EXHIBIT 4.8
DATED DECEMBER 1998
THE LENDERS HEREIN REFERRED TO
as Lenders
-and-
PETRODRILL SEVEN LIMITED
as Borrower
- and -
MITSUBISHI CORPORATION (UK) PLC
as Facility Agent
- and -
MITSUBISHI CORPORATION (UK) PLC
as Security Agent
-------------------------------------------------
LOAN AGREEMENT
providing for a secured loan facility
not exceeding US$180,000,000
in connection with the acquisition
of a semi-submersible drilling rig
t.b.n. "AMETHYST 7"
-------------------------------------------------
F I E L D - F I S H E R - W A T E R H O U S E
4 1 V I N E S T R E E T L O N D O N E C 3 N 2 A A
CONTENTS
CLAUSE/HEADING PAGE
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1. DEFINITIONS AND INTERPRETATION 2
2. THE FACILITY 17
3. CONDITIONS PRECEDENT 19
4. DISBURSEMENT OF ADVANCES 24
5. INTEREST 26
6. REPAYMENT AND PREPAYMENT 27
7. SECURITY 29
8. REPRESENTATIONS 31
9. PAYMENTS: TAXATION 35
10. EVENTS OF DEFAULT 37
11. COVENANTS 41
12. SECURITY ACCOUNTS 46
13. PROVISIONS RELATING TO SECURITY 48
14. CHANGE IN CIRCUMSTANCES 48
15. TRANSFERS 51
16. FEES AND EXPENSES 52
17. CURRENCY INDEMNITY 53
18. GENERAL INDEMNITIES 54
19. THE AGENTS 55
20. SET-OFF/PRO-RATA SHARING 61
21. NOTICES, ETC. 63
22. COUNTERPARTS 64
23. AGENTS'AND LENDERS'CERTIFICATES 65
24. WAIVER; REMEDIES CUMULATIVE 66
25. LANGUAGE 65
26. SEVERABILITY 65
27. GOVERNING LAW AND JURISDICTION 65
SIGNATORIES 67
SCHEDULES
1 THE LENDERS AND THEIR COMMITMENTS 68
2 THE FORM OF REPAYMENT SCHEDULE 69
3 PART 1: SERVICES CONTRACTS 70
PART 2: OTHER SERVICES CONTRACTS 70
4 DRAWING REQUEST 71
5 DETAILS OF THE HOLDER OF SHARES IN THE BORROWER
AND THE SISTER COMPANY 72
6 FORM OF TRANSFER CERTIFICATE 73
7 PART 1 - THE PROJECT DOCUMENTS 76
PART 2 - THE SECURITY DOCUMENTS 77
8 INSURANCES 79
THIS AGREEMENT is made this day of December 1998
BETWEEN
(1) THE LENDERS, the respective names and offices of which are set out in
Schedule 1, as Lenders;
(2) PETRODRILL SEVEN LIMITED, a company incorporated under the laws of the
British Virgin Islands having its registered office at 325 Waterfront
Drive, Omar Hodge Building, 2nd Floor, Wickhams Cay, Road Town, Tortola,
British Virgin Islands, as Borrower;
(3) MITSUBISHI CORPORATION (UK) PLC, a company incorporated in England and
Wales (Reg No. 2214224) whose registered office is at Bow Bells House,
Bread Street, London EC4M 9BQ, in its capacity as facility agent for
the Lenders; and
(4) MITSUBISHI CORPORATION (UK) PLC, a company incorporated in England and
Wales (Reg No. 2214224) whose registered office is Bow Bells House, Bread
Street, London EC4M 9BQ, in its capacity as security agent and trustee for
the Secured Parties.
WHEREAS:
(A) This Agreement sets out the terms and conditions upon and subject
to which loan facilities will be made available to the Borrower in an
aggregate principal amount (including interest capitalised in accordance
with the terms hereof) not exceeding US$180,000,000 for the purpose of
financing the acquisition of a semi-submersible drilling rig to be
constructed by the Builder, comprising a Tranche A Facility of a principal
amount (including interest capitalised as aforesaid) not exceeding
US$53,000,000, a Tranche B Facility in a principal amount (including
interest capitalised as aforesaid) not exceeding US$74,000,000 and a
Tranche C Facility in a principal amount (including interest capitalised
as aforesaid) not exceeding US$53,000,000.
(B) Subject to and upon the terms and conditions contained in this Agreement
and the Sister Company Loan Agreement respectively MC1 has agreed to make
available to the Borrower and the Sister Company loan facilities in the
aggregate principal amount (including interest capitalised as aforesaid)
not exceeding US$127,000,000 and of US$113,000,000 respectively.
(C) Maritima and Pride have severally and unconditionally agreed with and
undertaken to MC1 and MC2 that subject to and in accordance with the terms
of the Additional Funding and Guarantee Agreement (referred to in Recital
(D)), they will provide or arrange the provision of funding to the
Borrower in each case on or before 29 October 1999 and in each case on the
terms and conditions of the facilities to be made available under this
Agreement and the Sister Company Loan Agreement in the amount (including
interest capitalised as aforesaid as at such date) of US$53,000,000 and to
the Sister Company in the amount of US$47,000,000 (including interest
capitalised in accordance with the terms of the Sister Company Loan
Agreement as at such date).
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(D) Accordingly it has been agreed that subject to the terms and conditions
contained in this Agreement MC1 will provide a bridging loan to MC2 (an
affiliate company of MC1) in an amount (including interest capitalised as
hereinafter provided to 29 October 1999) not exceeding US$53,000,000 on
terms that it will be repaid to MC1 on or before 29 October 1999 and to
give effect to this and to the agreement and undertaking referred to in
Recital (C) Pride and Maritima have (INTER ALIA) entered into an
Additional Funding and Guarantee Agreement with MC1 and MC2 whereby Pride
and Maritima severally guarantee the repayment of the Bridging Loans and
MC2 has granted to them an option severally to purchase (subject to and in
accordance with the Additional Funding and Guarantee Agreement) from MC2
its Tranche A Commitment and its participation in the Tranche A Advances.
(E) It has therefore also been agreed that the Tranche C Facility will only
be made available to the Borrower by MC1 conditionally to the extent of
the repayment to MC1 of the Bridging Loan and the assumption by Pride and
Maritima or another Qualifying Lender of the Tranche A Commitments of MC2
and the assumption by Pride and Maritima or such party of MC2's
participation in the Tranche A Advances and the payment by Pride and
Maritima to MC2 of the amount thereof all in accordance with the
Additional Funding and Guarantee Agreement.
NOW IT IS HEREBY AGREED as follows:-
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINED TERMS
In this Agreement the following words and expressions shall, except where
the context otherwise requires, have the following meanings:
"ADDITIONAL FUNDERS" means Elliott Associates LP and Westgate
International LP;
"ADDITIONAL FUNDING AND GUARANTEE AGREEMENT" means the agreement to be
executed in the approved form by MC1, MC2, the Borrower, the Guarantors
and the Additional Funders whereby the Guarantors will severally guarantee
the performance by MC2 of its obligations under the Bridging Loan
Agreement and the Additional Funders guarantee the performance by Maritima
of its obligations thereunder (in each case without any right of recourse
to MC2);
"ADVANCE" means an advance made or to be made or deemed to be by the
Lenders under the Facilities or (as the context may require) the principal
amount thereof for the time being outstanding and when designated an "A"
ADVANCE, a "B" ADVANCE or a "C" ADVANCE means an Advance made or to be
made in respect of the Tranche "A" Facility, the Tranche "B" Facility or
the Tranche "C" Facility respectively and, additionally, when designated a
"PRE-DELIVERY ADVANCE" means an Advance made or to be made prior to the
Yard Delivery Date, when designated the "YARD DELIVERY ADVANCE" means the
Advance made or to be made on the Yard Delivery Date upon delivery of the
Rig by the Builder to the Borrower and when designated a "POST YARD
DELIVERY ADVANCE" means an Advance made or to be made after the Yard
Delivery Date but prior to the Charterparty Commencement Date;
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"AGENTS" means the Facility Agent and the Security Agent, and
"AGENT" means either of them, as the context requires;
"ASSIGNMENT OF DEED OF GUARANTEE AND UNDERTAKING AND SUBORDINATED LOAN
FACILITY AGREEMENT" means the assignment in the approved form to be
executed pursuant to Clause 7.1(xv);
"AVAILABLE FACILITY AMOUNT" means on any date in respect of any Facility
the Facility Amount of such Facility as reduced by the amount of Advances
made or deemed to have been made hereunder in respect of such Facility and
as further reduced by the amount of interest which has accrued on the
Advances drawn or deemed to have been drawn under such Facility since the
Interest Capitalisation Date last preceding such date;
"AVAILABILITY PERIOD" means the period commencing on the date of this
Agreement and ending on the earlier of 30 April 2001 and the Charterparty
Commencement Date;
"BALLOON" means the instalment of the Loan repayable by the
Borrower on the Final Repayment Date pursuant to Clause 6.3;
"BANKING DAY" means a day (not being a Saturday or Sunday) on which banks
and foreign exchange markets are open for business in London, New York,
Tokyo and Rio de Janeiro and, in respect of the period expiring on (and
including) the Yard Delivery Date, Seoul;
"BORROWER" means Petrodrill Seven Limited, a company organised and
existing under the laws of the British Virgin Islands (Company No. 273701)
whose registered office is at 325 Waterfront Drive, Omar Hodge Building,
2nd Floor, Wickhams Cay, Road Town, Tortola, British Virgin Islands;
"BRIDGING LOANS" has the meaning assigned to such term in the Bridging
Loan Agreement;
"BRIDGING LOAN AGREEMENT" means the agreement in the approved form dated
the same date as this Agreement between MC1 and MC2 pursuant to which MC1
has agreed to advance to MC2 the amounts of Advances made by MC2 under the
Tranche A Facility and the amounts of certain advances made by MC2
pursuant to the Sister Company Loan Agreement;
"BRIDGING LOAN REPAYMENT DATE" means the earlier of:
(i) 29 October 1999; and
(ii) the date on which (the Tranche A Facility having been fully
drawn and the Tranche A Facility having been fully drawn under and
as defined in the Sister Company Loan Agreement) further Drawings
are not available for Drawing under the Tranche B Facility (and
further drawings under the Tranche B Facility are not available as
defined in and in accordance with the Sister Company Loan Agreement)
by reason of the application of Clause 3.6(viii) of the Loan
Agreement (or Sister Company Loan Agreement) (because the making of
such Drawings would cause the Prospective Final Grossed-up Advances
Amount of the Tranche B Facility to exceed US$74,000,000 or (as the
case may be) the
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Prospective Final Grossed-up Amount of the Tranche B Facility as
defined in and under the Sister Company Loan Agreement to exceed
US$66,000,000);
"BUILDER" means Daewoo Corporation a company organised and existing under
the laws of Korea and Daewoo Heavy Industries Ltd., a company organised
and existing under the laws of Korea whose registered offices are at 541
5-GA, Namdaemuro, Jung-Gu, Seoul, Korea, being jointly and severally the
builder under the Rig Construction Contract;
"CHARTERPARTY" means the time charterparty agreement in respect of the Rig
(Contract No. 101.2.155.97-9) dated on or around 12 January 1998 and
executed by and between Maritima (as owner) and Petrobras (as charterer)
in the approved form, all rights and obligations of Maritima having since
been assigned by Maritima to the Borrower with Petrobras' approval by an
assignment document made between Petrobras, Maritima and the Borrower
dated 10 July 1998;
"CHARTERPARTY ASSIGNMENT" means a deed of assignment to be executed by the
Borrower in favour of the Security Agent for itself and as trustee for the
Secured Parties in accordance with Clause 7.1(iv);
"CHARTERPARTY COMMENCEMENT DATE" means the date on which the Rig (having
arrived at the Port or in sheltered waters in Macae -RJ) is accepted by
Petrobras for the commencement of operations, all in accordance with the
Charterparty;
"CHARTERPARTY HIRE" means all payments by way of charterhire and any other
monies from time to time payable under the Charterparty;
"COMMITMENT" in relation to a Lender means the aggregate of its Tranche A
Commitment, its Tranche B Commitment and its Tranche C Commitment;
"TRANCHE A COMMITMENT" in relation to a Lender means, subject as
hereinafter provided, the amount (if any) set opposite its name in the
column headed "TRANCHE A COMMITMENT" of Schedule 1 (or, as the case may
be, the amount specified as the portion of the Tranche A Facility
transferred in the Transfer Certificate pursuant to which such Lender
became a party hereto), "TRANCHE B COMMITMENT" in relation to a Lender
means, subject as hereinafter provided, the amount (if any) set opposite
its name in the column headed "TRANCHE B COMMITMENT" of Schedule 1 (or, as
the case may be, the amount specified as the portion of the Tranche B
Facility transferred in the Transfer Certificate pursuant to which such
Lender became a party hereto) and "TRANCHE C COMMITMENT" in relation to a
Lender means, subject as hereinafter provided, the amount (if any) set
opposite its name in the column headed "TRANCHE C COMMITMENT" in Schedule
1 (or, as the case may be, the amount specified as the portion of the
Tranche C Facility transferred in the Transfer Certificate pursuant to
which such Lender became a party hereto) and, in any such case, as reduced
from time to time in accordance with the provisions hereof; and "TRANCHE A
COMMITMENTS", "TRANCHE B COMMITMENTS" and "TRANCHE C COMMITMENTS" shall be
construed accordingly;
"CONSTRUCTION AND MOBILISATION COSTS" means the costs, charges and
expenses paid or to be paid by the Borrower in respect of spare parts,
operating manuals and procedures, training, construction management team
costs, commissioning of all equipment, construction insurance and
mobilisation costs during transit to Brazil;
"CONTRACT PRICE" has the meaning given to it in the Rig Construction
Contract;
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"CONTRACTUAL DELIVERY DATE" has the meaning given to it in the Rig
Construction Contract;
"CORRESPONDING SISTER COMPANY COMMITMENTS", "CORRESPONDING SISTER COMPANY
OUTSTANDINGS", "CORRESPONDING SISTER COMPANY FACILITIES" and
"CORRESPONDING SISTER COMPANY ADVANCES" means, in relation to any
Commitments, Outstandings, Facilities or Advances, the commitments,
outstandings, facilities or, as the case may be, advances under the Sister
Company Loan Agreement having the same designation as such Commitments,
Outstandings, Facilities or Advances under this Agreement;
"CROSS GUARANTEE" means the guarantee to be executed by the Borrower, the
Sister Company and the Shareholder in favour of the Security Agent for
itself and as trustee for the Secured Parties in accordance with Clause
7.1(xii);
"DAILY RATE" means after the Charterparty Commencement Date (in respect of
the first Year) US$26,753 per day during which the Rig is operating (and
during any day during which the Rig is not operating US$9,300) comprising
a fixed proportion of US$11,753 (or US$5,000 if non-operational for more
than 5 consecutive working days) (the "FIXED PROPORTION") and a variable
proportion of US$15,000 (or US$9,300 if non-operational for more than 5
consecutive working days) (the "VARIABLE PROPORTION") and in respect of
each subsequent Year an amount equal to the aggregate of (i) the Fixed
Proportion (unchanged) and (ii) the Variable Proportion escalated on the
first anniversary of the Charterparty Commencement Date and each
successive anniversary of the Charterparty Commencement Date thereafter at
the rate of 3% per annum);
"DEED OF COVENANTS" means the deed of covenants to be executed by the
Borrower in favour of the Security Agent for itself and as trustee for the
Secured Parties (in conjunction with the Mortgage) in accordance with
Clause 7.1(iii);
"DEED OF GUARANTEE AND UNDERTAKING" means the deed of guarantee
and undertaking to be executed in accordance with Clause 7.2;
"DELAYED DELIVERY DEDUCTIBLE" means any amount which is deductible by
insurers before amounts become payable or which is deducted from amounts
which are payable under the terms of the delayed delivery insurance
effected pursuant to Clause 11.3 in the event of a claim being made in
respect of such insurance;
"DRAWDOWN DATE", in relation to an Advance, means the date on
which such Advance is made or deemed to be made hereunder;
"DRAWING REQUEST" means the request for drawing an Advance
pursuant to any of the Facilities issued by the Borrower pursuant
to this Agreement;
"EARNINGS" means the aggregate of (i) the Charterparty Hire, (ii) all
other moneys whatsoever due or to become due to the Borrower at any time
during the Security Period arising out of the use or operation of the Rig
and/or out of the provision of related services (including, but not
limited to) all hire and other moneys receivable in respect of the Rig
(whether receivable directly by the Borrower or by any agent on its
behalf), all compensation payable to the Borrower in the event of
requisition of the Rig for hire, all remuneration for salvage and towage
services and all demurrage and detention moneys
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and (iii) damages for breach (or payments for variation or termination) of
the Charterparty or any other charterparty or contract entered into by the
Borrower for the employment of the Rig;
"ENVIRONMENTAL APPROVALS" means all approvals, licences, permits,
exemptions and authorisations required under applicable Environmental
Laws;
"ENVIRONMENTAL CLAIM" means (1) any claim by, or directive from, any
applicable governmental, judicial or other regulatory authority alleging
breach of, or non-compliance with, any Environmental Laws or Environmental
Approvals or otherwise howsoever relating to or arising out of an
Environmental Incident or (2) any claim by any other third party howsoever
relating to or arising out of an Environmental Incident (and, in each such
case, "CLAIM" shall mean a claim for damages, clean-up costs, compliance,
remedial action or otherwise);
"ENVIRONMENTAL INCIDENT" means (1) any release (or threatened release) of
Environmentally Sensitive Material from the Rig, (2) any incident in which
Environmentally Sensitive Material is released (or threatens to be
released) from any vessel other than the Rig and which involves collision
between the Rig and such other vessel or some other incident of navigation
or operation, in either case where the Rig or the Borrower are actually or
allegedly at fault or otherwise liable (in whole or in part) or (3) any
incident in which Environmentally Sensitive Material is released (or is
threatened to be released) from a vessel other than the Rig and where a
vessel is actually or potentially liable to be arrested as a result and/or
where the Borrower is actually or allegedly at fault or otherwise liable;
"ENVIRONMENTAL LAWS" means all laws, regulations, conventions and
agreements whatsoever relating to pollution or protection of the
environment (including, without limitation, the United States Oil
Pollution Act of 1990 and any comparable laws of the individual States of
the United States of America); and
"ENVIRONMENTALLY SENSITIVE MATERIAL" means oil, oil products, gas or any
other substance which is polluting, toxic or hazardous or any substance
the release of which into the environment is regulated, prohibited or
penalised by or pursuant to any Environmental Law;
"EVENT OF DEFAULT" means any of the events specified in Clause 10.1;
"FACILITIES" means the Tranche A Facility, the Tranche B Facility and the
Tranche C Facility and "FACILITY" means any of them;
"FACILITY AGENT" means Mitsubishi Corporation (UK) PLC, in its capacity as
facility agent for the Lenders and includes any successor facility agent
appointed hereunder;
"FACILITY AMOUNT" means in relation to any Facility the amount of such
Facility specified in Clause 2;
"FINAL REPAYMENT DATE" means the last of the dates specified in the
Repayment Schedule;
"FINANCING DOCUMENTS" means this Agreement and the Security Documents;
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"FLOOR GUARANTEE" means the guarantee to be executed by the Guarantors in
accordance with Clause 7.2(i);
"GUARANTEES" means the Floor Guarantee, and the Deed of Guarantee and
Undertaking, and "GUARANTEE" means any of them;
"GUARANTORS" means each of Maritima and Pride, and "GUARANTOR" means
either of them;
"INITIAL LENDERS" means MC1 and MC2;
"INSURANCES" means all policies and contracts of insurance (which
expression includes all entries of the Rig in a protection and indemnity
or war risks association) which are from time to time taken out or entered
into in respect of the Rig and the Charterparty Hire or otherwise
howsoever in connection with the Rig, including (but not limited to) any
policies of insurance effected pursuant to the Financing Documents
including (without limitation) (i) all insurances taken out by the Builder
in respect of the Rig and the Listed Items and the Purchaser's Supplies
(as defined in the Rig Construction Contract), and (ii) the Temporary
Confirmation of Insurance and (iii) (subject to such insurances being
available in the international insurance market) such other insurances as
the Facility Agent may from time to time at its discretion require;
"INSURANCES ASSIGNMENT" means a deed of assignment to the Insurances
executed or to be executed by the Borrower in favour of the Lender in
accordance with Clause 7.1(vi);
"INTER-COMPANY LOAN" means the loan made or to be made pursuant
to the Inter-company Loan Agreement;
"INTER-COMPANY LOAN AGREEMENT" means the agreement in the approved form
between the Borrower and the Sister Company for the loan by the Borrower
to the Sister Company of US$10,000,000;
"INTER-COMPANY LOAN ASSIGNMENT" means the assignment of the Inter-company
Loan to be executed pursuant to Clause 7.1(ii);
"INTEREST CAPITALISATION DATES" means (i)the date falling six months after
the date of this Agreement; (ii) each date falling at six monthly
