Exhibit 10.16
GUARANTY AGREEMENT
(R&B Falcon)
THIS GUARANTY AGREEMENT (this "Guaranty") is dated as of April 24,
1998 and is by R&B FALCON CORPORATION, a Delaware corporation (the
"Guarantor"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as administrative agent (in such capacity, the "Administrative
Agent") for its benefit and for the ratable benefit of the Documentation
Agent and the financial institutions (the "Banks") now or hereafter party
to that certain Credit Agreement dated as of November 10, 1997, as amended
by First Amendment dated as of even date herewith (as the same may be
further amended, modified or restated from time to time and at any time,
the "Credit Agreement"), among DEEPWATER DRILLING II L.L.C (the
"Borrower"), the Banks, the Administrative Agent, and NATIONAL WESTMINSTER
BANK Plc, as Documentation Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Credit Agreement, the Banks have
agreed to extend credit to the Borrower;
WHEREAS, the obligation of the Banks to extend credit is conditioned
upon, among other things, the execution and delivery by the Guarantor of
this Guaranty;
WHEREAS, the Guarantor, through its wholly-owned indirect subsidiary,
RB Deepwater Exploration II Inc. ("R&BII"), owns a sixty percent (60%)
equity interest in the Borrower;
WHEREAS, the Borrower was formed for the purposes of constructing and
operating the Drillship (and for the other incidental purposes set forth in
the Limited Liability Company Agreement pursuant to which the Borrower was
formed), and it is intended that the Drillship will be used in part in
connection with the exploration or development activities of the Guarantor
and its subsidiaries, and therefore, the Guarantor will derive substantial
direct and indirect economic benefit from the extensions of credit pursuant
to the Credit Agreement;
NOW, THEREFORE, (i) in consideration of the premises and to induce the
Banks to enter into the Credit Agreement and to extend credit, (ii) at the
special insistence and request of the Administrative Agent and the Banks,
and (iii) for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor, for the
benefit of the Administrative Agent, the Documentation Agent and the Banks,
hereby agree as follows:
Section 1. Defined Terms.
(a) Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein as therein defined.
(b) The following terms used herein shall have the meanings set
forth below:
"Guarantor Default" means any event or circumstance which, with
the giving of notice, the lapse of time, or both, would (if not cured
or remedied during such time) constitute a Guarantor Event of Default.
"R&B Credit Amendment" means any amendment, modification,
replacement, termination (a "change") of any terms of any documents
governing the R&B Credit Facility if, in the opinion of the
Administrative Agent (acting upon direction of the Majority Banks),
such change could be construed to have a material adverse effect on
the Majority Banks.
"R&B Credit Facility" means (a) the credit arrangements evidenced
by the Credit Agreement dated as of April 24, 1998 among the Guarantor
as borrower thereunder, The Chase Manhattan Bank as Administrative
Agent, and the other agents and banks parties thereto, as the same may
be further amended (with the consent of the Majority Banks, if such
consent is required pursuant to Section 7(b) of this Guaranty), and
(b) any credit arrangement or Indebtedness entered into or incurred in
renewal, extension, replacement or restatement thereof.
Section 2. Guaranty.
(a) The Guarantor hereby, unconditionally and irrevocably,
guarantees the prompt performance and payment in full in Dollars when due
(whether at stated maturity, by acceleration or otherwise) of the
Obligations heretofore or hereafter incurred by the Borrower, and the
Guarantor further agrees to pay all costs, fees and expenses (including,
without limitation, counsel fees of outside counsel, and the allocated cost
of in-house counsel) incurred by the Administrative Agent or any Bank in
enforcing any rights under this Guaranty.
(b) Notwithstanding anything herein or in any other Loan
Document to the contrary, the maximum aggregate liability of the Guarantor
under this Guaranty at any time shall not exceed an amount equal to sixty
percent (60%) of the dollar amount of the Obligations then outstanding.
Such amount shall be calculated without giving effect to payments made by
any guarantor of any part of the Obligations other than payments by the
Guarantor.
Section 3. Guaranty Absolute.
