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EXHIBIT 4.26
EXHIBIT D-1
FORM OF PARENT GUARANTY
GUARANTY, dated as of December 21, 1998, by NOBLE DRILLING CORPORATION
("Parent Guarantor"), a Delaware corporation, in favor of CHASE BANK OF TEXAS,
National Association, as trustee ("Trustee") for the benefit of the Purchasers.
All capitalized terms used herein and not otherwise defined shall have the
meanings provided such terms in the Agreement referred to below.
W I T N E S S E T H :
WHEREAS, Noble Drilling (Xxx Xxxxxxxx) Inc. (the "Company") has entered
into a Note Purchase Agreement (the "Agreement"), dated the date hereof, among
the Company, the Trustee and the Purchasers, pursuant to which the Company is to
issue and sell, and the Purchasers are to purchase, the Notes referred to
therein;
WHEREAS, Parent Guarantor will obtain benefits from the purchase of the
Notes by the Purchasers, and it is a condition precedent to the purchase of the
Notes by the Purchasers that Parent Guarantor execute and deliver this Guaranty
guaranteeing the Obligations of the Company under the Agreement and the Notes;
WHEREAS, Parent Guarantor may reasonably be expected to benefit, either
directly or indirectly, from this Guaranty;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Parent Guarantor hereby agrees as
follows:
1. The Guaranty. In order to induce the Purchasers to enter into the
Agreement and to purchase the Notes, and in recognition of the direct benefits
to be received by Parent Guarantor from the proceeds of the Notes, Parent
Guarantor hereby unconditionally and irrevocably guarantees, as primary obligor
and not merely as surety the full and prompt payment when due, whether upon
maturity, acceleration or otherwise, of any and all of the (x) Obligations and
(y) all other obligations (including which but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Company to the Purchasers under the Agreement (including, without
limitation, indemnities and interest thereon) now existing or hereafter incurred
under arising out of or in connection with the Agreement or any other Credit
Document and the due performance and compliance with the terms of the Credit
Documents by the Company and each Subsidiary Guarantor (collectively, the
"Guaranteed Obligations"),
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and additionally Parent Guarantor hereby unconditionally and irrevocably
guarantees the performance of all obligations and covenants of the Company under
the SDDI Contract. If any of the Guaranteed Obligations becomes due and payable
hereunder, Parent Guarantor unconditionally promises to pay such indebtedness to
Secured Creditors, or order, on demand, together with (without duplication) any
and all expenses which may be incurred by Secured Creditors in collecting any of
the Guaranteed Obligations. This Guaranty is a continuing one and all
liabilities to which it applies or may apply under the terms hereof shall be
conclusively presumed to have been created in reliance hereon. If a claim is
ever made upon any Secured Creditor for repayment or recovery of any amount or
amounts received in payment or on account of any of the Guaranteed Obligations
and any of the aforesaid payees repays all or part of said amount by reason of
(i) any judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property, including, but not limited
to any repayment by reason of a preferential payment or fraudulent transfer or
(ii) any settlement or compromise of any such claim effected by such payee with
any such claimant (including the Company), then and in such event Parent
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon Parent Guarantor, notwithstanding any revocation of this
Guaranty or any other instrument evidencing any liability of the Company, and
Parent Guarantor shall be and remain liable to the aforesaid payees hereunder
for the amount so repaid or recovered to the same extent as if such amount had
never originally been received by any such payee.
2. Bankruptcy. Additionally, Parent Guarantor unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
to the Secured Creditors whether or not due or payable by the Company upon the
occurrence in respect of the Company of any of the events specified in Section
8.05 of the Agreement, and unconditionally promises to pay such indebtedness on
demand, in Dollars.
3. Nature of Liability. The liability of Parent Guarantor hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations whether executed by Parent Guarantor, any other guarantor
or by any other party, and the liability of Parent Guarantor hereunder is not
affected or impaired by (a) any direction as to application of payment by the
Company or by any other party or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations or (c) any payment on or in reduction of any such other
guaranty or undertaking or (d) any dissolution, termination or increase,
decrease or change in personnel by the Company.
4. Absolute and Independent Obligation. No invalidity, irregularity or
unenforceability of all or any part of the Guaranteed Obligations or of any
security therefor shall affect, impair or be a defense to this Guaranty and this
Guaranty shall be primary, absolute and unconditional notwithstanding the
occurrence of any event or the existence of any other circumstances which might
constitute a legal or equitable
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discharge of a surety or guarantor except irrevocable payment in full of the
Guaranteed Obligations. The obligations of Parent Guarantor hereunder are
independent of the obligations of the Company, any other guarantor or any other
Person and a separate action or actions may be brought and prosecuted against
Parent Guarantor whether or not action is brought against the Company or any
such other guarantor or Person and whether or not the Company, or any such other
guarantor or other Person be joined in any such action or actions. Parent
Guarantor waives, to the full extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
hereof.