intervals between such date and (in the case of Tranche B Advances and
Tranche C Advances) the Charterparty Commencement Date; and (iii) (in the
case of Tranche A Advances) the Notional Interim A Facility Date and the
Charterparty Commencement Date;
"LENDERS" means the Initial Lenders and any person who becomes a Lender
from time to time pursuant to Clause 15 (Transfers) but excluding any
person who ceases to be a Lender pursuant to that Clause;
"LENDING OFFICE" means in relation to a Lender, the branch office of such
Lender through which such Lender is for the time being acting for the
purposes of this Agreement;
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"LISTED ITEMS" means the equipment defined as the "LISTED ITEMS" in the
Rig Construction Contract;
"LISTED ITEMS PRICE" means the price payable by the Borrower to the
Builder in respect of the Listed Items;
"LOAN" means the aggregate principal amount advanced by the Lenders
hereunder under any of the Facilities or (as the context requires) the
amount thereof for the time being outstanding hereunder and shall include
interest which has accrued and been capitalised in accordance with Clause
5.2;
"MC1" means Petro Dia Three S.A. a company incorporated under the laws of
Panama whose registered office is at 53rd Street, Urbanizacion Obarrio,
Torre Swiss Bank, 16th Floor, Panama City, Republic of Panama;
"MC2" means Petro Dia Four S.A. a company incorporated under the laws of
Panama whose registered office is at 53rd Street, Urbanizacion Obarrio,
Torre Swiss Bank, 16th Floor, Panama City, Republic of Panama;
"MAJORITY LENDERS" means those Lenders the aggregate of whose Outstandings
comprise at least 66 2/3% of the Loan or, if an Advance has not then been
made, Lenders the aggregate of whose Commitments represent at least 66
2/3% of the Total Commitments;
"MANAGEMENT ACCOUNT" means an account to be opened by and in the name of
the Borrower with the Management Account Bank and designated as the
Facility Agent may specify, and shall include any sub-account forming part
of such account and also any such other account or accounts as may, with
the agreement from time to time of the Security Agent, be opened and/or
designated as the Management Account by the Borrower;
"MANAGEMENT ACCOUNT BANK" means The Bank of Tokyo-Mitsubishi Limited,
London Branch or such other bank as the Facility Agent may nominate for
the purpose of holding and operating the Management Account;
"MANAGEMENT ACCOUNT CHARGE" means the charge over the Management Account
to be executed by the Borrower in favour of the Security Agent for itself
and as trustee for the Secured Parties in accordance with Clause 7.1(vii);
"MARITIMA" means Maritima Petroleo e Engenharia Ltda, (formerly Maritima
Navegacao e Engenharia Ltda), a company incorporated under the laws of
Brazil whose registered office is at Avenida Almte, Barroso, 52 Gr. 3400,
2031-000 Rio de Janeiro, Brazil;
"MONTHLY OUTGOINGS" means (in relation to each and every month) the day to
day administration and operational costs and expenses incurred or to be
incurred by the Borrower in the operation of the Rig for that month
exclusive of any such as arise under the provisions of this Agreement,
being an amount equal to the aggregate of the Daily Rate applicable for
the month in question multiplied by the number of days in that month;
"MORTGAGE DEBENTURE" means a first priority mortgage debenture to be
executed by the Borrower pursuant to Clause 7.1(x) in favour of the
Security Agent for itself and as trustee for the Secured Parties;
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"NOTIONAL FINAL FACILITY DATE" means 31 December 2000;
"NOTIONAL INTERIM A FACILITY DATE" means, in relation to the Tranche A
Facility, 29 October 1999;
"OFF-HIRE DEDUCTIBLE" means any amount which is deductible by insurers
before amounts become payable and which is deducted from amounts which are
payable under the terms of the off-hire insurance effected pursuant to
Clause 11.3 in the event of a claim being made in respect of such
insurance;
"OMNIBUS CONTRACT ASSIGNMENT" means the assignment to be executed
in accordance with Clause 7.1(ix);
"ORIGINAL SCHEDULED CHARTERPARTY COMMENCEMENT DATE" means 17 September
2000;
"ORIGINAL SCHEDULED YARD DELIVERY DATE" means 30 June 2000;
"OTHER SERVICES CONTRACTS" means the contracts specified in Schedule 3
Part 2;
"OUTSTANDINGS" means, in relation to a Lender at any time, the aggregate
principal amount of its participation in all (if any) Advances outstanding
at that time;
"OUTSTANDING INDEBTEDNESS" means the Loan and all interest thereon and all
other sums of money from time to time owing to the Lenders under this
Agreement and/or the Security Documents or any of them;
"PETROBRAS" means Petroleo Brasileiro S.A. - Petrobras;
"POST-DELIVERY OPEX" means costs incurred by the Borrower in the operation
of the Rig during the period between the Yard Delivery Date and the
Charterparty Commencement Date;
"POTENTIAL EVENT OF DEFAULT" means any event or circumstance which, with
the giving of notice, lapse of time or both or the satisfaction of any
other applicable condition or the making of any applicable determination,
may become an Event of Default;
"PRE-DELIVERY OPEX" means costs incurred by the Borrower in respect of
crews wages and travelling expenses during the period between the Original
Scheduled Yard Delivery Date and the Yard Delivery Date;
"PRIDE" means Pride International Inc., a company incorporated under the
laws of the State of Louisiana, USA of 5847 San Felipe, Suite 330,
Houston, Texas 77057 USA;
"PROJECT DOCUMENTS" means the documents specified in Schedule 7
Part 1;
"PROJECT PARTIES" means the parties to the Project Documents (including
the Security Parties);
"PROSPECTIVE FINAL GROSSED-UP ADVANCES AMOUNT" means on any date in
respect of any Facility the amount of the Advances which (on the basis of
the Advances which have been made or deemed to have been made under such
Facility on or prior to such date and
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the Advances which after such date will be deemed to be made pursuant to
Clause 4.4 for the purposes of capitalising interest on such Advances)
will be outstanding under such Facility on the Notional Final Facility
Date on the assumption that no other Advances are made (save only for
Advances deemed to be made in accordance with Clause 4.4 for the purposes
of capitalising interest) and no payments of interest or repayments of any
Advance are made between such date and the Notional Final Facility Date;
"PROSPECTIVE INTERIM GROSSED-UP A ADVANCES AMOUNT" means on any date in
respect of the Tranche A Facility the amount of the A Advances which (on
the basis of the A Advances made or deemed to have been made under the
Tranche A Facility on or prior to such date and the A Advances which after
such date will be deemed to be made pursuant to Clause 4.4 for the
purposes of capitalising interest on such A Advances) will be outstanding
under the A Facility on the Notional Interim A Facility Date on the
assumption that no other A Advances (save any for A Advances deemed to be
made in accordance with Clause 4.4 for the purposes of capitalising
interest) are made and no payments of interest or repayments of any
Advance are made between such date and the Notional Interim A Facility
Date;
"PROVISIONAL CONTRACT PRICE" has the meaning ascribed thereto in the Rig
Construction Contract;
"PURCHASER'S SUPPLIES" has the meaning ascribed to such term in the Rig
Construction Contract;
"PURCHASER'S SUPPLIES CONTRACTS" means the contracts entered into or
novated from time to time by the Borrower for the purchase of Purchaser's
Supplies;
"PURCHASER'S SUPPLIES PRICE" means the aggregate amount payable by the
Borrower to the suppliers of Purchaser's Supplies under the Purchaser's
Supplies Contracts;
"QUALIFYING LENDER" means Elliott Associates LP, Westgate International LP
and/or any person who in accordance with Clause 15.3 becomes a Lender
under this Agreement and complies with the requirements of that Clause and
being (in the case only of a Transferee to whom a Lender is proposing to
transfer or novate any of its Tranche A Commitments), either (i) a bank or
other financial institution which is a first class international bank
incorporated in any country which is a member of OECD or (ii) a person
approved by MC1 such approval not to be unreasonably withheld or delayed;
"REFUND GUARANTEE" means the guarantee issued to Petrodrill Construction
Inc and novated to the Borrower by The Export-Import Bank of Korea (or
such other international bank acceptable to the Lenders) in respect of
certain instalments of the Contract Price paid by the Borrower to the
Builder pursuant to the Rig Construction Contract;
"REPAYMENT DATE" means any of the eighty-four (84) repayment dates
specified in the Repayment Schedule;
"REPAYMENT INSTALMENT" means each instalment for repayment of the Loan and
payment of interest thereon, in each case as provided for in Clauses 6.2
and 6.3;
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"REPAYMENT SCHEDULE" means the schedule substantially in the form set out
in Schedule 2 to be prepared by the Facility Agent in accordance with
Clause 6.3;
"REQUISITION COMPENSATION" means all moneys or other compensation payable
during the Security Period by reason of requisition for title or other
compulsory acquisition of the Rig otherwise than by requisition for hire;
"RESERVE ACCOUNT" means an account to be opened by and in the name of the
Borrower with the Reserve Account Bank and designated as the Facility
Agent may specify, and includes any sub-account forming part of such
account and also any such other account or accounts as may, with the
agreement from time to time of the Facility Agent, be opened and/or
designated as the Reserve Account by the Borrower;
"RESERVE ACCOUNT BANK" means The Bank of Tokyo-Mitsubishi Limited, London
Branch or such other bank as the Facility Agent may nominate for the
purpose of holding and operating the Reserve Account;
"RESERVE ACCOUNT CHARGE" means the charge over the Reserve Account to be
executed by the Borrower in favour of the Security Agent for itself and as
trustee for the Secured Parties in accordance with Clause 7.1(viii);
"RIG" means the semi submersible drilling platform to be built, or (as the
case may be) being built or (as the case may be) built and delivered to
the Borrower pursuant to the Rig Construction Contract including the
Materials, the Listed Items and the Purchaser's Supplies (all as defined
in the Rig Construction Contract);
"RIG CONSTRUCTION CONTRACT" means the agreement dated 9 April 1998 and
executed between the Builder and Petrodrill Construction Inc and novated
to the Borrower in the approved form for the construction and delivery of
a semi-submersible drilling platform having Builder's Hull No 3015 (as the
same may hereafter be amended and supplemented from time to time with the
prior approval of the Lender);
"RIG CONSTRUCTION CONTRACT AND REFUND GUARANTEE ASSIGNMENT" means the
assignment executed or to be executed in accordance with Clause 7.1(i);
"RIG MORTGAGE" means a first priority mortgage on the Rig to be executed
by the Borrower pursuant to Clause 7.1(iii) (together with the Deed of
Covenants supplemental thereto);
"SECURED OBLIGATIONS" means all monies, obligations and liabilities of any
nature whatsoever which are now or at any time hereafter may be or become
due or owing by the Borrower or any of the other Security Parties to
either of the Agents or any of the Lenders under or pursuant to any of the
Financing Documents (including damages for breaches thereof) and any other
liabilities, whether actual or contingent, now existing or hereafter
incurred by the Borrower or any of the other Security Parties to either of
the Agents or any of the Lenders under or pursuant to any of the Financing
Documents or under or pursuant to any of the Sister Company Financing
Documents (whether in either case due, owing or incurred by the Borrower
or such other Security Parties alone or jointly with any other person(s)
and in whatever name, firm or style and whether as principal or surety);
- 11 -
"SECURED PARTIES" means the Lenders and the Agents and also the Lenders
and the Agents (as defined in the Sister Company Loan Agreement);
"SECURITY AGENT" means Mitsubishi Corporation (UK) PLC in its capacity as
security agent and trustee for the Lenders under the Security Trust Deed
and includes any successor security agent and trustee appointed under the
terms hereof and thereof;
"SECURITY DOCUMENTS" means the agreements, mortgages, deeds and other
documents specified in Schedule 7 Part 2 and any other documents
(including, as the context may require, this Agreement) that may now or
hereafter be executed as security for the Loan or any part thereof but
excluding (for the avoidance of doubt) the Floor Guarantee;
"SECURITY PARTIES" means the Borrower, the Guarantors, the Shareholder,
the Sister Company, and during the period prior to the unconditional and
irrevocable performance by each of the Additional Funders of their
obligations under the Additional Funding and Guarantee Agreement and
unless and until the Additional Funders are no longer under any actual or
contingent obligation under the Additional Funding and Guarantee Agreement
the Additional Funders or any of them, and "SECURITY PARTY" means any of
them;
"SECURITY PERIOD" means the period commencing on the date hereof and
terminating on the date upon which all moneys payable or to become payable
to the Agents and/or the Lenders at any time and from time to time
pursuant to the terms hereof and pursuant to the Security Documents and
all moneys payable or to become payable to the Agents and/or the Lenders
at any time and from time to time pursuant to the Sister Company Financing
Documents shall have been paid in full and neither the Agents nor any of
the Lenders are under any actual or contingent obligation to the Borrower
or the Sister Company under the Financing Documents or the Sister Company
Financing Documents;
"SECURITY TRUST DEED" means the security trust deed entered into or to be
entered into relating to the security granted in favour of the Security
Agent by the Borrower;
"SERVICES CONTRACTS" means the contracts specified in Schedule 3
Part 1 between the Borrower and the Services Providers;
"SERVICES PROVIDERS" means the persons specified in the Service Contracts
for the provision of services to the Borrower and the Rig in the course of
its operation;
"SERVICES RENDERING CONTRACT" means the contract (Contract No.
101.0.156.97-1) which is supplemental to the Charterparty and which
provides for services related thereto in relation to the Rig, as executed
on or around 12 January 1998 by and between Maritima and Petrobras in the
approved form, with the Borrower since being joined as an intervenient
party with Petrobras' approval by a document executed by and between
Petrobras, Maritima and the Borrower and dated 21 August 1998;
"SERVICES RENDERING CONTRACT ASSIGNMENT" means the assignment to be
executed in accordance with Clause 7.1(v);
"SERVICES RENDERING CONTRACT PAYMENTS" means payments made or to be made
by Petrobras to the Borrower pursuant to the Services Rendering Contract;
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"SHARE CHARGE" means the charge over the whole of the issued share capital
of the Borrower to be executed by the Shareholder in favour of the
Security Agent for itself and as trustee for the Secured Parties in
accordance with Clause 7.1(x);
"SHAREHOLDER" means Amethyst Financial Company Limited, a company
incorporated in the British Virgin Islands as the shareholder in
the Borrower;
"SISTER COMPANY" means Petrodrill Six Limited a company incorporated
under the laws of the British Virgin Islands under Company No. 273686;
"SISTER COMPANY FINANCING DOCUMENTS" means all or any of the agreements
and documents to be executed by or in favour of the Agents and/or the
Lenders for the provision of finance in connection with the acquisition
and operation by the Sister Company of the Sister Rig, and shall include
all agreements, encumbrances, guarantees and other documents and
instruments entered into pursuant to or as contemplated by such agreements
whether by the Sister Company or any third party but excluding (for the
avoidance of doubt) the Floor Guarantee;
"SISTER COMPANY LOAN AGREEMENT" means the loan agreement of the same date
as this Agreement between the same parties as the parties to this
Agreement for the provision by the Lenders of certain loan facilities to
the Sister Company relating to the acquisition of the Sister Rig by the
Sister Company;
"SISTER RIG" means the semi-submersible drilling rig (Builder's Hull No.
3016) to be built or (as the case may be) being built or (as the case may
be) built and delivered to the Sister Company pursuant to the contract
between Petrodrill Construction Inc. and the Builder and novated to the
Sister Company, to be owned and operated by the Sister Company including
the Materials, Listed Items and the Purchaser's Supplies (all as defined
in such contract);
"SUB-CONTRACTORS' GUARANTEES" means the guarantees or warranties of the
Builder's sub-contractors, as referred to in Clause 17.13 of the Rig
Construction Contract;
"SUBORDINATED LOAN FACILITY AGREEMENT" means the agreement dated the same
date as this agreement to be executed in accordance with Clause 7.1(xiv);
"SURPLUS EARNINGS" means, at any relevant time, such amount of the
Earnings (i) which remains standing to the credit of the Management
Account at such time and (ii) which is available for transfer to the
Reserve Account pursuant to Clause 12.2 at such time;
"TEMPORARY CONFIRMATION OF INSURANCE" means the temporary confirmation of
insurance (and described as Temporary Confirmation of Insurance) issued by
McGriff, Seibels, bartama & Colvin Inc (as brokers) on 15 December 1998
with Assigned No.
MS-S711A-Daewoo;
"TOTAL PROJECT COSTS" means the aggregate of the Contract Price, the
Listed Items Price, the Pre-delivery Opex, the Construction and
Mobilisation Costs, Post-delivery Opex and all other costs and expenditure
of any nature which it is necessary for the Borrower to incur in order to
perform its obligations under the Rig Construction Contract and to
acquire, transport and mobilise the Rig and to have the Rig (having first
arrived at the
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port or in sheltered waters in Macae - RJ) accepted by Petrobras, all in
accordance with the Charterparty;
"TOTAL TRANCHE A COMMITMENTS" means at any time the aggregate of all the
Tranche A Commitments of all the Lenders at such time;
"TOTAL TRANCHE B COMMITMENTS" means at any time the aggregate of all the
Tranche B Commitments of all the Lenders at such time;
"TOTAL TRANCHE C COMMITMENTS" means at any time the aggregate of all the
Tranche C Commitments of all the Lenders at such time;
"TOTAL COMMITMENTS" means at any time the aggregate of all the Commitments
of all the Lenders at such time;
"TOTAL FACILITIES AMOUNT" means the lesser of (i) US$180,000,000 and (ii)
the aggregate of 100% of the Contract Price, the Purchaser's Supplies
Price, the Construction and Mobilisation Costs, Pre-delivery Opex,
Post-delivery Opex and interest capitalised in accordance with Clause 4.4;
"TOTAL LOSS" means:-
(i) the actual total loss of the Rig;
(ii) the agreed, arranged or constructive total loss of the Rig;
(iii) requisition for title or other compulsory acquisition of title of
the Rig by any governmental or other competent authority, agency or
instrumentality otherwise than by requisition for hire;
(iv) capture seizure arrest detention or confiscation of the Rig by any
government or person acting or purporting to act on behalf of any
government unless the Rig be released and restored to the Borrower
from such capture seizure arrest or detention within 6 months after
the occurrence thereof or such other period as may be specified in
the Rig's Insurances;
"TOTAL OUTSTANDINGS" means at any time the Outstandings of all the Lenders
at such time;
"TRANCHE A FACILITY" means the loan facility referred to in Clause 2.1(a),
the terms and conditions of which are set out in this Agreement;
"TRANCHE B FACILITY" means the loan facility referred to in Clause 2.1(b),
the terms and conditions of which are set out in this Agreement;
"TRANCHE C AVAILABILITY COMMENCEMENT DATE" means the date on which the
conditions specified in Clause 3.5 (in addition to any other conditions
precedent to the availability of the Tranche C Facility) have been
satisfied and on which any part of the Tranche C Facility becomes
available for drawing;
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"TRANCHE C FACILITY" means the loan facility referred to in Clause 2.1(c),
the terms and conditions of which are set out in this Agreement;
"TRANSFER CERTIFICATE" means an instrument executed pursuant to and in
accordance with Clause 15.4;
"TRANCHES" means the tranches into which the Loan is deemed to be divided
in accordance with and for the purposes of certain provisions of this
Agreement;
"TRANSFEREE" means a Qualifying Lender to whom a Lender transfers all or
part of such Lender's rights, benefits and obligations under this
Agreement, the other Security Documents and the Sister Company Financing
Documents subject to and in accordance with Clause 15 and the provisions
of the Sister Company Loan Agreement;
"US DOLLARS" or "US$" or "$" means the lawful currency from time to time
of the United States of America;
"YARD DELIVERY DATE" means the date on which the Rig is delivered by the
Builder to, and accepted by, the Borrower in accordance with the Rig
Construction Contract; and
"YEAR" means each successive period of 365 days throughout the Security
Period, the first such period to commence on the Charterparty Commencement
Date.