(a) The obligations of the Guarantor hereunder are those of a
primary obligor, and not merely a surety, and are independent of the
Obligations. A separate action or actions may be brought against the
Guarantor whether or not an action is brought against the Borrower, any
other guarantor or other obligor in respect of the Obligations or whether
the Borrower, any other guarantor or any other obligor in respect of the
Obligations are joined in any such action or actions.
(b) Subject to the limitation set forth in Section 2(b) above,
the Guarantor guarantees that the Obligations will be paid and performed
strictly in accordance with the terms of the Credit Agreement and the other
Loan Documents regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of
the Administrative Agent or the Banks with respect thereto. The Guarantor
agrees that its guarantee constitutes a guarantee of payment when due and
not of collection. The liability of the Guarantor under this Guaranty
shall be absolute and unconditional irrespective of:
(i) any lack of genuineness, validity, legality or
enforceability of the Credit Agreement, any other Loan Document
or any other document, agreement or instrument relating thereto
or any assignment or transfer of any thereof;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations
(including, without limitation, the possible extension of the
Revolving Termination Date and increase of the amount of the
Commitments all on the terms and conditions set forth in the
Credit Agreement), or any waiver, indulgence, compromise,
renewal, extension, amendment, modification of, or addition,
consent, supplement to, or consent to departure from, or any
other action or inaction under or in respect of, the Credit
Agreement or any other Loan Document or any document, instrument
or agreement relating to the Obligations or any other instrument
or agreement referred to therein or any assignment or transfer of
any thereof;
(iii) any release or partial release of any other
guarantor or other obligor in respect of the Obligations;
(iv) any exchange, release or non-perfection of any
collateral for all or any of the Obligations, or any release, or
amendment or waiver of, or consent to departure from, any
guaranty or security, for all or any of the Obligations;
(v) any furnishing of any security for any of the
Obligations;
(vi) the liquidation, bankruptcy, insolvency or
reorganization of the Borrower, any other guarantor or other
obligor in respect of the Obligations or any action taken with
respect to this Guaranty by any trustee or receiver, or by any
court, in any such proceeding;
(vii) any modification or termination of any
intercreditor or subordination agreement pursuant to which the
claims of other creditors of the Borrower or the Guarantor are
subordinated to those of the Banks; or
(viii) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable
discharge of, the Borrower or the Guarantor.
(c) This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment or performance of
the Obligations, or any part thereof, is, upon the insolvency, bankruptcy
or reorganization of the Borrower or the Guarantor or otherwise pursuant to
applicable law, rescinded or reduced in amount or must otherwise be
restored or returned by the Administrative Agent or any Bank, all as though
such payment or performance had not been made.
(d) If an event permitting the acceleration of any of the
Obligations shall at any time have occurred and be continuing and such
acceleration shall at such time be prevented by reason of the pendency
against the Borrower of a case or proceeding under any bankruptcy or
insolvency law, the Guarantor agrees that, for purposes of this Guaranty
and its obligations hereunder, the Obligations shall be deemed to have been
accelerated and, subject to the limitation set forth in Section 2(b) above,
the Guarantor agrees to forthwith pay such Obligations (including, without
limitation, interest which but for the filing of a petition in bankruptcy
with respect to the Borrower, would accrue on such Obligations), and the
other obligations hereunder, without any further notice or demand.
Section 4. Waivers. The Guarantor hereby waives promptness,
diligence, notice of intention to accelerate, notice of acceleration,
notice of acceptance and any and all other notices with respect to any of
the Obligations and this Guaranty and any requirement that the
Administrative Agent or any Bank protect, secure, perfect or insure any
security interest in or any Lien on any property subject thereto or exhaust
any right or take any action against the Borrower, any other guarantor or
any other Person or any collateral or security or to any balance of any
deposit accounts or credit on the books of any Bank in favor of the
Borrower or the Guarantor.
Section 5. Subrogation. The Guarantor agrees that it will not
exercise any rights of subrogation, reimbursement or contribution,
contractual, statutory or otherwise which it may acquire by way of
subrogation under this Guaranty, by any payment hereunder or otherwise,
until all of the Obligations have been paid in full in cash and all
Commitments have terminated.
