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EXHIBIT 10.2
ISSUER LOAN ESCROW AGREEMENT
This ISSUER LOAN ESCROW AGREEMENT (the "Agreement"), dated as of Xxxxx
00, 0000, xxxxx Xxxxxx Xxxxxx Trust Company of New York, corporation duly
organized and existing under the laws of the State of New York and validly
existing as a banking organization under the banking laws of the State of New
York, as escrow agent (in such capacity, the "Escrow Agent"), United States
Trust Company of New York, a corporation duly organized and existing under the
laws of the State of New York and validly existing as a banking organization
under the banking laws of the State of New York, as trustee (in such capacity,
the "Trustee") under the Indenture (as defined herein), R&B Falcon Corporation,
a Delaware corporation (the "Company"), and RBF Finance Co., a Delaware
corporation (the "Issuer").
RECITALS
A. Pursuant to the Indenture, dated as of March 26, 1999 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
"Indenture"), among the Issuer, the Company as Guarantor and the Trustee, the
Issuer is issuing $400,000,000 aggregate principal amount of its 11% Senior
Secured Notes due 2006 and $400,000,000 aggregate principal amount of its 113/8%
Senior Secured Notes due 2009, (collectively, the "Secured Notes").
B. The Issuer will enter into loan agreements with the Company (each an
"Issuer Loan Agreement") and will use the proceeds of the Secured Notes to make
loans (each an "Issuer Loan") pursuant to such Issuer Loan Agreements to the
Company to finance all or a portion of certain costs of acquiring, constructing,
altering, improving or repairing drilling rigs and drillships (individually, a
"Mortgaged Rig") or improvements to be used in connection with the Mortgaged
Rig, each such financing to be a separate loan secured by a Lien on the
Mortgaged Rig or if such Mortgaged Rig is under construction but not yet flagged
as of the date of this Agreement, on the construction contract and equipment
purchased for such Mortgaged Rig.
C. Each Issuer Loan for a flagged Mortgaged Rig will be secured by a
Lien on the Mortgaged Rig pursuant to a ship mortgage (a "Mortgage") and each
Issuer Loan for an uncompleted Mortgaged Rig will be secured by Liens on the
construction contract and the equipment purchased for such Mortgaged Rig
pursuant to a security agreement (each an "Issuer Security Agreement").
D. The Company has requested that the Issuer make an Issuer Loan in the
aggregate principal amount of up to $209,900,000 (the "Millennium Issuer Loan")
to finance the acquisition and construction of the Deepwater Millennium
drillship (the "Millennium Mortgaged Rig") pursuant to a Loan Agreement dated
March 26, 1999 between the Company and the Issuer (the "Millennium Issuer Loan
Agreement").
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E. As security for its obligations, among other things, under the
Millennium Issuer Loan and the Millennium Issuer Loan Agreement, the Company is
required to enter into an Issuer Security Agreement of even date herewith
granting a Lien on the construction contract therefor and the other collateral
described therein, to grant a Mortgage on the Millennium Mortgaged Rig in favor
of the Issuer as soon as the Millennium Mortgaged Rig is flagged and, prior to
the grant of such Mortgage, among other things, to deposit the Escrow Amount (as
defined herein) in a special, segregated and irrevocable account in the name of
and beneficially owned by the Company which is pledged to, and to be under the
sole dominion and control of, the Issuer (the "Escrow Account") pending the
reinvestment of such amounts in accordance with the Loan Agreement (the "Issuer
Collateral").
F. As security for its obligations, among other things, under the
Secured Notes and the Indenture, the Issuer is required to enter into a Senior
Secured Note Security and Pledge Agreement of even date herewith (the "Secured
Note Security Agreement"), with United States Trust Company of New York, as
Collateral Agent (the "Collateral Agent") and the Trustee in which the Issuer
grants Liens on and pledges the notes (each an "Issuer Note") evidencing all
Issuer Loans made thereunder in connection with the Mortgaged Rigs (including
the Millennium Issuer Loan) and collaterally assigns all Liens, including
Mortgages and the other Collateral securing such Issuer Notes (the "Secured Note
Collateral").
G. Under the terms of each of the Issuer Loan Agreements, the Company
is required to pay all payments of principal, interest, commitment fees and
other obligations on such Issuer Loans and the Issuer Loan Agreements, all funds
received pursuant to the Mortgages and the Issuer Security Agreements, whether
the proceeds of the Issuer Collateral or otherwise, consisting of cash or cash
equivalents to the Trustee for deposit in the Escrow Account.
