Exhibit 10.124
FIRST PREFERRED MORTGAGE
Dated November 13, 1996
READING & XXXXX OFFSHORE, LIMITED
- in favor of -
CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH,
as Security Trustee
XXXXXX X. XXXXXXXX
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INDEX
CLAUSE SUBJECT MATTERPAGE
1 DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . 2
2 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 7
3 MORTGAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4 PAYMENT COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 9
5 PRESERVATION OF SECURITY . . . . . . . . . . . . . . . . . . 10
6 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7 RIG COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 13
8 PROTECTION OF SECURITY . . . . . . . . . . . . . . . . . . . 17
9 ENFORCEABILITY AND TRUSTEE'S POWERS . . . . . . . . . . . . . 18
10 APPLICATION OF MONEYS . . . . . . . . . . . . . . . . . . . . 20
11 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . 21
12 POWER OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . 21
13 INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . . . 22
14 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15 COMMUNICATIONS . . . . . . . . . . . . . . . . . . . . . . . 24
16 ASSIGNMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 24
17 TOTAL AMOUNT, ETC. . . . . . . . . . . . . . . . . . . . . . 24
18 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 24
19 JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . 25
ACKNOWLEDGEMENT OF MORTGAGE
EXHIBIT 1 FORM OF CREDIT AGREEMENT
EXHIBIT 2 FORM OF SUBSIDIARY GUARANTY
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THIS FIRST PREFERRED MORTGAGE (this "Mortgage") is made on the 13th day of
November, 1996
BY
(1) READING & XXXXX OFFSHORE, LIMITED, an Oklahoma corporation having its
principal offices at 000 Xxxxxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000
(the "Owner"),
IN FAVOR OF
(2) CHRISTIANIA BANK OG KREDITKASSE, NEW YORK BRANCH, a Norwegian banking
corporation having its office at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, as security trustee for the Banks (as hereinafter defined) and
as mortgagee (the "Trustee")
WHEREAS
(A) The Owner is the sole owner of the whole of the xxxx-up drilling rig
XXXXXX X. XXXXXXXX documented under the laws and flag of the United
States of America with Official Number 673210 of 3,729 gross
registered tons and 2,496 net registered tons (the "Rig").
(B) By a Credit Agreement dated as of November 13, 1996 (as modified,
amended or supplemented from time to time, the "Credit Agreement")
among (i) Reading & Xxxxx Corporation, a Delaware corporation
("Holdings"), (ii) Reading & Xxxxx Drilling Co., an Oklahoma
corporation (the "Borrower"), (iii) the banks party thereto (the
"Banks"), (iv) Credit Lyonnais New York Branch and Banque Indosuez, as
documentation agents (the "Documentation Agents") and (v) the Trustee,
as administrative agent, arranger and security trustee (in such
capacity, the "Administrative Agent") (the form of which Credit
Agreement together with Exhibit B thereto but without the remaining
attachments is attached hereto as Exhibit 1), it was agreed among
other things that the Banks would make available to the Borrower upon
the terms and conditions therein described a reducing revolving credit
facility (the "Facility") in an aggregate amount at any time
outstanding of Three Hundred Million United States Dollars
(US$300,000,000), providing for the making of Loans and the issuance
of, and participation in, Letters of Credit as contemplated therein.
(C) The obligations of the Borrower with respect to the Facility are
evidenced by the Credit Agreement and the other Credit Documents,
including the promissory notes of the Borrower payable to the order of
the respective Banks (each a "Note" and, collectively, the "Notes")
(the form of which is attached as Exhibit B to the Credit Agreement).
(D) The Owner, for good and valuable consideration has authorized,
executed and delivered a Subsidiary Guaranty (as modified, amended or
supplemented from time to time, the "Subsidiary Guaranty"), the form
of which Subsidiary Guaranty is attached hereto as Exhibit 2, in favor
of the Administrative Agent guaranteeing the performance by the
Borrower of its obligations under the Credit Agreement and the other
Credit Documents.
