure of Deepwater to perform its obligations
hereunder or thereunder. The Agent shall be under no obligation to any
Certificate Purchaser to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, the
Transaction Documents, or to inspect the properties, books or records of
Deepwater.
SECTION 11.4 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex, facsimile or teletype message, statement, order
or other document or conversation reasonably believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to Deepwater), independent accountants and other
experts selected by such Agent. The Agent may deem and treat the
registered owner of any Certificate as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with such Agent. The Agent shall be fully justified
in failing or refusing to take any action under the Transaction Documents
unless it shall first receive such advice or concurrence of the Majority
Certificate Purchasers (or, where expressly required by any provision of
the Transaction Documents, the Required Certificate Purchasers) as they
deem appropriate and, if they so request, they shall first be indemnified
to their satisfaction against any and all liability and expense which may
be incurred by them by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under the Transaction Documents and the
Certificates in accordance with a request of the Majority Certificate
Purchasers (or, where expressly required by any provision of the
Transaction Documents, the Required Certificate Purchasers), and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Certificate Purchasers and all future holders of the
Certificates.
SECTION 11.5 [Intentionally Omitted]
SECTION 11.6 Non-Reliance on Agent and Other Certificate Purchasers.
Each Certificate Purchaser expressly acknowledges that neither
Documentation Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates have made any representation or warranty
to it, and that no act by the Documentation Agent hereinafter taken,
including any review of the affairs of Deepwater and its Affiliates, shall
be deemed to constitute any representation or warranty by the Documentation
Agent to any Certificate Purchaser. Each Certificate Purchaser represents
to the Documentation Agent that it has, independently and without reliance
upon the Documentation Agent, or any other Certificate Purchaser, and based
on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of Deepwater and its
Affiliates, the value of and title to any collateral, and all applicable
bank regulatory laws relating to the transactions contemplated hereby and
by the other Transaction Documents and has made its own decision to make
its Certificate Purchaser Amount available hereunder and enter into this
Agreement and the other Transaction Documents to which it is a party as a
Certificate Purchaser. Each Certificate Purchaser also represents that it
will, independently and without reliance upon the Documentation Agent, or
any other Certificate Purchaser, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Transaction Documents to which
it is a party as a Certificate Purchaser, and to make such investigation
as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and creditworthiness of Deepwater
and its Affiliates. Except for notices, reports and other documents
expressly required to be furnished to the Certificate Purchasers by the
Documentation Agent hereunder, the Documentation Agent shall have no duty
or responsibility to provide any Certificate Purchaser with any credit or
other information concerning the business, operations, property, financial
and other condition or creditworthiness of Deepwater or its Affiliates, the
Documentation Agent and its Affiliates which may come into the possession
of the Documentation Agent, or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
SECTION 11.7 Indemnification. The Certificate Purchasers (excluding
any Purchasing Party) severally agree to indemnify the Documentation Agent
in its capacity as such (to the extent not reimbursed by Deepwater within
a reasonable period after demand has been made to Deepwater for those
amounts owing by Deepwater, and without limiting the obligation of
Deepwater to do so), ratably according to their respective Certificate
Purchaser Amounts, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including,
without limitation, at any time following the payment of the Certificates)
be imposed on, incurred by or asserted against the Documentation Agent in
any way relating to or arising out of the Transaction Documents, or any
documents contemplated by or referred to herein or therein or any action
taken or omitted by the Documentation Agent under or in connection with any
of the foregoing; provided that no Certificate Purchaser shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Documentation Agent's gross negligence or
willful misconduct; and provided, further, that the Documentation Agent
shall not make any claim under this Section 11.7 for any claim or expense
indemnified against by Deepwater or its Affiliates without first making
demand on such Person for payment of such claim or expense (unless such
demand shall then be prohibited by Applicable Law). Whenever, at any time
after the Documentation Agent has received from any Certificate Purchaser
such Certificate Purchaser's ratable share of amounts owing to the
Documentation Agent pursuant to this Section 11.7, the Documentation Agent
shall receive any reimbursement from Deepwater on account of such amounts,
the Documentation Agent shall distribute to such Certificate Purchaser its
ratable share thereof in like funds as received; provided, however, that
in the event that the receipt by the Documentation Agent of such
reimbursement is required by law or court or administrative order to be
returned, such Certificate Purchaser shall return to the Documentation
Agent any portion thereof previously distributed by the Documentation Agent
to it in like funds as such reimbursement is required to be returned by the
Documentation Agent.
SECTION 11.8 Agent. The Documentation Agent and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of
business with Deepwater, Conoco, R&B Falcon and their Affiliates as though
the Documentation Agent were not the Documentation Agent hereunder and
without notice to or the consent of the Certificate Purchasers. It is
understood and acknowledged by each Certificate Purchaser that an Affiliate
of the Documentation Agent may also separately be a Certificate Purchaser.
It is further understood and acknowledged by each Certificate Purchaser
that, pursuant to the activities referenced in this Section 11.8, the
Documentation Agent and its Affiliates may receive information regarding
Deepwater, Conoco, R&B Falcon and their Affiliates (including information
that may be subject to confidentiality obligations in favor of Deepwater,
Conoco, R&B Falcon and their Affiliates) and acknowledge that the
Documentation Agent shall be under no obligation to provide such
information to them. With respect to its Certificate Purchaser Amount, if
any, the Documentation Agent shall have the same rights and powers under
this Agreement as any other Certificate Purchaser and may exercise the same
as though it were not the Documentation Agent.