1.2 CONSTRUCTION OF PARTICULAR EXPRESSIONS
Any reference in this Agreement to:-
"APPROVED FORM" means, in relation to any document, the document in
question being in such form and having such content as shall have been
approved by the Facility Agent;
"CALENDAR MONTH" means a period commencing on the first day of the month
and ending on the last day of that month (for example, the period 1
January to 31 January shall be a calendar month);
"CERTIFIED COPY" means, in relation to any document certified by a
company, a copy of such document bearing the endorsement "Certified a
true, complete and accurate copy of the original" and signed and dated by
a duly authorised officer of the company in question;
"CLAIM" has the meaning given to this expression in the
definition of "Environmental Claim" in Clause 1.1;
"ENCUMBRANCE" means a mortgage, charge, pledge, lien or other encumbrance
securing any obligation of any person or any other type of contractual or
preferential arrangement (including, without limitation, title transfer
and retention of title and set off arrangements) having a similar legal or
economic effect, but excluding any encumbrances arising by operation of
law or in the ordinary course of business which are discharged in the
ordinary course of business unless being contested in good faith and by
appropriate proceedings;
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"EXCESS RISKS" means the proportion (if any) of claims for general
average, salvage and salvage charges not recoverable under the hull and
machinery policies in respect of the Rig in consequence of her insured
value being less than the value at which the Rig is assessed for the
purpose of such claims;
"GOVERNMENTAL AUTHORITY" includes any political sub-division of such
governmental authority;
"HOLDING COMPANY" has the meaning given to this term in Section 736 of the
Companies Act 1985 (or any statutory modification or re-enactment
thereof);
"INDEBTEDNESS" means, in relation to any person, any obligation of any
kind (whether present or future, actual or contingent, whether incurred as
principal or surety and whether in respect of interest, principal or
otherwise) for the payment or prepayment of money;
"MONTH" means a period beginning in one calendar month and ending in the
next calendar month on the day numerically corresponding to the day of the
calendar month on which it started provided that (i) if the period started
on the last Banking Day in a calendar month or if the next calendar month
contains no such numerically corresponding day, it shall end on the last
Banking Day in the next calendar month and (ii) if such numerically
corresponding day is not a Banking Day, the period shall end on the next
following Banking Day but if there is no such Banking Day it shall end on
the preceding Banking Day, and the terms "MONTHS" and "MONTHLY" shall be
construed accordingly;
"PERSON" means any person, firm or company (and shall include that
person's assignees);
"PROTECTION AND INDEMNITY RISKS" (in relation to the Insurances for the
Rig) means the usual risks covered by an English protection and indemnity
association including the proportion not recoverable in case of collision
under the ordinary running down clause;
"SAME DAY FUNDS" means freely transferable funds in the currency due
hereunder settled for same day value in such manner and through such
clearing system (if any) as the Lender shall notify to the Borrower as
being customary for the settlement in such currency of international
transactions of the type contemplated by this Agreement;
"SUBORDINATED INDEBTEDNESS" means any indebtedness of any of the Security
Parties which cannot lawfully be repaid prior to such time as all amounts
due and/or to become due to the Lender under or in connection with the
Financing Documents have been repaid/paid in full;
"SUBSIDIARY" means in relation to any company any entity over fifty per
cent (50%) of whose capital is owned, directly or indirectly, by such
company or which is otherwise effectively controlled directly or
indirectly by such company and "control" for this purpose means control by
virtue of the direct or indirect ownership of the majority of the voting
share capital or the right to appoint management or direct policies by
virtue of ownership of share capital, contract or otherwise;
"TAXES" means any present or future taxes, levies, duties, charges, fees,
deductions or withholdings of any nature now or hereafter imposed, levied,
collected, withheld or
- 16 -
assessed by any country or any political sub-division or taxing authority
thereof and "TAX" and "TAXATION" shall be construed accordingly;
a TIME OF DAY shall (unless otherwise specified) be construed as a
reference to London time; and
"WAR RISKS" (in relation to the Insurances for the Rig) includes the risk
of mines and all risks excluded from the standard form of English marine
policy by Clause 23 of the Lloyd's Institute Time Clauses (Hull) 1/10/83).
1.3 CONSTRUCTION OF CERTAIN REFERENCES
In this Agreement, unless the context otherwise requires:
(1) References to this Agreement include the Recitals, Appendices and
Schedules to this Agreement and references to Clauses, Appendices
and Schedules are to be construed as references to the Clauses of,
and Appendices and Schedules to, this Agreement as amended from time
to time;
(2) References to (or to any specified provisions of) any Financing
Document or any other document shall be construed as references to
such Financing Document, that provision or that document as amended
or novated or supplemented (as the case may be) from time to time;
and
(3) References to the singular shall include the plural and vice versa;
1.4 HEADINGS
Clause headings are inserted for convenience of reference only and shall
be ignored in the interpretation of this Agreement.
2. THE FACILITY
2.1 AMOUNT AND CURRENCY
The Lenders upon and subject to the terms of this Agreement and in
reliance on the representations and warranties by the Borrower herein
contained hereby agrees to make available to the Borrower the following
facilities:
(a) the Tranche A Facility, being a facility in an amount (and including
all interest on A Advances capitalised in accordance with this
Agreement to the Notional Interim A Facility Date) not exceeding
US$53,000,000;
(b) the Tranche B Facility, being a facility in an amount (including all
interest on B Advances capitalised in accordance with this
Agreement) not exceeding US$74,000,000; and
(c) the Tranche C Facility, being a facility in an amount (including all
interest on C Advances capitalised in accordance with this
Agreement) not exceeding US$53,000,000.
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2.2 PURPOSE
The Facilities are made available for, and shall be applied by the
Borrower exclusively to:
(i) the payment by the Borrower to the Builder of amounts falling due to
the Builder in respect of the Contract Price in accordance with the
Rig Construction Contract or in reimbursement to the Borrower of the
instalments of the Contract Price paid by the Borrower prior to the
Drawdown Date of the Advance in question;
(ii) as to an amount not exceeding US$10,000,000, in making the
Inter-company Loan to the Sister Company;
(iii) if the Yard Delivery Date is postponed beyond the Original Scheduled
Yard Delivery Date, towards Pre-delivery Opex not exceeding
US$20,000 per day;
(iv) as to an amount not exceeding US$11,800,000, towards Construction
and Mobilisation Costs;
(v) Post-delivery Opex;
(vi) in the case of Advances deemed to have been made under Clause 4.4,
in capitalising interest in accordance with such Clause; and
(vii) the payment of interest accrued on Tranche A Advances during the
period from the Bridging Loan Repayment Date to the Charterparty
Commencement Date.
2.3 OBLIGATIONS OF THE LENDERS
Each Lender will participate through its Lending Office:
(i) in each Tranche A Advance in the proportion borne by its Tranche A
Commitment to the Total Tranche A Commitments on the Drawdown Date
of such Tranche A Advance;
(ii) in each Tranche B Advance in the proportion borne by its Tranche B
Commitment to the Total Tranche B Commitments on the Drawdown Date
of such Tranche B Advance; and
(iii) in each Tranche C Advance in the proportion borne by its Tranche C
Commitment to the Total Tranche C Commitments on the Drawdown Date
of such Tranche C Advance.
The obligations of each Lender hereunder are several and the failure of
any Lender to carry out its obligations hereunder shall not relieve any
other Lender, the Agents or the Borrower from any of its or their
respective obligations to the parties hereto other than to such Lender
which has so failed, and neither shall either of the Agents nor any Lender
be responsible for the obligations of any Lender or (as the case may be)
any other Lender hereunder.
2.4 INTERESTS OF LENDERS
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Notwithstanding any other term of this Agreement, the interests of the
Lenders are several and the aggregate of the amounts outstanding at any
time hereunder from the Borrower to any Lender or to the Facility Agent or
the Security Agent for its own account is a separate and independent debt.
Save as otherwise expressly provided herein or in any other Security
Document each of the Agents and every Lender shall each have the right to
protect and enforce its rights arising under this Agreement and it shall
not be necessary for any Lender or (as the case may be) either of the
Agents to be joined as an additional party in any proceedings for this
purpose but this is without prejudice to Clause 10.4.
2.5 UNCONDITIONAL OBLIGATIONS
The Borrower enters into this Agreement as principal, and the obligations
of the Borrower to make payment hereunder and to observe and perform all
of its other obligations under this Agreement are absolute, unconditional
and irrevocable obligations of the Borrower and are not and shall not be
deemed to be in any way conditional or dependent upon the performance of
the Rig Construction Contract by the Builder or the performance by
Petrobras of its obligations under the Charterparty and/or the Services
Rendering Contract, the continued hiring of the Rig under the
Charterparty, the availability of funds in the Management Account and/or
the Reserve Account or the performance by any other party other than the
Lenders of its obligations to the Borrower or the successful delivery or
operation of the Rig or any other matter or event of any nature whatsoever
save as expressly provided in this Agreement.
3. CONDITIONS PRECEDENT
3.1 INITIAL CONDITIONS
None of the Facilities shall be available for drawing until the
satisfaction, in a manner in all respects satisfactory to the Facility
Agent, of the following conditions and until delivery to the Facility
Agent of the following documents, all in form and substance satisfactory
to the Facility Agent:
(i) a certified copy of each of the Project Documents, certified in each
case by the parties thereto;
(ii) a certificate signed by the Borrower certifying that each Project
Document to which it is a party is in full force and effect and that
all conditions precedent to the parties' respective obligations
thereunder have been satisfied (or identifying those conditions
which have not yet been satisfied) and that all necessary
authorisations of governmental and other authorities to which the
parties to such documents are subject have been obtained to such
documents and the performance by the parties thereto of their
respective obligations thereunder other than registration with the
Brazilian Central Bank;
(iii) the Security Documents other than the Mortgage and the Deed of
Covenants duly executed by the parties thereto;
(iv) the documents specified in Clause 7.1 (except those specified in
Clause 7.1(iii));
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(v) certified copies of the Articles of Incorporation and By-Laws of
each of the Security Parties and the certificate of good standing
and certificate of incumbency of each of the Security Parties;
(vi) a duly certified copy of the resolutions of the Board of Directors,
or such other documents evidencing the completion of corporate
authorisation procedures (to the satisfaction of the Facility Agent)
of each of the Security Parties authorising the execution, delivery
and performance of each of the Financing Documents to which it is a
party and, as the case may be, including the incurring of debt
obligations hereunder and thereunder, upon the terms hereof and
thereof and authorising the person(s) who signed, or will sign, this
Agreement, the Security Documents and all other agreements and
documents executed or to be executed pursuant hereto and thereto on
behalf of the relevant Security Party to do so, and any power of
attorney executed in connection therewith;
(vii) specimen signature(s) of the person(s) authorised to execute this
Agreement, the Security Documents and all other documents to be
provided hereunder or thereunder on behalf of the Security Parties;
(viii)a duly certified copy of the shareholder's consent to and approval
for the actions taken at the Board of Directors' meeting of the
Borrower and the Sister Company to give guarantees in respect of,
and to charge their assets as security for, each other's liabilities
to the Secured Parties under the Financing Documents and the Sister
Company Financing Documents;
(ix) certified copies of all governmental approvals, authorisations,
consents, registrations and confirmations, if any, with respect to
this Agreement and the Security Documents shall have been received
by the Facility Agent other than registration with the Brazilian
Central Bank;
(x) a written confirmation from each of the agents for service of
process appointed by the Borrower pursuant to this Agreement and the
Security Documents irrevocably accepting such appointment shall have
been received by the Lender;
(xi) a legal opinion from the English legal advisers to the Agents and
the Initial Lenders in a form acceptable to the Facility Agent;
(xii) a legal opinion from Higgs & Johnson, Bahamian counsel to the Agents
and the Initial Lenders, in a form acceptable to the Facility Agent;
(xiii)a legal opinion from Tozzini Freise Teixeira e Silva, Brazilian
counsel to the Agents and the Initial Lenders, in a form acceptable
to the Facility Agent;
(xiv) a legal opinion from Dancia Penn & Co, British Virgin Islands
counsel to the Agents and the Initial Lenders, in a form acceptable
to the Facility Agent;
(xv) a legal opinion from Kim & Chang, Korean counsel to the Agents and
the Initial Lenders, in a form acceptable to the Facility Agent;
- 20 -
(xvi) legal opinions from Baker & Botts LLP and from [name of Louisiana
Counsel], US counsel to the Agents and the Initial Lenders, in a
form acceptable to the Facility Agent;
(xvii) a legal opinion from Zevan & Associates, Netherlands Antilles
Counsel to the Agents and the Initial Lenders, in a form acceptable
to the Facility Agent;
(xviii) a legal opinion from Nauta Dutilh, Netherlands Counsel to the
Agents and the Initial Lenders, in a form acceptable to the
Facility Agent;
(xix) a legal opinion from Kleinberg Kaplan Wolff and Cohen, New York
Counsel to the Agents and the Initial Lenders, in a form acceptable
to the Facility Agent;
(xx) a legal opinion from Maples and Calder, Cayman Islands, Counsel to
the Agents and the Initial Lenders, in a form acceptable to the
Facility Agent;
(xxi) the Bridging Loan Agreement having been duly executed in the
approved form and having become unconditional in accordance with
its terms;
(xxii) the Additional Funding and Guarantee Agreement in the approved form
having been duly executed by the parties thereto and having become
unconditional in accordance with its terms;
(xxiii) a letter from Petrobras in the approved form regarding the
delivery and acceptance of the Rig under the Charterparty;
(xxiv) the completion of all filings, registration or recordings of all of
the Security Documents required by the laws of any applicable
jurisdiction; and
(xxv) evidence satisfactory to the Facility Agent that the Rig
Construction Contract, the Charterparty and the Services Rendering
Contract are in full force and effect.
3.2 PRE-DELIVERY ADVANCES
The making of each Pre-delivery Advance and of each Post Yard Delivery
Advance shall be subject to the delivery to the Facility Agent (if the
Lender so requests) of such evidence as the Facility Agent may reasonably
require that the instalment of the Contract Price to which such Advance is
to be applied has been paid or (as the case may be) become due and payable
under the Rig Construction Contract or (in the case of an Advance
requested in respect of Pre-delivery Opex or Construction and Mobilisation
Costs) that the relevant expenditure has been paid or (as the case may be)
become due and payable within the requirements of Clause 2.2(iii) or (as
the case may be) 2.2(iv).
3.3 YARD DELIVERY ADVANCE AND POST YARD DELIVERY ADVANCES
The making of the Yard Delivery Advance and of each Post Yard Delivery
Advance shall be conditional upon and (in the case of the Yard Delivery
Advance) be made simultaneously with:
(i) the Rig having been duly delivered by the Builder to and accepted by
the Borrower in accordance with the Rig Construction Contract, and
the protocol of
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delivery and acceptance and other delivery documents required by the
Rig Construction Contract having been duly executed and delivered in
accordance with the terms thereof;
(ii) the Rig having been duly registered in the Registry of Bahamian
Ships and the Borrower having been registered as the owner of
64/64th shares in the Rig (free of all encumbrances other than the
Rig Mortgage and the Mortgage Debenture), and a provisional
certificate of registration having been issued by such Registry;
(iii) the Rig Mortgage, together with the Deed of Covenants collateral
thereto, having been duly executed by the Borrower, received by the
Security Agent and registered in the Registry of Bahamian Ships;
(iv) the Rig having been insured and entered in the P & I Club (including
the Mortgagee's Interest Insurance with Additional Perils
(Pollution) Insurance) in accordance with the provisions of the
Mortgage and the Deed of Covenants and all requirements therein and
in this Agreement and the other Financing Documents in respect of
insurance having been complied with;
(v) the Insurances Assignment having been duly executed by the
parties thereto and consented to, or notified to and acknowledged
by, the relevant parties, and copies of all Insurances taken out
pursuant to the Mortgage, the Deed of Covenants and this Agreement
and the other Financing Documents and an entry certificate in the P
& I Club and the original of the letter of undertaking to be issued
by the P & I Club having been received by the Security Agent, each
in form and substance satisfactory to the Facility Agent;
(vi) certified copies of all Korean and Bahamian governmental approvals,
authorisations, consents, registrations and confirmations with
respect to the delivery and export of the Rig to the Borrower
pursuant to the Rig Construction Contract and with respect to
registration (whether provisional or permanent) of title to the Rig
in the name of the Borrower under the Bahamian flag having been
received by the Facility Agent;
(vii) a certified copy of the Classification Certificate stating that the
Rig has been built according to the class requirements (without
recommendations) having been received by the Facility Agent; and
(viii)all such other agreements, documents certificates or opinions as
the Facility Agent may reasonably request having been received by
the Facility Agent.
3.4 TRANCHE B ADVANCES
Prior to the Tranche C Availability Commencement Date no Tranche B Advance
may be drawn under the Tranche B Facility unless and until the Tranche A
Facility (including Advances deemed to have been made in accordance with
Clause 4.4) has been drawn to the fullest extent possible without
breaching the condition imposed by Clause 3.6(ix).
3.5 TRANCHE C ADVANCES
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The Tranche C Facility shall be made available to the extent that and in
the amount that the Bridging Loan has been repaid by MC2 pursuant to the
Bridging Loan Agreement and Tranche C Advances from time to time may be
drawn PRO TANTO in an aggregate amount not exceeding the amount so repaid.
3.6 ALL ADVANCES
The obligations of the Lenders to make any Advance under any of the
Facilities shall be subject to the further conditions that as at the
Drawdown Date of each such Advance:
(i) no Event of Default or Potential Event of Default shall have
occurred and be continuing;
(ii) each of the Project Documents shall then continue to be in full
force and effect and no event of default (howsoever described) and
no event or circumstance which with the giving of notice or lapse of
time may become such an event has occurred under any Project
Document;
(iii) the proceeds of the Advance shall, on the Drawdown Date of the
Advance, be due from the Borrower to the Builder under the Rig
Construction Contract or, as the case may be, the Borrower has
provided the Facility Agent with such evidence as the Facility Agent
may require that such proceeds will be applied for the purposes
specified in Clause 2.2;
(iv) the Lender shall have been provided with such further documentation
or information in support of the Drawing Request in respect of such
Advance as the Facility Agent may reasonably determine to be
necessary;
(v) the representations and warranties made or deemed made in Clause 8
shall be true in all material respects on and as of the Drawdown
Date of such Advance with the same effect as though such
representations and warranties had been made on and as of such
Drawdown Date;
(vi) the making of such Advance not causing the amount outstanding in
respect of the Facility under which it is drawn to exceed the
Available Facility Amount of such Facility on the Drawdown Date of
such Advance;
(vii) the making of such Advance not causing the Loan to exceed the Total
Facilities Amount;
(viii)the making of such Advance under any Facility not causing the
Prospective Final Grossed-up Advances Amount of such Facility to
exceed the Facility Amount of such Facility; and
(ix) in the case of a Tranche A Advance, the making of such Advance not
causing the Prospective Interim Grossed-up A Advances Amount of the
Tranche A Facility to exceed US$53,000,000.
3.7 NO WAIVER OF CONDITIONS
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The conditions specified in Clause 3 are for the exclusive benefit of the
Agents and Lenders and if the Facility Agent in its discretion allows the
Borrower to draw any Advance under any Facility notwithstanding that some
or all of the conditions specified in Clause 3 have not been satisfied the
Agents and the Lenders shall not thereby be deemed to have waived any such
condition, and the Borrower covenants with the Agents and the Lenders to
satisfy such conditions upon request from the Lenders forthwith or within
such time limit as the Facility Agent may agree.
4. DISBURSEMENT OF ADVANCES
4.1 GENERAL
Subject to the terms of this Agreement (including, but not limited to, the
conditions set forth in Clause 3):
(i) subject to sub-paragraph (ii) of this Clause 4.1, Advances
under the Tranche A Facility, the Tranche B Facility and the Tranche
C Facility may be drawn by the Borrower in a maximum principal
amount up to but not exceeding the Available Facility Amount of the
relevant Facility on the Drawdown Date of the relevant Advance when
requested by the Borrower from time to time during the Availability
Period; and
(ii) with effect from the Tranche C Availability Commencement Date
Advances shall be made under each of the Facilities in the
proportions PRO RATA which the Available Facility Amount of each
such Facility bears to the Total Available Facility Amounts of all
the Facilities on the Drawdown Date of such Advances.
4.2 PROCEDURE
When the Borrower wishes to draw any Advance under any of the Facilities,
it shall deliver to the Facility Agent a Drawing Request substantially in
the form of Schedule 4 appropriately completed, to be received by the
Lender not later than 11:00am (London time), seven (7) Banking Days prior
to the date of drawing of the Advance, specifying in respect of the
proposed Drawing:
(a) the date of the Drawing (which must be a Banking Day during
the Availability Period);
(b) the principal amount of the Advance in US Dollars; and
(c) the Facility under which the Drawing is requested.