(E) This Mortgage is made for the benefit of the Trustee to secure the
guaranty by the Owner of (i) the full and prompt payment when due of
(x) the principal of and interest on the Notes issued, and Loans made,
under the Credit Agreement, and all reimbursement obligations and
Unpaid Drawings with respect to the Letters of Credit issued under the
Credit Agreement and (y) all other obligations and indebtedness
(including, without limitation, indemnities, Fees and interest
thereon) of the Borrower to the Secured Creditors (as hereinafter
defined), whether now existing or hereafter incurred under, arising
out of or in connection with the Credit Agreement and the other Credit
Documents including, without limitation, this Mortgage and the due
performance and compliance by the Borrower with all of the terms,
conditions and agreements contained in the Credit Agreement and the
other Credit Documents including, without limitation, this Mortgage;
(ii) any and all sums advanced by the Trustee in order to preserve the
Collateral (as hereinafter defined) or preserve its security interest
in the Collateral; (iii) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or
liabilities of the Borrower referred to in clause (i) above, after an
Event of Default shall have occurred and be continuing, the reasonable
expenses of the Trustee of re-taking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the
Collateral, or of any exercise by the Trustee of its rights hereunder,
together with reasonable attorneys' fees of counsel to the Trustee and
court costs; and (iv) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Clause 13 of this
Mortgage (all such obligations, liabilities, sums and expenses
referred to in clauses (i) through (iv) above being collectively
referred to as the "Obligations"). It is acknowledged and agreed that
the "Obligations" shall include extensions of credit of the types
described above, whether outstanding on the date of this Mortgage or
extended from time to time after the date of this Mortgage.
(F) This First Preferred Mortgage is entered into by the Owner in
consideration of the Banks agreeing to make the Facility available to
the Borrower and as a condition thereto and for other good and
valuable consideration provided by the Banks (the sufficiency of which
the Owner hereby acknowledges).
NOW THIS MORTGAGE WITNESSETH AND IT IS HEREBY AGREED
1. DEFINITIONS AND INTERPRETATION
1.01 In this Mortgage unless the context otherwise requires, the following
expressions shall have the following meanings:
"Administrative Agent" shall have the same meaning for such term as
set forth in the Credit Agreement;
"Bank" means any lender listed from time to time on Annex I to the
Credit Agreement (collectively, the "Banks");
"Collateral" shall have the same meaning for such term as set forth in
the Credit Agreement;
"Credit Agreement" means the Credit Agreement, dated as of November
13, 1996, among Holdings, the Borrower, the Banks, the Documentation
Agents, and the Administrative Agent first referred to in Recital (B)
hereto, as modified, amended or supplemented from time to time;
"Credit Documents" shall have the meaning for such term as set forth
in the Credit Agreement;
"Credit Facility Period" shall mean the period commencing on the date
hereof and ending on the date the Total Commitments have terminated,
no Letters of Credit remain outstanding and the Loans and the Unpaid
Drawings together with interest, fees and all other obligations are
paid in full;
"Default Rate" shall mean the rate of interest calculated in
accordance with Section 1.08(c) of the Credit Agreement;
"Environmental Approvals" means all approvals, licenses, permits,
exemptions or authorization required under applicable Environmental
Laws;
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations (other than
internal reports prepared by Holdings or any of its Subsidiaries
solely in the ordinary course of such Person's business and not in
response to any third party action or request of any kind) or
proceedings relating in any way to any Environmental Law or any permit
issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all
Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all
Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Materials arising from alleged injury or
threat of injury to health, safety or the environment;
"Environmental Incident" means (i) any release of Environmentally
Sensitive Material from the Rig, (ii) any incident in which
Environmentally Sensitive Material is released from a vessel other
than the Rig and which involves collision between the Rig and such
other vessel or some other incident of navigation or operation, in
either case, where the Rig or the Owner are actually or allegedly at
fault or otherwise liable (in whole or in part) or (iii) any incident
in which Environmentally Sensitive Material is released from a vessel
other than the Rig and where the Rig is actually or potentially liable
to be arrested as a result and/or where the Owner is actually or
allegedly at fault or otherwise liable (and, in each such case,
"release" shall mean disposing, discharging, injecting, spilling,
leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing and the like, into or upon any land or water or air, or
otherwise entering into the environment);
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guide, policy
and rule of common law now or hereafter in effect and in each case as
amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree or
judgment, relating to the environment, health, safety or Hazardous
Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.; the
Toxic Substances Control Act, 15 U.S.C. 7401 et seq.; the Clean Air
Act, 42 U.S.C. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C.