5. Authorization. Parent Guarantor authorizes the Secured Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease
in the rate of interest thereon), any security therefor, or any
liability incurred directly or indirectly in respect thereof, and the
Guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against any Credit
Party or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Company or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
substitute the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Company to its creditors other
than the Secured Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Company to the Secured Creditors
regardless of what liability or liabilities of the Company remain
unpaid;
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(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge
of Parent Guarantor from its liabilities under this Guaranty.
6. Reliance. It is not necessary for the Secured Creditors to inquire
into the capacity or powers of the Company or the officers, directors, partners
or agents acting or purporting to act on its behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
7. Subordination. Any of the indebtedness of the Company now or
hereafter owing to Parent Guarantor is hereby subordinated to the Guaranteed
Obligations. Prior to the transfer by Parent Guarantor of any note or negotiable
instrument evidencing any of the indebtedness of the Company to Parent
Guarantor, Parent Guarantor shall xxxx such note or negotiable instrument with a
legend that the same is subject to this subordination. Without limiting the
generality of the foregoing, Parent Guarantor hereby agrees with the Secured
Creditors that it will not exercise any right of subrogation which it may at any
time otherwise have as a result of this Guaranty (whether contractual, under law
or otherwise) until all Guaranteed Obligations have been irrevocably paid in
full in cash.
8. Waiver. (a) Parent Guarantor waives any right (except as cannot be
waived under law) to require any Secured Creditor to (i) proceed against the
Company, any other guarantor or any other party, (ii) proceed against or exhaust
any security held from the Company, any other guarantor or any other party or
(iii) pursue any other remedy in any Secured Creditor's power whatsoever. Parent
Guarantor waives any defense based on or arising out of any defense of the
Company, any other guarantor or any other party, other than irrevocable payment
in full of the Guaranteed Obligations, based on or arising out of the disability
of the Company, any other guarantor or any other party, or the unenforceability
of the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Company other than irrevocable
payment in full of the Guaranteed Obligations. The Secured Creditors may, at
their election, foreclose on any security held by the Collateral Trustee or any
other Secured Creditor by one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Secured Creditors may have against the Company or any other party, or any
security, without affecting or impairing in
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any way the liability of Parent Guarantor hereunder except to the extent the
Guaranteed Obligations have been irrevocably paid.
(b) Parent Guarantor waives all presentments, demands for performance,
protests and notices (except notices expressly provided for in the Credit
Documents to be provided to Parent Guarantor), including, without limitation,
notices of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or incurring
of new or additional Guaranteed Obligations. Parent Guarantor assumes all
responsibility for being and keeping itself informed of the Company's financial
condition and assets, and of all other circumstances, bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which Parent Guarantor assumes and incurs hereunder, and agrees that the
Secured Creditors shall have no duty to advise Parent Guarantor of information
known to them regarding such circumstances or risks.
(c) Until such time as the Guaranteed Obligations have been irrevocably
paid in full in cash , Parent Guarantor hereby waives all rights of subrogation
which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under law, or otherwise) to the claims of the Secured Creditors
against the Company or any other guarantor of the Guaranteed Obligations and all
contractual, statutory or common law rights of reimbursement, contribution or
indemnity from the Company or any other guarantor which it may at any time
otherwise have as a result of this Guaranty.
9. Enforcement. The Secured Creditors agree that this Guaranty may be
enforced only by the action of the Trustee, in each case acting upon the
instructions of the Required Purchasers and no Secured Creditor shall have any
right individually to seek to enforce or to enforce this Guaranty or to realize
upon the security to be granted by the Security Documents, it being understood
and agreed that such rights and remedies may be exercised by the Trustee for the
benefit of the Secured Creditors upon the terms of this Guaranty and the
Security Documents.
10. Representations, Warranties and Agreements. In order to induce the
Purchasers to accept this Guaranty and to purchase the Notes, Parent Guarantor
makes the following representations and warranties to, and agreements with, the
Purchasers, all of which shall survive the execution and delivery of this
Guaranty:
(a) Corporate Status. Parent Guarantor is a duly organized and validly
existing corporation in good standing under the laws of the
jurisdiction of its organization and has the corporate power and
authority to own its property and assets and to transact the business
in which it is engaged.