The Borrower may deliver a Drawing Request setting out a schedule of
requested Pre-delivery Advances subject to the satisfaction of the
conditions specified in this Agreement on the Drawdown Date of such
Advances and, in particular, Clause 3.2. Subject to the terms of this
Agreement, such Drawing Request shall be irrevocable and the Borrower
shall be bound to borrow in accordance with such Drawing Request. The
Facility Agent shall promptly notify each Lender of such Drawing Request.
The Borrower may not deliver a Drawing Request hereunder until after
satisfaction of the other conditions precedent (including those applicable
to the relevant Facility) set out in Clause 3.
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4.3 TRANSFER OF FUNDS
Subject as otherwise provided herein each Lender shall on the relevant
Drawdown Date make available to the Facility Agent in US Dollars in the
manner and to the account provided for in Clause 9.2 the amount of its
participation in the relevant Advance in the proportion which its
Commitment in respect of the Facility under which such Advance is drawn
bears to the Total Commitments in respect of such Facility. The Borrower
irrevocably and unconditionally instructs and authorises the Facility
Agent to make each Advance upon and subject to the terms hereof:
(i) in the case of an Advance made or to be made for the purpose
specified in Clause 2.2(i) by paying the proceeds thereof (or such
proportion thereof as is not in reimbursement of amounts already
paid by the Borrower) by disbursement to the Builder;
(ii) in the case of an Advance made or to be made for the purpose
specified in Clause 2.2(ii) by disbursement to the Sister Company in
accordance with the Inter-Company Loan Agreement;
(iii) in the case of an Advance made or to be made for the purposes
specified in Clause 2.2(iii), 2.2(iv), 2.2(v), 2.2(vi) or 2.2(vii)
by disbursement to the Borrower of amounts paid or payable by the
Borrower in respect of the matters specified in such sub-clauses
and upon such disbursement of any amount the Lenders shall be deemed in
proportion to the respective amounts made available by them to the
Facility Agent to have made to the Borrower an Advance in US Dollars in
the amount of the amount so disbursed which shall satisfy PRO TANTO the
obligations of such Lenders to lend such amount to the Borrower hereunder
and shall reduce accordingly the amount of the Commitments and of such
Facility available for drawing.
4.4 CAPITALISATION OF INTEREST
Subject as provided in Clause 5.2(ii) on each Interest Capitalisation Date
the Borrower shall be deemed to have served a Drawing Request requesting
an Advance (an "INTEREST CAPITALISATION ADVANCE") in respect of each
Advance outstanding on such Interest Capitalisation Date in the amount of
interest to be capitalised on such outstanding Advance on such Interest
Capitalisation Date in accordance with Clause 5.2. Each Interest
Capitalisation Advance shall be deemed to have been requested from those
Lenders who have participated in the Advances (or to whom participations
in such Advances have been transferred in accordance with the Transfer
Certificates pursuant to which they become Lenders hereunder) to which it
relates (and shall be deemed to be drawn under the Facility or Facilities
under which such Advances were drawn) and (subject to Clause 4.5) such
Lenders shall be deemed to have made to the Borrower an Interest
Capitalisation Advance in US Dollars in the amount of such interest which
shall (i) increase the amount of the Loan by such amount; (ii) satisfy PRO
TANTO the obligations of such Lenders PRO RATA in proportion to their
respective participations in such Advance to lend such amount to the
Borrower hereunder; and (iii) reduce accordingly the amount of their
Commitments and of such Facility available for drawing. The Facility Agent
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shall calculate, and notify the relevant Lenders and the Borrower of the
amount of each Interest Capitalisation Advance and of such Lenders'
respective participations therein.
4.5 FACILITY LIMIT
Interest on the Advances will not be capitalised if this would cause the
amount of the Loan to exceed the Total Facilities Amount. Accordingly, if
on any Interest Capitalisation Date as a result of the application of
Clause 4.4 and of Clause 5.2 the aggregate amount of all Advances exceeds
(or, if an Interest Capitalisation Advance were made or deemed to be made
pursuant to Clause 4.4 the aggregate of all Advances would exceed) the
Total Facilities Amount the Borrower shall pay to the Facility Agent for
the account of the Lenders by way of a payment of interest the amount of
interest which would otherwise have been capitalised by means of such
Interest Capitalisation Advance.
4.6 CANCELLATION
Any portion of the Total Commitments in respect of any Facility not
advanced hereunder on or prior to the last day of the Availability Period
shall be reduced automatically to nil immediately thereafter and shall not
thereafter be available for drawing.
4.7 FAILURE TO DRAW
If for any reason (other than a default by a Lender or a Lender's bank)
the Advance is not made hereunder after a Drawing Request therefor has
been given pursuant to Clause 4.2, the Borrower will pay to the Facility
Agent for the account of the relevant Lenders such amount as the Facility
Agent may certify in reasonable detail (such certification to be
conclusive in the absence of manifest error) as necessary to compensate it
for any resulting loss or expense on account of funds acquired, contracted
for or utilised in order to fund the Advance.
5. INTEREST
5.1 RATE
Interest shall accrue on the Loan from the respective Drawdown Dates of
each Advance comprising the Loan until actual repayment (i) in respect of
the period prior to the Yard Delivery Date at the rate of 12.5% per annum
and (ii) thereafter, at the rate of 11% per annum.
5.2 CAPITALISATION AND PAYMENT OF INTEREST
(i) Subject to paragraph (i) below interest accruing prior to the
Charterparty Commencement Date shall be capitalised in accordance
with this Clause and the other provisions of this Agreement. On each
Interest Capitalisation Date interest which has accrued on the Loan
shall be capitalised and added to the amount of the Loan in
accordance with Clause 4.4 so that the principal amount of the Loan
shall thereafter be deemed for all purposes (including, but not
limited to, the calculation of interest) to comprise and to include
the principal amount advanced hereunder and the amount of such
capitalised interest deemed to have been advanced.
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(ii) Interest accruing on all Tranche A Advances during the period from
the Bridging Loan Repayment Date until the Charterparty Commencement
Date shall not be capitalised but shall be paid in arrears on each
Interest Capitalisation Date.
5.3 DEFAULT RATE
Without affecting any other remedy of the Lenders or the Agents hereunder,
the Borrower will pay interest on the Loan or any part thereof or interest
thereon or other sum due under this Agreement or any of the Security
Documents which is not paid on the due date for payment thereof for each
day during the period of such default at such annual rate as is
conclusively certified by the Facility Agent to the Borrower to be equal
to the aggregate of (1) two per cent (2%) per annum and (2) the higher of
(a) the rate quoted by the Facility Agent as the arithmetic mean quoted by
the Lenders (or, in the absence of such quotation from any Lender
determined by the Facility Agent) (weighted by reference to the
participations of the Lenders in the overdue payment in question) as being
the rates at which each such Lender was (or would have been), at or about
11.00am (London time) on the date of acquisition of the relevant deposits,
able in accordance with its usual practices to fund in US Dollars from its
principal bankers on an overnight or call basis or for such period or
periods as such Lender may determine and in amounts equivalent to, or
comparable with, the amount of the Loan or relevant part thereof or
interest thereon or other sum due in respect thereof as aforesaid in
respect of which default has been made and (b) 11%. Interest payable by
the Borrower as aforesaid shall be payable on demand by the Facility Agent
and shall be compounded at such intervals as the Facility Agent may
determine.
5.4 DAY COUNT FRACTION
All interest is respect of Advances and the Loan shall accrue from day to
day (after as well as before judgment) on the basis of a year of 360 days
and for the actual number of days elapsed.
6. REPAYMENT AND PREPAYMENT
6.1 CONSOLIDATION OF ADVANCES
In addition and without prejudice to any other provision of this
Agreement, with effect from the Charterparty Commencement Date all
Advances drawn under the Facilities and then comprising the Loan shall be
consolidated and treated as a single amount for all purposes of this
Agreement.
6.2 REPAYMENT INSTALMENTS
The Borrower shall repay an amount equal to 85% of the Loan outstanding on
the Charterparty Commencement Date after the capitalisation of interest on
such date in accordance with Clause 5.2 together with the interest
accruing on the Loan during the period of such repayments by means of
eighty-four (84) equal payments, one such payment being payable on each
Repayment Date in the amount of the Repayment Instalment (comprising a
proportion of the principal of the Loan repayable on each such date and
the interest element payable on each such date) specified in respect of
such Repayment Date in the Repayment Schedule delivered by the Facility
Agent pursuant to Clause 6.4. The Repayment Dates shall be the fifth day
of the second month next
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following the month during which the Charterparty Commencement Date occurs
and the 83 dates falling at consecutive monthly intervals thereafter.
6.3 BALLOON PAYMENT
The remaining 15% of the Loan outstanding on the Charterparty Commencement
Date as aforesaid shall be repaid by a single payment on the Final
Repayment Date.
6.4 REPAYMENT SCHEDULE
The Facility Agent shall prepare, within fourteen (14) Banking Days after
the Charterparty Commencement Date, a repayment schedule in the form of
the Repayment Schedule set out in Schedule 2 setting forth the specific
Repayment Dates and the specific amounts of each Repayment Instalment,
comprising a proportion of the principal of the Loan repayable on each
such date and the interest element payable on each such date, which shall
form an integral part hereof upon notification thereof to the Borrower.
6.5 REBORROWING
No amount repaid may be reborrowed by the Borrower.
6.6 PREPAYMENT
The Borrower may upon giving the Facility Agent not less than 90 days'
prior written notice prepay the whole or part of the Loan subject to and
in accordance with Clauses 6.8 and 18. Save as expressly permitted or
required under the terms of this Agreement the Borrower may not prepay any
part of the Loan.
6.7 TOTAL LOSS OF THE RIG
In the event that the Rig becomes a Total Loss at any time, the whole of
the insurance proceeds or other compensation payable in respect of such
Total Loss will be paid to the Security Agent (as assignee(s) and chargee
thereof under the Rig Construction Contract and Refund Guarantee
Assignment, the Rig Mortgage and associated Deed of Covenants, the
Mortgage Debenture and the Insurances Assignment). In the event that any
of the said insurance proceeds or other compensation are received in any
currency other than US Dollars, the Facility Agent on behalf of the
Lenders will be entitled (and is hereby authorised) at the cost of the
Borrower to convert the same into US Dollars at the Facility Agent's
principal banker's spot rate of exchange applicable at the relevant time.
The whole amount of such insurance proceeds or other compensation
(converted into US Dollars, if appropriate) will be applied by the
Facility Agent in or towards prepayment of the Loan subject to and in
accordance with Clauses 6.8 and 18 and any excess shall be paid to the
Borrower. If the amount thereof is less than the Outstanding Indebtedness
the Borrower shall on demand pay to the Facility Agent for the account of
the Lenders the amount of such shortfall.
6.8 CONDITIONS APPLICABLE
Prepayment of the Loan made under Clauses 6.6 or 6.7 will be made together
with accrued interest to the date of prepayment together with all other
amounts which may be payable under this Agreement and the other Security
Documents. On any such
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prepayment the Borrower will additionally pay such further amount as will
indemnify the Agents and the Lenders against all funding or other fees,
costs, charges, losses, demands and expenses sustained or incurred as a
consequence of such prepayment, including (but not limited to) any such
sustained or incurred in liquidating deposits taken to fund the amount so
prepaid or sustained or incurred in connection with the cancellation,
reduction or re-arrangement of any interest rate swap, hedge transaction
or other funding or financing agreement or arrangement which the Agents
and/or any of the Lenders may have arranged or entered into for the
purpose of funding the amount so prepaid (and the Borrower hereby
acknowledges that the Agents and the Lenders may effect such arrangements
as the Agents and/or any of the Lenders may in their discretion consider
appropriate), and the certificate of the relevant Agent or Lender as to
the amount of such fees, costs, charges, losses, demands, expenses and
shall in the absence of manifest error be final and conclusive and binding
on the Borrower.
6.9 APPLICATION OF PREPAYMENTS
Any prepayment made pursuant to Clauses 6.5, 6.6, 14.3 or any other
provision of this Agreement shall (subject always to any appropriation by
the Facility Agent under Clause 9.5) be applied in reduction of the
Repayment Instalments (including the Balloon) PRO RATA.
7. SECURITY
7.1 LOAN SECURITY DOCUMENTS
By way of continuing security for the due and punctual performance by the
Borrower of all of its obligations under the Financing Documents, the
Borrower shall execute and deliver (or procure the execution and delivery)
to the Security Agent of the following (all at the times and in all other
respects in accordance with the terms of this Agreement and the Security
Documents):
(i) an assignment, in the approved form of the benefit of and the
Borrower's right and interest in the Rig Construction Contract, the
Refund Guarantee, and the Sub-contractors' Guarantees, together with
the notices to the Builder and to the issuer(s) of the Refund
Guarantee and the acknowledgements and consents specified in such
assignment duly executed by the parties thereto;
(ii) an assignment, in the approved form of the Inter-company Loan
together with the notices to the Sister Company and the
acknowledgements and consents specified in such assignment duly
executed by the parties thereto;
(iii) a first preferred mortgage over the Rig and Deed of Covenants
collateral thereto, each being in the approved form;
(iv) an assignment, in the approved form of the benefit of and the title
and interest of the Borrower in the Charterparty, Earnings and
Requisition Compensation, together with the notices to Petrobras and
the acknowledgements and consents specified in such assignment duly
executed by the parties thereto;
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(v) an assignment, in the approved form of the Services Rendering
Contract, together with the notices to Petrobras and the
acknowledgements and consents specified in such assignment duly
executed by the parties thereto;
(vi) an assignment, in the approved form of the Insurances together with
the notices, acknowledgement, consents and letters of undertaking in
relation to the Insurances and other related documents as may be
specified in such assignment and/or as may otherwise be required by
this Agreement or any of the other Security Documents;
(vii) a charge in the approved form over the Management Account, together
with the notices to the Management Account Bank and the
acknowledgements and consents and undertakings specified in such
agreement duly executed by the parties thereto;
(viii)a charge in the approved form over the Reserve Account, together
with the notices to the Reserve Account Bank and the
acknowledgements and consents and undertakings specified in such
agreement duly executed by the parties thereto;
(ix) an assignment, in the approved form, of all of the Services
Contracts, together with the notices to the Services Providers and
the acknowledgements and consents specified in such assignments duly
executed by the parties thereto;
(x) a mortgage debenture in the approved form creating fixed and
floating charges over the business, undertaking and assets of the
Borrower;
(xi) a charge, in the approved form creating a charge over the
Shareholder's shares in the Borrower;
(xii) a guarantee, in the approved form by the Borrower, the Sister
Company and the Shareholder guaranteeing and securing the
obligations of each of the Borrower and the Sister Company to the
Agents and the Lenders in accordance with its terms;
(xiii)a deed of guarantee and undertaking, in the approved form, between
the Borrower, the Guarantors, the Lenders, the Facility Agent and
the Security Agent;
(xiv) a subordinated loan facility agreement, in the approved form,
between the Borrower, the Guarantors, the Facility Agent and the
Security Agent;
(xv) an assignment of deed of guarantee and undertaking and subordinated
loan facility agreement, in the approved form, between the Borrower
and the Security Agent; and
(xvi) the Sister Company Financing Documents duly executed by all the
parties thereto.
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7.2 GUARANTEES AND UNDERTAKINGS
By way of continuing security for the due and punctual performance by the
Borrower of its obligations under the Financing Documents and/or any other
agreements to which the relevant Guarantee relates, the Borrower will
procure the execution by the Guarantors and the delivery to the Security
Agent and, in the case of sub-clause 7.2(i) the Initial Lenders of the
following guarantees and undertakings:
(i) A guarantee, in the approved form whereby the Guarantors guarantee
in their several proportions to the Initial Lenders in accordance
with the terms therein contained the repayment of the Loan and the
Sister Company Loan by the Borrower and the Sister Company
respectively in accordance with this Agreement and the Sister
Company Loan Agreement up to an amount not exceeding US$108,000,000;
(ii) a deed of guarantee and undertaking, in the approved form whereby
the Guarantors severally or jointly and severally (in accordance
with its terms) give certain guarantees and undertakings.
7.3 SISTER RIG COLLATERAL
The security created by the Borrower under or pursuant to the Financing
Documents shall also constitute security to the Lender for the obligations
of the Sister Company under the Sister Company Financing Documents, and
the security created by the Sister Company under the Sister Company
Financing Documents shall also constitute security for the Borrower's
obligations under the Financing Documents, all in accordance with their
respective terms.
7.4 SECURITY AGENT AS TRUSTEE
The Secured Obligations shall be secured by the interests and rights
granted in favour of the Security Agent as trustee for the Agents and the
Lenders under the Security Documents and such interests and rights shall
be held by the Security Agent upon trust for the benefit of the Secured
Parties without any preference or priority amongst them as security for
the Secured Obligations in accordance with the Security Trust Deed.
8. REPRESENTATIONS
8.1 REPRESENTATIONS
The Borrower hereby represents and warrants to the Facility Agent
and each of the Lenders, that:-
(i) each of the Borrower and the Sister Company is duly formed and is
validly existing under the laws of the British Virgin Islands, has
full power to carry on its business as it is now being conducted and
has complied with all statutory and other requirements relative to
such business;
(ii) the Borrower and each of the other Security Parties and the
Project Parties has full power to execute, deliver and
perform its obligations under each of the Financing
Documents and the Project Documents to which it is or is to
be a party
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and (in the case of the Borrower) to borrow hereunder and to repay
and service such borrowings in the manner herein provided; all
necessary corporate, shareholder and other action has been taken by
the Borrower and all other Security Parties and the Project Parties
to approve and authorise the execution, delivery and performance of
each of the Financing Documents and the Project Documents to which
it is or is to be a party;
(iii) save for registration of the Charterparty with the Brazilian Central
Bank all necessary governmental or other official consents,
authorisations and licences for the Borrower and all other Security
Parties and the Project Parties to execute, deliver and perform
their obligations under each of the Financing Documents and the
Project Documents to which it is or is to be a party have been
obtained and, as of the date of this Agreement, no further such
consents, authorisations or licences are necessary for the
performance by the Borrower and the other Security Parties and the
Project Parties of their respective obligations under each of the
Financing Documents and the Project Documents to which it is or is
to be a party;
(iv) the Financing Documents and the Project Documents constitute, or
will upon due execution as provided herein and therein constitute,
the legal, valid and binding obligations of the Borrower and the
other Security Parties and the Project Parties as are or are to be
parties thereto enforceable in accordance with their respective
terms subject to equitable principles and creditors' rights
generally;
(v) the execution and delivery of, and the performance of the provisions
of, the Financing Documents by each of the Borrower and the other
Security Parties and of the Project Documents by the other Project
Parties do not, and will not during the Security Period, contravene
(a) any applicable law or regulation existing at the date hereof or
(b) any contractual restriction binding on any of the Borrower and
the other Security Parties or any of the Project Parties or (c) any
of the constitutional documents of any of the Borrower or the other
Security Parties or any of the Project Parties;
(vi) no action, suit or proceeding is pending or threatened against any
of the Borrower and/or the other Security Parties before any court,
board of arbitration or administrative agency which could or might
result in any material adverse change in the business or condition
(financial or otherwise) of any of the Borrower and/or the other
Security Parties;
(vii) none of the Borrower or the other Security Parties is in default
under any agreement by which it is bound, nor is it in default in
respect of any financial commitment or obligation (including
obligations under guarantees) which could or might result in any
material adverse change in the business or condition (financial or
otherwise) of any of the Borrower and/or the other Security Parties;
(viii)the financial and other information relative to the Borrower and
the other Security Parties and the Project Parties and the Project
Documents furnished to the Agents and/or any of the Lenders in
connection with the negotiation of this Agreement is, to the best
knowledge and belief of the Borrower, true, accurate and complete
and neither contains any mis-statement of fact nor omits any
material fact or any fact necessary to make any such information not
misleading. There has been no
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material adverse change in the position of such person(s) from that
set forth in the relevant aforesaid information;
(ix) details of the holders of shares in the Shareholders, the Borrower,
the Guarantors and the Sister Company and their respective
shareholdings are as set out in Schedule 5 and will so remain
throughout the Security Period;
(x) the Borrower has no Subsidiaries as at the date hereof;
(xi) no Event of Default, nor any Potential Event of Default has occurred
and is continuing;
(xii) the Rig will upon the Drawdown Date of the Yard Delivery Advance
be:-
(a) in the absolute and (save for the Rig Mortgage thereon and the
other Security Documents) unencumbered ownership of the
Borrower;
(b) registered in the name of the Borrower under the flag
of the Commonwealth of the Bahamas and at the Port of
Nassau;
(c) properly classed with Lloyds Register of Shipping with the
following notation: "Unrestricted Service O.U. + 100A1, + LMC,
UMS, DP(AA), PC, DRILL, OIWS with the descriptive notation
semi-submersible, self-propelled drilling vessel"; and
(d) insured in accordance with the relevant provisions of the Deed
of Covenants and this Agreement;
(xiii)all applicable Environmental Laws and Environmental Approvals
relating to the Rig and its operation and management and the
business of the Borrower (as now conducted and as reasonably
anticipated to be conducted in the future) have been complied with
except to the extent that such failure to so comply would not
reasonably be expected to have a material adverse effect;
(xiv) no Environmental Claim has been made or threatened against the
Borrower or otherwise in connection with the Rig which would be
expected to have a material adverse effect;
(xv) no Environmental Incident has occurred which would be expected to
have a material adverse effect;
(xvi) the choice by the Security Parties and the Project Parties of a
particular governing law to govern this Agreement and any other
Financing Document and the Project Document containing such
provisions and the submission by such parties to the jurisdiction of
the courts of a particular country in this Agreement and any other
Financing Document and the Project Documents containing such
provisions are valid and binding;
(xvii)the execution and performance by Security Parties and the Project
Parties of this Agreement the other Financing Documents and the
Project Documents are private commercial acts and neither the
Borrower nor any other Security Party or any
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Project Party is entitled to claim any immunity in relation to
itself or its assets under any law or in any jurisdiction in
connection with any legal proceedings, set-off or counterclaim
relating to this Agreement or any other Financing Document or any
Project Document, or in connection with the enforcement of any
judgment, award, ruling or order arising from such proceedings;
(xviii) no Taxes are imposed by withholding or otherwise on any payment to
be made by the Borrower or the other Security Parties under this
Agreement or any of the other Financing Documents or are imposed on
or by virtue of the execution or delivery by the Borrower or the
other Security Parties of this Agreement or any of the other
Financing Documents or any document or instrument to be executed or
delivered under this Agreement or any of the other Financing
Documents;
(xix) it is not necessary to ensure the legality, validity, enforceability
or admissibility in evidence of this Agreement or any other
Financing Documents that it or any other instrument be filed,
recorded, registered or enrolled in any court, public office or
elsewhere in Brazil or that any stamp, registration or similar tax
be paid in Brazil on or in relation to this Agreement or any other
Financing Documents, which are in proper form for their respective
enforcement in the courts of Brazil and the other jurisdictions to
which the same are expressed to be subject other than the recording
of the relevant Financing Documents and the payment of recording
fees;
(xx) save as disclosed in writing to the Facility Agent by a letter dated
of even date with this Agreement, the Borrower is not party to any
agreements, arrangements or contracts (written or oral) other than
the Project Agreements, the Security Documents and the Inter Company
Loan Agreement;
(xxi) the legal opinions furnished pursuant to Clause 3.1(xii) to (xx) are
true and correct in all respects;
(xxii)save for different charter rates set out in a letter delivered by
the Borrower to the Facility Agent and having even date with this
Agreement, the Charterparty and the Services Rendering Contracts are
in identical terms to the charterparties and services rendering
contracts executed between Maritima and Petrobras in respect of the
Related Rigs; and
(xxiii) Maritima is the same legal entity as the company previously called
Maritima Navegacao Engenharia Ltda.