SECTION 11.9 Successor Agent. At any time during the term of this
Agreement, the Documentation Agent may resign upon thirty (30) days notice
to the Certificate Purchasers and Deepwater. If the Documentation Agent
resigns herewith, the Required Certificate Purchasers shall appoint from
among the Certificate Purchasers a successor documentation agent which
successor Agent shall be approved by Deepwater (which approval shall not
be unreasonably withheld or delayed). If no successor Agent is appointed
prior to the effective date of the resignation of the corresponding Agent,
such Agent may appoint, after consulting with the Certificate Purchasers
and Deepwater, a successor Agent from among the Certificate Purchasers.
Upon the successor Agent's acceptance of its appointment as successor Agent
hereunder, such successor Agent shall succeed to all the rights, powers and
duties of the retiring Agent and the term "Documentation Agent" shall mean
such successor documentation agent and such retiring Documentation Agent's
appointment, powers and duties as a Documentation Agent shall be
terminated. After the retiring Agent's resignation herewith, the
provisions of this Section 11 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent hereunder and
under the other Transaction Documents. If no successor agent has accepted
appointment by the date which is forty-five (45) days following the notice
of resignation, the resignation shall thereupon become effective and the
Certificate Purchasers shall perform all of the duties of such Agent
hereunder and under the other Transaction Documents until such time, if
any, as the Required Certificate Purchasers appoint a successor Agent as
provided for above.
SECTION 12
MISCELLANEOUS
SECTION 12.1 Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Transaction Documents, and the parties' obligations under any and all
thereof, shall survive the execution and delivery of this Agreement, the
transfer of the Drillship to the Head Lessor (if applicable), the lease of
the Drillship by the Head Lessor (if any) to the Charter Trustee and the
subsequent charter of the Drillship by the Charter Trustee to Deepwater,
the construction of the Drillship, any disposition of any interest of the
Charter Trustee or the Investment Trust in the Drillship, the payment of
the Advances and shall be and continue in effect notwithstanding any
investigation made by any party and the fact that any party may waive
compliance with any of the other terms, provisions or conditions of any of
the Transaction Documents. Except as expressly provided herein, it is
expressly understood and agreed that the indemnification obligations of
Deepwater under Section 10 shall survive the expiration or termination of
the Charter or either Charter Supplement and the other Transaction
Documents and the payment by Deepwater Conoco, or R&B Falcon of all amounts
due thereunder for a period of three (3) years (but shall continue in full
force and effect following such date with respect to any Claim asserted
prior to such date) and shall be separate and independent from any remedy
under the Charter or any other Transaction Document.
SECTION 12.2 No Broker; etc. Each of the parties hereto represents to
the others that it has not retained or employed any broker, finder or
financial advisor, other than Bank of America National Trust and Savings
Association, to act on its behalf in connection with this Agreement or the
transactions contemplated herein, nor has it authorized any broker, finder
or financial adviser retained or employed by any other Person so to act.
Any party who is in breach of this representation shall indemnify and hold
the other parties harmless from and against any cost or liability arising
out of such breach of this representation.
SECTION 12.3 Notices. Unless otherwise specifically provided herein,
all notices, consents, directions, approvals, instructions, requests and
other communications required or permitted by the terms hereof to be given
to any Person shall be given in writing by United States mail, by
nationally recognized courier service, by hand or by facsimile
communication and any such notice shall become effective one (1) Business
Day after delivery to a nationally recognized courier service specifying
overnight delivery or, if delivered by hand, when received, or, if sent by
facsimile communication, when confirmed by electronic or other means during
business hours on a Business Day (or, if confirmed after business hours or
on a non-Business Day, on the next Business Day) and shall be directed to
the address of such Person as indicated:
If to Deepwater, to it at:
Attn: Manager
Deepwater Drilling II L.L.C.
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with copies to:
Attn: Xxxxx X. Xxxxxxxx, Esq.
Corporate Counsel
Conoco Inc. (formerly Continental Oil Company)
Charter Number 523126
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Esq.
Counsel
R&B Falcon Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Investment Trust, to it at:
Attn: Corporate Trust Administration
Wilmington Trust FSB
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000 Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Charter Trustee, to it at:
Attn: Corporate Trust Administration
Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX, 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to the Investment Trustee, to it at:
Attn: Corporate Trust Administration
Wilmington Trust FSB
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000 Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to any Member, to it at:
Conoco Development II Inc.
000 Xxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attn: Assistant Secretary
or
RBF Deepwater Exploration II Inc.
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attn: President
If to a Certificate Purchaser, to it at the address set forth in
Schedule 5.