3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. 2701 et
seq. and any applicable state and local or foreign counterparts or
equivalents;
"Fees" shall have the same meaning for such term as set forth in the
Credit Agreement;
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other
equipment that contained, electric fluid containing levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials
or substances defined as or included in the definition of "hazardous
substances," "hazardous waste," "hazardous materials," "extremely
hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority;
"Indemnitee" shall have the meaning set forth in Section 13.01;
"Insurances" includes all policies and contracts of insurance (which
expression includes all entries of the Rig in a protection and
indemnity association) which are from time to time taken out or
entered into in respect of the Rig or otherwise by the Owner (whether
in the sole name of the Owner or in the joint names of the Owner and
the Administrative Agent) and all benefits thereof (including claims
of whatsoever nature and return of premiums);
"Interest Period" shall have the same meaning for such term as set
forth in Section 1.09 of the Credit Agreement;
"Letter of Credit" shall have the same meaning for such term as set
forth in Section 2.01(a) of the Credit Agreement;
"Loan(s)" shall have the same meaning for such term as set forth in
the Credit Agreement;
"Major Casualty" means any casualty to the Rig in respect whereof the
claim or the aggregate of the claims against all insurers, before
adjustment for any relevant franchise or deductible, exceeds Five
Hundred Thousand United States Dollars (US$500,000) or the equivalent
in any other currency;
"Note" means each promissory note of the Borrower referred to in
Recital (C) hereto and in Section 1.05(a) of the Credit Agreement;
"Obligations" shall have the meaning provided in Recital (E) hereto;
"Oil Pollution Act 1990" means the Oil Pollution Xxx 0000 (33 U.S.C.
2701 et seq.), as amended;
"Other Rigs" means, individually or collectively, each of (i) the
semi-submersible drilling rig XXXX XXXXX owned by the Borrower
documented under the laws and flag of the United States with Official
Number 906283 of 19,928 gross registered tons and 14,948 net
registered tons; (ii) the offshore drilling rig X. X. XXXX owned by
Reading & Xxxxx Exploration Co. documented under the laws and flag of
the United States with Official Number 583169 of 5,383 gross
registered tons and 4,185 net registered tons; (iii) the offshore
drilling rig XXXXXXX XXXXXX owned by Reading and Xxxxx Borneo Drilling
Co., Ltd. documented under the laws and flag of the Republic of Panama
with Patente Number 6618-76-CH of 5,829 gross registered tons and
1,748 net registered tons; (iv) the xxxx-up drilling rig XXX XXXXXXXXX
owned by Reading & Xxxxx (A) Pty Ltd. documented under the laws and
flag of Australia with Official Number 855213 of 11,455 gross
registered tons and 3,436 net registered tons; (v) the semi-
submersible drilling rig X. X. XxXXXX owned by the Borrower documented
under the laws and flag of the Republic of Panama with Patente Number
25384-PEXT of 15,453 gross registered tons and 4,636 net registered
tons; (vi) the semi-submersible drilling rig RIG 41 owned by the
Borrower documented under the laws and flag of the Republic of Panama
with the Patente Number to be assigned on the date hereof of 10,078
gross registered tons and 3,024 net registered tons; (vii) the xxxx-up
drilling rig XXXXXX X. XXXX owned by HRB Rig Corporation documented
under the laws and flag of the United States of America with Official
Number 642693 of 4,121 gross registered tons and 3,079 net registered
tons; (viii) the xxxx-up drilling rig X. X. XxXXXXXXXX owned by the
Owner documented under the laws and flag of the United States of
America with Official Number 562059 of 5,525 gross registered tons and
1,657 net registered tons; (ix) the xxxx-up drilling rig XXXXXXXX XXXX
owned by the Borrower documented under the laws and flag of the United
States of America with Official Number 601699 of 4,701 gross
registered tons and 4,701 net registered tons; (x) the xxxx-up
drilling rig X. X. XXXXX owned by the Borrower documented under the
laws and flag of the United States of America with Official Number
651645 of 4,186 gross registered tons and 3,090 net registered tons;
(xi) the xxxx-up drilling rig XXXXX X. XXXXXX owned by the Borrower
documented under the laws and flag of the United States of America
with Official Number 645360 of 4,121 gross registered tons and 3,079
net registered tons; (xii) the xxxx-up drilling rig X. X. XXXXXXX
owned by Reading & Xxxxx Exploration Co. documented under the laws and
flag of the United States of America with Official Number 626904 of
6,494 gross registered tons and 5,834 net registered tons; and (xiii)
the xxxx-up drilling rig X. X. XXXXXXXX to be owned by HRB Rig
Corporation documented under the laws and flag of the United States of
America with Official Number 673210 of 6,096 gross registered tons and
6,096 net registered tons;