(b) Corporate Power and Authority. Parent Guarantor has the corporate
power and authority to execute, deliver and carry out the terms and
provisions
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hereof and has taken all necessary corporate action to authorize the
execution, delivery and performance hereof. Parent Guarantor has duly
executed and delivered this Guaranty and such Guaranty constitutes the
legal, valid and binding obligation of Parent Guarantor enforceable
against Parent Guarantor in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
(c) No Violation. Neither the execution, delivery and performance by
Parent Guarantor of this Guaranty nor compliance with the terms and
provisions hereof, nor the consummation of the transactions
contemplated herein (i) will contravene any applicable provision of any
law, statute, rule, regulation, order, writ, injunction or decree of
any court or governmental instrumentality , (ii) will result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the
property or assets of Parent Guarantor pursuant to the terms of, any
indenture, mortgage, deed of trust, agreement or other instrument to
which Parent Guarantor or any of its Subsidiaries is a party or by
which they or any of their respective property or assets are bound or
to which they are subject, or (iii) will violate any provision of the
Certificate of Incorporation or Bylaws of Parent Guarantor.
(d) Litigation. There are no actions, suits or proceedings pending or,
to the knowledge of Parent Guarantor, after due inquiry, threatened
with respect to Parent Guarantor or its Subsidiaries that are
reasonably likely to have a material adverse effect on the rights or
remedies of the Purchasers or on the ability of Parent Guarantor to
perform its obligations to them hereunder.
(e) Governmental Approvals. Except for the orders, consents, approvals,
licenses, authorizations, validations, recordings, registrations and
exemptions that have already been duly made or obtained and remain in
full force and effect, no order, consent, approval, license,
authorization, or validation of, or filing, recording or registration
with, or exemption by, any foreign or domestic governmental or public
body or authority, or any subdivision thereof, is required to authorize
or is required in connection with (i) the execution, delivery and
performance hereof, or (ii) the legality, validity, binding effect or
enforceability hereof.
(f) Investment Company Act. Neither the Parent Guarantor nor any other
Credit Party is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act
of 1940, as amended.
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(g) Public Utility Holding Company Act. Neither the Parent Guarantor
nor any other Credit Party is 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 Company Act of 1935, as
amended.
(h) True and Complete Disclosure. All information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of Parent
Guarantor in writing to the Trustee or any Purchaser for purposes of or
in connection with the Agreement, this Guaranty or any transaction
contemplated herein is, and all other such information (taken as a
whole) hereafter furnished by or on behalf of Parent Guarantor in
writing to any Purchaser will be, true and accurate in all material
respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to
make such information (taken as a whole) not misleading at such time in
light of the circumstances under which such information was provided.
There is no fact known to Parent Guarantor which is reasonably likely
to have a material adverse effect on the rights or remedies of the
Purchasers or on the ability of any Credit Party to perform its
respective obligations under any Credit Document to them, which has not
been disclosed herein or in such other documents, certificates and
statements furnished to the Trustee and the Purchasers for use in
connection with the transactions contemplated hereby.
(i) Financial Condition; Financial Statements. (i) On and as of the
Effective Date, on a pro forma basis after giving effect to all
Indebtedness incurred, and to be incurred, by the Credit Parties in
connection herewith, (x) the sum of the assets, at a fair valuation, of
Parent Guarantor on a consolidated basis taken as a whole will exceed
its debts, (y) Parent Guarantor on a consolidated basis taken as a
whole will not have incurred or intended to, or believe that it will,
incur debts beyond its ability to pay such debts as such debts mature
and (z) Parent Guarantor on a consolidated basis taken as a whole will
not have unreasonably small capital with which to conduct its business.
(ii)(A) The consolidated balance sheet of Parent Guarantor at
December 31, 1997 and the related consolidated statements of operations
and cash flows of Parent Guarantor for the fiscal year, as the case may
be, ended as of said date, which have been examined by Price Waterhouse
LLP, independent certified public accountants, who delivered an
unqualified opinion in respect thereto, and (B) the consolidated
balance sheet of Parent Guarantor as of March 31, 1998, copies of which
have heretofore been furnished to each Purchaser, present fairly the
financial position of such entities at the dates of said statements and
the results for the period covered thereby in accordance with GAAP,
except to the extent provided in the notes to said financial statements
and, in the case of the March 31,
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1998 statements, subject to normal and recurring year-end audit
adjustments. All such financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied except to the extent provided in the notes to said
financial statements. Nothing has occurred since December 31, 1997 that
has had or is reasonably likely to have a Material Adverse Effect on
the rights or remedies of the Purchasers hereunder, or on the ability
of Parent Guarantor to perform its obligations to them.
(iii) Except as reflected in the financial statements and the
notes thereto described in clause (ii) above, there were as of the
Effective Date no liabilities or obligations with respect to Parent
Guarantor of a nature (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in
aggregate, would be material to Parent Guarantor on a consolidated
basis and its Subsidiaries taken as a whole, except as incurred
subsequent to March 31, 1998 in the ordinary course of business
consistent with past practices.
(j) Tax Returns and Payments. The Parent Guarantor and each of its
Subsidiaries has filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it
and has paid all material taxes and assessments payable by it which
have become due, other than those not yet delinquent and except for
those contested in good faith. The Parent Guarantor and each of its
Subsidiaries has paid, or has provided adequate reserves (in the good
faith judgment of the management of the Parent Guarantor) for the
payment of, all federal, state and foreign income taxes applicable for
all prior fiscal years and for the current fiscal year to the date
hereof.