Section 6. Representations and Warranties. The following
representations and warranties are hereby made to the Administrative Agent
and the Banks:
(a) The Guarantor represents and warrants that it is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.
(b) The Guarantor represents and warrants that it: (i) is duly
qualified as a foreign corporation and in good standing under the laws of
each jurisdiction where qualification or licensing is required by the
nature of its business except where the absence of such qualification has
no reasonable likelihood of having a Material Adverse Effect on the
business, properties, assets or conditions (financial or otherwise) of the
Guarantor; (ii) has all requisite corporate power and authority and the
legal right to own, pledge, mortgage and operate its properties, and to
conduct its business as now or currently proposed to be conducted; (iii) is
in compliance with its certificate of incorporation and bylaws; (iv) is not
in default under any material agreement; and (v) is in compliance with all
applicable law except if such noncompliance has no reasonable likelihood of
having a Material Adverse Effect on the business, operations, properties,
assets or conditions (financial or otherwise) of the Guarantor or on its
ability to perform its obligations under this Guaranty.
(c) The Guarantor represents and warrants that the execution,
delivery, and performance by the Guarantor of this Guaranty (i) are within
the Guarantor's corporate powers; (ii) have been duly authorized by all
necessary corporate action; (iii) do not contravene the Guarantor's
certificate of incorporation or bylaws; and (iv) do not result in or
require the creation of any Lien upon or with respect to any of its
properties.
(d) The Guarantor represents and warrants that no authorization
or approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery and
performance by the Guarantor of this Guaranty.
(e) The Guarantor represents and warrants that this Guaranty is
a legal, valid and binding obligation of the Guarantor enforceable against
the Guarantor in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency or similar laws relating to
creditors' rights generally, as such laws would apply in the event of
bankruptcy, insolvency or other similar occurrence with respect to the
Guarantor, and except as may be limited by equitable principles (whether
enforcement is sought in equity or law).
(f) The Guarantor represents and warrants that there is no
pending or threatened action or proceeding affecting the Guarantor before
any Governmental Authority which has any reasonable likelihood of having a
Material Adverse Effect on the business, operations, properties, assets or
conditions (financial or otherwise) of the Guarantor, the Liens created by
any Loan Document or the ability of the Guarantor to perform its
obligations under this Guaranty.
(g) The Guarantor represents and warrants that: (i) the
consolidated financial statements of the Guarantor and its subsidiaries
dated December 31, 1997, and the related consolidated statements of income
or operations, shareholders' equity and cash flows for the fiscal year
ended on that date, (A) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise
expressly noted therein, subject to ordinary, good faith year-end audit
adjustments; and (B) fairly present the financial condition of the
Guarantor and its subsidiaries as of the date thereof and results of
operations for the period covered thereby; and (ii) since December 31,
1997, there has been no Material Adverse Effect with respect to the
Guarantor.
Section 7. Certain Covenants.