H. The parties have entered into this Agreement in order to set forth
the conditions upon which, and the manner in which, funds will be disbursed from
the Escrow Account and released from the security interest and Liens created
hereby.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Defined Terms. Terms used herein and not defined herein shall have
the meanings as defined in the Indenture. In addition to any other defined terms
used herein, the following terms shall constitute defined terms for purposes of
this Agreement and shall have the meanings set forth below:
"Applied" means that disbursed funds have been applied pursuant to
Section 3(a) or pursuant to Section 6(b)(iii).
"Available Funds" means (A) the sum of (i) all amounts deposited in the
Escrow Account from time to time and (ii) interest earned or dividends paid on
the funds in the Escrow
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Account (including holdings of Eligible Cash Equivalents), less (B) the
aggregate disbursements previously made pursuant to this Agreement.
"Collateral" shall have the meaning given in Section 6(a) hereof.
"Default" means a "Default" as defined in Section 6 of the Loan
Agreement.
"Disbursement Request" means a notice sent by the Company, approved by
the Issuer and certified by the Trustee to the Escrow Agent requesting a
disbursement of funds from the Escrow Account, in substantially the form of
Exhibit A hereto. Each Disbursement Request shall be signed by the Chairman of
the Board, a Vice Chairman of the Board, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer or any Vice President of the
Company and of the Issuer and a Responsible Officer of the Trustee.
"Eligible Cash Equivalents" means (i) U.S. Governmental Obligations
with a maturity of four years or less; (ii) commercial paper issued by any
corporation if such commercial paper has credit ratings of at least "A-1" from
S&P or at least "P-1" by Xxxxx'x; (iii) certificates of deposit, bankers'
acceptances, time deposits, Eurocurrency Deposits and similar types of
Investments routinely offered by commercial banks with final maturities of one
year or less issued by commercial banks having combined capital and surplus in
excess of $100,000,000; and (iv) shares in money market mutual or similar funds
having assets in excess of $100,000,000.
"Escrow Account" shall have the meaning given in Section 2(b).
"Escrow Account Statement" shall have the meaning given in Section
2(g).
"Escrow Agent" shall have the meaning set forth in the preamble to this
Agreement.
"Escrow Amount" shall mean $100,000,000 of the proceeds received by the
Company from the sale of the Secured Notes pursuant to the Purchase Agreement.
"Event of Default" means an "Event of Default" as defined in Section
6.1 of the Indenture.
"Issue Date" means March 26, 1999.
"Trustee" shall include any successor Trustee appointed pursuant to the
Indenture.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable at the issuer's option.
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2. Escrow Account; Escrow Agent.
(a) Appointment of Escrow Agent. The Company and the Issuer hereby
appoint the Escrow Agent, and the Escrow Agent hereby accepts appointment, as
escrow agent, under the terms and conditions of this Agreement.
(b) Establishment of the Escrow Account. Concurrent with the execution
and delivery hereof, the Escrow Agent shall establish and maintain in the name
of the Company at United States Trust Company of New York, a special, segregated
and irrevocable escrow account designated Issuer Loan Escrow Account pledged by
R&B Falcon Corporation to RBF Finance Co. (the "Escrow Account"). All funds
accepted by the Escrow Agent pursuant to this Agreement shall be deposited in
the name of and beneficially owned by the Company and pledged to, and under the
sole dominion and control of, the Issuer, acting for its benefit and for the
benefit of the Holders of the Secured Notes and the Trustee. All such funds
shall be held in the Escrow Account until disbursed in accordance with the terms
hereof. The Escrow Account, the funds held therein and any Eligible Cash
Equivalents held by the Escrow Agent in which such funds are invested shall be
beneficially owned by the Company and pledged to and under the sole dominion and
control of the Issuer, acting for its benefit. Concurrently with the Issuer's
making the Millennium Issuer Loan, the Company shall deliver the Escrow Amount
to the Escrow Agent for deposit into the Escrow Account against the Escrow
Agent's written acknowledgement and receipt of the Initial Escrow Amount.
(c) Escrow Agent Compensation. The Company shall pay to the Escrow
Agent such compensation for services to be performed by it under this Agreement
as the Company and the Escrow Agent may agree in writing from time to time. The
Escrow Agent shall be paid any compensation owed to it directly by the Company
and shall not disburse from the Escrow Account any such amounts.
The Company shall reimburse the Escrow Agent upon request for all
reasonable expenses, disbursements, and advances incurred or made by the Escrow
Agent in implementing any of the provisions of this Agreement, including
compensation and the reasonable expenses and disbursements of its counsel. The
Escrow Agent shall be paid any such expenses owed to it directly by the Company
and shall not disburse from the Escrow Account any such amounts.
The provisions of this Section 2(c) shall survive termination of this
Agreement.