"Permitted Liens" means: (1) liens incident to expenses of current
operations, other than for master's and crew's wages, incurred in the
ordinary course of business of the Owner and due and payable for not
more than thirty (30) days (or being contested in good faith, provided
such liens are not in excess of U.S.$5,000,000.00, and if in excess
thereof, then the Owner shall, upon the written request of the
Administrative Agent, provide a bond or other security satisfactory to
the Administrative Agent); (2) liens for master's and crew's wages not
yet due and payable; (3) liens for taxes, assessments, governmental
charges, fines and penalties not at the time delinquent (unless being
contested in good faith, provided such liens are not in excess of
U.S.$5,000,000.00, and if in excess thereof, then the Owner shall,
upon the written request of the Administrative Agent, provide a bond
or other security satisfactory to the Administrative Agent); (4) liens
for general average and salvage (including contract salvage); (5)
liens for claims covered by valid policies of insurance meeting the
requirements of Clause 6 hereof (except that no lien shall be deemed
not covered by insurance to the extent insurance in force would cover
the amount secured by the lien but for any applicable deductible
amount approved by the Administrative Agent); (6) liens arising
pursuant to any judgment or to an order of attachment, distraint or
similar legal process arising in connection with legal proceedings,
but only if and so long as the execution or other enforcement thereof
is not unstayed for more than 30 consecutive days; (7) any lien for
the payment or discharge of which provisions satisfactory to the
Administrative Agent have been made as evidenced by the Administrative
Agent's written consent to such lien; (8) any lien in favor of the
Banks; and provided that Permitted Liens shall not include any liens
described in subclauses (1) through (7) above unless they: (i) are
subordinate to the lien of this Mortgage or (ii) constitute a maritime
lien which would in any event be entitled as such to priority over the
Mortgage under the United States shipping laws or other applicable
laws relating to the Rig's trading pattern. Nothing herein shall be
deemed a waiver of the preferred status of this Mortgage;
"Protection and indemnity risks" means the usual risks covered by
protection and indemnity associations of international repute
including the proportion not recoverable in case of collision under
the ordinary running-down clause (unless such is recoverable under the
relevant hull and machinery coverage);
"Requisition Compensation" means all moneys or other compensation
payable during the Credit Facility Period by reason of requisition for
title or other compulsory acquisition of the Rig otherwise than by
requisition for hire;
"Rig" means the vessel described in Recital (A) hereto and includes
any share or interest therein and her engines, machinery, boats,
tackle, outfit, spare gear, fuel, consumable or other stores,
belongings and appurtenances whether on board or ashore and whether
now owned or hereafter acquired (but excluding therefrom any leased
equipment owned by third parties);
"Secured Creditors" shall mean the Trustee, the Banks, the Letter of
Credit Issuer and the Administrative Agent under and as defined in the
Credit Agreement;
"Security Documents" shall have the same meaning for such term as set
forth in the Credit Agreement;
"Security Interest" means a mortgage, charge (whether fixed or
floating), pledge, lien, hypothecation, assignment, trust arrangement,
title retention or other security interest or arrangement of any kind
whatsoever;
"Subsidiary Guaranty" means the agreement dated as of November 13,
1996 made by the Owner in favor of the Administrative Agent as first
referred to in Recital (D) hereto, as modified, amended or
supplemented from time to time;
"Ship Mortgage Act" means the United States Ship Mortgage Act, 1920,
as amended, recodified at 46 U.S.C. 31301, et seq.;
"Taxes" shall have the same meaning for such term as set forth in the
Credit Agreement;
"Total Commitment" shall have the same meaning for such term as set
forth in the Credit Agreement;
"Total Loss" means (a) the actual, constructive, arranged, agreed, or
compromised Total Loss of the Rig; (b) the requisition for title or
other compulsory acquisition or forfeiture of the Rig otherwise than
by requisition for hire; (c) the capture, seizure, arrest, detention
or confiscation of the Rig by any government or by persons acting or
purporting to act on behalf of any government unless the Rig be
released from such capture, seizure, arrest or detention within ninety
(90) days after the occurrence thereof;
"United States Dollars" and "US$" means the lawful currency of the
United States of America;
"Unpaid Drawing" shall have the same meaning for such term as set
forth in the Credit Agreement;
"War Risks" includes the risk of mines and all risks excluded from the
standard form of English marine policy by the free of capture and
seizure clause.