(a) Information Covenants. The Guarantor shall deliver to the
Administrative Agent, in form and detail satisfactory to the Administrative
Agent and the Majority Banks, with sufficient copies for each Bank:
(i) Annual Financial Statements. As soon as
available, but not later than 90 days after the end of each
fiscal year, a copy of the consolidated balance sheet of the
Guarantor and its subsidiaries as at the end of such year and the
related consolidated statements of operations and of cash flows
for such year, setting forth comparative consolidated figures for
the previous fiscal year, and accompanied by the opinion of a
nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such
consolidated financial statements present fairly the financial
position for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years. Such opinion
shall not be qualified or limited because of a restricted or
limited examination by the Independent Auditor of any material
portion of the subject companies;
(ii) Quarterly Financial Statements. As soon as
available, but not later than 45 days after the end of each of
the first three fiscal quarters of each fiscal year, a copy of
the unaudited consolidated balance sheet of the Guarantor and its
subsidiaries as of the end of such quarter and the related
consolidated statements of operations and of cash flows for the
period and for the elapsed portion of the fiscal year ended with
the last day of such quarterly period, and in each case setting
forth the comparative consolidated figures for the related period
in the prior fiscal year, and certified by the chief financial
officer or controller of the Guarantor as fairly presenting, in
accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments, the financial position and the
results of operations of the Guarantor and its subsidiaries;
(iii) Compliance Certificate. At the time of the
delivery of the financial statements provided for in Sections
7(a)(i) and (ii), a certificate signed by a Responsible Officer
of the Guarantor, stating that (A) the financial statements being
delivered present fairly the financial position of the Guarantor
as of the date thereof, (B) as of the date of such certificate,
no Guarantor Default or Guarantor Event of Default exists (or if
it does exist, an explanation of same and of the action the
Guarantor intends to take to remedy same), (C) the
representations and warranties of the Guarantor set forth in this
Guaranty are true and correct in all material respects as of the
date of such certificate except those which relate solely to an
earlier date, (D) as of the date of such certificate, no
actions, suits or proceedings are pending or, to the best
knowledge of the Guarantor threatened, at law, in equity, in
arbitration or before any Government Authority, against the
Guarantor or any of its properties which: (x) purport to or do
restrain the performance by the Guarantor under this Guaranty, or
(y) individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect with respect to the
Guarantor and its subsidiaries taken as a whole, and (E) since
the date of the financial statements being delivered, there has
been no Material Adverse Effect with respect to the Guarantor and
its subsidiaries taken as a whole;
(iv) Information Provided to Lenders. Promptly upon
transmission thereof, copies of all other information concerning
the Guarantor and its Subsidiaries which is delivered to the
agent and/or financial institutions pursuant to the R&B Credit
Facility;
(v) SEC Reports. Promptly upon transmission thereof,
copies of any material filings and registration with, and reports
to, the SEC by the Guarantor or its subsidiaries and copies of
all financial statements, proxy statements, notices and reports
as the Guarantor or any of its subsidiaries shall generally send
to analysts or all holders of their capital stock in their
capacity as such holders (in each case to the extent not
theretofore delivered to the Banks pursuant to this Guaranty);
and
(vi) Additional Information. Promptly, such additional
information regarding the business, financial or corporate
affairs of the Guarantor or any subsidiary of the Guarantor as
any Bank, acting through the Administrative Agent, may from time
to time reasonably request.
(b) Amendments to R&B Credit Agreement. (i) Prior to agreeing
to any R&B Credit Amendment, the Guarantor agrees to deliver a copy thereof
to the Administrative Agent. The Guarantor agrees not to consent to or
permit any R&B Credit Amendment without the prior written consent of the
Majority Banks acting through the Administrative Agent.
(ii) No Subsidiary of the Guarantor shall guarantee or otherwise
become liable for repayment of, nor shall the Guarantor or any of its
Subsidiaries give any security for, all or any part of Indebtedness under
the R&B Credit Facility, unless simultaneously therewith a guarantee (or
security agreement(s), as applicable) is executed in favor of the
Administrative Agent and the Banks, such guarantee (or security
agreement(s), as applicable) to be upon substantially the same terms as
granted to such other creditors and otherwise in form and substance
satisfactory to the Administrative Agent acting upon the direction of the
Majority Banks.
(c) Other Indebtedness and Permitted Liens. The Guarantor will
not, and will not permit any of its Subsidiaries to (i) create, incur
assume or permit to exist any Indebtedness (as defined in the Credit
Agreement governing the R&B Credit Facility (the "R&B Falcon Credit
Agreement")) except as permitted by the R&B Falcon Credit Agreement, or
(ii) create, incur, assume or permit to exist any Lien (as defined in the
R&B Falcon Credit Agreement) on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except
as permitted by the R&B Falcon Credit Agreement.
Section 8. Further Assurances. The Guarantor agrees that at any
time and from time to time, at the expense of the Guarantor, the Guarantor
will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, as the
Administrative Agent may reasonably request, to enable the Administrative
Agent to protect and to exercise and enforce its rights and remedies
hereunder.