(d) Investment of Funds in the Escrow Account. Pending release thereof
in accordance with the terms of the Indenture and the Millennium Issuer Loan
Agreement, funds deposited in the Escrow Account shall be invested and
reinvested only upon the following terms and conditions:
(i) Acceptable Investments. All funds deposited or held in the
Escrow Account at any time shall be invested, at the direction of the
Company except during the continuance of a Default or an Event of
Default, and then only at the direction of the Issuer with the
certification of the Trustee, by the Escrow Agent in Eligible Cash
Equivalents which constitute Permitted Investments for the
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Company in accordance with the Company's or the Issuer's written
instructions, as applicable, from time to time to the Escrow Agent;
provided, however, that any such written instruction shall specify the
particular Investment to be made, shall contain the certification
referred to in Section 2(d)(ii), if required, and shall be executed by
any officer of the Company. All Eligible Cash Equivalents shall be
assigned to and held in the possession of, or, in the case of Eligible
Cash Equivalents maintained in book entry form with the Federal
Reserve Bank, transferred to a book entry account in the name of, the
Escrow Agent, as pledgee, with such guarantees as are customary,
except that Eligible Cash Equivalents maintained in book entry form
with the Federal Reserve Bank shall be transferred to a book entry
account in the name of the Escrow Agent at the Federal Reserve Bank
that includes only Eligible Cash Equivalents held by the Escrow Agent
for its customers and segregated by separate recordation in the books
and records of the Escrow Agent.
(ii) Security Interest in and Lien on Investments. No investment
of funds in the Escrow Account shall be made unless the Company has
certified to the Escrow Agent, the Issuer, the Collateral Agent and
the Trustee that, upon such investment, the Issuer will have a first
priority perfected Lien and security interest for the benefit of the
Issuer in the applicable Investment. A certificate as to a class of
investments need not be issued with respect to individual investments
in securities in that class if the certificate applicable to the class
remains accurate with respect to such individual investments, which
continued accuracy the Escrow Agent may conclusively assume. Promptly
after the Issue Date, and within 3 months after the anniversary of the
Issue Date, until the payment in full of the Millennium Issuer Loan in
accordance with the terms thereof and of the Millennium Issuer Loan
Agreement, and all other Obligations then due and owing under the
Millennium Issuer Loan, or the release of all of the funds in the
Escrow Account pursuant to the terms hereof, the Millennium Issuer
Loan Agreement, this Agreement and the other Loan Documents (as
defined in the Millennium Issuer Loan Agreement), the Company shall
provide to the Issuer, for the benefit of the Trustee, the Collateral
Agent and the Escrow Agent, an Opinion of Counsel, dated each such
date as applicable, which opinion shall meet the requirements of
Section 314(b) of the Trust Indenture Act of 1939, as amended (the
"TIA").
(iii) Interest and Dividends. All interest earned and dividends
paid on funds invested in Eligible Cash Equivalents shall be deposited
in the Escrow Account as additional Collateral beneficially owned by
the Company and pledged to the Issuer, acting for its benefit, and
shall be reinvested in accordance with the terms hereof.
(iv) Limitation on Escrow Agent's Responsibilities. The Escrow
Agent's sole responsibilities under this Section 2 shall be (A) to
retain, or cause its agent in the State of New York to retain,
possession of certificated Eligible
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Cash Equivalents (except, however, that the Escrow Agent may surrender
possession of any such Eligible Cash Equivalent to the issuer thereof
for the purpose of effecting assignment, crediting interest, or
reinvesting such security or reducing such security to cash) and to be
the registered or designated owner of Eligible Cash Equivalents which
are not certificated, (B) to follow the Company's or the Issuer's
written instructions. as certified by the Trustee, as applicable,
given in accordance with Section 2(d)(i), (C) to invest and reinvest
funds pursuant to this Section 2(d) and (D) to use reasonable efforts
to reduce to cash such Eligible Cash Equivalents as may be required to
fund any disbursement or payment in accordance with Section 3. In
connection with clause (i) above, the Escrow Agent will maintain, or
cause its agent in the State of New York to maintain, continuous
possession in the State of New York of certificated Eligible Cash
Equivalents and cash included in the Collateral and will cause
uncertificated Eligible Cash Equivalents to be registered in the
book-entry system of, and transferred to an account of the Escrow
Agent or a sub-agent of the Escrow Agent at, the Federal Reserve Bank
of New York. Except as provided in Section 6, the Escrow Agent shall
have no other responsibilities with respect to perfecting or
maintaining the perfection of the Issuer's Liens and security interest
in the Issuer Collateral and shall not be required to file any
instrument, document or notice in any public office at any time or
times. In connection with clause (D) above, except as set forth below,
the Escrow Agent shall not be required to reduce to cash any Eligible
Cash Equivalents to fund any disbursement or payment in accordance
with Section 3 in the absence of written instructions signed by an
officer of the Company specifying the particular investment to
liquidate unless a Default or Event of Default has occurred and is
continuing, in which case such written instructions shall be signed by
an officer of the Issuer and certified by a Trust Officer of the
Trustee. If no such written instructions are received, the Escrow
Agent shall liquidate those Eligible Cash Equivalents having the
lowest interest rate per annum, regardless of maturity, or if none
such exist, those having the nearest maturity. The Escrow Agent shall
have no duty to determine whether or not to file or record any
document or instrument in connection with this Agreement, but will
follow the instructions of the Issuer, as certified by the Trustee.