1.02 Except where otherwise expressly provided or unless the context
otherwise requires, words and expressions defined in the Credit
Agreement shall have the same meanings when used in this Mortgage.
1.03 In this Mortgage:
(a) Clause headings are inserted for convenience only and shall not
affect the construction of this Mortgage and, unless otherwise
specified, all references to Clauses are to clauses of this
Mortgage;
(b) unless the context otherwise requires, words denoting the
singular number shall include the plural and vice versa;
(c) references to persons include bodies corporate and
unincorporated;
(d) references to assets include property, rights and assets of
every description;
(e) references to any document are to be construed as references to
such document as amended or supplemented from time to time; and
(f) references to any enactment include re-enactments, amendments
and extensions thereof.
2. REPRESENTATIONS AND WARRANTIES
2.01 The Owner hereby represents and warrants to the Trustee that:
(a) the Owner is the sole legal and beneficial owner of the whole of
the Rig and neither the whole nor any share in the Rig is
subject to any Security Interest (except for Permitted Liens and
the lien of this Mortgage);
(b) the Owner has not sold or transferred, or agreed to sell or
transfer, title to the Rig or any share therein;
(c) the Owner is a corporation duly organized and validly existing
and in good standing under the laws of the State of Oklahoma;
(d) the Owner has full power and authority (i) to register the Rig
in its name under United States flag, (ii) to execute and
deliver this Mortgage, (iii) to mortgage the Rig as security for
the Obligations and (iv) to comply with the provisions of, and
perform all its obligations under, this Mortgage;
(e) the Owner has complied with all statutory and other material
requirements relating to the ownership, registration and
operation of the Rig;
(f) the Owner has taken all necessary action to authorize the
execution and delivery of this Mortgage and this Mortgage
constitutes, the legal, valid and binding obligation of the
Owner enforceable against the Owner in accordance with its terms
(except to the extent limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws of general
application relating to or affecting the enforcement of
creditors' rights as from time to time in effect and general
equitable principles) and when filed with the United States
Coast Guard's National Vessel Documentation Center in Falling
Waters, West Virginia will create a legal, valid and enforceable
first preferred mortgage lien on the Rig;
(g) the entry into and performance by the Owner of this Mortgage
does not and will not during the Credit Facility Period violate
in any respect (i) any law or regulation of any governmental or
official authority or body, or (ii) any of the constitutive
documents of the Owner including the Certificate of
Incorporation or By-laws, as amended from time to time, or (iii)
any material agreement, contract or other undertaking to which
the Owner is a party or which is binding upon the Owner or any
of its assets;
(h) all consents, licenses, approvals and authorizations required in
connection with the entry into, performance, validity and
enforceability of this Mortgage and the transactions
contemplated hereby and thereby have been obtained and are in
full force and effect and will be so maintained during the
Credit Facility Period;
(i) save for such registrations and filings as are referred to in
this Mortgage, it is not necessary for the legality, validity,
enforceability or admissibility in evidence of this Mortgage
that it or any document relating thereto be registered, filed,
recorded or enrolled with any court or authority in any relevant
jurisdiction or that any stamp, registration or similar taxes be
paid on or in relation to this Mortgage;
(j) the Owner is in compliance with all applicable Environmental
Laws and all Environmental Approvals relating to the Rig, its
operation and management and the business of the Owner (as now
conducted and as reasonably anticipated to be conducted in the
future) have been obtained or complied with;
(k) no Environmental Claim has been made or threatened against the
Owner, the Approved Manager or otherwise in connection with the
Rig; and
(l) no Environmental Incident which has resulted, or which could
reasonably be expected to result, in an Environmental Claim in
excess of US$200,000 has occurred.