(k) Employee Benefit Plans. (i) Neither the Parent Guarantor nor any of
its Subsidiaries nor any ERISA Affiliate has ever maintained or
contributed to (or had an obligation to contribute to) any Plan or any
Foreign Pension Plan where any current or reasonably foreseeable
liability of the Parent Guarantor or any of its Subsidiaries with
respect to such Plan or such Foreign Pension Plan would be reasonably
likely to have a Material Adverse Effect. All contributions required to
be made with respect to (x) any employee pension benefit plan (as
defined in Section 3(2) of ERISA) maintained or contributed to by (or
to which there is an obligation to contribute of) the Parent Guarantor,
any of its Subsidiaries or an ERISA Affiliate and (y) any Foreign
Pension Plan have been timely made except any such failures to
contribute which would not individually or in the aggregate be
reasonably likely to have a Material Adverse Effect. The Parent
Guarantor and its Subsidiaries may cease contributions to or terminate
any employee benefit plan (within the meaning of Section 3(3) of ERISA)
maintained or contributed to by (or to which there is an obligation to
contribute of) them without incurring any
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liability which, individually or in the aggregate would be reasonably
likely to have a Material Adverse Effect.
(ii) Each Foreign Pension Plan has been maintained in material
compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities.
(l) Pollution and Other Regulations. (i) The Parent Guarantor and its
Subsidiaries are in compliance with all applicable Environmental Laws
governing its business for which failure to comply is reasonably likely
to have a Material Adverse Effect, and neither the Parent Guarantor nor
any of its Subsidiaries are liable for any material penalties, fines or
forfeitures for failure to comply with any of the foregoing. All
licenses, permits, registrations or approvals required for the business
of the Parent Guarantors and its Subsidiaries, as conducted as of the
Effective Date, under any Environmental Law have been secured and the
Parent Guarantor and its Subsidiaries are in compliance therewith,
except such licenses, permits, registrations or approvals the failure
to secure or to comply therewith is not likely to have a Material
Adverse Effect. The Parent Guarantor and its Subsidiaries are not in
any respect in noncompliance with, breach of or default under any
applicable writ, order, judgment, injunction, or decree to which the
Parent Guarantor or any such Subsidiary is a party or which would
affect the ability of the Parent Guarantor and its Subsidiaries to
operate the Mortgaged Rigs or any facility and no event has occurred
and is continuing which, with the passage of time or the giving of
notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or
defaults as are not likely to, in the aggregate, have a Material
Adverse Effect. There are as of the Effective Date no Environmental
Claims pending or, to the knowledge, after due inquiry, of the Parent
Guarantor, threatened, against the Parent Guarantor or any of its
Subsidiaries wherein an unfavorable decision, ruling or finding would
be reasonably likely to have a Material Adverse Effect. There are no
facts, circumstances, conditions or occurrences on any real property,
drilling rig or facility owned or operated by the Parent Guarantor or
any of its Subsidiaries that is reasonably likely (x) to form the basis
of an Environmental Claim against the Parent Guarantor, any Mortgaged
Rig or facility owned by any Credit Party, or (y) to cause the Vessel
or facility to be subject to any restrictions on its ownership,
occupancy, use or transferability under any Environmental Law, except
in each such case, such Environmental Claims or restrictions that
individually or in the aggregate are not reasonably likely to have a
Material Adverse Effect.
(ii) Hazardous Materials have not at any time been (x) generated, used,
treated or stored on, or transported to or from, any drilling rig or
facility including the
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Mortgaged Rigs at any time owned or operated by the Parent Guarantor or
any of its Subsidiaries or (y) released on or from any such drilling
rig or facility, in each case where, to the Parent Guarantor's
knowledge, after due inquiry, such occurrence or event individually or
in the aggregate is reasonably likely to have a Material Adverse
Effect.
(m) Properties. The Parent Guarantor and its Subsidiaries have title to
all material properties owned by them , free and clear of all Liens,
other than Permitted Liens.
(n) Labor Relations. Neither the Parent Guarantor nor any of its
Subsidiaries is engaged in any unfair labor practice that is reasonably
likely to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Parent Guarantor or any of its
Subsidiaries or threatened against the Parent Guarantor or any of its
Subsidiaries, before the National Labor Relations Board, and no
grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is pending against the Parent Guarantor
or any of its Subsidiaries or, to the Parent Guarantor's knowledge,
after due inquiry, threatened against any of them, (ii) no strike,
labor dispute, slowdown or stoppage is pending against the Parent
Guarantor or any of its Subsidiaries or, to the Parent Guarantor's
knowledge, after due inquiry, threatened against the Parent Guarantor
or any of its Subsidiaries and (iii) no union representation petition
existing with respect to the employees of the Parent Guarantor or its
Subsidiaries and no union organizing activities are taking place,
except with respect to any matter specified in clause (i), (ii) or
(iii) above, either individually or in the aggregate, such as is not
reasonably likely to have a Material Adverse Effect.