(e) Substitution of Escrow Agent. The Escrow Agent may resign by giving
not less than 30 days' prior written notice to the Company and the Issuer, with
a copy to the Trustee. Such resignation shall take effect upon the later to
occur of (i) delivery of all funds and Eligible Cash Equivalents maintained by
the Escrow Agent hereunder and copies of all books, records and other documents
in the Escrow Agent's possession relating to such funds or Eligible Cash
Equivalents or this Agreement to a successor Escrow Agent mutually approved by
the Company, the Issuer and the Trustee (which approvals shall not be
unreasonably withheld or delayed) and (ii) the Company, the Trustee and such
successor Escrow Agent entering into this Agreement or any written successor
agreement no less favorable to the interests of the Holders of the Secured
Notes, the Trustee and the Issuer than this Agreement; and the Escrow Agent
shall thereupon be discharged of all obligations under this Agreement and shall
have no further duties,
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obligations or responsibilities in connection herewith, except as set forth in
Section 4. If a successor Escrow Agent has not been appointed or has not
accepted such appointment within 30 days after notice of resignation is given to
the Company, the Escrow Agent may apply to a court of competent jurisdiction for
the appointment of a successor Escrow Agent.
3. Disbursements.
(a) Disbursement Request; Disbursements.
(i) The Millennium Issuer Loan Agreement provides that upon
completion of the Millennium Mortgaged Rig, the Company is required to
grant a first priority perfected Lien on the Millennium Mortgaged Rig.
Provided that no Event of Default under the Millennium Issuer Loan
Agreement has occurred and is continuing, the Company is entitled to
have the funds in the Escrow Account released upon the delivery in
form and substance satisfactory to the Issuer and the Trustee of the
following documents:
1. A Mortgage covering the Millennium Mortgaged Rig which
has been duly filed in the Republic of Panama; and
2. Opinions of Counsel that (i) the Company has duly
authorized, executed and delivered the Mortgage; (ii) the
Mortgage constitutes a legally binding obligation of the Company
enforceable against the Company in accordance with its terms
(except as (i) the enforceability thereof may be limited
bankruptcy, insolvency or other similar laws affecting creditors'
rights, generally and (ii) the enforceability thereof may be
limited by right of acceleration and the availability of
enforceable remedies may be limited by equitable principles of
general applicability, and subject to such other exceptions,
limitations or qualifications that are usual and customary for
such opinions) and (iii) the Mortgage constitutes a valid and
perfected first mortgage lien on the Millennium Mortgaged Rig.
(ii) At least two Business Days prior to any date on which the
funds are to be released from the Escrow Account upon satisfaction of
the aforementioned conditions precedent, the Issuer, the Company and
the Trustee shall submit to the Escrow Agent a completed Disbursement
Request substantially in the form of Exhibit A hereto requesting that
all funds from the Escrow Account be released. Provided that any such
Disbursement Request is not rejected by it, the Escrow Agent, two
Business Days after receipt of such Disbursement Request, shall
disburse the funds requested in such Disbursement Request by wire or
book-entry transfer of immediately available funds to the Company. The
Escrow Agent shall notify the Issuer, the Company and the Trustee as
soon as reasonably possible if any such Disbursement Request is
rejected and the reason(s) therefor.
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(iii) If an Event of Default under the Millennium Issuer Loan
Agreement has occurred and is continuing, the Trustee shall be
entitled unilaterally to initiate withdrawals by executing a
Disbursement Request which will be substantially similar to the form
of Exhibit A but which need only to be executed by the Trustee.
(b) Conditions Precedent to Disbursement. Subject to Section 4 and any
mandatory provisions of applicable law, the Escrow Agent shall make the payments
to be made pursuant to a completed Disbursement Request if (i) the Company and
the Issuer shall have submitted, in accordance with the provisions of Section
3(a) herein, such Disbursement Request to the Escrow Agent substantially in the
form of Exhibit A with blanks appropriately filled in containing the signed
certification of the Trustee included in such form and (ii) the Escrow Agent
shall not have received any notice from the Trustee or the Issuer that as a
result of an Event of Default the Millennium Issuer Loan has been accelerated
and has become due and payable (in which event the Escrow Agent shall apply all
Available Funds as required by Section 6(b)(ii)).