2.02 The representations and warranties of the Owner set out in Clause 2.01
shall survive the execution of this Mortgage and shall be deemed to be
repeated at the time of the making of each Loan and at the time of the
issuance of each Letter of Credit, with respect to the facts and
circumstances existing at each such time, as if made at each such
time.
3. MORTGAGE
3.01 In order to secure the Obligations, the Owner has granted, conveyed
and mortgaged and does by these presents grant, convey and mortgage
unto the Trustee, its successors and assigns, the whole of the Rig TO
HAVE AND TO HOLD the same unto the Trustee, its successors and assigns
forever upon the terms herein set forth for the enforcement of the
Obligations.
Provided only and the condition of these presents is such that if all
of the Obligations secured by this Mortgage have terminated or have
been performed in full as and when the same shall become due and
payable in accordance with the terms of the Subsidiary Guaranty and
this Mortgage and shall observe and comply with the covenants, terms
and conditions contained in the Subsidiary Guaranty and this Mortgage
expressed or implied to be performed, observed or complied with by and
on the part of the Owner and its successors and assigns, all without
delay or fraud and according to the true intent and meaning thereof,
then these presents and the rights hereunder shall cease, determine
and be void otherwise to be and remain in full force and effect and,
in such event, the Trustee agrees to execute and record at the expense
of the Owner, all such documents as the Owner may reasonably require
to discharge this Mortgage.
Notwithstanding anything to the contrary herein it is not intended
that any provision of this Mortgage shall waive the preferred status
of this Mortgage and that if any provision or part thereof herein
shall be construed as waiving the preferred status of this Mortgage
then such provision shall to such extent be void and of no effect.
3.02 The Owner shall remain liable to perform all the obligations assumed
by it in relation to the Rig and none of the Secured Creditors shall
be under any obligation of any kind whatsoever in respect thereof or
be under any liability whatsoever in event of any failure by the Owner
to perform its obligations in respect thereof.
4. PAYMENT COVENANTS
4.01 The Owner hereby covenants with the Secured Creditors:
(a) to pay and indemnify the Secured Creditors for all such
expenses, claims, liabilities, losses, costs, duties, fees,
charges or other moneys as are stated in this Mortgage to be
payable by the Owner to or recoverable from the Owner by the
Secured Creditors (or in respect of which the Owner agrees in
this Mortgage to indemnify any of the Secured Creditors) at the
times and in the manner specified in this Mortgage;
(b) to pay interest on any such expenses, claims, liabilities,
losses, costs, duties, fees, charges or other moneys referred to
in Clause 4.01(a) from the date on which demand is made by any
Secured Creditor for payment by the Owner of the relevant
expense, claim, liability, loss, cost, duty, fee, charge or
other money incurred by a Secured Creditor for which the Owner
is responsible (both before and after any relevant judgment) at
the Default Rate; and
(c) to pay and perform its obligations which may be or become due or
owing to a Secured Creditor under this Mortgage and the
Subsidiary Guaranty at the times and in the manner specified
herein or therein.