SECTION 12.4 Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 12.5 Amendments, Waivers and Consents. Except as otherwise
expressly provided herein or in any other Transaction Document, no
amendment, waiver or termination of any provision of this Agreement or any
other Transaction Document, and no consent with respect to any departure
by any Person therefrom, shall be effective unless the same shall be in
writing and signed by the Majority Certificate Purchasers and the
applicable Person and acknowledged by the Trustees, and then any such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such
waiver, amendment or consent shall, unless in writing and signed by all
Certificate Purchasers and acknowledged by the Trustees, do any of the
following:
(a) change the Commitment of any Certificate Purchaser (except
with the written consent of such Certificate Purchaser) except as provided
in Section 7.9;
(b) postpone or delay any date fixed by any Transaction Document
for any payment of Certificate Return on the Certificates, or any fees or
other amounts due to the Certificate Purchasers (or any of them) under any
Transaction Document (except, with respect to amounts owed only to a
particular Certificate Purchaser, with the written consent of such
Certificate Purchaser);
(c) reduce (i) the amount of any outstanding Advances or the rate
of the Certificate Return on the Certificates, or (ii) any fees or other
amounts payable to Certificate Purchasers (or any of them) under any
Transaction Document (except, with respect to amounts owed only to a
particular Certificate Purchaser, with the written consent of such
Certificate Purchaser);
(d) postpone or reduce the payment obligations of Deepwater
pursuant to any Transaction Document (except, with respect to amounts owed
only to a particular Certificate Purchaser, with the written consent of
such Certificate Purchaser);
(e) change the aggregate percentage of the Certificate Purchaser
Balance or the Commitment Percentage which is required for Certificate
Purchasers (or any of them) to take any action hereunder;
(f) amend this Section or any provision herein or in any other
Transaction Document providing for consent or other action by all
Certificate Purchasers;
(g) discharge the Conoco Guaranty (other than pursuant to Section
9.4(a)(iv)), the R&B Falcon Guaranty (other than pursuant to Section
9.4(a)(iv)) or either Drilling Contract Guaranty (other than pursuant to
Section 9.4(a)(i)), or release the Lien of the Ship Mortgage or any
material portion of any other Collateral or subordinate or take any action,
including the issuance of additional instruments or documents, which
results in the subordination of the interest of any Certificate Purchaser
in any Collateral (including taking any action which has the effect of
altering the subordination of payments under the Transaction Documents made
to a Purchasing Party in any way that may be detrimental to the interests
of any Certificate Purchaser);
(h) amend the definition of "Certificate Return Rate", " Certificate
Margin", "Base Rate", "Alternate Rate", "Federal Funds Rate", "Charter
Residual Risk Amount", "Coverage Ratio", "Residual Guaranty Amount" ,
"Required Certificate Purchaser", "Certificate Return" or "Return Period" ;
or
(i) amend Section 2.4(c) hereof, Section 14.1 of the Master
Charter or Article 3 of the Depository Agreement;
and provided, further, that no amendment, waiver or consent shall, unless
in writing and signed by the Trustees in addition to the appropriate number
of Certificate Purchasers or the Hedging Agreement Counterparties, as
applicable, affect the rights or duties of the Trustees under this
Agreement or any other Transaction Document or the Hedging Agreement
Counterparties, respectively.
SECTION 12.6 Confidentiality. Each party hereto agrees to exercise
commercially reasonable efforts to keep any non-public information
delivered or made available by Deepwater to it which is indicated or stated
in writing to be confidential information, confidential from anyone other
than persons employed or retained by such Participant who are or are
expected to become engaged in evaluating, approving, structuring or
administering any of the Transaction Documents (such Persons to likewise
be under similar obligations of confidentiality with respect to such
information); provided, however, that nothing herein shall prevent any
party from disclosing such information (i) to any other party, (ii) upon
the order of any court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority having jurisdiction over such
Participant, (iv) which has been publicly disclosed, (v) to the extent
reasonably required in connection with any litigation to which any party
or its Affiliates may be a party, (vi) to the extent reasonably required
in connection with the exercise of any remedy hereunder or under any other
Transaction Document, (vii) to such party's legal counsel, independent
auditors and to such party's Affiliates, (viii) to any actual or proposed
assignee or other transferee of all or part of its rights hereunder which
has agreed in writing to be bound by the provisions of this Section 12.6
and (ix) except as otherwise required by Applicable Law; provided, however,
that, should disclosure of any such confidential information be required
by virtue of clause (ii) or (v) of the immediately preceding provisos, such
party shall notify Deepwater of the same so as to allow Deepwater to seek
a protective order or to take any other appropriate action; provided,
further, that no such party shall be required to delay compliance with any
directive to disclose beyond the last date such delay is legally
permissible any such information so as to allow Deepwater to effect any
such action and provided, further, that if Deepwater exercises the Return
Option, no Participant thereafter shall be bound by the terms of this
Section 12.6 with respect to any information regarding the Drillship
(excluding, however, any information regarding the Drilling Contracts).
SECTION 12.7 Headings; etc. The Table of Contents and headings of the
various Sections of this Agreement are for convenience of reference only
and shall not modify, define, expand or limit any of the terms or
provisions hereof.
SECTION 12.8 Parties in Interest. Except as expressly provided
herein, none of the provisions of this Agreement are intended for the
benefit of any Person except the parties hereto.
SECTION 12.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE (INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING, TO THE MAXIMUM EXTENT PERMITTED
BY LAW, ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES). THIS
AGREEMENT HAS BEEN DELIVERED IN THE STATE OF NEW YORK.
SECTION 12.10 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 12.11 Further Assurances. The parties hereto shall promptly
cause to be taken, executed, acknowledged or delivered, at the expense of
Deepwater, all such further acts, conveyances, documents and assurances as
any of the parties may from time to time reasonably request in order to
carry out and effectuate the intent and purposes of this Agreement, the
other Transaction Documents and the transactions contemplated hereby and
thereby (including, the preparation, execution and filing of any and all
Uniform Commercial Code financing statements and other filings or
registrations which the parties hereto may from time to time request to be
filed or effected). Deepwater will, at its own expense and without need
of any prior request from any other party, take such action as may be
necessary (including any action specified in the preceding sentence), or
(if the Investment Trust or the Trustees shall so request) as so requested,
in order to (i) maintain and protect all security interests provided for
hereunder or under any other Transaction Document and (ii) allow the
Charter Trustee to accurately and correctly execute any Disbursement
Certificates allowed to be executed by it in accordance with the terms of
the Depository Agreement.