(c) No Distributions. Provided that no Event of Default has occurred
and is continuing, the Company shall initiate all requests for withdrawal of
funds from the Escrow Account by executing a Disbursement Request and submitting
such request to the Issuer and the Trustee. However, the Company shall not be
entitled to direct the Escrow Agent to make distributions from the Escrow
Account except upon execution by the Issuer and certification by the Trustee on
a Disbursement Request that the applicable conditions have been satisfied, as
provided in Section 3(a). The Trustee shall not, except following an Event of
Default, be entitled unilaterally to initiate withdrawals.
(d) Deposits Irrevocable. Any deposits made into the Escrow Account
hereunder shall be irrevocable and the amount of such deposits and any
instrument or security held in the Escrow Account hereunder and all interest
thereon shall be held in trust by the Escrow Agent and applied solely as
provided herein.
4. Limitation of the Escrow Agent's Liability: Responsibilities of the
Escrow Agent. The Escrow Agent's responsibility and liability under this
Agreement shall be limited as follows: (i) the Escrow Agent does not represent,
warrant or guaranty to the Issuer, the Trustee or the Holders of the Secured
Notes from time to time the performance of the Company; (ii) the Escrow Agent
shall have no responsibility to the Company or the Issuer or the Trustee from
time to time as a consequence of performance or non-performance by the Escrow
Agent hereunder, except for any negligence or willful misconduct of the Escrow
Agent; (iii) the Company shall remain solely responsible for all aspects of the
Company's business and conduct; and (iv) the Escrow Agent is not obligated to
supervise, inspect or inform the Company or any third party of any matter
referred to above.
No implied covenants or obligations shall be inferred from this
Agreement against the Escrow Agent, nor shall the Escrow Agent be bound by the
provisions of any agreement beyond the specific terms hereof. Specifically and
without limiting the foregoing, the Escrow Agent shall in no event have any
liability in connection with its investment, reinvestment or
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liquidation, in good faith and in accordance with the terms hereof, of any funds
or Eligible Cash Equivalents held by it hereunder, including without limitation
any liability for any delay not resulting from negligence or willful misconduct
in such investment, reinvestment or liquidation, or for any loss of principal or
income incident to any such delay.
The Escrow Agent shall be entitled to rely upon any judicial order or
judgment, upon any written opinion of counsel or upon any certification,
instruction, notice, or other writing delivered to it by the Company or the
Issuer or the Trustee in compliance with the provisions of this Agreement
without being required to determine the authenticity or the correctness of any
fact stated therein or the propriety or validity of service thereof. The Escrow
Agent may act in reliance upon any instrument comporting with the provisions of
this Agreement or signature believed by it to be genuine and may assume that any
person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof has been duly
authorized to do so.
The Escrow Agent may act pursuant to the oral or written advice of
counsel chosen by it with respect to any matter relating to this Agreement and
(subject to clause (ii) of the first paragraph of this Section 4) shall not be
liable for any action taken or omitted in accordance with such advice.
The Escrow Agent shall not be called upon to advise any party as to
selling or retaining, or taking or refraining from taking any action with
respect to, any securities or other property deposited hereunder.
In the event of any ambiguity in the provisions of this Agreement with
respect to any funds or property deposited hereunder, the Escrow Agent shall be
entitled to refuse to comply with any and all claims, demands or instructions
with respect to such funds or property, and the Escrow Agent shall not be or
become liable for its failure or refusal to comply with conflicting claims,
demands or instructions. The Escrow Agent shall be entitled to refuse to act
until either any conflicting or adverse claims or demands shall have been
finally determined by a court of competent jurisdiction or settled by agreement
between the conflicting claimants as evidenced in a writing, satisfactory to the
Escrow Agent, or the Escrow Agent shall have received security or an indemnity
satisfactory to the Escrow Agent sufficient to save the Escrow Agent harmless
from and against any and all loss, liability or expense which the Escrow Agent
may incur by reason of its acting. The Escrow Agent may in addition elect in its
sole option to commence an interpleader action or seek other judicial relief or
orders as the Escrow Agent may deem necessary.
No provision of this Agreement shall require the Escrow Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder.
5. Indemnity. The Company shall indemnify, hold harmless and defend the
Escrow Agent and its directors, officers, agents, employees and controlling
persons, from and against any and all claims, actions, obligations, liabilities
and expenses, including defense costs, investigative fees and costs, legal fees,
and claims for damages, arising from the Escrow Agent's
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performance under this Agreement, except to the extent that such liability,
expense or claim is directly attributable to the negligence or willful
misconduct of any of the foregoing persons. The provisions of this Section shall
survive any termination, satisfaction or discharge of this Agreement as well as
the resignation or removal of the Escrow Agent. The provisions of this paragraph
5 shall survive the termination of this Agreement.