(o) Rig Classification. Each Mortgaged Rig is classified in the highest
class available for rigs of its age and type with the American Bureau
of Shipping, Inc, Bureau Veritas, Det Norske Veritas, Lloyd's Register
of Shipping, or another internationally recognized classification
society reasonably acceptable to the Trustee, free of any material
requirements or recommendations, provided that the Vessel may be out of
class as a result of, and pending the completion of the Project.
(p) Patents, etc. The Parent Guarantor has obtained all patents,
trademarks, service marks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are necessary for the
operation of its business taken as a whole as presently conducted, and
Parent Guarantor knows of no such rights the absence of which would be
reasonably likely to have a Material Adverse Effect.
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(q) Representations In Mortgages. The Parent Guarantor hereby confirms
each representation and warranty of the Company and NDAHC and NDUS set
forth in the Mortgages.
11. Affirmative Covenants. Parent Guarantor covenants and agrees that
on the Effective Date and thereafter for so long as this Agreement is in effect
and until the Notes (together with interest), Fees and all other Obligations
incurred hereunder, are irrevocably paid in full:
(a) Information Covenants. Parent Guarantor will furnish to the Trustee
(with sufficient copies for each of the Purchasers, and the Trustee
will promptly forward to each of the Purchasers):
(i) Annual Financial Statements. Within 120 days after the
close of each fiscal year of Parent Guarantor, the consolidated balance
sheet of Parent Guarantor and its Subsidiaries, as at the end of such
fiscal year and the related consolidated statements of income and
retained earnings and of cash flows for such fiscal year, in each case
setting forth comparative consolidated figures for the preceding fiscal
year, and examined by independent certified public accountants of
recognized national standing whose opinion shall not be qualified as to
the scope of audit and as to the status of Parent Guarantor and its
Subsidiaries as a going concern shall state that such financial
statements present fairly, in all material respects, the financial
position of the companies being reported upon and their results of
operations and cash flows and have been prepared in conformity with
GAAP, and that the examination of such accountants in connection with
such financial statements has been made in accordance with generally
accepted auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances. Such opinion shall be
accompanied by a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making their
audit, they have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if they are aware
that any such condition or event then exists, specifying the nature and
period of the existence thereof (it being understood that such
accountants shall not be liable, directly or indirectly, for any
failure to obtain knowledge of any Default or Event of Default unless
such accountants should have obtained knowledge thereof in making an
audit in accordance with GAAP or did not make such an audit),
(ii) Quarterly Financial Statements. As soon as available and
in any event within 60 days after the close of each of the first three
quarterly accounting periods in each fiscal year, the consolidated
balance sheet of Parent Guarantor and its Subsidiaries, as at the end
of such quarterly period and the related consolidated
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statements of income and retained earnings and of cash flows for such
quarterly period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period, in each case setting forth
comparative consolidated figures for the related period in the prior
fiscal year, subject to changes resulting from audit and normal
year-end audit adjustments.
(iii) Compliance Certificate. At the time of the delivery of
the financial statements provided for in clauses (i) and (ii) above, a
certificate of Parent Guarantor signed by its Senior Vice
President-Finance, Controller or other Authorized Officer setting forth
the calculations required to establish whether Parent Guarantor was in
compliance with the provisions of Section 12 hereof as at the end of
such fiscal period or year, as the case may be.
(iv) Notices. Promptly, and in any event (i) within ten
Business Days after Parent Guarantor obtains knowledge thereof, notice
of the commencement of or any significant development in any litigation
or governmental proceeding pending against Parent Guarantor which is
likely to have a Material Adverse Effect or (ii) within five days after
Parent Guarantor obtains knowledge thereof, notice of any Default or
Event of Default or a default or event of default under the Parent
Guaranty.
(v) Other Information. From time to time, such other
information or documents (financial or otherwise) as the Trustee or any
Purchaser may reasonably request.
(b) Books, Records, Inspection. The Parent Guarantor will, upon
reasonable notice to the Senior Vice President-Finance, Controller or
any other Authorized Officer of the Parent Guarantor, permit officers
and designated representatives of the Trustee (at the expense of the
Trustee, but after the occurrence and during the continuance of a
Default or any Event of Default, at the expense of the Parent
Guarantor) or any Purchaser (at the expense of such Purchaser but after
the occurrence and during the continuance of a Default or an Event of
Default at the expense of the Parent Guarantor), to the extent
necessary, to examine the books of account of the Parent Guarantor and
discuss the affairs, finances and accounts of the Parent Guarantor
with, and be advised as to the same by, its and their officers and
independent accountants, all at such reasonable times and intervals and
to such reasonable extent as the Trustee or the Purchaser may desire.