SECTION 12.12 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 12.13 Limitations on Recourse. (a) The Certificate Purchasers,
the Trustees and the Investment Trust agree that their rights in respect
of the obligations of Deepwater to pay Charter Hire, and any claim or
liability under this Agreement or any other Transaction Document shall be
limited to satisfaction out of, and enforcement against, the Collateral.
The Certificate Purchasers, the Trustees and the Investment Trust hereby
acknowledge and agree that none of the Non-Recourse Parties shall have any
liability to all or any of the Certificate Purchasers, the Trustees or the
Investment Trust for the payment of any sums now or hereafter owing by
Deepwater under this Agreement or any other Transaction Document or for the
performance of any of the obligations of Deepwater contained herein or
therein or shall otherwise be liable or responsible with respect thereto
(such liability, including such as may arise by operation of law, being
hereby expressly waived), except as provided in this Section 12.13. If (i)
any Event of Default shall occur and be continuing or (ii) any claim of any
Certificate Purchasers, the Investment Trust and the Trustees against or
alleged liability to such Persons of Deepwater shall be asserted under this
Agreement or any other Transaction Document, the Certificate Purchasers,
the Trustees and the Investment Trust agree that they shall not have the
right to proceed directly or indirectly against the Non-Recourse Parties
or against their respective properties and assets (other than the
Collateral) for the satisfaction of any of the obligations of Deepwater to
pay Charter Hire or of any such claim or liability or for any deficiency
judgment (except to the extent enforceable out of the Collateral) in
respect of such obligations or any such claim or liability. The foregoing
notwithstanding, it is expressly understood and agreed that nothing
contained in this Section 12.13 shall be deemed to (a) release any Non-
Recourse Party from liability for its fraudulent actions or willful
misconduct or (b) limit or affect the obligations of any Non-Recourse Party
in accordance with the terms of this Agreement or any other Transaction
Document creating such obligation to which such Non-Recourse Party is a
party, including, without limitation, the obligations of Conoco or R&B
Falcon under the Drilling Contract Guaranties or with respect to payment
of the Residual Guaranty Amount, or the obligations of the Drilling Parties
under the Drilling Contracts. The foregoing acknowledgments, agreements
and waivers shall be enforceable by any Non-Recourse Party.
(b) Deepwater, Conoco and R&B Falcon hereby acknowledge and agree that
none of the Documentation Agent, the Trustees and the Certificate
Purchasers shall have any personal liability whatsoever to Deepwater,
Conoco, R&B Falcon or their respective successors or assigns for any claim
based on or in respect of this Agreement or arising from the transactions
contemplated hereby. Subject to Section 6.1 of the Master Charter, the
sole recourse of Deepwater, Conoco or R&B Falcon or any Person claiming
through or on behalf thereof for any such claims arising hereunder will be
to the Trust Estate. Each of Deepwater, Conoco and R&B Falcon further
acknowledges and agrees that it has no rights (as third-party beneficiary
or otherwise) or standing under any agreement between the Trustees and any
or all of the Investment Trust, the Documentation Agent, or the Certificate
Purchasers which agreements are not by their terms intended for the benefit
of other parties other than Sections 5.2,5.3, 5.4 and 5.5 of the Charter
Trust Agreement and Sections 5.2, 5.3, 5.4 and 5.5 of the Investment Trust
Agreement.
(c) It is expressly understood and agreed by the parties hereto that
(a) this Agreement and the other Transactions Documents executed by either
Trustee, are not being executed in such Trustee s respective personal
capacities, except as expressly stated herein or therein, but solely (i)
in the case of Wilmington Trust Company, (x) as charter trustee under the
Charter Trust Agreement and, (y) solely with respect to the Depository
Agreement, as Depository and Securities Intermediary thereunder, and (ii)
in the case of Wilmington Trust FSB, as investment trustee under the
Investment Trust Agreement and (b) under no circumstances shall either
Trustee be personally liable for the payment of any indebtedness or
expenses of the Charter Trust or the Investment Trust, as applicable, or
be liable for the breach or failure of any obligation, representation,
warranty or covenant made or undertaken by the Charter Trustee or
Investment Trust, as applicable, under this Agreement, any other
Transaction Document or any related agreement, except to the extent of the
Charter Trust Estate and the Investment Trust Estate, respectively.
SECTION 12.14 Applicable Laws. Nothing in this Agreement or any other
Transaction Document shall be construed to constitute or to require either
the Trustees, Investment Trust or Deepwater to take or omit any action
which would constitute a violation of, or subject the Trustees, Investment
Trust or Deepwater to a penalty under, the laws of the United States of
America.