8.2 LENDERS' AND AGENTS' RELIANCE
The Borrower acknowledges that it has made the representations and
warranties referred to in Clause 8.1 with the intention of persuading the
Agents and the Lenders to enter into this Agreement and that the Agents
and the Lenders have entered into this Agreement on the basis of, and in
full reliance on, each of such representations and warranties. The
Borrower warrants to the Agents and the Lenders that each of such
representations and warranties is true and correct in all material
respects as of the date of this Agreement and that none of them omits any
matter the omission of which makes any of such representations and
warranties misleading.
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8.3 KNOWLEDGE OF LENDERS OR AGENTS
The rights and remedies of the Agents and the Lenders in relation to any
misrepresentations or breach of warranty on the part of the Borrower shall
not be prejudiced by any investigation by or on behalf of the Agents
and/or the Lenders into the affairs of the Borrower, by the execution or
the performance of this Agreement or by any other act or thing which may
be done by or on behalf of the Agents and/or the Lenders in connection
with this Agreement and which might, apart from this Clause, prejudice
such rights or remedies.
8.4 REPETITION
The representations set out in Clause 8.1 and the warranty in Clause 8.2
shall survive the execution of this Agreement and the making of the
Advances hereunder and shall be deemed to be repeated at the time of the
giving of each Drawing Request, on the date for the borrowing of each
Advance and on each Repayment Date with reference to the facts and
circumstances then subsisting, as if made at each such time.
9. PAYMENTS: TAXATION
9.1 CURRENCY OF ACCOUNT
The US Dollar is the currency of account and the currency of payment for
each and every sum due from the Borrower hereunder, PROVIDED HOWEVER THAT
any amount falling due under Clause 18 (Indemnities) or 16 (Fees and
Expenses) shall be payable in the currency in which the corresponding
loss, expense, deficiency, duty, tax or other payment has been incurred or
suffered.
9.2 ACCOUNTS AND PROCEDURE FOR PAYMENT
All payments to be made by the Borrower to the Agents for the account of
the Lenders or to Lenders hereunder shall be made on and for value on the
due date:-
(a) if in US Dollars in freely transferable same day funds to the
account of the Facility Agent with the Management Account Bank, ,
account number to be notified by the Facility Agent or at such other
bank as the Facility Agent may designate; and
(b) if in any other currency, in same day funds to such account of the
Facility Agent with such bank as the Facility Agent may from time to
time designate.
9.3 WITHHOLDING; GROSS-UP
All payments to be made by or for the account of the Borrower hereunder or
under any other Security Document shall be made without set-off or
counterclaim and free and clear of and without deduction for or on account
of any present or future Taxes of any nature whatsoever imposed by or in
any country ("APPLICABLE TAX") unless (i) the Borrower is compelled by law
to make payment to or for the account of either Agent or any Lender
subject to such Applicable Tax, or (ii) the Security Agent or the Facility
Agent is compelled by law to make payment for or for the account of any
Lender subject to such Applicable Tax in any such case the Borrower shall
promptly pay such Applicable Tax
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and the amount of the relevant payment by the Borrower hereunder or (as
the case may be) under the relevant other Security Document shall be
increased to the extent necessary to ensure that the relevant Agent or (as
the case may be) the relevant Lender actually receives an amount, free and
clear of and after deduction for all such Applicable Tax, equal to the
full amount which would have been received if no such withholding or
deduction had been made. The Borrower shall pay and indemnify and keep
indemnified the Agents and each of the Lenders against all such Applicable
Tax. The Borrower shall promptly deliver to the Facility Agent copies of
official Tax receipts evidencing payment of any such Applicable Tax
imposed as aforesaid. The obligations of the Borrower under this Clause
9.3 shall survive the repayment of the Loan and the payment of all other
sums payable hereunder and under the other Security Documents.
9.4 BANKING DAY CONVENTION
Whenever any payment hereunder would otherwise become due on a day which
is not a Banking Day, the due date thereof shall instead be the next
succeeding Banking Day unless such Banking Day falls in the next calendar
month in which case payment shall be made on the immediately preceding
Banking Day.
9.5 APPROPRIATION
Notwithstanding any other provision of this Agreement and/or of the
Security Documents (express or implied), at any time after the occurrence
and during the continuance of an Event of Default the Facility Agent shall
have an absolute and unfettered right to appropriate any payments received
from the Borrower and/or from any other Security Party and any monies
received in respect of all or any of the other Security Documents to such
of the Borrower's obligations hereunder and/or under the Security
Documents and/or under the Sister Rig Financing Documents (whether to the
Loan or any part thereof, or the Sister Company Loan or any part thereof
interest or any other sums payable hereunder or thereunder) as the
Facility Agent may determine, to the exclusion of any right on the part of
the Borrower to make any appropriation in respect of such payment(s)
and/or monies.
9.6 CONTROL ACCOUNT
The Facility Agent will maintain a control account showing the Loan and
other sums owing by the Borrower under this Agreement and the other
Financing Documents and all payments in respect thereof made by the
Borrower from time to time. The control account shall in the absence of
manifest error be conclusive as to the amount from time to time owing by
the Borrower under this Agreement and the other Financing Documents.
9.7 REIMBURSEMENT OF FACILITY AGENT
(i) Unless the Facility Agent shall have been notified by a Lender not
later than one Banking Day prior to the Drawdown Date of any Advance
that such Lender will not make available its portion of such Advance
the Facility Agent may assume that such Lender has made its portion
available to the Facility Agent. If the Facility Agent makes an
amount available to the Borrower which has not (but should have)
been made available to the Facility Agent by a Lender, the Facility
Agent shall be entitled to recover the relevant amount from such
Lender on demand, or failing this, the Borrower shall on request
made by the Facility Agent
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to the Borrower refund such amount, together with interest thereon
at the rate determined by the Facility Agent to be equal to the cost
to the Facility Agent of funding such amount for the period until
receipt by the Facility Agent thereof.
(ii) If the Facility Agent makes an amount available to a Lender which
has not (but should have) been made available to the Facility Agent
by the Borrower, such Lender shall on request refund such amount to
the Facility Agent together with interest thereon at the rate
determined by the Facility Agent to be equal to the cost to the
Facility Agent of making available such amount for the period from
the date on which such amount was so made available until receipt by
the Facility Agent thereof.
10. EVENTS OF DEFAULT
10.1 EVENTS
Each of the following events (whether or not arising as a result of events
or circumstances beyond the Borrower's control) shall constitute an Event
of Default, if:-
(i) any principal of or interest on the Loan or any other amount
becoming payable under this Agreement and/or the Security Documents
is not paid on the due date for payment thereof or (in the case only
of sums expressed to be payable upon demand) within a period of five
(5) Banking Days after demand is made therefor; or
(ii) the Borrower shall make default under, or in the due and punctual
observance and performance of, Clause 11.1(xi) and shall fail to
remedy the same within one (1) Banking Day after written notice from
the Facility Agent to the Borrower requiring such default to be
remedied; or
(iii) the Borrower or any other Security Party makes default under, or in
the due and punctual observance and performance of, any other
provision of this Agreement and/or the Security Documents and/or any
of the Project Documents which default (in the reasonable opinion of
the Facility Agent) is not capable of remedy and/or imperils the
security created by the Security Documents and/or any of the Project
Documents or any of them, or any such default arises which (in the
reasonable opinion of the Facility Agent) is capable of remedy and
does not imperil the security created by the Security Documents
and/or any of the Project Documents or any of them and is not
remedied within thirty (30) days after written notice from the
Facility Agent to the Borrower requiring remedial action; or
(iv) any indebtedness of any Security Party (being indebtedness in excess
of US$500,000 (or the equivalent in any other currency) is not paid
on its due date or within any period of grace specified in the
contract evidencing the original terms of such indebtedness or
becomes due or capable of being declared due prior to its stated
date of payment; or
(v) any party to a Project Document (other than the Borrower or another
Security Party) defaults in the due performance or observance of any
of its covenants, undertakings or obligations under such Project
Document which default could be
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material in the context of the transactions contemplated by the
Financing Documents and (if such default is capable of remedy) the
same is not remedied to the satisfaction of the Facility Agent
within the period (if any) allowed for remedy thereof under the
Project Documents or a period of thirty (30) days after the Facility
Agent gives notice to the Borrower requiring the same to be
remedied; or
(vi) any representation or warranty made pursuant to Clause 8.1 or any
other provision of this Agreement or made pursuant to any provision
of any of the Security Documents proves to have been materially
incorrect or becomes materially incorrect in any respect as of the
date on which such representation or warranty is made or repeated
(or deemed to be repeated); or
(vii) any governmental licence, authorisation, consent or approval at any
time necessary to enable the Borrower and/or any of the Security
Parties and/or any of the Project Parties to comply with its or
their respective obligations hereunder or under the Security
Documents or under the Project Documents or any of them or to enable
the operation of the Rig is revoked or withheld or modified or is
otherwise not granted or fails to remain in full force and effect or
(but without prejudice to the generality of the foregoing) the
Charterparty and other related documents which require registration
are not registered with the Central Bank of Brazil in accordance
with Clause 11.1(f) within the period of four weeks after the
Charterparty Commencement Date; or
(viii)the Borrower and/or any other Security Party or any Project Party
other than a Security Party becomes insolvent or bankrupt or
suspends payment of its debts generally as they fall due, or any
steps are taken by any person or by any government authority for the
winding up, liquidation or dissolution of the Borrower and/or any
other Security Party or any Project Party other than a Security
Party or for the making of an administration order (including,
without limitation, the presentation of a petition for an
administration order) or for the re-arrangement, re-organisation or
reconstruction of the Borrower and/or any other Security Party or
any Project Party other than a Security Party, or if an encumbrancer
takes possession of or if a receiver or trustee is appointed of, or
if any distress or execution is levied against, any of the assets of
the Borrower and/or any other Security Party or any Project Party
other than a Security Party, or if any process or proceeding similar
to any of the foregoing shall be instituted under the laws of any
relevant jurisdiction; or
(ix) the Borrower and/or any other Security Party suspends or threatens
to suspend its operations or (without the prior written consent of
the Facility Agent) disposes or threatens to dispose of all or
substantially all of its business, property or assets, or if all or
substantially all of the same is seized or appropriated; or
(x) any change occurs in the shareholders and the respective
shareholdings in the Borrower or the Sister Company from those
specified in Schedule 5; or
(xi) save as may be permitted under this Agreement or any of the Security
Documents any Charterparty Hire and/or any other Earnings are paid
otherwise than to the Management Account; or
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(xii) the Rig becomes a Total Loss and the Facility Agent does not, within
a period of one hundred and eighty (180) days following the
occurrence of such Total Loss, receive for the account of the
Lenders the insurance proceeds or other compensation relating to
such Total Loss in an amount not less than the amount for which the
Rig shall have been required to be insured at the time of such Total
Loss pursuant to the Mortgage and Deed of Covenants and the other
Financing Documents; or
(xiii)this Agreement or any of the Security Documents or any of the
Project Documents ceases at any time to be the legal, valid and
binding obligation of the Borrower or, as the case may be, any other
Security Party or, as the case may be, Project Party being a party
thereto, or if it becomes impossible or unlawful for any of the
material obligations of the Borrower and/or any other Security Party
and/or any Project Party to be performed or for any of the rights
given to the Agents or the Lenders hereunder and/or under any of the
Security Documents to be exercised or the Borrower or any other
Security Party or any Project Party disaffirms or repudiates any
such obligations; or
(xiv) the Rig is not delivered to and accepted by the Borrower in all
material respects in accordance with the provisions of the Rig
Construction Contract prior to the date falling 365 days after the
Original Scheduled Yard Delivery Date; or
(xv) the Rig has not arrived at the Port or in sheltered waters in
Macae-RJ) and accepted by Petrobras for the commencement of
operations in all respects in accordance with the Charterparty prior
to the date falling 365 days after the Original Scheduled
Charterparty Commencement Date; or
(xvi) the Rig Construction Contract is terminated or any event or
circumstance arises thereunder which entitles either party
thereunder to terminate the same pursuant to Clauses 18 or 19
thereof or otherwise pursuant to the terms thereof or either party
repudiates its obligations thereunder or commits any other breach
which would entitle the other party to treat its obligations
thereunder as terminated; or
(xvii)the Refund Guarantee is terminated or the issuer thereof repudiates
its obligations thereunder; or
(xviii) the Charterparty is terminated or any event or circumstance arises
thereunder which entitles either party thereto to terminate the same
or either party repudiates its obligations thereunder or commits any
other breach which would entitle the other party to treat its
obligations thereunder as terminated; or
(xix) the Services Rendering Contract is terminated or any event or
circumstance arises thereunder which entitles either party thereto
to terminate the same or either party repudiates its obligations
thereunder or commits any other breach which would entitle the other
party to treat its obligations thereunder as terminated; or
(xx) there is any breach or non observance on the part of Pride and/or
Maritima of their respective obligations under the Additional
Funding and Guarantee Agreement; or
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(xxi) the Bridging Loan is not repaid to MC1 on the Bridging Loan
Repayment Date (otherwise than by reason of a default by MC2 in the
performance of its obligations under the Additional Funding and
Guarantee Agreement to remit to MC1 amounts received from the
Transferees to whom MC2 transfers its participation in the Tranche A
Facility in accordance with the Additional Funding and Guarantee
Agreement; or
(xxii)it is not possible to maintain the Insurances throughout the
Security Period for any reason (including, without limitation, by
reason of any relevant Insurances not being available in the
international insurance market); or
(xxiii) any of the events or circumstances specified in the foregoing
paragraphs (i) to (xx) (MUTATIS MUTANDIS) occur under the Sister
Company Financing Documents.
10.2 RIGHTS ON EVENT OF DEFAULT
At any time after the occurrence of an Event of Default and while the same
is continuing (and in addition and without prejudice to any other rights
of the Agents or the Lenders):
(i) the Facility Agent may and shall if so directed by the Majority
Lenders by notice in writing to the Borrower declare that the Loan
and all other amounts outstanding from the Borrower under this
Agreement and/or the Security Documents are immediately due and
payable and such declaration shall be effective from the date of
such occurrence or such other later date as the Facility Agent may
specify in the said notice, and (at the same time as or at any time
subsequent to the service of such notice and the same shall be
immediately due and payable and the Lenders' obligation to make
available or to continue to make available the Facilities, or any
part thereof, to the Borrower shall immediately cease); and/or
(ii) either of the Agents or any of the Lenders may terminate or
otherwise rearrange (at the discretion of such Agents or Lenders)
any interest rate or currency swap, hedging or other currency or
interest rate management agreement or arrangements which the Agents
or any of the Lenders may have taken out or entered into in relation
to the Loan or any part thereof.
10.3 SURVIVAL OF RIGHTS
The termination of this Agreement for any cause whatsoever shall not
affect the right of the Agents and the Lenders to recover from the
Borrower any amounts due to the Agents and the Lenders on or before the
termination or in consequence thereof or the right of the Agents and the
Lenders to recover any damages for breach of this Agreement and/or the
Security Documents or any of them.
10.4 NO INDEPENDENT ACTION
No Lender may, except with the prior consent of the Majority Lenders (and,
where a Lender may, it may only do so through the Security Agent):
(a) enforce any encumbrance created or evidenced by any Security
Document or require the Security Agent to enforce any such
encumbrance;
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(b) sue for or institute any creditor's process (including a Mareva
injunction, garnishment, execution or levy, whether before or after
judgment) in respect of any obligation (whether or not for the
payment of money) owing to it under or in respect of any Financing
Document;
(c) take any step (including petition, application, notice of meeting or
proposal to creditors) for the winding-up, or administration of, or
any insolvency proceeding in relation to, the Borrower, or for a
voluntary arrangement or scheme or arrangement in relation to the
Borrower; or
(d) apply for any order for an injunction or specified performance in
respect of the Borrower in relation to any of the Financing
Documents.
Provided that for the avoidance of doubt that nothing herein contained
shall restrict the rights of the Beneficiaries under (and as defined in)
the Floor Guarantee to enforce or refrain from enforcing their rights
thereunder at such times and in such manner as they may think fit.