Section 9. Application of Payments. Any payment received by the
Administrative Agent from the Guarantor (or from any Bank pursuant to
Section 14 below), shall be applied by the Administrative Agent as follows:
First, to the payment of costs and expenses of
collection and all expenses (including without limitation
Attorney Costs), liabilities and advances made or incurred by the
Administrative Agent in connection therewith;
Next, to the Banks pro rata, based on the then
outstanding amount of the Obligations owed to each in payment in
full of the Obligations; and
Finally, after payment in full of all Obligations and
the termination of the Commitments, the payment to the Guarantor,
or its successors and assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent
jurisdiction may direct, of any surplus then remaining from such
proceeds;
provided, however, that nothing contained in this Section 9 shall expand or
modify the limitation on the Guarantor's liability set forth in Section
2(b) of this Guaranty.
Section 10. Decisions Relating to Exercise of Remedies.
Notwithstanding anything in this Guaranty to the contrary, the
Administrative Agent may exercise, and at the request of the Majority Banks
shall exercise or refrain from exercising, all rights and remedies provided
for herein and provided by law.
Section 11. No Waiver. No failure on the part of the
Administrative Agent or any Bank to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 12. Amendments, Etc. No amendment or waiver of any
provision of this Guaranty, nor consent to any departure by the Guarantor
herefrom, shall in any event be effective unless the same shall be in
writing and signed, in the case of amendments, by the Guarantor and by the
Administrative Agent (acting with the consent of the Majority Banks or all
the Banks, as may be required pursuant to Section 10.01 of the Credit
Agreement) and, in the case of consent or waiver, by the Administrative
Agent (acting with the consent of the Majority Banks or all the Banks, as
may be required pursuant to Section 10.01 of the Credit Agreement) and then
such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which made or given.
Section 13. Notices. All notices, requests and other
communications provided for hereunder shall be in writing and given as
provided in Section 10.02 of the Credit Agreement. The address for notices
to the Guarantor shall be the address set forth below its signature to this
Guaranty, or such other address as shall be designated by the Guarantor in
a written notice to the Administrative Agent.
Section 14. Right to Set-off.
(a) Upon the occurrence and during the continuance of any Event
of Default under the Credit Agreement, each Bank is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to
set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Bank to or for the credit or the account of the Guarantor
against any and all of the Obligations (subject to the limitation set forth
in Section 2(b) above), irrespective of whether or not such Bank shall have
made any demand under this Guaranty and although such Obligations may be
contingent and unmatured. Each Bank which sets-off pursuant to this
Section 14(a) shall give prompt notice to the Guarantor and the
Administrative Agent following the occurrence thereof; provided that the
failure to give such notice shall not affect the validity of the set-off.
(b) Any payment obtained pursuant to Section 14(a) above (or in
any other manner directly from the Guarantor) by any Bank shall be remitted
to the Administrative Agent and distributed among the Banks in accordance
with the provisions of Section 9 above.
Section 15. Continuing Guaranty. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until the
indefeasible payment (after the termination of the Commitments) in full
(subject to Section 2(b) above) of the Obligations and all other amounts
payable under this Guaranty; (b) be binding upon the Guarantor, its
successors and assigns; and (c) inure to the benefit of the Administrative
Agent, the Banks and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Bank may
assign or otherwise transfer its rights and obligations under the Credit
Agreement to any other Person or entity, and such other Person or entity
shall thereupon become vested with all the benefits in respect thereof
granted to the Bank herein or otherwise, all as provided in, and to the
extent set forth in, Sections 10.07 and 10.08 of the Credit Agreement.