SECTION 12.15 Right to Inspect. Upon reasonable notice and at such
times and places as shall not unduly interfere with the commercial
utilization or operation of the Drillship (it being understood that
Deepwater shall be under no obligation to interrupt or delay any operation
of the Drillship or to otherwise incur any out-of-pocket expense or loss
of revenue), but in no event more than once in any twelve-month period,
Deepwater shall afford representatives of the Charter Trustee (together
with representatives of the Certificate Purchasers and the Trustees)
reasonable access to the Drillship, its logs and papers for the purpose of
inspecting the same. Any such inspection shall be subject to any required
Government Approvals and shall be at the sole risk and expense of the
Charter Trustee, the Certificate Purchasers and the Trustees, as
applicable, unless a Charter Event of Default has occurred and is
continuing, in which case any such inspection shall be at the expense of
Deepwater and may occur more than once per year upon reasonable notice
after such Charter Event of Default. Upon written request by the Trustees,
Deepwater shall give the Trustees prior written notice of the time and
location of the Drillship's next scheduled dry-docking.
SECTION 12.16 Accounts, Distribution of Payments and Flow of Funds.
Pursuant to the Deepwater Assignment, Deepwater has assigned its right to
receive payment of all Deposited Amounts to the Charter Trustee and the
Investment Trust. Each of the Trustees, the Investment Trust and Deepwater
hereby agrees (severally and not jointly) to deposit, or to cause to be
deposited, all Account Collateral of any kind received by it promptly (but
not later than six (6) Business Days after receipt) into the Accounts
established pursuant to the Depository Agreement to be applied as set forth
in the Depository Agreement.
SECTION 12.17 Attorneys-in-Fact. Subject to the terms of the
Transaction Documents, without in any way limiting the obligations of
Deepwater hereunder, Deepwater hereby appoints each of the Charter Trustee
and the Investment Trust as its agent and attorney-in-fact, with full power
and authority at any time during which Deepwater is obligated to deliver
possession of the Drillship to the Charter Trustee in connection with the
exercise of remedies after the occurrence of an Event of Default, to demand
and take possession of the Drillship in the name and on behalf of Deepwater
from whomsoever shall be at the time in possession thereof in accordance
with the Transaction Documents.
SECTION 12.18 Successor Trustees; Jurisdiction of Trust.
Notwithstanding the provisions of the Trust Agreement, so long as no Event
of Default shall have occurred and be continuing, (i) no successor or
replacement Charter Trustee or Investment Trustee shall be appointed
without the prior written consent of Deepwater (which consent shall not be
unreasonably withheld or delayed) and (ii) the jurisdiction in which the
trusts under the Trust Agreements are created shall not be changed without
the prior written consent of Deepwater.
SECTION 12.19 Third-Party Beneficiaries. Each of the Certificate
Purchasers agrees that the Drilling Parties shall be third-party
beneficiaries of the covenant contained in Section 6.3(b) and each shall
be entitled to rely on and enforce such covenant as though such Drilling
Party were a party to this Agreement. Each of the parties hereto agrees
that the Hedging Agreement Counterparties shall be third-party
beneficiaries of the covenant contained in Sections 10 and 12.5 and shall
be entitled to rely on and enforce such covenants as though the Hedging
Agreement Counterparties were parties to this Agreement.
SECTION 12.20 Consent to Jurisdiction. Each of the parties hereto (i)
hereby irrevocably submits to the nonexclusive jurisdiction of the Supreme
Court of the State of New York, New York County (without prejudice to the
right of any party to remove to the United States District Court for the
Southern District of New York) and to the jurisdiction of the United States
District Court for the Southern District of New York, for the purposes of
any suit, action or other proceeding arising out of this Agreement, the
other Transaction Documents, or the subject matter hereof or thereof or any
of the transactions contemplated hereby or thereby brought by any of the
parties hereto or their successors or assigns, (ii) hereby irrevocably
agrees that all claims in respect of such suit, action or proceeding may
be heard and determined in such New York State court or, to the fullest
extent permitted by Applicable Law, in such Federal court and (iii) to the
extent permitted by Applicable Law, hereby irrevocably waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, in any such
suit, action or proceeding any claim that it is not personally subject to
the jurisdiction of the above-named courts, that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this Agreement, the other
Transaction Documents, or the subject matter hereof or thereof may not be
enforced in or by such court. A final judgment obtained in respect of any
action, suit or proceeding referred to in this Section 12.20 shall be
conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any manner as provided by and subject to Applicable Law.
Each of the parties hereto hereby consents to service of process in
connection with the subject matter specified in the first sentence of this
Section 12.20 in connection with the above mentioned courts in New York by
registered mail, Federal Express, DHL or similar courier at the address to
which notices to it are to be given, it being agreed that service in such
manner shall constitute valid service upon such party or its respective
successors or assigns in connection with any such suit, action or
proceeding only; provided, however, that nothing in this Section 12.20(i)
shall affect the right of any of such party or its respective successors
or assigns to serve legal process in any other manner permitted by law or
affect the right of any of such parties or its respective successors or
assigns to bring any suit, action or proceeding against any other one of
such parties or its respective property in the courts of other
jurisdictions.
SECTION 12.21 Deepwater Acknowledgment With Respect to Charter Trust
Agreement. Deepwater hereby agrees and consents to the provisions of
Section 8.1(a) of the Charter Trust Agreement in respect of Deepwater's
obligations to reimburse the Charter Trustee's reasonable fees and
expenses.