(c) Maintenance of Property; Insurance. There will at all times be
maintained in full force and effect insurance on the Mortgaged Rigs in
such amounts with carriers of such insurance industry ratings, covering
such risks and liabilities and with such deductibles or self-insured
retentions as are in accordance with normal industry practice for
similarly situated insureds.
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(d) Payment of Taxes. The Parent Guarantor will and will cause each of
its Subsidiaries to pay and discharge all material taxes, assessments
and governmental charges or levies imposed upon it or upon its income
or profits, or upon any properties belonging to it or its Subsidiaries,
prior to the date on which penalties attach thereto, and all lawful
claims which, if unpaid, might become a Lien or charge upon any
properties of the Parent Guarantor or its Subsidiaries, provided that
the Company shall not be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves (in the good
faith judgment of the management of the Parent Guarantor) with respect
thereto.
(e) Consolidated Corporate Franchises. The Parent Guarantor will do,
and will cause each Credit Party to do, all things necessary to
preserve and keep in full force and effect its corporate existence,
material rights and authority, unless the failure to do so is not
reasonably likely to have a Material Adverse Effect, provided that any
transaction permitted by Section 7.02 of the Agreement will not
constitute a breach of this clause (d).
(f) Compliance with Statutes, etc. The Parent Guarantor and its
Subsidiaries will comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of their
business and the ownership of their property other than those the
non-compliance with which would not have a Material Adverse Effect or
would not have a material adverse effect on the ability of any Credit
Party to perform its business or its respective obligations under any
Credit Document to which it is a party.
(g) Good Repair. Except in the event any Mortgaged Rig has been damaged
or has suffered a casualty as to which (within a reasonable period of
time) management has not made a determination whether to replace or
repair, or if the determination to replace or repair has been made, as
to which such replacement or repairs are being undertaken, subject to
availability of equipment, materials and/or repair facilities, the
Parent Guarantor will, and will cause each Credit Party to, keep the
Mortgaged Rigs, in whomsoever's possession they may be, in good repair,
working order and condition, normal wear and tear excepted, and,
subject to Section 7.02 of the Agreement, see that from time to time
there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, (i) to the extent and in the manner useful or
customary for companies in similar businesses and (ii) to the extent
the failure to do so is reasonably likely to cause a Material Adverse
Effect.
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(h) End of Fiscal Years; Fiscal Quarters. The Parent Guarantor will,
for financial reporting purposes, cause (i) its and its Subsidiaries
fiscal years to end on December 31 of each year and (ii) its fiscal
quarters to end on March 31, June 30, September 30 and December 31 of
each year.
(i) ERISA. As soon as possible and, in any event, within 10 days after
the Parent Guarantor, any of its Subsidiaries or any ERISA Affiliate
knows or has reason to know that: (a) a material contribution required
to be made with respect to (i) any employee pension benefit plan (as
defined in Section 3(2) of ERISA) maintained or contributed to by (or
to which there is an obligation to contribute of) the Parent Guarantor,
any of its Subsidiaries or an ERISA Affiliate or (ii) any Foreign
Pension Plan has not been timely made or (b) the Parent Guarantor or
any of its Subsidiaries may incur any material liability pursuant to
any employee welfare benefit plan (as defined in Section 3(1) of ERISA)
that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee
pension benefit plan (as defined in Section 3(2) of ERISA), the Parent
Guarantor or the Company will deliver to each of the Purchasers a
certificate of the Senior Vice President-Finance or Controller of the
Parent Guarantor setting forth details as to such occurrence and the
action, if any, that the Parent Guarantor, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any
notices required or proposed to be given to or filed with or by the
Parent Guarantor, such Subsidiary, the ERISA Affiliate, a plan
participant or the plan administrator.
(j) Further Assurances. (i) The Parent Guarantor will, and will cause
each other Credit Party to, at the expense of such Credit Party, make,
execute, endorse, acknowledge, file and/or deliver to the Trustee, from
time to time such vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements,
power of attorney, certificates, real property surveys, reports and
other assurances or instruments and take such further steps relating to
the Trustee or any Purchaser may reasonably require.
(ii) The Parent Guarantor agrees that each action required
above by this clause (i) shall be completed as soon as possible, but in
no event later than 30 days after such action is requested to be taken
by the Trustee or the Required Purchasers, provided that in no event
shall the Parent Guarantor or any of its Subsidiaries be required to
take any action, other than using its reasonable commercial efforts
without any material expenditure, to obtain consents or other actions
from third parties with respect to its compliance with this clause (i).