11. COVENANTS
11.1 GENERAL COVENANTS
The Borrower hereby covenants and undertakes with the Agents and each of
the Lenders that throughout the Security Period:-
(i) it will obtain and promptly renew (or require the other Project
Parties where applicable to obtain and promptly renew) from time to
time and comply with the terms of all consents which may be required
under any applicable law in connection with or for the execution,
delivery or due performance by the Security Parties and the Project
Parties of this Agreement, the Security Documents or the Project
Documents or for the validity or enforceability of this Agreement or
the Security Documents or the Project Documents (or procure such
obtaining, renewal or compliance);
(ii) it will pay or cause to be paid all of its obligations, ents, rates,
taxes, assessments, impositions, calls and outgoings whatsoever
(whether governmental, municipal or otherwise) imposed upon or
payable in respect of its property or assets as and when the same
shall become payable save for any of the same which are being
contested in good faith and by appropriate proceedings and which
could not reasonably be expected to have a material adverse effect
on the business or operation of the Borrower;
(iii) it will deliver to the Facility Agent in sufficient copies for each
of the Lenders:
(a) as soon as the same are available (and in any event within one
hundred and twenty (120) days) after the end of each of its
financial years ending after the date hereof, its accounts for
such financial year (including the profit and loss account for
the financial year ended on the last day of such financial
year and the balance sheet as of the end of such financial
year) having ensured that such accounts were prepared on such
basis as is
- 41 -
reasonably acceptable to the Facility Agent and were prepared
in accordance with accounting principles and practices
generally accepted in the United States of America ("GAAP")
and consistently applied and give (in conjunction with the
notes thereto) a fair presentation in accordance with GAAP of
(i) the financial condition of the Borrower as at the date as
of which they were prepared, and (ii) the results of the
operations of the Borrower for the period to which they relate
and were audited by auditors acceptable to the Facility Agent
and were certified by its duly authorised officer as giving
(in conjunction with the notes thereto) a true and fair view
of its financial condition as at the end of such financial
year and of the results of its operations during such
financial year;
(b) simultaneously with the delivery of each of its accounts in
accordance with sub-clause (iii)(a), a certificate signed by a
duly authorised director or officer of the Borrower confirming
that as of the date of such certificate (which must be dated
not more than ten (10) days prior to the date on which it is
delivered to the Facility Agent) no Event of Default or
Potential Event of Default has occurred at any time after the
date of the last such certificate delivered pursuant to this
sub-clause (iii)(b) (or the date of this Agreement, in the
case of the initial such certificate);
(c) as soon as reasonably practicable following receipt from the
Builder, a certified true copy of each progress report given
by the Builder pursuant to the Rig Construction Contract and
each notice of anticipated delivery date given by the Builder
pursuant to the Rig Construction Contract and a certified true
copy of each other notice or report given to it by the Builder
pursuant to or in connection with the Rig Construction
Contract which could reasonably be considered to be material
in the context of the transactions contemplated by the
Security Documents and the Project Documents;
(d) simultaneously with delivery to Petrobras of each progress
report given by the Borrower to Petrobras pursuant to the
Charterparty and each other notice or report so delivered by
the Borrower pursuant to the Charterparty which could
reasonably be considered to be material in the context of the
transactions contemplated by the Security Documents and the
Project Documents, a certified true copy of such notice or
report;
(e) from time to time promptly upon request by the Lender, such
other information as the Security Agent may reasonably require
in the context of this Agreement and any of the Security
Documents and the Project Documents; and
(f) evidence satisfactory to the Security Agent that it has
registered the Charterparty and any other documents requiring
registration with the Central Bank of Brazil within 4 weeks of
the Charterparty Commencement Date,
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(iv) promptly upon becoming aware of the same, it will notify the
Security Agent of:
(a) any dispute between the Borrower and (A) the Builder in
relation to the Rig Construction Contract, (B) Petrobras in
relation to the Charterparty or any of the other Project
Documents which, in any case, could reasonably be considered
to be material in the context of the transactions contemplated
by this Agreement and any of the other Security Documents or
could reasonably be expected to have a material adverse effect
on the Borrower;
(b) any breach by any party to any Security Document or any
Project Document of any party's obligations thereunder which
could reasonably be considered to be material in the context
of the transactions contemplated by this Agreement and any
other Security Document or could reasonably be expected to
have a material adverse effect on the Borrower and provide the
Security Agent with details of the nature and extent of such
breach and the steps which it intends to take in respect
thereof;
(c) any event which could materially adversely affect the
completion and delivery of the Rig under the Rig Construction
Contract Date; and
(d) the occurrence of any Event of Default or any Potential Event
of Default;
(v) it will immediately upon delivery of the Rig by the Builder register
itself as the owner of 64/64th shares in the Rig at the Registry of
Bahamian Ships free from any encumbrance (save only for the Mortgage
and the Mortgage Debenture) and will deliver to the Facility Agent a
certified copy of the certificate of registration of the Rig
immediately it is issued;
(vi) it will perform all of its obligations under each of the Security
Documents and the Project Documents to which it is a party in
accordance with the respective terms thereof and not terminate or
amend, or offer to terminate or amend, any of the Security Documents
or Project Documents to which it is a party or waive any of its
rights thereunder which, in the case of any amendment or waiver,
could be material in the context of this Agreement and the Security
Documents or Project Documents and the transactions contemplated
hereby or thereby and without prejudice to the generality of the
foregoing it will use all reasonable endeavours to procure that all
payments are made by Petrobras pursuant to the Project Documents
without any withholding, set-off, counterclaim or other deduction of
any kind;
(vii) it will permit representatives of the Facility Agent (or any
accountants, engineers or other experts or specialists designated by
the Facility Agent) to visit or inspect, or procure that any such
representatives are able to visit or inspect, the Rig during its
construction and after the Yard Delivery Date and the Borrower's
books of account, at such times and as often as may be reasonably
required by the Facility Agent subject to the Facility Agent first
giving reasonable prior written notice and in exercising such rights
the Facility Agent's representative will comply with the reasonable
instructions of the Borrower's crew;
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(viii)it will at its own cost and expense promptly execute, acknowledge,
deliver, file and register all such additional documents,
instruments, agreements, certificates, consents and assurances and
do all such other acts and things as may be legally required for the
Borrower to do and as may be necessary or as the Facility Agent may
reasonably request from time to time in order to effectuate the
purposes of this Agreement or any of the Security Documents or the
Project Documents or to perfect the security interest intended to be
constituted by any of the Security Documents or to enable the Agents
and the Lenders to obtain the full benefits of this Agreement or any
of the Security Documents or the Project Documents and to exercise
and enforce the rights and remedies under this Agreement or any of
the Security Documents or the Project Documents;
(ix) it will not, without the prior written consent of the Facility
Agent:-
(a) (save and except as envisaged in this Agreement) create,
assume or permit to exist any encumbrance upon any of its
property or other assets, real or personal, tangible or
intangible, whether now owned or hereafter acquired, other
than any lien on the Rig arising as a result of any necessary
salvage or arising in the ordinary course of operation of the
Rig; or
(b) engage in any business or activity except the ownership of the
Rig, its chartering to Petrobras in accordance with the
Charterparty and its operation and activities incidental
thereto or pursuant to any subsequent charter or drilling
service contract; or
(c) save and except as envisaged by this Agreement make
any loans to any person(s), make any investments of any kind
(including but not limited to (i) the acquisition of any
shares in or debentures of any company and/or (ii) the
purchase, or acquisition on finance lease, hire purchase or
similar terms, of any fixed asset(s) premises/office equipment
for the Borrower's own use, including charters out), or
authorise or enter into any capital commitments otherwise than
in the ordinary course of business; or
(d) (save and except as envisaged in this Agreement or agreed by
the Facility Agent in writing) borrow any money or permit any
such borrowing to continue, or enter into any agreement for
payment on deferred terms (otherwise than on customary
suppliers' credit terms) or any equipment lease or contract
hire agreement (other than in respect of necessary machinery
and/or equipment for the Rig or otherwise in the ordinary
course of business); or
(e) (save and except as envisaged in this Agreement) assume,
guarantee or endorse or otherwise become or remain liable in
connection with any obligation of any person (otherwise than
in the ordinary course of operating of the Rig); or
(f) at any time during the Security Period purchase or
otherwise acquire for value any shares of its capital stock,
and will not in any financial year during the Security Period
declare or pay any dividend on any of such shares or make any
distribution to the holder(s) of any such shares except
- 44 -
as provided in Clause 12.4 and it will not issue any new
shares of its capital stock.
(x) it will maintain the Management Account and the Reserve Account (and
any other account(s) opened by the Borrower for the purposes of this
Agreement;
(xi) in the event that, and whenever, the Facility Agent shall issue any
certificate for the purposes of Clause 9.2 of the Deed of Guarantee
and Undertaking and shall supply a certified copy thereof to the
Borrower, the Borrower will, unless the Guarantors shall have made
the relevant payment by way of subscription for equity share capital
in the Borrower pursuant to Clause 9.1 of the Deed of Guarantee and
Undertaking within seven (7) Banking Days immediately following the
day on which it is supplied by the Facility Agent with a certified
copy of such certificate, deliver to the Sponsors (and will not
purport to revoke) a duly completed request for a drawing under the
Subordinated Loan Facility Agreement in an amount equal to the
amount specified in said certificate, and will simultaneously
deliver a certified copy of such certificate to the Facility Agent;
(xii) it will ensure that Formaritima Ltd and Petrodrill Engineering N.V.
will not (without the prior written consent of the Facility Agent,
such consent not to be unreasonably withheld or delayed) cancel,
vary or amend any of the Other Services Contracts and that
Formaritima Ltd and Petrodrill Engineering N.V. will (unless the
Facility Agent otherwise agrees) take all appropriate steps to
enforce performance by all parties (other than Formaritima Ltd and
Petrodrill Engineering N.V.) of their respective obligations under
the Other Services Contracts; and
(xiii)it will do or cause to be done all things necessary to preserve in
full force its corporate existence, rights, franchises or
authorities necessary for the conduct of its business.
11.2 COST OVERRUNS
Without prejudice to any other provision of this Agreement or any other
Security Documents, the Borrower will perform its obligations under the
Rig Construction Contract and any Purchaser's Supplies Contract.
11.3 INSURANCES
The Borrower will take out and effect and maintain throughout the Security
Period the Insurances meeting the requirements specified in Schedule 8
with such insurers as are acceptable to the Facility Agent. The terms and
conditions of such insurances shall be subject to the prior approval of
the Facility Agent (such approval not to be unreasonably withheld or
delayed) and duplicates of all cover notes, policies and certificates of
entry shall be provided to the Security Agent for its approval and
retention. The Borrower will renew all such insurances at least fourteen
(14) days before the relevant policies or contracts or certificates of
entry expire and the Borrower will punctually pay all premiums, calls,
contributions or other sums payable in respect of such insurances.
11.4 INSURANCE PROCEEDS AND DEDUCTIBLES
The Borrower shall:
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(i) procure that the insurance proceeds, received or to be received by
the Borrower shall be paid to the Facility Agent in accordance with
the Insurances Assignment and are paid into the Management Account;
(ii) pay to the Facility Agent and remit to the Management Account an
amount equal to the deductions made for deductibles or excess
applied by insurers in respect of any claim, such payments to be
funded by the Borrower (without recourse to the Lenders).
11.5 LIQUIDATED DAMAGES; REFUNDS
The Borrower shall procure that all amounts payable by the Builder under
the Rig Construction Contract and the Export-Import Bank of Korea under
the Refund Guarantee received or to be received by the Borrower are paid
to the Security Agent and credited to the Management Account.
12. SECURITY ACCOUNTS
12.1 REMITTANCE OF EARNINGS
The Borrower shall, throughout the Security Period, procure and ensure
that all monies payable under the Charterparty and any other Earnings are
paid to the Management Account unless and until such time as the Lender
shall, following the occurrence of an Event of Default and whilst the same
is continuing, require that the Charterparty Hire and any other Earnings
of the Rig and all the Services Rendering Contract Payments are paid to
the Facility Agent or as it may direct (whereafter the Borrower shall
procure and ensure that the Charterparty Hire and any other Earnings and
all the Services Rendering Contract Payments are paid in accordance with
the directions of the Facility Agent).
12.2 USE OF MANAGEMENT ACCOUNT
Subject to the provisions of Clause 12.1 and unless and until an Event of
Default shall have occurred and be continuing (whereupon the provisions of
Clause 12.4 shall be and become applicable) and subject in all respects to
the provisions of Clause 9.5, monies from time to time credited to, or
standing to the credit of, the Management Account shall be applied in
accordance with the following provisions:-
(i) Subject to no Event of Default or Potential Event of Default having
occurred, and be continuing the Facility Agent and the Borrower
shall on the 5th day of each month (commencing on the 5th of the
month following the month during when the first payment of
Charterparty Hire is paid to the Management Account) release to the
Borrower an amount not exceeding the Monthly Outgoings incurred by
the Borrower during the preceding month.
(ii) All other monies from time to time standing to the credit of the
Management Account shall be applied by the Facility Agent in or
towards payment of the Repayment Instalments and otherwise in or
towards amounts of principal of, and interest accrued on, the Loan
from time to time payable by the Borrower hereunder and other
amounts from time to time falling due and payable hereunder and/or
under any of the Security Documents (and such application by the
Facility
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Agent, which the Facility Agent is hereby irrevocably authorised
by the Borrower to do, shall constitute PRO tanto satisfaction of
the corresponding obligations of the Borrower hereunder).
(iii) Subject to the payments made in accordance with sub-clauses (i) or
(ii) Surplus Earnings shall be transferred to the Reserve Account on
the 5th day of each month.
12.3 USE OF RESERVE ACCOUNT
All monies transferred to the Reserve Account in accordance with Clause
12.2(iii) shall during the Security Period remain credited to the Reserve
Account unless withdrawn pursuant to Clause 12.4 in accordance with and
subject to the Reserve Account Charge. If at the time the amount for the
time being credited to the Management Account is insufficient to discharge
the Monthly Outgoings and/or payments to the Agents and the Lenders in
accordance with Clause 12.2(i) and/or 12.2 (ii), then subject to no Event
of Default and no Potential Event of Default having occurred, the Facility
Agent shall apply any amounts credited to the Reserve Account in or
towards the Monthly Outgoings and/or payments to the Agents and the
Lenders and the provisions of Clause 12.2(i) and (ii) shall (MUTATIS
MUTANDIS) apply.
12.4 WITHDRAWAL
Subject to there being credited to the Reserve Account and the Sister
Company Reserve Account immediately following such withdrawal an amount
equal to the aggregate of the next six (6) Repayment Instalments and the
next six (6) Repayment Instalments under and as defined in the Sister
Company Loan Agreement the Borrower may from time to time withdraw monies
from the Reserve Account.
12.5 FOLLOWING EVENT OF DEFAULT
Without prejudice to the provisions of the Management Account Charge and
the Reserve Account Charge, upon the occurrence of an Event of Default and
whilst the same is continuing the Facility Agent shall forthwith be and
become entitled then or at any time thereafter to apply all moneys
standing to the credit of, or from time to time credited to, the
Management Account and the Reserve Account in or towards payment of
amounts due to the Agents and the Lenders under this Agreement and/or the
other Security Documents.
12.6 INTEREST
Amounts for the time being standing to the credit of the Management
Account and the Reserve Account shall bear interest at the rates from time
to time paid by the Management Account Bank or (as the case may be) the
Reserve Account Bank to its customers for US Dollar deposits of like
amounts for like periods (but having regard to payments which are
scheduled to fall due to be made from time to time from such accounts),
such interest to accrue from day to day, to be calculated on the actual
number of days elapsed and on the basis of a three hundred and sixty (360)
day year and to be credited to the relevant account at such intervals as
the Facility Agent and the Borrower shall agree.
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13. PROVISIONS RELATING TO SECURITY
13.1 CONTINUING SECURITY
It is declared and agreed that:
(i) the security created or to be created by or pursuant to this
Agreement and the other Security Documents shall be held by the
Security Agent as a continuing security for the payment and
discharge of the Secured Obligations;
(ii) the security so created shall not be satisfied by any intermediate
payment or satisfaction of any part of the amount hereby and thereby
secured;
(iii) the security so created shall be in addition to and shall not in any
way be prejudiced or affected by any collateral or other security
now or hereafter held by the Agents or any of the Lenders for all or
any part of the moneys hereby and thereby secured;
(iv) every power and remedy given to the Agents or any of the Lenders
hereunder or under any of the Security Documents shall be in
addition to, and not a limitation of, any and every other power or
remedy vested in the Lender hereunder or thereunder; and
(v) all the powers so vested in the Agents or any of the Lenders may be
exercised from time to time and as often as the Lender may deem
expedient.
13.2 CLAIMS AGAINST SECURITY PARTIES
Notwithstanding any other provision of this Agreement and/or of the
Security Documents (express or implied), the Agents and the Lenders shall
have an absolute and unfettered right to make, enforce or seek to enforce
any claim against the Borrower and/or against any other Security Party
and/or against any security or other asset(s) or document(s), agreement(s)
or arrangement(s) simultaneously and/or in such order or sequence as any
of the Agents or the Lenders may in their sole and absolute discretion see
fit.
14. CHANGE IN CIRCUMSTANCES
14.1 ILLEGALITY
In the event that by reason of change subsequent to the date hereof in any
applicable law, regulation or regulatory requirement or in the
interpretation thereof it shall appear to any Lender that it has become
unlawful for such Lender to maintain or give effect to its obligations as
contemplated by this Agreement, such Lender shall inform the Facility
Agent who shall thereupon give notice to the Borrower to that effect,
whereafter the liability of such Lender to make or to maintain Commitments
and its participation in the Loan shall cease, and if any of the
Facilities in which such Lender is participating has already been drawn
down the Borrower shall prepay such Lender's participation in the Loan to
such Lender either immediately or, on the latest date permitted by such
law, regulation or regulatory requirement, in accordance with and subject
to the provisions of Clause 18. In any such event, but without prejudice
to the aforesaid obligations of the Borrower to prepay such Lender's
participation in the Loan, the Borrower and the Lender
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so affected and the Facility Agent shall negotiate in good faith for a
period of 30 days next succeeding the giving of such notice with a view to
agreeing terms for making such Lender's participation in the Loan
available from another jurisdiction, or for establishing a mutually
acceptable basis for funding from alternative sources, or for
restructuring the Facilities on a basis which is not unlawful.
14.2 INCREASED COSTS
(i) If by reason of the introduction of, or any change in, any
applicable law, treaty, regulation or regulatory requirement or any
change in the interpretation or application of any of the foregoing
by any judicial, governmental or other competent body or authority
or if by reason of compliance by any Lender or either of the Agents
with any applicable directive, request or requirement (whether or
not having the force of law) of any central bank or governmental,
fiscal or other authority (including, but not limited to, a
directive, request or requirement relating to any Lender's
allocation of capital for the purpose of its business) any Secured
Party incurs an increased cost (as defined in paragraph (ii)), the
Borrower shall promptly on demand made by the Facility Agent on
behalf of such Secured Party pay to the Facility Agent for the
account of such Secured Party the amount of such increased cost:-
(ii) In this Agreement "INCREASED COST" means:
(a) any Taxation to which any Secured Party is subjected with
respect to the Loan or any part thereof (other than corporate
Taxation on such Secured Party's overall net income); or
(b) an additional cost incurred by a Secured Party as a result of
it having entered into, or performing, maintaining or funding
its obligations under, this Agreement or any other Financing
Documents; or
(c) that portion of any additional cost incurred by a Secured
Party in making, funding or maintaining all or any advances or
commitments comprised in a class of advances or commitments
formed by or including its participations in the Loans made
available or to be made available under this Agreement, as is
attributable to it making, funding or maintaining those
participations; or
(d) a reduction in any amount payable to a Secured Party or in the
effective return to a Secured Party under this Agreement or on
its capital which is attributable to the funding of this
Agreement or its commitment to make funds available hereunder;
or
(e) the amount of any payment made by a Secured Party, or the
amount of any interest or other return foregone by a Secured
Party, calculated by reference to any amount received or
receivable by that Secured Party from any other party under
this Agreement.
(iii) Any demand made by the Facility Agent under sub-paragraph (i) above
shall contain reasonable details of the increased cost and the
event(s) giving rise to it,
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but no Secured Party need disclose any information which is
confidential or disclosure of which would be contrary to its
recognised banking policies.
(iv) The obligation under paragraph (i) to pay increased costs does not
apply to any increased cost:
(a) compensated for by the operation of Clause 9.2; or
(b) attributable to any change in the rate of tax on the
overall net income of a Secured Party (or the overall net
income of a division or branch of a Secured Party) imposed in
the jurisdiction in which its principal office for the time
being is situate or in which it is resident for tax purposes
or is carrying on business and by virtue thereof is subject to
such tax in that jurisdiction; or
(c) attributable to any law or regulation relating to any of the
matters set out in the report of the Basle Committee on
Banking Regulations and Supervisory Practices dated July 1988
and entitled "INTERNATIONAL CONVERGENCE OF CAPITAL MEASUREMENT
AND CAPITAL STANDARDS" as the same are in force and applied
and interpreted at the date of this Agreement.
(iv) In the case of a demand made by or on behalf of a Lender, the
Borrower shall be at liberty at any time after the receipt of such
notice, so long as the circumstances giving rise to such increased
cost continue, on giving not less than five Banking Days'
irrevocable notice to the Facility Agent and such Lender, to prepay
all (but not part only) of such Lender's participation in the Loan
in accordance with and subject to the provisions of Clause 14.3.
(v) In any such event, but without prejudice to the obligations of the
Borrower as aforesaid, the Borrower and the Lender will negotiate in
good faith with a view to mitigating the effects on the Borrower.
14.3 PREPAYMENT
Where any Lender's participation in the Loan is to be prepaid by the
Borrower pursuant to any of the provisions of this Clause 14, the Borrower
shall simultaneously with such prepayment pay to the Facility Agent for
the account of such Lender all accrued interest on any sum prepaid to the
date of prepayment and all other sums payable by the Borrower to or for
the account of such Lender pursuant to this Agreement and/or the Security
Documents together with such amounts as may be certified by such Lender to
be necessary to satisfy the indemnity obligations of the Borrower as
provided for in Clause 18.