SECTION 12.22 Appointment of Wilmington Trust FSB as Attorney-in-Fact
on behalf of the Beneficial Owners; Powers of Attorney. Each of the
Beneficial Owners identified in the Charter Trust Agreement, by its
respective signature below, hereby appoints Wilmington Trust FSB as
attorney-in-fact solely for the purpose of, in its name, place and stead,
executing and delivering the Charter Trust Agreement. Wilmington Trust FSB
is further authorized and directed by each such Beneficial Owner to execute
and deliver the power of attorney substantially in the form attached hereto
as Exhibit W-1, in favor of the Persons listed therein, for the purpose of
having the Charter Trust Agreement duly executed and delivered by each such
Beneficial Owner. Such appointment shall not be construed to be a
"statutory short form power of attorney" as defined in Section 5-1501 of
the New York General Obligations Law. Further, Wilmington Trust Company
shall execute and deliver the Power of Attorney attached hereto as Exhibit
W-2, both in its individual capacity, as expressly provided in such Exhibit
W-2, and as Charter Trustee.
SECTION 12.23 Non-Defaulting Drilling Party s Right to Pursue Contests.
Where a Non-Defaulting Drilling Party has exercised its Assumption Cure
Right, if the Charter Trustee, Investment Trust and the Certificate
Purchasers have opted not to pursue remedies against (i) where Frontier
Deepwater Drilling is a Defaulting Drilling Party, Conoco for any failure
to make payments due under the Conoco Guaranty or the Conoco Drilling
Contract Guaranty following a demand for payment thereunder, or (ii) where
R&B Falcon Drilling (International & Deepwater) Inc. is a Defaulting
Drilling Party, R&B Falcon for any failure to make payments due under the
R&B Falcon Guaranty or the R&B Falcon Drilling Contract Guaranty following
a demand for payment thereunder, such Non-Defaulting Drilling Party shall
have the right to pursue any and all claims of the Charter Trustee,
Investment Trust and the Certificate Purchasers under any such Guaranty;
provided, however that such Non-Defaulting Drilling Party shall not have
the right in any way to settle or compromise any such claim pursued under
this Section for less than the full amount owed under any such Guaranty
unless each of the Certificate Purchasers has consented to such settlement
or compromise. Notwithstanding anything to the contrary in this Section,
all amounts received by the Non-Defaulting Drilling Party as a result of
the pursuit of any claims hereunder shall be deposited into the appropriate
Account under the Depository Agreement, as though such amounts had been
paid by, where clause (i) above applies, Conoco and, where clause (ii)
above applies, R&B Falcon.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this PARTICIPATION
AGREEMENT to be duly executed by their respective officers and thereunto
duly authorized as of the day and year first above written.
DEEPWATER DRILLING II L.L.C.
By:
Name:
Title:
DEEPWATER INVESTMENT TRUST 1999-A
By: WILMINGTON TRUST FSB, not in its
individual capacity, but solely as
Investment Trustee
By:
Name:
Title:
WILMINGTON TRUST FSB, not in its
individual capacity, except as specified
herein, but solely as Investment Trustee
By:
Name:
Title:
WILMINGTON TRUST COMPANY, not in its
individual capacity, except as specified
herein, but solely as Charter Trustee
By:
Name:
Title:
R&B FALCON CORPORATION,
with respect to Sections 2.15, 6.4, 9.4(a)
and 12.13(b) only
By:
Name:
Title:
CONOCO INC.,
with respect to Sections 2.15, 6.4,
9.4(a) and 12.13(b) only
By:
Name:
Title:
RBF DEEPWATER EXPLORATION II INC.,
with respect to Sections 5.2 and 6.4 only
By:
Name:
Title:
CONOCO DEVELOPMENT II INC., with
respect to Sections 5.2 and 6.4 only
By:
Name:
Title:
BA LEASING & CAPITAL CORPORATION,
as Documentation Agent
By:
Name:
Title:
By:
Name:
Title:
Certificate Purchasers:
BA LEASING & CAPITAL CORPORATION
By:
Name:
Title:
By:
Name:
Title:
BANK ONE, LOUISIANA, NATIONAL
ASSOCIATION
By:
Name:
Title:
By:
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By:
Name:
Title:
By:
Name:
Title:
DIME COMMERCIAL CORP.
By:
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
FLEET CAPITAL CORPORATION
By:
Name:
Title:
By:
Name:
Title:
FBTC LEASING CORP.
By:
Name:
Title:
By:
Name:
Title:
MEES PIERSON CAPITAL CORP.