Section 16. Subordination of the Credit Parties' Obligations to the
Guarantor. The Guarantor hereby expressly covenants and agrees for the
benefit of the Administrative Agent and the Banks that all obligations and
liabilities of the Borrower and all obligations and liabilities of all
other guarantors of the Obligations (or any part thereof) ("Other
Guarantors"), to the Guarantor of whatsoever description (including,
without limitation, all rights of contribution) (the "Subordinated
Obligations") shall be subordinated and junior in right of payment to the
Obligations. In the case of any Insolvency Proceeding wherein the obligor
of Subordinated Obligations (an "Obligor") is debtor, the Obligor and any
assignee, trustee in bankruptcy, receiver or other similar Person, debtor
in possession or other Person(s) in charge are hereby directed to pay to
the Administrative Agent (for the benefit of the Banks) the full amount of
the Obligations (including interest to date of payment and including
without limitation interest accrued after the filing of a petition
initiating an Insolvency Proceeding) before making any payment in respect
of the Subordinated Obligations to the Guarantor, and insofar as may be
necessary for that purpose, the Guarantor hereby assigns and transfers to
the Administrative Agent all rights to such payments. Notwithstanding the
foregoing provisions of this Section 16:
(a) with respect to obligations and liabilities of the Borrower to
the Guarantor ("Borrower/Guarantor Obligations"), the Guarantor
may receive payments in respect of Borrower/Guarantor Obligations
so long as there has not occurred a Default or Event of Default;
(b) with respect to obligations and liabilities of one or more of the
Other Guarantors who are not signatories to this Guaranty
("Unrelated Guarantors") which obligations or liabilities are
related to the Borrower, the Drillship, or R&BII's interest in
the Borrower ("Drillship-Related R&B/Conoco Obligations"), the
Guarantor may receive payments in respect of Drillship-Related
R&B/Conoco Obligations so long as there has been no acceleration
of the Obligations under the Credit Agreement and there is not
pending any Insolvency Proceeding involving as debtor the
Borrower or the Obligor of the Drillship-Related R&B Conoco
Obligations; and
(c) obligations and liabilities of Unrelated Guarantors to the
Guarantor, if such obligations and liabilities are unrelated to
the Borrower and the Drillship ("Unrelated R&B/Conoco
Obligations"), shall not be subject to the provisions of this
Section 16.
If the Guarantor shall receive any payment in respect of the Subordinated
Obligations in contravention of the terms of this Section, such payments
shall be collected and received by the Guarantor as trustee for the
Administrative Agent and the Banks and paid over to the Administrative
Agent and the Banks on account of the Obligations.
Section 17. Severability; Entire Agreement.
(a) If for any reason any provision or provisions hereof are
determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or affect those portions of
this Guaranty which are valid.
(b) This Guaranty, together with the other Loan Documents,
embodies the entire agreement and understanding among the Guarantor and the
other parties to the Loan Documents, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.
Section 18. Taxes.
(a) Any and all payments by the Guarantor to each Bank or the
Administrative Agent under this Guaranty and any other Loan Document shall
be made free and clear of, and without deduction or withholding for, any
Taxes. In addition, the Guarantor shall pay all Other Taxes with respect
to amounts owed by it.
(b) If the Guarantor shall be required by law to deduct or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of any
sum payable hereunder to any Bank or the Administrative Agent, then: (i)
the sum payable shall be increased as necessary so that after making all
required deductions and withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) such Bank or the
Administrative Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions or withholdings been
made; (ii) the Guarantor shall make such deductions and withholdings; (iii)
the Guarantor shall pay the full amount deducted or withheld to the
relevant taxing authority or other authority in accordance with applicable
law; and (iv) the Guarantor shall also pay to each Bank or the
Administrative Agent for the account of such Bank, at the time interest is
paid, all additional reasonable amounts which the respective Bank
specifies, in a Certificate Regarding Taxes (as defined in Section 18(e)
below) as necessary to preserve the after-tax yield the Bank would have
received if such Taxes, Other Taxes or Further Taxes had not been imposed.
(c) The Guarantor agrees to indemnify and hold harmless each
Bank and the Administrative Agent for the full amount of Taxes, Other Taxes
and Further Taxes in the amount that the respective Bank specifies, in a
Certificate Regarding Taxes (as defined in Section 18(e) below) as
necessary to preserve the after-tax yield the Bank would have received if
such Taxes, Other Taxes or Further Taxes had not been imposed, and any
liability (including penalties, interest, additions to tax and expenses)
arising therefrom or with respect thereto, whether or not such Taxes, Other
Taxes or Further Taxes were correctly or legally asserted. Payment under
this indemnification shall be made within 30 days after the date the Bank
or the Administrative Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by the
Guarantor of Taxes, Other Taxes or Further Taxes, the Guarantor shall
furnish to the Administrative Agent and each Bank the original or a
certified copy of a receipt evidencing payment thereof, or other evidence
of payment reasonably satisfactory to the Administrative Agent.