6. Grant of Liens and Security Interest: Instructions to Escrow Agent.
(a) The Company hereby irrevocably grants a first priority security
interest in and Lien on, and pledges, assigns and sets over to the Issuer all of
the Company's right, title and interest in the Escrow Account, and all property
now or hereafter placed or deposited in, or delivered to the Escrow Agent for
placement or deposit in, the Escrow Account, including, without limitation, all
funds held therein, all Eligible Cash Equivalents held by (or otherwise
maintained in the name of) the Escrow Agent pursuant to Section 2, and all
proceeds thereof as well as all rights of the Company under this Agreement
(collectively, the "Collateral"), in order to secure all obligations and
indebtedness of the Company under the Millennium Issuer Loan and any other
obligation, now or hereafter arising, of every kind and nature, owed by the
Company under the Millennium Issuer Loan Agreement and related Loan Documents
(as defined therein). The Escrow Agent hereby acknowledges the Issuer's security
interest and Lien as set forth above. The Company shall take all actions
necessary on its part to insure the continuance of a first priority security
interest in and Lien on the Collateral in favor of the Issuer in order to secure
all such obligations and indebtedness.
(b) The Company, the Issuer and the Trustee hereby irrevocably instruct
the Escrow Agent to, and the Escrow Agent shall, (i) (A) at all times maintain
sole dominion and control over funds and Eligible Cash Equivalents in the Escrow
Account, acting for the benefit of the Trustee to the extent specifically
required herein, (B) maintain, or cause its agent within the State of New York
to maintain, possession of all certificated Eligible Cash Equivalents purchased
hereunder that are physically possessed by the Escrow Agent in order for the
Trustee to enjoy a continuous perfected first priority security interest therein
under the law of the State of New York (the Company hereby agreeing that in the
event any certificated Eligible Cash Equivalents are in the possession of the
Company or a third party, the Company shall use its best efforts to deliver all
such certificates to the Escrow Agent), (C) take all steps specified by the
Company pursuant to paragraph (a) above to cause the Trustee to enjoy a
continuous perfected first priority security interest and Liens under the New
York Uniform Commercial Code and any applicable law of the State of New York in
all Eligible Cash Equivalents purchased hereunder that are not certificated and
(D) maintain the Collateral free and clear of all Liens, security interests,
safekeeping or other charges, demands and claims against the Escrow Agent of any
nature now or hereafter existing in favor of anyone other than the Issuer; (ii)
promptly notify the Issuer and the Trustee if the Escrow Agent receives written
notice that any Person other than the Issuer has or claims to have a Lien on or
security interest in any portion of the Collateral and (iii) upon receipt of
written notice from the Trustee of the acceleration of the maturity of the
Millennium Issuer Loan, and direction from the Trustee to disburse all Available
Funds to the Trustee for deposit in the Senior Secured Note Escrow Account (the
"Secured Note Escrow Account") established pursuant to the Senior Secured Escrow
Agreement dated as of March 26,
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1999 between United States Trust Company of New York, as Escrow Agent, the
Issuer and the Trustee (the "Secured Note Escrow Agreement"), as promptly as
practicable disburse all funds held in the Escrow Account to the Trustee for
deposit in the Secured Note Escrow Account and transfer title to all Eligible
Cash Equivalents held by the Escrow Agent hereunder to the escrow agent under
the Secured Note Escrow Account Agreement. The Escrow Agent shall not have any
right to receive compensation from the Issuer or the Trustee and is without any
authority to obligate the Issuer or the Trustee or to compromise or pledge its
security interest and Lien hereunder. Accordingly, the Escrow Agent is hereby
directed to cooperate with the Issuer in the exercise of its respective rights
in the Collateral provided for herein.
(c) Upon demand, the Company will execute and deliver to the Trustee
such instruments and documents as the Issuer and the Trustee may reasonably deem
necessary or advisable to confirm or perfect the rights of the Issuer and the
Trustee under this Agreement and the Issuer's interest in the Collateral. The
Issuer and the Trustee shall be entitled to take all necessary action to
preserve and protect the security interest created hereby as a Lien and
encumbrance upon the Collateral.