14.4 FACILITY AGENT'S AND LENDER'S DETERMINATION
The certificate or determination of the Facility Agent or (as the case may
be) any Lender, as to any of the matters referred to in this Clause 14
shall, save for any manifest error, be conclusive and binding on the
Borrower.
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15. TRANSFERS
15.1 AGREEMENT BINDING ON SUCCESSORS
This Agreement and the other Financing Documents shall benefit and bind
the parties, any transferee or assignee in respect of which an assignment
or novation becomes effective in accordance with Clause 15.3(iii), and
their respective successors as if they were named as parties and had
executed this Agreement. Any reference in any Financing Document to any
party shall be construed accordingly.
15.2 BORROWER'S ASSIGNMENT
The Borrower may not assign or transfer all or any part of its rights or
obligations under any Financing Document.
15.3 TRANSFER
A Lender (an "EXISTING LENDER") may at any time assign, transfer or novate
any of its rights and/or obligations under this Agreement (and the other
Financing Documents to the extent possible as a matter of law) only if:-
(i) such assignment, transfer or novation is to a Qualifying
Lender (a "NEW LENDER");
(ii) such Existing Lender simultaneously assigns, transfers or
novates to such New Lender the proportion of its Corresponding
Sister Company Commitments and of its Corresponding Sister Company
Outstandings so that such New Lender becomes a Lender (as defined in
and in accordance with the Sister Company Loan Agreement) which is
the same as the proportion of its Commitments and Outstandings which
it is assigning, transferring or novating hereunder;
(iii) either such assignment, transfer or novation is effected pursuant to
Clause 15.4 or such New Lender executes an undertaking in form and
substance satisfactory to the Facility Agent that it is bound by the
terms of the Financing Documents.
15.4 NOVATION
Subject to Clause 15.3 any Existing Lender may at any time novate all or
part of its Commitments and/or transfer all or part of its Outstandings
and its rights and benefits under the Financing Documents by delivering to
the Facility Agent a duly completed and executed Transfer Certificate
substantially in the form of Schedule 6. On receipt of such a Transfer
Certificate, the Facility Agent shall countersign it for and on behalf of
itself and the other parties to this Agreement and with effect from the
date specified in the Transfer Certificate to the extent that they are
expressed to be the subject of transfer and/or novation in the Transfer
Certificate:-
(i) the Existing Lender and the other Parties (the "EXISTING PARTIES")
will be released from their obligations to each other (the
"DISCHARGED OBLIGATIONS");
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(ii) the New Lender and the existing Parties will assume obligations
towards each other which differ from the discharged obligations only
insofar as they are owed to or assumed by the New Lender instead of
the Existing Lender;
(iii) the rights of the Existing Lender against the existing Parties and
vice versa (the "DISCHARGED RIGHTS") will be cancelled; and
(iv) the New Lender and the existing Parties will acquire rights against
each other which differ from the discharged rights only insofar as
they are exercisable by or against the New Lender instead of the
Existing Lender,
15.5 NEW LENDERS
Each New Lender shall, by its execution of a Transfer Certificate, accept
that none of the other parties hereto is in any way responsible for:
(a) the accuracy and/or completeness of any information supplied to the
New Lender in connection herewith;
(b) the financial condition, creditworthiness, condition, affairs,
status and nature of the Borrower or any of the Guarantors or any
other Security Party or the observance by the Borrower, any of the
Guarantors or any other Security Party of any of their respective
obligations under the Financing Documents or any document relating
thereto; or
(c) the legality, validity, effectiveness, adequacy or enforceability of
this Agreement or any document relating hereto and, save as
otherwise expressly provided herein, none of such parties shall, or
shall be deemed to be, the agent or trustee of such New Lender in
connection herewith.
15.6 LENDING OFFICES
The initial Lending Office(s) of each Lender has/have been notified by
that Lender to the Facility Agent. Any Lender may at any time change any
of its Lending Office(s) in relation to all or a specified part of any of
its Commitments and/or Outstandings by notifying the Facility Agent and
the Borrower of the fax number, telex number and address of its new
Lending Office(s).
15.6 DISCLOSURE OF INFORMATION
The Lender may disclose information regarding the Borrower or the
Guarantors and the transactions entered into pursuant to this Agreement to
any actual or potential, assignee or sub-participant, subject to such
recipients of information agreeing to keep it confidential.
16. FEES AND EXPENSES
16.1 FEES AND DISBURSEMENTS
The Borrower will pay to each of the Agents on demand, all costs, charges
and expenses (including all out-of-pocket expenses and legal fees and VAT
thereon) incurred by each
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of the Agents in connection with the preservation of its rights under and
enforcement or attempted enforcement of this Agreement and the Security
Documents or otherwise in connection with the Loan or any part thereof.
16.2 TAXES AND DUTIES
The Borrower will pay to the Facility Agent and the Lenders on demand, all
stamp, registration and other duties (including any such duties payable by
the Lender) imposed by any relevant jurisdiction (or any taxing authority
therein or thereof) on this Agreement and/or any of the Security Documents
or otherwise in connection with the Loan or any part thereof.
17. CURRENCY INDEMNITY
17.1 CURRENCY INDEMNITY
(i) If, for any reason, any payment due from the Borrower under or in
connection with any Security Document is made or is satisfied in a
currency (the "OTHER CURRENCY") other than the currency in which the
relevant payment under this Agreement is due (the "CONTRACTUAL
CURRENCY"), then to the extent that the payment (when converted into
the Contractual Currency at the rate of exchange on the date of
payment or, in the case of the liquidation or insolvency of the
Borrower, at the rate of exchange on the latest date permitted by
applicable law for the determination of liabilities in such
liquidation or insolvency) actually received by the party entitled
thereto falls short of the amount expressed to be due under the
terms of this Agreement or, as the case may be, such other Security
Document, the Borrower shall, as a separate and independent
obligation, indemnify the party entitled thereto and hold such party
harmless against the amount of such shortfall.
(ii) If on any occasion the Contractual Currency so purchased exceeds the
amount payable hereunder in the Contractual Currency to the party
entitled thereto then, subject to the Borrower having no further
obligation, actual or contingent, to such party under this
Agreement, such party shall refund to the Borrower the excess amount
of the Contractual Currency so purchased.
(iii) For the purpose of this Clause "RATE OF EXCHANGE" means the rate at
which the party entitled thereto is able on the relevant date to
purchase the Contractual Currency with the Other Currency and shall
take into account any premium and other costs of exchange.
17.2 INDEPENDENT OBLIGATIONS
The indemnities in Clause 17.1 shall constitute separate and independent
obligations of the Borrower from the other respective obligations under
this Agreement, shall give rise to a separate and independent cause of
action against the Borrower and shall apply irrespective of any indulgence
granted by the Lenders or by the Agents from time to time.
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18. GENERAL INDEMNITIES
18.1 UNSCHEDULED REPAYMENTS
Without prejudice to the provisions of Clause 16.2, the Borrower shall
indemnify each Agent and each Lender against all funding and other fees,
costs, charges, losses, demand and expenses incurred or sustained as a
consequence of the Lender receiving (including any receipt in respect of a
repayment or prepayment made with the consent or at the request of or as
required by the Agents or any Lender including, but not limited to, any
prepayment under Clauses 6.5, 6.6 or 14.3) or recovering all or any part
of the Loan or any other amount due hereunder on a day other than at the
times and otherwise in accordance with the Repayment Schedule.
18.2 EVENT OF DEFAULT
The Borrower undertakes to indemnify each of the Agents and the Lenders
against any and all liabilities losses costs, demands, charges,
liabilities and expenses (including, without limitation, legal fees) which
the Agents or such Lender may incur or sustain as a consequence of any
default by the Borrower in the performance of the obligations expressed to
be assumed by it in this Agreement and/or the Security Documents.
18.3 FINANCING COSTS
The liability of the Borrower under Clauses 18.1 and 18.2 shall include
but not be limited to all funding or other fees, costs, charges, losses,
demands and expenses sustained or incurred by either of the Agents or each
of the Lenders including (but not limited to) any sustained or incurred in
liquidating deposits taken to fund the amount so prepaid or sustained or
incurred in connection with the cancellation, reduction or re-arrangement
of any interest rate swap, hedge transaction or other funding or financing
agreement or arrangement which the Agents or such Lender may have arranged
or entered into for the purpose of funding the amount so prepaid (and the
Borrower hereby acknowledges that either of the Agents or each of the
Lenders may in its discretion enter into any such agreements or
arrangements as it considers appropriate).
18.4 OPERATION OF RIG
The Borrower shall indemnify each of the Agents and each of the Lenders
upon demand against all costs, expenses, claims, liabilities and losses of
any nature whatsoever sustained or incurred as a result of or in
connection with any the ownership or operation of the Rig and/or claims by
any third party or any Environmental Claim being made against the Lender
or otherwise howsoever arising out of any Environmental Incident. If the
Lender shall become aware of any claim for the purposes of this Clause
18.4 it shall give notice thereof to the Borrower as soon as reasonably
practicable (but not as a condition precedent to the liability of the
Borrower under this Clause 18.4) and shall (if the Borrower shall
indemnify and secure each of the Agents and each of the Lenders to such
Agents or (as the case may be) such Lender's reasonable satisfaction
against any liability costs damages and expenses which may reasonably be
incurred thereby and/or in relation thereto) take such action as the
Borrower may reasonably and promptly by notice request to avoid, resist or
compromise the claim, provided that:
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(1) If either Agent or (as the case may be) the Lender receives
instructions to appeal against or otherwise resist any claim, it may
thereafter give notice to the Borrower to provide such Agent or (as
the case may be) such Lender with a written opinion of legal
advisers (to be approved by the Agent or (as the case may be) such
Lender, such approval not to be unreasonably withheld) to the effect
that there are reasonable and proper grounds for appealing against
or resisting such claim, and if no such opinion is received by such
Agent or (as the case may be) such Lender within 21 days after the
service of such notice such Agent or (as the case may be) such
Lender shall thereupon be released from any obligations which it
would otherwise have under this Clause and (notwithstanding any
other provision hereof) shall be entitled to immediate
indemnification by the Borrower in respect of such claim, and if
such an opinion is so received but there is a change in the basis on
which it is given then such Agent or (as the case may be) such
Lender may give further notice under this Clause.
(2) Neither Agent nor any Lender shall be required to appeal against or
otherwise resist or to compromise any claim if in the reasonable
opinion of such Agent or Lender doing so could have adverse long
term or consequential implications for such Agent or Lender.
(3) All communications pertaining to any claim with the person authority
or body whatsoever making the claim as are made by the Borrower (if
any) shall first be approved by the Agent or (as the case may be)
such Lender (such approval not to be unreasonably withheld).
18.5 AGENT'S OR LENDER'S CERTIFICATE
A certificate of either Agent or a Lender of the amount of any such loss
or expense as is mentioned in Clauses 18.1, 18.2 and 18.3 and specifying
the basis upon which such loss, expense or amount is computed shall, in
the absence of manifest error, be final and conclusive and binding on the
parties hereto.
19. THE AGENTS
19.1 APPOINTMENT
Each Lender irrevocably appoints the Facility Agent to act as its agent
for the purpose of this Agreement and irrevocably authorises it to take
such action and exercise such rights, powers and discretions as are
specifically delegated to it by this Agreement or the other Security
Documents and such other action, rights, powers and discretions as are
reasonably incidental thereto. However, the Facility Agent may not begin
any legal action or proceeding in the name of a Lender without its
consent. The relationship between the Facility Agent and the Lenders is of
agent and principal only. The Facility Agent shall not be a trustee for
any Lender, nor an agent or trustee for the Borrower or either Guarantor,
under or in relation to any Security Document.
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19.2 DUTIES OF FACILITY AGENT
The Facility Agent shall:-
(i) promptly send to each Lender details of each communication
received by it from the Borrower and/or either of the Guarantors
under this Agreement (except that details of any communication
relating to a particular Lender shall be sent to that Lender only),
details of any Transfer Certificate executed by any other Lender and
provide such other information relating to the Facility as any
Lender may reasonably request;
(ii) promptly send to each Lender a copy of any document or information
received by it under Clause 4 (Availability and Drawing);
(iii) subject to the other provisions of this Clause 19, act in accordance
with any instructions from the Majority Lenders or, if so instructed
by the Majority Lenders, refrain from exercising a right, power or
discretion vested in it under this Agreement; and
(iv) have only those duties, obligations and responsibilities of a solely
mechanical and administrative nature, expressly specified in this
Agreement.
19.3 PERFORMANCE OF DUTIES
The Facility Agent:-
(i) may perform any of its duties, obligations and responsibilities
under the Security Documents by or through its personnel or any
sub-contractor or agents;
(ii) may refrain from exercising any right, power or discretion vested
in it under the Security Documents until it has received
instructions from the Majority Lenders or (provided that
instructions have been requested) as to whether (and, if it is to
be, the way in which) it is to be exercised and shall in all cases
be fully protected when acting, or (if so instructed) refraining
from acting, in accordance with instructions from the Majority
Lenders;
(iii) may treat (a) the Lender which makes available any share of the Loan
as the person entitled to repayment of that share unless all or part
of it has been assigned or transferred (and the Facility Agent has
received notice of that assignment or transfer) in accordance with
Clause 15; and (b) the office(s) notified by a Lender to the
Facility Agent for this purpose before the signing of this Agreement
(or, as the case may be, in the relevant Transfer Certificate or
notice of assignment) as its Lending Office(s) unless the Facility
Agent has received from that Lender a notice of change of Lending
Office in accordance with Clause 15. The Facility Agent may act on
any such assignment and/or notice until it is superseded by a
further assignment and/or notice;
(iv) shall not be required to do anything which would or might in its
reasonable opinion be contrary to any law or directive or otherwise
render it liable to any person which is not a party to the Security
Documents and may do anything which is in its reasonable opinion
necessary to comply with any law or directive;
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(v) shall not be required to make any enquiry as to default by the
Borrower or either of the Guarantors (unless specifically so
instructed by the Majority Lenders) in the performance or observance
of any of the provisions of the Security Documents or as to the
existence of any Event of Default or Potential Event of Default
unless that Facility Agent acquires actual knowledge to the contrary
or has been notified in writing thereof by a Lender; and
(vi) may refrain from taking any step (or further step) to protect
or enforce the rights of any person under the Security Documents
until it has been indemnified (or received confirmation that it will
be so indemnified) and/or secured to its satisfaction against any
and all actions, charges, costs, losses, expenses or liabilities
(including legal, accountants' and other professional fees) which
would or might be brought, made or preferred against or suffered,
sustained or incurred by it as a result.
19.4 AGENTS' DISCRETIONS
The Facility Agent may:-
(i) assume that any representation made by the Borrower or either of the
Guarantors in connection with the Security Documents is true;
(ii) assume that no Event of Default has occurred and that the Borrower
is not in breach of or default under the Security Documents;
(iii) assume that any right, power, authority or discretion vested in this
Agreement upon the Majority Lenders or any other person has not been
exercised;
(iv) rely on any communication, certificate, legal opinion or other
document reasonably believed by it to be genuine;
(v) rely as to any matter of fact which might reasonably be expected to
be within the knowledge of any person, on a written statement by
that person and on any communication or document believed by it to
be genuine;
(vi) obtain and pay for the advice or services of any lawyers,
accountants, surveyors or other experts in relation to the
negotiation, preparation, execution and enforcement of the Security
Documents as may to it seem necessary or desirable and rely on any
such advice;
(vii) retain for its own benefit and without liability to account any fee
or other sum receivable by it in connection with its agency and
subject always to Clause 20 (Set Off/Pro-Rata Sharing) for its
account; and
(viii)accept deposits from, lend money to, provide any advisory or other
services or engage in any kind of banking or other business with,
any party to any Security Document or related company of any party
(and, in each case, may do so without liability to account to any
Lender).
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19.5 LIMITATION OF RESPONSIBILITIES
Neither the Facility Agent nor any of its personnel,
sub-contractors or agents shall be:-
(i) responsible for the adequacy, accuracy, completeness or
reasonableness of any representation, warranty, statement,
projection, assumption or information provided by the Borrower or
either of the Guarantors to any Lender, or contained in any Security
Document or any notice or other document delivered under or in
connection with any Security Document;
(ii) responsible for the execution, delivery, validity, legality,
adequacy, enforceability or admissibility in evidence of any
Security Document or any such notice or other document or for the
satisfaction or failure by the Borrower to satisfy any condition
precedent to the utilisation of the Facility; or
(iii) responsible for the collectability of amounts payable under any
Security Documents;
(iv) responsible for the accuracy of any statements (whether written or
oral) made in or in connection with any Security Documents; or
(v) liable for anything done or not done by it or any of them under or
in connection with any Security Document save in the case of its or
their own negligence or wilful misconduct (but so that this Clause
19.5(v) shall not be construed to impose any liability in respect of
any matter for which liability is under any other provision of this
Clause excluded).
19.6 THE FACILITY AGENT AS LENDER
The Facility Agent shall with respect to its own participation in the
Facilities (if any) have the same rights and powers under the Financing
Documents as any other Lender and may exercise them as though it were not
also acting as agent for the Lenders. The Facility Agent and its
associates and affiliates may, without liability to disclose or account,
engage in any kind of financial, trust or commercial business with, or
acquire or dispose of any kind of security of, the Borrower, any
Guarantor, any other Security Party, any of their respective associates or
affiliates and none of the Facility Agent, nor any of its associates or
affiliates shall have any obligation to disclose or account for any
dealings with the Borrower, any Guarantor, any other Security Party, any
of their respective associates or affiliates prior to the date of this
Agreement. The agency department of the Facility Agent will be treated as
a separate entity from any other department of the Facility Agent and any
information received by the Facility Agent in any other capacity may be
treated as confidential by them.
19.7 NO RELIANCE ON THE FACILITY AGENT
Without affecting the responsibility of the Borrower for information
supplied by it or on its behalf in connection with any Security Document,
each Lender confirms that it has itself been, and will at all times
continue to be, solely responsible for making its own independent
investigation and appraisal of the business, financial condition,
prospects, creditworthiness, status and affairs of the Borrower, the
Guarantors or any other person
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and has not relied, and will not at any time rely, on the Facility Agent
or any other Lender:-
(i) to provide it with any information relating to the business,
financial condition, prospects, creditworthiness, status or affairs
of the Borrower, the Guarantors or any other person, whether coming
into its possession before or after the drawing of the Facility
(except as stated in Clause 19.2 or as provided otherwise in this
Agreement); or
(ii) to check or enquire into the adequacy, accuracy, completeness or
reasonableness of any representation, warranty, valuation,
statement, projection, assumption or information at any time
provided by or on behalf of the Borrower, the Guarantors or any
other person under or in connection with any Security Document
(whether or not that information has been or is at any time
circulated to it by the Facility Agent); or
(iii) to assess or keep under review the business, financial condition,
prospects, creditworthiness, status or affairs of the Borrower, the
Guarantors or any other person.
19.8 LENDERS' INDEMNITY
To the extent that the Borrower or either of the Guarantors do not do so
on demand or are not obliged to do so, each Lender shall on demand
indemnify the Facility Agent in the proportion borne by its Outstandings
to all the Outstandings at the relevant time (or, if there are then no
Outstandings, in the proportion borne by its Commitments to the Total
Commitments) against any cost, expense or liability mentioned in Clause 16
(Fees and Expenses) or sustained or incurred by the Facility Agent in
complying with any instructions from the Majority Lenders or otherwise
sustained or incurred by it (in its capacity as an Agent) in connection
with its duties, obligations and responsibilities under the Security
Documents except routine administrative costs and expenses of the Facility
Agent or to the extent that they are sustained or incurred as a result of
the gross negligence or wilful misconduct of the Facility Agent or any of
its personnel or agents.
19.9 CHANGE OF AGENTS
Notwithstanding the irrevocable appointments in Clause 19.1, the Facility
Agent may resign at any time if it gives at least 30 days' notice in
writing to the Borrower and the Lenders and the Facility Agent may at any
time be removed by the Majority Lenders giving not less than 30 days'
notice to the Facility Agent. However, no resignation or removal shall be
effective until the successor has been appointed and accepted its
appointment in accordance with this Clause 19.9. The Majority Lenders may
appoint a successor to the resigning or removed Facility Agent but, if the
successor has not been so appointed and accepted its appointment within 15
days after the date of the notice of resignation or, as the case may be,
removal, the resigning Facility Agent and the Majority Lenders may appoint
a successor Facility Agent. Any appointment of a successor must be in
writing, signed by the person(s) appointing that successor and delivered
to that successor. Any acceptance of such appointment must be in writing,
signed by the person appointed and delivered to the person(s) appointing
that successor. The other parties to this Agreement shall be promptly
informed of the acceptance by a successor Facility Agent. Upon the
successor accepting its appointment, the resigning or, as the case may
- 59 -
be, the removed facility Agent shall be automatically discharged from any
further obligation under the Security Documents and its successor and each
of the other parties to the Security Documents shall have the same rights
and obligations among themselves as they would have had if the successor
had been the original Facility Agent party to this Agreement and the other
Security Documents. The resigning or, as the case may be, the removed
Facility Agent shall provide its successor with (or with copies of) such
records as its successor requires to carry out its duties under the
Security Documents.