(e) As used in this Section 18, a "Certificate Regarding Taxes"
means a Certificate executed on behalf of the applicable Bank setting forth
in reasonable detail the amount payable to such Bank hereunder. Such
certificate shall be conclusive and binding on the Guarantor in the absence
of manifest error.
Section 19. Event of Default. As used in this Guaranty and in the
other Loan Documents, a "Guarantor Event of Default" shall mean the
occurrence of any of the following events:
(a) the Guarantor fails to observe any covenant in Section 7(b)
or 7(c) of this Guaranty; or
(b) the Guarantor shall fail to observe or perform any other
term or covenant contained in this Guaranty; provided, however if such
default is capable of being cured or remedied, then such default shall not
constitute a Guarantor Event of Default unless it shall continue unremedied
for a period of twenty (20) days; or
(c) the Guarantor (A) fails to make any payment in respect of
any Indebtedness or Contingent Obligation having an aggregate principal
amount (including undrawn committed or available amounts and including
amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $5,000,000 when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) and such
failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure, or (B)
fails to perform or observe any other condition or covenant, or any other
event shall occur or condition exist, under any agreement or instrument
relating to any such Indebtedness or Contingent Obligation, and such
failure continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure, if the
effect of such failure, event or condition is to result in acceleration of
all or any part of such Indebtedness or renegotiation of the material
payment terms of any such Indebtedness to become due prior to its scheduled
maturity, or to result in such Contingent Obligation becoming payable or
cash collateral in respect thereof being demanded; or
(d) An R&B Credit Amendment shall be made or done without the
prior written consent of the Administrative Agent (acting upon direction of
the Majority Banks).
SECTION 20. GOVERNING LAW AND JURISDICTION.
(a) THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS); PROVIDED THAT THE ADMINISTRATIVE AGENT
AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY
EXECUTION AND DELIVERY OF THIS GUARANTY, THE GUARANTOR CONSENTS, FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE
COURTS. THE GUARANTOR HEREBY IRREVOCABLY DESIGNATES AND APPOINTS CAPITOL
SERVICES, INC., WITH OFFICES ON THE DATE HEREOF AT 00 XXXXXX XXX., XXXXX
000, XXXXXX, XXX XXXX, 00000, AS ITS DESIGNEE, APPOINTEE AND ADMINISTRATIVE
AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN
RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS,
NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING.
IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND ADMINISTRATIVE AGENT SHALL
CEASE TO BE AVAILABLE TO ACT AS SUCH, THE GUARANTOR AGREES TO DESIGNATE A
NEW DESIGNEE, APPOINTEE AND ADMINISTRATIVE AGENT IN NEW YORK ON THE TERMS
AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE
AGENT. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE GUARANTOR FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT
ITS ADDRESS SET FORTH BELOW ITS SIGNATURE TO THIS GUARANTY AGREEMENT, SUCH
SERVICE TO BECOME EFFECTIVE TEN DAYS AFTER MAILING SUCH AGREEMENT. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY BANK TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE GUARANTOR IN ANY OTHER
JURISDICTION. THE GUARANTOR WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED
BY NEW YORK LAW.
(c) THE GUARANTOR IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS GUARANTY OR
ANY DOCUMENT RELATED HERETO.
SECTION 21. WAIVER OF JURY TRIAL. THE GUARANTOR WAIVES ITS RIGHTS
TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS GUARANTY, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY
OTHER PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER
WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE GUARANTOR
AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT
TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE GUARANTOR
FURTHER AGREES THAT ITS RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH
SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS GUARANTY OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR
THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.
[SIGNATURE IS ON FOLLOWING PAGE]
ENTIRE AGREEMENT. THIS WRITTEN GUARANTY AND OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the
date first above written.
R&B FALCON CORPORATION
By
Name:
Title:
Address for Notices:
R&B Falcon Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xx. Xxx X. Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxx, Esq .
Co-Counsel
R&B Falcon Corporation
000 Xxxxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