By:
Name:
Title:
By:
Name:
Title:
NATIONAL WESTMINSTER BANK PLC
By:
Name: Xxxxxxxx X. Dundee
Title: Senior Vice President, National
Westminster Bank Plc, New York Branch
By:
Name: Xxxxxxxx X. Dundee
Title: Senior Vice President, National
Westminster Bank Plc, Nassau Branch
THE ROYAL BANK OF SCOTLAND PLC
By:
Name: Xxxxx Xxxxxx
Title: Vice President
SIEMENS CREDIT CORPORATION
By:
Name: Xxxxxxx X. Xxxxx
Title: Vice President
EXHIBIT A
Form of Funding Indemnity Letter
EXHIBIT B
Opinion of White & Case LLP, special counsel to Deepwater
SEE TABS 60 AND 61
Exhibit C
[Intentionally Omitted]
Exhibit D
Opinion of Xxxxx X. Anderson, in-house counsel to Conoco
SEE TAB 63
Exhibit E
Opinion of Xxxxx X. Xxxxxx, counsel to R&B Falcon
SEE TAB 62
Exhibit F
Officer's and Manager's Certificates
SEE TABS 40, 44, 47, 49 AND 52
Exhibit G
Officer's Certificates
SEE TABS 54 AND 57
Exhibit H-1
Amended and Restated Drilling Contracts
SEE TABS 22 AND 24
Exhibit H-2
Amended and Restated Drilling Contract Guaranties
SEE TABS 23 AND 24
Exhibit I
Drilling Consent
SEE TAB 26
Exhibit J
[Intentionally Omitted]
Exhibit K
[Intentionally Omitted]
Exhibit L
[Intentionally Omitted]
Exhibit M
Xxxx of Sale
SEE TAB 32
Exhibit N
Form of Advance Request
SEE TAB 35
Exhibit O
Opinion of Haight, Gardner, Holland & Knight
SEE TABS 68 AND 69
Exhibit P
Opinion of Xxxxx, Xxxxxxx & Xxxxxxx, Panamanian Counsel
SEE TAB 70
Exhibit Q
Form of Notice of Certificate Return Rate
Exhibit R
Certificate Purchaser Assignment and Assumption Agreement
Exhibit S-1
Form of Hedging Agreements
Exhibit S-2
Form of Deepwater Hedging Agreements
Exhibit T
Form of Ship Mortgage
SEE TAB 21
Exhibit U
Opinions of Xxxxxxx X. Xxxxxxx, Vice President and Trust Counsel of
Wilmington Trust Company and Xxxxxxxx, Xxxxxx & Finger
SEE TABS 64 AND 67
Exhibit W
Form of Subcharter
Exhibit W-1
Special Power of Attorney for Executing the Charter Trust Agreement and
Ship Mortgage on Behalf of Wilmington Trust FSB and the Beneficial
Owners
SEE TAB 16
Exhibit W-2
Special Power of Attorney for Executing the Charter Trust Agreement and
Ship Mortgage on Behalf of Wilmington Trust Company
SEE TAB 15
Exhibit X
SEE TAB 27
Form of Letter of Credit
Schedule 1
List of Transaction Documents
Schedule 2
Facility Fee Rate
Schedule 3
List of UCC and Other Necessary Security Filings
Schedule 4
Information Relied Upon by Appraiser
1. Description & General Design Specifications for the Drillship
2. Construction Cost Data
3. Participation Agreement
Schedule 5
Certificate Purchaser Notice Addresses,
Payment Instructions and Responsible Officers
BA LEASING & CAPITAL CORPORATION
Full Legal Name of
Bank:___________________________________________________
Name of Person(s) signing
Documents:_____________________Title:_______________
_____________________Title:_______________
General Information:
Domestic Lending Office: Eurodollar Lending Office:
----------------------- -------------------------
Name: Name:
Address: Address:
Address for Notices:
Name:_____________________
Address:
Tel #:
Fax #:
Administrative Contact Person:
Name:_____________________
Address:
Tel #:
Fax #:
Taxpayer ID #:______________
Payment Instructions (for US Dollars):
BANK ONE, LOUISIANA, N.A.
-------------------------
Full Legal Name of Bank: Bank One, Louisiana, N.A.
Name of Person(s)
signing Documents: J. Xxxxxxx Xxxxx Title: First Vice President
________________ Title: _______________
General Information:
-------------------
Domestic Lending Office: Eurodollar Lending Office:
----------------------- -------------------------
Name: Bank One, Louisiana, N.A. Name: Same as for Notices
Address: 000 Xx. Xxxxxxx Xxx, Address: Same as for Notices
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Address for Notices:
-------------------
Name: J. Xxxxxxx Xxxxx
Address: 000 Xx. Xxxxxxx Xxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Tel #: 000-000-0000
Fax #: 000-000-0000
Administrative Contact Person:
-----------------------------
Name: Xxxxx Xxxxxxxx
Address: 000 Xxxxxxxxxxxx Xx. XX0
Xx. Xxxxx, XX 00000
Tel #: 000-000-0000
Fax #: 000-000-0000
Taxpayer ID #: 75 227 0994
Payment Instructions (for US Dollars):
Bank One, N.A.
ABA 000000000
Account# 552 9616 151010
Attn: Southern Region Coml. Special Services
Ref: Deepwater Drilling II L.L.C.
CREDIT LYONNAIS NEW YORK BRANCH
-------------------------------
Full Legal Name of Bank: Credit Lyonnais New York Branch
Name of Person(s) signing Documents: Philippe Soustra Title: Sr. Vice President
________________ Title:_______________
General Information:
Domestic Lending Office: Eurodollar Lending Office:
----------------------- -------------------------
Name: Credit Lyonnais New York Branch Name: Same as Domestic
Lending Office
Address: 1301 Avenue of the Americas Address: Same as Domestic
Xxx Xxxx, XX 00000 Lending Office
Address for Notices:
-------------------
Name: Xxxxxxxxxx Xxxxxx
Address: 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Tel #: 000-000-0000
Fax #: 000-000-0000
Administrative Contact Person:
-----------------------------
Name: Xxxxxxxxxx Xxxxxx
Address: 0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Tel #: 000-000-0000
Fax #: 000-000-0000
Taxpayer ID #: 00-0000000
Payment Instructions (for US Dollars):
Credit Lyonnais New York
ABA#: 000000000
Account #: 01-88179-3701-00-179
Ref: Deepwater II Synthetic Lease
THE DAI-ICHI KANGYO BANK, LTD.
-----------------------------
Full Legal Name of Bank: The Dai-Ichi Kangyo Bank, Ltd.