12. Negative Covenants. Parent Guarantor hereby covenants and agrees
that as of the Effective Date and thereafter for so long as this Guaranty is in
effect and until all Obligations guaranteed hereunder are irrevocably paid in
full:
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(a) Changes in Business. The Parent Guarantor will not materially alter
the character of its business taken as a whole from that conducted at
the Effective Date.
(b) Consolidation, Merger, Sale of Assets, etc. The Parent Guarantor
will not and will not permit any Credit Party to wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or
consolidation, sell or otherwise dispose of all or any part of the
Collateral or agree to do any of the foregoing at any future time,
except that the following shall be permitted:
(i) any Subsidiary Guarantor may be merged into the Parent
Guarantor or any other Credit Party and the Company may be merged into
the Parent Guarantor; provided, however, that the surviving company
shall have assumed the obligations of the Subsidiary Guarantor under
the Subsidiary Guaranty in writing and shall have delivered to the
Trustee an opinion of counsel to the effect that the obligations of the
Subsidiary Guarantor under the Subsidiary Guaranty have been duly and
validly assumed and constitute valid and binding obligations of the
surviving company enforceable in accordance with their terms; and
(ii) so long as no Default or Event of Default exists or would
result therefrom, on or after June 1, 2001 the Credit Parties may sell
the Mortgaged Rigs for cash at fair market value, provided that the
proceeds of any such disposition shall be applied to prepay the Notes
in full in accordance with Section 3.01 of the Agreement.
(c) Interest Coverage Ratio. The Parent Guarantor shall not permit the
ratio at the end of each fiscal quarter of (i) Adjusted Consolidated
EBITDA to (ii) Consolidated Interest Expense for the period of the four
most recently completed consecutive fiscal quarters of the Company to
be less than 3.00:1.00.
(d) Leverage Ratio. The Parent Guarantor shall not permit the Leverage
Ratio as of the end of any fiscal quarter to be more than 0.40:1.00.
(e) Net Worth. The Parent Guarantor shall not permit Consolidated Net
Worth as of the end of any fiscal quarter to be less than $812,382,000
plus 50% of Consolidated Net Income (determined on a cumulative basis)
for all Cumulative Net Income Periods ending prior to the date of
determination for which Consolidated Net Income was a positive number.
13. Miscellaneous.
(a) Calculations; Computations. (a) The financial statements to be
furnished to the Purchasers pursuant hereto shall be made and prepared
in accordance with
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GAAP consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by
Parent Guarantor to the Purchasers), provided that (x) except as
otherwise specifically provided herein, all computations determining
compliance with Section 12, including definitions used therein, shall
utilize accounting principles and policies in effect at the time of the
preparation of, and in conformity with those used to prepare, the
December 31, 1997 and March 31, 1998 historical financial statements of
the Company delivered to the Purchasers pursuant to Section 10(i), and
(y) that if at any time the computations determining compliance with
Section 12 utilize accounting principles different from those utilized
in the financial statements furnished to the Purchasers, such financial
statements shall be accompanied by reconciliation work-sheets.
(b) Notices. All notices and other communications provided for
hereunder shall be given as set forth in the Agreement (i) to Guarantor
at the address set forth below its execution hereof, and (ii) to
Trustee and/or Purchasers at the addresses set forth in the Agreement.
(c) Benefit of Agreement. This Guaranty shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that Parent Guarantor may not
assign or transfer any of its rights or obligations hereunder without
the prior written consent of the Purchasers.
(d) Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury
Trial.
(i) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Guaranty may be brought in
the courts of the state of New York or of the United States for the
Southern District of New York, and, by execution and delivery of this
Guaranty, the Parent Guarantor hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts. The Parent
Guarantor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by
the mailing of copies thereof by registered or certified mail, postage
prepaid, to the Parent Guarantor located outside New York City and by
hand delivery to the Company located within New York City, at its
address for notices pursuant to Section 13(b) above, such service to
become effective 7 days after such mailing. Nothing herein shall affect
the right of the Trustee or any Purchaser to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise
proceed against Parent Guarantor in any other jurisdiction.
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(ii) The Parent Guarantor hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Guaranty brought in the courts referred to in
clause (i) above and hereby further irrevocably waives and agrees not
to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
(iii) The Parent Guarantor by its acceptance hereof, hereby
irrevocably waives all right to a trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Guaranty
or the transactions contemplated hereby.
(e) Headings Descriptive. The headings of the several sections and
subsections of this Guaranty are inserted for convenience only and
shall not in any way affect the meaning or construction of any
provision of this Guaranty.
14. Definitions. As used herein, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural forms of the term defined):
"Adjusted Consolidated EBITDA" shall mean for any period,
Consolidated EBITDA for such period, less cash dividends and cash taxes
paid during such period.
"Capital Lease" as applied to any Person shall mean any lease
of any property (whether real, personal or mixed) by that Person as
lessee which, in conformity with GAAP, is accounted for as a capital
lease on the balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Parent Guarantor or any of its Subsidiaries
in each case taken at the amount thereof accounted for as liabilities
in accordance with GAAP.