(d) The Company and the Issuer each hereby appoints the Trustee as its
attorney-in-fact with full power of substitution, exercisable upon the
occurrence and during the continuance of a Default or Event of Default, to do
any act which the Company is obligated hereto to do, and the Trustee may, but
shall not be obligated to, exercise such rights as the Company might exercise
with respect to the Collateral and take any action in the Company's name to
protect the Issuer's Liens and security interest hereunder. In addition to the
rights provided under Section 6(b)(iii) hereof, upon an Event of Default as
defined in the Loan Agreement and for so long as such Event of Default
continues, the Trustee, for the benefit of the Issuer, may exercise in respect
of the Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured party
under the New York Uniform Commercial Code or other applicable law, and the
Trustee may also upon obtaining possession of the Collateral as set forth
herein, without notice to the Company except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale,
at any exchange, broker's board or at any of the Issuer's or Trustee's offices
or elsewhere, for cash, on credit or for future delivery, and upon such other
terms as the Trustee may deem commercially reasonable. The Company acknowledges
and agrees that any such private sale may result in prices and other terms less
favorable to the seller than if such sale were a public sale. The Company agrees
that, to the extent notice of sale shall be required by law, at least ten (10)
days' notice to the Company of the time and place of any public sale or the time
after which any private sale is to be made shall constitute reasonable
notification. The Trustee shall not be obligated to make any sale regardless of
notice of sale having been given. The Trustee may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it
was so adjourned.
7. Termination. This Agreement shall terminate automatically ten (10)
days following disbursement of all funds remaining in the Escrow Account
(including Eligible Cash Equivalents) unless sooner terminated by agreement of
the parties hereto in accordance with the
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terms hereof and not in violation of the Indenture or the Loan Agreement (the
Trustee may not agree to terminate this Agreement unless it has received the
consent of 100% of the Holders of all of the Secured Notes outstanding);
provided, however, that the obligations of the Company under Section 2(c) and
Section 5 (and any existing claims thereunder) shall survive termination of this
Agreement or the resignation of the Escrow Agent; provided, further, however,
that until such tenth day, the Company will cause this Agreement (or any
permitted successor agreement) to remain in effect and will cause there to be an
Escrow Agent (including any permitted successor thereto) acting hereunder (or
under any such permitted successor agreement).
8. Miscellaneous.
(a) Waiver. Any party hereto may specifically waive any breach of this
Agreement by any other party, but no such waiver shall be deemed to have been
given unless such waiver is in writing, signed by the waiving party and
specifically designating the breach waived, nor shall any such waiver constitute
a continuing waiver of similar or other breaches.
(b) Invalidity. If for any reason whatsoever any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
(c) Assignment. This Agreement is personal to the parties hereto, and
the rights and duties of any party hereunder shall not be assignable except with
the prior written consent of the other parties. Notwithstanding the foregoing,
this Agreement shall inure to and be binding upon the parties and their
successors and permitted assigns. Nothing herein shall restrict the Escrow Agent
from performing its duties through a sub-agent.
(d) Benefit. The parties hereto and their successors and permitted
assigns, but no others, shall be bound hereby and entitled to the benefits
hereof; provided, however, that the Holders of the Secured Notes and their
permitted assigns shall be entitled to the benefits hereof and to enforce this
Agreement.
(e) Time. Time is of the essence with respect to each provision of this
Agreement.
(f) Entire Agreement; Amendments. This Agreement, the Millennium Issuer
Loan Agreement, the Indenture and the Security Agreements contain the entire
agreement among the parties with respect to the subject matter hereof and
supersede any and all prior agreements, understandings and commitments, whether
oral or written. This Agreement may be amended only in accordance with Article
7.6 of the Millennium Issuer Loan Agreement and Article X of the Indenture and
further by a writing signed by a duly authorized representative of each party
hereto.
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(g) Notices. All notices and other communications required or permitted
to be given or made under this Agreement shall be in writing and shall be deemed
to have been duly given and received, regardless of when and whether received,
either: (a) on the day of hand delivery; (b) three Business Days following the
day sent, when sent by United States certified mail, postage and certification
fee prepaid, return receipt requested, addressed asset forth below; (c) when
transmitted by telecopy with verbal confirmation of receipt by the telecopy
operator to the telecopy number set forth below; or (d) one business day
following the day timely delivered to a next-day air courier addressed as set
forth below:
To Escrow Agent:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
To the Trustee:
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust Administration
Telecopy: (000) 000-0000
To the Company:
R&B Falcon Corporation
000 Xxxxxxxxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxx X. Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
To the Issuer:
RBF Finance Co.
000 Xxxxxxxxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxxx X. Xxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
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or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(i) Captions. Captions in this Agreement are for convenience only and
shall not be considered or referred to in resolving questions of interpretation
of this Agreement.
(j) Choice of Law: Waiver of Jury Trial. The existence, validity,
construction, operation and effect of any and all terms and provisions of this
Agreement shall be determined in accordance with and governed by the laws of the
State of New York, without regard to principles of conflicts of law. The parties
to this Agreement hereby agree that jurisdiction over such parties and over the
subject matter of any action or proceeding arising under this Agreement may be
exercised by a competent Court of the State of New York, or by a United States
Federal Court, sitting in The City of New York. The Company and the Issuer each
submits to the personal jurisdiction of such courts, each hereby waives personal
service of process upon it and hereby waives, to the extent permitted by
applicable law, the right to a trial by jury in any action or proceeding with
the Escrow Agent. All actions and proceedings brought by the Company or the
Issuer against the Escrow Agent relating to or arising from, directly or
indirectly, this Agreement shall be litigated only in courts within the State of
New York. The Company and the Issuer each waives any objection that it may have
to the location of the court in which the Escrow Agent has commenced a
proceeding described in this paragraph including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens.