Name of Person(s) signing Documents: ________________ Title:_______________
________________ Title:_______________
General Information:
Domestic Lending Office: Eurodollar Lending Office:
----------------------- -------------------------
Name: The Dai-Ichi Kangyo Bank, Name: Same as Domestic Lending Office
Ltd.
Address: 1 World Trade Center, Address: Same as Domestic Lending Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Address for Notices:
-------------------
Name: Xxxxxxxxx Xxxxx
Address: 0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel #: 000-000-0000
Fax #: 000-000-0000
Administrative Contact Person:
-----------------------------
Name: Xxxxxxxxx Xxxxx
Address: 0 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel #: 000-000-0000
Fax #: 000-000-0000
Taxpayer ID #: ___________
Payment Instructions (for US Dollars):
Dai-Ichi Kangyo Bank, New York
Fedwire ABA No: 000000000
Attn: Loan Admin. Asst. General Manager
Re: Deepwater II Synthetic Lease
Account #: N/A
DIME COMMERCIAL CORP.
--------------------
Full Legal Name of Bank: Dime Commercial Corp.
Name of Person(s) signing Documents: Xxxxxxx X. Xxxxx Title: Senior
Vice President
________________ Title: ______________
General Information:
Domestic Lending Office: Eurodollar Lending Office:
----------------------- -------------------------
Name: Dime Commercial Corp. Name: Dime Commercial Corp.
Address: 1180 Avenue of the Americas Address: 1180 Avenue of the Americas
Xxxxx 000 Xxxxx 000
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Address for Notices:
-------------------
Name: Dime Commercial Corp.
Address: 1180 Avenue of the Americas
Xxxxx 000
Xxx Xxxx, XX 00000
Tel #:
Fax #:
Administrative Contact Person:
-----------------------------
Name: Xxxxxxx X. Xxxxx
Address: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxx 000
Xxx Xxxx, XX 00000
Tel #: 000-000-0000
Fax #: 000-000-0000
Taxpayer ID #: 00-0000000
Payment Instructions (for US Dollars):
FLEET CAPITAL CORPORATION
-------------------------
Full Legal Name of Bank: Fleet Capital Corporation
Name of Person(s) signing Documents: Xxxxxx Xxxxxxxxx Title: Vice President
Xxxxxx X Xxxxx Title: Vice President
General Information:
Domestic Lending Office: Eurodollar Lending Office:
----------------------- -------------------------
Name: See Address for Notices Name: See Address for Notices
Address: See Address for Notices Address: See Address for Notices
Address for Notices:
-------------------
Name: Fleet Capital Corp.
Address: 00 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Senior Credit Officer
Tel #: 000-000-0000
Fax #: 000-000-0000
Administrative Contact Person:
-----------------------------
Name: Xxxxxx Xxxxxxxxxx
Address: See Address for Notices
Tel #: 000-000-0000
Fax #: 000-000-0000
Taxpayer ID #: 00-0000000
Payment Instructions (for US Dollars):
Fleet Bank RI
ABA#: 000000000
for the account of Fleet Capital Leasing
Account # 015-0000000
upon reciept contact: Xxxxxx Xxxxxxx, (000) 000-0000
FBTC LEASING CORP.
-----------------
Full Legal Name of Bank: FBTC Leasing Corp.
Name of Person(s) signing Documents: ________________ Title:________________
________________ Title:________________
General Information:
Domestic Lending Office: Eurodollar Lending Office:
----------------------- -------------------------
Name: See Administrative Name: See Administrative
Contact Person Contact Person
Address: See Administrative Address: See Administrative
Contact Person Contact Person
Address for Notices:
-------------------
Name: See Administrative Contact Person
Address: See Administrative Contact Person
Tel #:
Fax #:
Administrative Contact Person:
-----------------------------
Name: Xxxxx Xxxxxx (Backup: Xxxx Xxxx)
Address: Xxx Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Tel #: 000-000-0000 (000-000-0000)
Fax #: 000-000-0000
Taxpayer ID #: 00-0000000
Payment Instructions (for US Dollars):
Bank Name: Fuji Bank and Trust Company
ABA Number: 02600-8905
Acct. Name: FBTC Leasing Corp.
Acct Number: 001-900269
MEES PIERSON CAPITAL CORP.
-------------------------
Full Legal Name of Bank: Mees Pierson Capital Corp.
Name of Person(s) signing Documents: ________________ Title:________________
________________ Title:________________
General Information:
Domestic Lending Office: Eurodollar Lending Office:
----------------------- -------------------------
Name: See Administrative Name: See Administrative
Contact Person Contact Person
Address: See Administrative Address: See Administrative
Contact Person Contact Person
Address for Notices:
-------------------
Name: See Administrative Contact Person
Address: See Administrative Contact Person
Tel #:
Fax #:
Administrative Contact Person:
-----------------------------
Name: Xxxxxxx Xxxxx
Address: 0 Xxxxxxxx Xxxxx
000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000-0000
Tel #: 000-000-0000
Fax #: 000-000-0000
Taxpayer ID #: ______________
Payment Instructions (for US Dollars):
Bank Name: Chase Manhattan Bank
ABA#: 021 000 021
Beneficiary: Mees Pierson Capital Corp.
A/C #: 001-1624418
Reference: Deepwater Drilling
A/C #: 100980351
Schedule 6
[Intentionally Omitted]
Schedule 7
Terms of Subordination for Subordinated Debt