"Consolidated EBIT" shall mean, for any period, (A) the sum of
the amounts for such period of (i) Consolidated Net Income, (ii)
provisions for taxes based on income, (iii) Consolidated Interest
Expense, (iv) amortization or write-off of deferred financing costs to
the extent deducted in determining Consolidated Net Income and (v)
losses on sales of assets (excluding sales in the ordinary course of
business) and other extraordinary losses less (B) the amount for such
period of gains on sales of assets (excluding sales in the ordinary
course of business) and other extraordinary gains, all as determined on
a consolidated basis in accordance with GAAP.
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"Consolidated EBITDA" shall mean, for any period, the sum of
the amounts for such period of (i) Consolidated EBIT, (ii) depreciation
expense of the Parent Guarantor and its Subsidiaries and (iii)
amortization expense of the Parent Guarantor and its Subsidiaries, all
as determined on a consolidated basis in accordance with GAAP.
"Consolidated Indebtedness" shall mean, as at any date of
determination, the aggregate stated balance sheet amount of all
Indebtedness (including the Notes) of the Parent Guarantor and its
Subsidiaries on a consolidated basis as determined in accordance with
GAAP, excluding all Contingent Obligations relating to the Indebtedness
of any Person which is included in the calculation of Consolidated
Indebtedness of the Parent Guarantor and its Subsidiaries.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that attributable to Capital Leases)
of the Parent Guarantor and its Subsidiaries in accordance with GAAP on
a consolidated basis with respect to all outstanding Indebtedness of
the Parent Guarantor and its Subsidiaries, provided that for purposes
of this definition only, "Indebtedness" shall be deemed to include all
indebtedness of the Parent Guarantor and its Subsidiaries which is
otherwise excluded pursuant to clause (y) of the proviso contained in
the definition of "Indebtedness".
"Consolidated Net Income" shall mean for any period, the net
income (or loss) of the Parent Guarantor and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period
determined in conformity with GAAP.
"Consolidated Net Worth" shall mean, at any time,
shareholder's equity of the Parent Guarantor and its Subsidiaries on a
consolidated basis determined in accordance with GAAP.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing or intending to guarantee any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation,
any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting
direct or indirect security therefor, (b) to advance or supply funds
(i) for the purchase or payment of any such primary obligation or (ii)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or
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(d) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof, provided, however, that the
term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"Cumulative Net Income Period" shall mean each period
consisting of a fiscal quarter of the Company ending after March 31,
1998.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time.
"Indebtedness" of any Person shall mean without duplication
(i) all indebtedness of such Person for borrowed money, (ii) the
deferred purchase price of assets or services which in accordance with
GAAP would be shown on the liability side of the balance sheet of such
Person, (iii) the face amount of all letters of credit issued for the
account of such Person and, without duplication, all drafts drawn
thereunder, (iv) all Indebtedness of a second Person secured by any
Lien on any property owned by such first Person, whether or not such
indebtedness has been assumed, (v) all Capitalized Lease Obligations of
such Person, (vi) all obligations of such Person to pay a specified
purchase price for goods or services whether or not delivered or
accepted, (vii) all net obligations of such Person under Interest Rate
Agreements and (viii) all Contingent Obligations of such Person (other
than Contingent Obligations arising from the guaranty by such Person of
Permitted Indebtedness of the Company and/or its Subsidiaries) provided
that Indebtedness shall not include (x) trade payables and accrued
expenses, in each case arising in the ordinary course of business and
(y) indebtedness incurred by non-Credit Party Subsidiaries of the
Parent Guarantor which is non-recourse to the Parent Guarantor or any
other Subsidiary of the Parent Guarantor.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, any interest rate cap agreement, any interest rate collar
agreement or other similar agreement or arrangement designed to protect
the Parent Guarantor against interest rate risk.
"Leverage Ratio" shall mean, at any date of determination, the
ratio of Consolidated Indebtedness on such date to Total Capitalization
on such date.
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"Non-Recourse Subsidiary" shall mean any Subsidiary of the
Parent Guarantor which is the obligor with respect to any Indebtedness
which is excluded from the definition of "Indebtedness" pursuant to
clause (y) of the proviso contained therein.
"Total Capitalization" shall mean, at any time, the sum of
Consolidated Indebtedness and Consolidated Net Worth at such time.
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IN WITNESS WHEREOF, Parent Guarantor has caused multiple counterparts
of this Agreement to be duly executed and delivered as of the date first above
written.
NOBLE DRILLING CORPORATION
By /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Address for Notices: Xxxxx X. Xxxxxxxx, Senior Vice President-
Finance
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Accepted and Agreed to:
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Xxxxx X. Xxxxx
Vice President and Trust Officer