(k) Authority of the Issuer and the Company; Valid and Binding
Agreement. Each of the Issuer and the Company hereby represents and warrants
that this Agreement has been duly authorized, executed and delivered on its
behalf and constitutes the legal, valid and binding obligation of each of the
Issuer and the Company. The execution, delivery and performance of this
Agreement by the Issuer and the Company does not violate any applicable law or
regulation to which either the Issuer or the Company is subject and does not
require the consent of any governmental or other regulatory body to which either
the Issuer or the Company is subject, except for such consents and approvals as
have been obtained and are in full force and effect.
(l) Authority of the Escrow Agent and the Trustee: Valid and Binding
Agreement. Each of the Escrow Agent and the Trustee hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered on
its behalf and constitutes its legal, valid and binding obligation.
(m) Agent for Service: Submission to Jurisdiction: Waiver of
Immunities. By the execution and delivery of this Agreement, each of the Issuer
and the Company (i) acknowledges that it has, by separate written instrument,
irrevocably designated and appointed [CT Corporation System, 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ](or any successor), as its authorized agent upon which
process may be served in any suit or proceeding arising out of or relating to
this Agreement that may be instituted in any federal or state court in the State
of New
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York, or brought under federal or state securities laws, and acknowledges that
[CT Corporation System ] has accepted such designation, (ii) submits to the
jurisdiction of any such court in any such suit or proceeding, and (iii) agrees
that service of process upon [CT Corporation System ](or any successor) and
written notice of said service to the Issuer shall be deemed in every respect
effective service of process upon each of the Issuer and the Company in any such
suit or proceeding. The Issuer and the Company each further agrees to take any
and all action, including the execution and filing of any and all such documents
and instrument, as may be necessary to continue such destination and appointment
of [CT Corporation System ](or any successor) in full force and effect so long
as the Loan shall be outstanding.
To the extent that either the Company or the Issuer has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, each hereby irrevocably waives such immunity in respect of its
obligations under this Agreement, to the extent permitted by law.
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IN WITNESS WHEREOF, the parties have executed and delivered this Escrow
Account Agreement as of the day first above written.
ESCROW AGENT: UNITED STATES TRUST COMPANY OF NEW YORK
as Escrow Agent
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
TRUSTEE: UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
ISSUER: RBF FINANCE CO.
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Name:
Title:
COMPANY: R&B FALCON CORPORATION
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Name:
Title:
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EXHIBIT A
Form of Disbursement Request
[Letterhead of the Company]
[Date]
United States Trust Company of New York
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Administration
Re: Disbursement Request No.
[indicate whether revised]
Ladies and Gentlemen:
We refer to the Issuer Escrow Agreement (the "Escrow Agreement"), dated
as of March 26, 1999 among you (the "Escrow Agent"), United States Trust Company
of New York, as Trustee, RBF Finance Co., a Delaware corporation (the "Issuer")
and R&B Falcon Corporation, a Delaware corporation (the "Company"). Capitalized
terms used herein shall have the meaning given in the Escrow Agreement.
This letter constitutes a Disbursement Request under the Escrow
Agreement.
The undersigned hereby notifies you that the Company has requested, and
has satisfied the conditions contained in Section 3(a) of the Escrow Loan
Agreement for the release of all of the funds and escrowed property continued
from the Escrow Account.
In connection with the requested disbursement, each of the undersigned
hereby notifies you that:
1. The Millennium Issuer Loan has not, as a result of an Event of
Default (as defined in the Millennium Issuer Loan Agreement), been accelerated
and become due and payable.
2. An opinion of counsel as required by Section 3(a) of the Escrow
Agreement is delivered herewith.
3. The Mortgage for the Millennium Mortgaged Rig as required by Section
3(a) of the Escrow Agreement has been delivered to the Issuer and the Trustee.
4. [add wire instructions].
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The Escrow Agent is entitled to rely on the foregoing in disbursing
funds relating to this Disbursement Request.
The Company: R&B Falcon Corporation
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
The Issuer: RBF Finance Co.
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
The Trustee hereby certifies to the Escrow Agent that it has received
the applicable Opinion of Counsel and Mortgage Officers' Certificate described
in Section 3(a) of the Escrow Agreement and such other opinions and documents as
it requires for its consent to the release of the funds to be disbursed pursuant
to the foregoing Disbursement Request.
United States Trust Company of New York
as Trustee
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
A-2