5. PRESERVATION OF SECURITY
5.01 It is declared and agreed that:
(a) the security created by this Mortgage shall be held by the
Trustee as a continuing security for the performance of the
Obligations and that the security so created shall not be
satisfied by any intermediate payment or satisfaction of any
part of the Obligations;
(b) the security so created shall be in addition to and shall not in
any way be prejudiced or affected by any of the other Security
Documents;
(c) the Trustee shall not have to wait for the Administrative Agent
to enforce any of the other Security Documents before enforcing
the security created by this Mortgage;
(d) no delay or omission on the part of the Trustee in exercising
any right, power or remedy under this Mortgage shall impair such
right, power or remedy or be construed as a waiver thereof nor
shall any single or partial exercise of any such right, power or
remedy preclude any further exercise thereof or the exercise of
any other right, power or remedy. The rights, powers and
remedies provided in this Mortgage are cumulative and not
exclusive of any rights, powers and remedies provided by law and
may be exercised from time to time and as often as the Trustee
may deem expedient; and
(e) any waiver by the Trustee of any terms of this Mortgage or any
consent given by the Trustee under this Mortgage shall only be
effective if given in writing and then only for the purpose and
upon the terms for which it is given.
5.02 Any settlement or discharge under this Mortgage between the Trustee
and the Owner shall be conditional upon no security or payment to the
Secured Creditors or any of them by the Credit Parties or any other
person being avoided or set-aside or ordered to be refunded or reduced
by virtue of any provision or enactment relating to bankruptcy,
insolvency, administration or liquidation for the time being in force
and, if such condition is not satisfied, the Trustee shall be entitled
to recover from the Owner on demand the value of such security or the
amount of any such payment as if such settlement or discharge had not
occurred.
5.03 The rights of the Secured Creditors under this Mortgage and the
security hereby constituted shall not be affected by any act,
omission, matter or thing which, but for this provision, might operate
to impair, affect or discharge such rights and security, in whole or
in part, including without limitation, and whether or not known to or
discoverable by the Secured Creditors or any other person:
(a) any time or waiver granted to the Credit Parties or any other
person; or
(b) the taking, variation, compromise, renewal or release of or
refusal or neglect to perfect or enforce any rights, remedies or
securities against any of the Credit Parties or any other
persons; or
(c) any legal limitation, disability, incapacity or other
circumstances relating to the Credit Parties or any other
person; or
(d) any amendment or supplement to the Credit Agreement, any of the
other Credit Documents (other than this Mortgage) or any other
document or uch jurisdiction or
other judicial authority and for the purpose of any action which the
Trustee may bring against the Rig, any writ, notice, judgment or other
legal process or documents may (without prejudice to any other method
of service under applicable law) be served upon the master of the Rig
(or upon anyone acting as the master) and such service shall be deemed
good service on the Owner for all purposes.
19.03 The Owner agrees that should the Trustee bring a legal action or
proceedings against it or its assets in relation to any matters
arising out of or in connection with this Mortgage, no immunity from
such legal action or proceedings (which shall be deemed to include,
without limitation, suit, attachment prior to judgment, other
attachment, the obtaining of judgment, execution or other enforcement)
shall be claimed by or on behalf of the Owner or with respect of its
assets, and the Owner hereby irrevocably waives any such right of
immunity which it or its assets now has or may hereafter acquire and
the Owner hereby consents generally in respect of any legal action or
proceedings arising out of or in connection with this Mortgage to the
giving out of any relief or the issue of any process in connection
with such action or proceedings including, without limitation, the
making, enforcement or execution or attachment against any property
whatsoever of any order or judgment which may be made or given in such
action or proceedings.
IN WITNESS whereof the Owner has caused this Mortgage to be executed the day
and year first before written.
READING & XXXXX OFFSHORE, LIMITED
By_____________________________________
Name: X.X. Xxxxx
Title: Vice President and Treasurer
ACKNOWLEDGEMENT OF MORTGAGE
STATE OF NEW YORK )
) S.S.
COUNTY OF NEW YORK )
On this 13th day of November, 1996 before me personally appeared Xxxxxxx X.
Xxxxx to me known who being by me duly sworn did depose and say that he
resides at 00000 Xxxxx Xxxx, Xxxxxxx, XX; that he is Vice President and
Treasurer for READING & XXXXX OFFSHORE, LIMITED, the corporation described in
and which executed the foregoing instrument; and that he signed his name
thereto by order of the Board of Directors of READING & XXXXX OFFSHORE,
LIMITED.
_____________________
Notary Public