19.10 SIGNING OF TRANSFER CERTIFICATES
The Borrower, the Security Agent and each Lender (except for the Existing
Lender and the New Lender seeking the relevant assignment and/or novation)
irrevocably authorises the Facility Agent to sign each Transfer
Certificate on their behalf.
19.11 ACCEPTANCE OF TITLE
The Facility Agent may accept without investigation, requisition or
objection such title as any person may have to the undertakings, property
and assets which are subject to the Security Documents and shall not be
bound or concerned to examine or enquire into nor be liable to any other
Secured Party or any other person for any defect or failure in the title
of any person whether such defect or failure was known to the Facility
Agent or might have been discovered upon examination or enquiry and
whether capable of remedy or not nor for any failure on the part of the
Facility Agent to give notice to any third party of the Security Documents
to which it is party or otherwise perfect or register the security thereby
created.
19.12 THE BORROWER AND THE FACILITY AGENT
The Borrower shall be entitled to rely on any direction, instruction,
certificate, document or other communication made by the Facility Agent
and shall not be required to enquire whether it is made with the authority
of the Lenders, and performance of any obligation arising under this
Agreement or the Security Documents in reliance on any such shall be
deemed to be proper performance of the obligation in question.
19.13 AGENT OF THE LENDERS
Save as expressly provided in the Security Documents, the Facility Agent
is appointed hereunder and thereunder solely as the agent of the Lenders,
and the foregoing provisions of this Clause 19 (The Agents) apply solely
to the Facility Agent in their capacity as agent for the Lenders.
19.14 AGENT'S KNOWLEDGE
Information obtained by the Facility Agent in any capacity other than in
its capacity as Facility Agent and or through any department other than
the department having specific responsibility for the administration of
the Loan and the Security Documents shall not be imputed to the Facility
Agent.
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19.15 AMENDMENTS
The Facility Agent may (except where any other authority is required for
the same by the express provisions of the Financing Documents) grant
waivers or consents or vary the terms of the Financing Documents only if
the same has been authorised by the Majority Lenders. Any such waiver,
consent or variation so authorised and effected by the Facility Agent
shall be binding on all the Lenders and the Facility Agent shall be under
no liability whatsoever in respect of any such wavier, consent or
variation. This Clause 19.15 shall not authorise, except with the prior
consent of all the Lenders:
(a) any change in the manner in which interest is calculated or paid
under this Agreement in respect of the Loan;
(b) any extension of the date for, or alteration in the amount or
currency of, any payment of principal, interest, fee, commission or
any other amount payable under the Financing Documents in respect of
the Loan;
(c) any increase in any Lender's Commitment in respect of the
Facilities;
(d) any extension of a date on which a payment of principal must be paid
in respect of the Loan; or
(e) any variation of the definition of Majority Lenders, and this Clause
19.15 shall not authorise, except with the prior consent of all the
Lenders;
(g) any variation of:
(i) Clause 14.1 (ILLEGALITY), 20.2 (PRO RATA SHARING); or
(ii) this Clause 19.17,
(h) any extension of the Availability Period; or
(i) any amendment of any provision of the Financing Documents which
contemplates the need for the consent or approval of each Lender.
19.16 THE SECURITY AGENT
The Lenders will appoint the Security Agent to act as security agent in
accordance with the Security Trust Deed.
20. SET-OFF/PRO-RATA SHARING
20.1 SET OFF
The Borrower authorises the Facility Agent and each of the Lenders to
apply (without prior notice) any credit balance (whether or not then due)
to which the Borrower is at any time beneficially entitled on any account
at, any sum held to its order by and/or any liability or obligation
(whether or not matured) of, any office of the Facility Agent or such
Lender in or towards satisfaction of any sum then due and payable by it to
the Facility Agent or such Lender under the Security Documents and unpaid
and, for that
- 61 -
purpose, to convert one currency into another (provided that nothing in
this Clause 20.1 shall be effective to create a charge, and provided
further that any credit balance, sum and/or liability or obligation as
aforesaid shall be held by the Facility Agent or, as the case may be, such
Lender pursuant to or in connection with the Security Documents). No party
shall be obliged to exercise any of its rights under this Clause 20.1,
which shall be without prejudice and in addition to any right of set-off,
combination of accounts, lien or other right (including the benefit of the
Security Documents) to which it is at any time otherwise entitled (whether
by operation of law, contract or otherwise). Each Lender shall notify the
Facility Agent and the Borrower forthwith upon the exercise or purported
exercise of any right of set-off giving full details in relation thereto
and the Facility Agent shall inform the other Lenders forthwith.
20.2 PRO-RATA SHARING
If at any time the proportion received or recovered (whether by direct
payment, by exercise of any right of set-off, combination of accounts or
lien, or otherwise) by any Lender in respect of the total sum which has
become due to it from the Borrower or either of the Guarantors under the
Security Documents before that time exceeds the proportion received or
recovered by the Lender(s) receiving or recovering the smallest proportion
(if any), then:-
(i) such Lender shall promptly notify the Facility Agent and within 2
Banking Days after receiving a request from the Facility Agent, that
Lender shall pay to the Facility Agent an amount equal to the excess
and the Facility Agent shall notify the Borrower or the relevant
Guarantor, as the case may be, of the receipt of such amount;
(ii) the Facility Agent shall promptly distribute that payment as if it
were made by the Borrower or the relevant Guarantor, as the case may
be; and
(iii) as between the Borrower and the Lenders, that excess amount shall be
treated as having been paid to the Lenders to which (and in the
proportions in which) it is distributed under (ii) above, rather
than as having been paid to that Lender.
Within 2 Banking Days after any Lender receives or recovers any such sum
otherwise than by payment through the Facility Agent, that Lender shall
notify the Facility Agent of the amount and currency so received or
recovered, how it was received or recovered and whether it represents
principal, interest or other sums. If all or part of any amount so
received or recovered by that Lender (the "RELEVANT LENDER") required
thereafter to be repaid to the Borrower or another obligor, as the case
may be, has to be refunded by it (with or without interest), each Lender
to whom any part of that amount has been distributed shall repay to the
Facility Agent for the account of the Relevant Lender (within 2 Banking
Days after receiving a request from the Facility Agent on behalf of the
Relevant Lender) its proportionate share of the amount to be repaid to the
Borrower or, as the case may be, other obligor and of any interest
required to be paid by the Relevant Lender on that amount in respect of
all or any part of the period from the date of the relevant distribution
to the date of that payment to the Relevant Lender.
Any amount received or recovered by a Lender under a novation, assignment,
sub-participation or the like shall be ignored for the purpose of this
Clause 20.2. Furthermore, a Lender shall not be obliged to share any
amount which it has (i) alone
- 62 -
received on its own account under Clause 14 (Changes in Circumstances) or
(ii) received or recovered as a result of taking legal proceedings with
any other Lender which had an opportunity to participate in those legal
proceedings but did not do so and did not take separate legal proceedings.
The provisions of this Clause 20.2 shall not, and shall not be construed
so as to, constitute a charge by a Lender over all or any part of a sum
received or recovered by it in the circumstances mentioned in Clause 20.2.
20.3 FLOOR GUARANTEE
For the avoidance of doubt, nothing contained in this Clause 20 shall in
any way restrict the Initial Lenders or other Beneficiaries under (and as
defined in) the Floor Guarantee from recovering and retaining for their
own exclusive benefit amounts received or recovered by them under or in
respect of the Floor Guarantee.
21. NOTICES, ETC.
21.1 METHOD OF SENDING
Each communication to be made hereunder shall be made in writing but,
unless otherwise stated, may be made by facsimile transmission or by telex
or by letter.
21.2 ADDRESSES FOR NOTICES
Any communication or document to be made or delivered by one person to
another pursuant to this Agreement shall (unless the one has by not less
than three (3) days' written notice to the other specified another
address) be made or delivered to that other person at the respective
addresses set out below.
(1) The Borrower (Petrodrill Seven Limited):-
PETRODRILL ENGINEERING NV
K.P. van der Mandalelaan 38
3062 MB Rotterdam (Brainpark)
The Netherlands
Attention: Steve Assiter
Facsimile:
Telex:
(2) The Initial Lenders:-
PETRO DIA THREE S.A.
c/o MITSUBISHI CORPORATION
6-3 Marunouchi 2-chome
Chiyoda-ku
Tokyo
Japan
Attention: General Manager, Ship & Industrial Project Department
-63-
PETRO DIA FOUR S.A.
c/o MITSUBISHI CORPORATION
6-3 Marunouchi 2-chome
Chiyoda-ku
Tokyo
Japan
Attention: General Manager, Ship & Industrial Project Department
Facsimile:
Telex:
(3) The Facility Agent:-
MITSUBISHI CORPORATION (UK) PLC
Bow Bells House
Bread Street
London
EC4M 9BQ
Attention: General Manager, Machinery Department
Facsimile: 0171 822 0184
Telex:
(4) The Security Agent:-
MITSUBISHI CORPORATION (UK) PLC
Bow Bells House
Bread Street
London
EC4M 9BQ
Attention: General Manager, Machinery Department
Facsimile: 0171 822 0184
Telex:
21.3 DEEMED RECEIPT
Any notice given hereunder shall be deemed to have been received:
(i) If sent by facsimile transmission or by telex, at the opening of
business one (1) Banking Day after the day it was transmitted;
(ii) In the case of a written notice lodged by hand, at the time of
actual delivery; and
(iii) If posted, on the fifth Banking Day following the day on which it
was properly despatched by first class mail postage prepaid.
22. COUNTERPARTS
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This Agreement may be executed in any number of counterparts and by the
different parties hereto on different counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
23. AGENTS' AND LENDERS' CERTIFICATES
A certificate of either of the Agents or of any Lender (i) stating the
amount of any sum due to such Agent or Lender hereunder (and specifying
the provision hereof under which such sum became due and reasonable
details of the manner of calculation thereof), and/or (ii) stating the
determination by either Agent or any Lender as to any matter to be
determined by such Agent or Lender hereunder (including but not limited to
rate of interest and currency exchange), shall be conclusive as to the
subject matter thereof in the absence of manifest error.
24. WAIVER; REMEDIES CUMULATIVE
No failure to exercise and no delay in exercising on the part of the
Lender any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege preclude any other or further exercise thereof, or the exercise
of any other right, power or privilege. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies
provided by law.
25. LANGUAGE
Each document referred to herein or to be delivered hereunder and under
the Security Documents (including financial statements) and each other
communication shall be in the English language. In the event of any
conflict between the version in English and any version in any other
language of any document (including this Agreement) the version in English
shall prevail.
26. SEVERABILITY
Any provision in this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of
such provision in any other jurisdiction.
27. GOVERNING LAW AND JURISDICTION
27.1 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
27.2 SUBMISSION TO JURISDICTION
For the benefit of the Agents and the Lenders, the Borrower irrevocably
agrees that the English courts are to have jurisdiction to settle any
disputes which may arise out of or in connection with this Agreement and
the other Financing Documents and that accordingly any suit, action or
proceedings ("PROCEEDINGS") arising out of or in connection with this
Agreement and the other Financing Documents may be brought in such courts.
- 65 -
27.3 WAIVER OF OBJECTION
The Borrower irrevocably waives any objection which it may have now or
hereafter to the laying of the venue of any Proceedings in any such court
as is referred to in Clause 27.2 and any claim that any such Proceedings
have been brought in an inconvenient forum and further irrevocably agrees
that a judgment in any Proceedings brought in the English courts shall be
conclusive and binding upon the Borrower and may be enforced in the courts
of any other jurisdiction.
27.4 OTHER JURISDICTIONS
Nothing contained in this Clause 27 shall limit the right of the Agents or
any Lender to take proceedings against the Borrower in any other court of
competent jurisdiction, nor shall the taking of Proceedings in any one or
more jurisdictions preclude the taking of Proceedings in any other
jurisdiction, whether concurrently or not.
27.5 SERVICE OF PROCESS
The Borrower irrevocably and unconditionally:
(a) designates, and appoints and empowers Hackwood Secretaries Limited
of One Silk Street, London EC2Y 8HQ to receive for it and on its
behalf, service of process issued out of the English courts to
receive for it and on its behalf service of process issued out of
the Japanese courts in any Proceedings arising out of or in
connection with this Agreement;
(b) agrees to maintain in England a duly appointed process agent
notified to the Facility Agent, for the purposes of paragraph (a)
above;
(c) agrees that failure by any such process agent to give notice of such
process to it shall not impair the validity of such service or of
any judgment based thereon;
(d) consents to the service of process out of any of the said courts in
any such Proceedings by the airmailing of copies, postage prepaid,
to it at its address for the time being applying for the purposes of
Clause 19; and
(e) agrees that nothing herein shall affect the right to serve process
in any other manner permitted by law.
IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed by their authorised officers or other representatives the day and year
first above written
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SIGNATORIES
EXECUTED on behalf of ) /s/ Illegible
PETRODRILL SEVEN LIMITED )
by its duly authorised signatory/ )
attorney-in-fact: ) /s/ Illegible
EXECUTED on behalf of PETRO ) /s/ H. MIYAMOTO
DIA THREE S.A. by its duly )
authorised signatory/attorney-in-fact: ) /s/ Illegible
EXECUTED on behalf of PETRO ) /s/ H. MIYAMOTO
DIA FOUR S.A. by its duly )
authorised signatory/attorney-in-fact: ) /s/ Illegible
EXECUTED on behalf of ) /s/ Illegible
MITSUBISHI CORPORATION )
(UK) PLC (in its capacity as Facility )
Agent) a by its duly authorised )
signatory/attorney-in-fact: ) /s/ Illegible
EXECUTED on behalf of ) /s/ Illegible
MITSUBISHI CORPORATION )
(UK) PLC (in its capacity as Security )
Agent) by its duly authorised )
signatory/attorney-in-fact: ) /s/ Illegible
- 67 -
SCHEDULE 1
THE LENDERS AND THEIR COMMITMENTS
TRANCHE A FACILITY
NAME OF LENDER AMOUNT OF TRANCHE A COMMITMENT US$
(INCLUDING INTEREST TO BE CAPITALISED
PRIOR TO THE NOTIONAL INTERIM A FACILITY
DATE)
Petro Dia Four SA 53,000,000
TRANCHE B FACILITY
NAME OF LENDER AMOUNT OF TRANCHE B COMMITMENT US$
(INCLUDING INTEREST TO BE CAPITALISED
PRIOR TO THE NOTIONAL INTERIM A FACILITY
DATE)
Petro Dia Three SA 74,000,000
TRANCHE C FACILITY
NAME OF LENDER AMOUNT OF TRANCHE C COMMITMENT US$
(INCLUDING INTEREST TO BE CAPITALISED
PRIOR TO THE NOTIONAL INTERIM A FACILITY
DATE)
Petro Dia Three SA 53,000,000
- 68 -
SCHEDULE 2
THE FORM OF REPAYMENT SCHEDULE
REPAYMENT DATE AMOUNT OF REPAYMENT INSTALMENT
- 69 -
SCHEDULE 3
PART 1: SERVICES CONTRACTS
1. Management Agreement between the Borrower and Formaritima Ltd relating to
the Rig and dated as of 5 November 1998.
2. Licensing Agreement between Bigem Holdings NV and the Borrower relating to
the design of the Rig and dated as of 5 November 1998.
3. Construction Management Agreement between the Borrower and Petrodrill
Engineering BV relating to the Rig and dated as of 5 November 1998.
PART 2: OTHER SERVICES CONTRACTS
1. Technical Services Agreement between Formaritima Ltd and Pride-Foramer
S.A. relating to the Rig and dated as of 5 November 1998.
2. Marine and Nautical Services Agreement between Formaritima Ltd and
Workships Contractors B.V. relating to the Rig and dated as of 5 November
1998.
3. Supply Agreement between Petrodrill Engineering N.V. and Maritima relating
to the Rig and dated as of 5 November 1998.
4. Local Services Agreement between Formaritima Ltd and Maritima relating to
the Rig and dated as of 5 November 1998.
5. Supply Agreement between Petrodrill Engineering N.V. and Pride-Foramer
S.A. relating to the Rig and dated as of 5 November 1998.
6. Supply Agreement between Petrodrill Engineering N.V. and Workships
Contractors B.V.
- 70 -
SCHEDULE 4
DRAWING REQUEST
FROM: Petrodrill Seven Limited [DATE]
TO: Mitsubishi Corporation (UK) PLC
as Facility Agent
Dear Sirs
LOAN AGREEMENT
We refer to the Loan Agreement dated [ ] December 1998 (the "LOAN AGREEMENT")
and made between the Lenders (as defined therein) (1) ourselves (as Borrower),
Mitsubishi Corporation (UK) PLC (as Facility Agent) and Mitsubishi Corporation
(UK) PLC (as Security Agent). Terms defined in the Loan Agreement shall have the
same meaning when used herein.
We hereby give you irrevocable Notice:
(a) that we wish to make a Drawing on [INSERT DATE OF PROPOSED drawing] (being
a Banking Day during the Availability Period)*;
(b) that the Advance will be in the principal amount of US$[ ]; and
(c) that the Facility under which the Drawing is requested is the:
[Tranche A Facility] [Tranche B Facility] [Tranche C Facility],
upon the terms and subject to the conditions of the Loan Agreement.
We confirm that the representations and warranties set out in Clause 8 of the
Loan Agreement are true and that, no event which is or, with the giving of
notice or the passage of time or both, would become an Event of Default has
occurred and is continuing.
Please pay the proceeds of the Advance to the credit of the Management Account.
Yours faithfully
_________________________________
Authorised signatory for and on behalf of
PETRODRILL SEVEN LIMITED
_________________________________
* or attached schedule of requested Pre-delivery Advances.
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SCHEDULE 5
DETAILS OF THE HOLDER OF SHARES IN THE BORROWER
AND THE SISTER COMPANY
Amethyst Financial Company Limited is the registered holder and beneficial owner
of the entire issued share capital in the Borrower.
- 72 -
SCHEDULE 6
FORM OF TRANSFER CERTIFICATE
To: [Insert name of Facility Agent]
[Insert address of Facility Agent]
Attention: [ ]
PETRODRILL SEVEN LIMITED
US$180,000,000 LOAN AGREEMENT DATED [ ] 1998
1. This Transfer Certificate relates to the above loan agreement (the "LOAN
AGREEMENT", which term shall include any amendments or supplements
thereto), and the other Security Documents referred to therein. Terms
defined in the Loan Agreement have the same meaning in this Transfer
Certificate.
In this Transfer Certificate :
"EXISTING LENDER" means [ ]; and
"TRANSFEREE" means [ ].
2. The Existing Lender (i) confirms that the details in the Schedule to this
Transfer Certificate under the heading "RIGHTS TO BE ASSIGNED AND/OR
OBLIGATIONS TO BE NOVATED" accurately summarises the Outstandings which
are to be assigned and/or Commitments which are to be novated by this
Transfer Certificate and (ii) requests the Transferee to accept and
procure the transfer to the Transferee of the portion specified in the
Schedule hereto of, as the case may be, such Outstandings and/or its
Commitment by counter-signing and delivering this Transfer Certificate to
the Facility Agent at its address for the service of notices specified in
the Loan Agreement.
3. The Transferee hereby requests the Facility Agent to accept this Transfer
Certificate as being delivered to the Facility Agent pursuant to and for
the purposes of Clause 15 (Transfers) of the Loan Agreement so as to take
effect in accordance with the terms thereof on the Transfer Date or on
such later date as may be determined in accordance with the terms thereof.
4. The Transferee:
(a) confirms that it has received a copy of the Loan Agreement together
with such other documents and information as it has requested in
connection with this transaction;
(b) confirms that it has not relied and will not rely on the Existing
Lender to check or enquire on its behalf into the legality,
validity, effectiveness, adequacy or completeness of any such
documents or information;
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(c) confirms and agrees that it has not relied and will not rely on any
of the Existing Lender, the Agents, or the other Lenders to assess
or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of the
Borrower or any other party to the Security Documents, and has not
relied and will not rely on any of the Existing Lender, the Agent or
the other Lenders to ensure that the Borrower or any other party to
the Security Documents are not in breach of or default under any of
the same; and
(d) if not already a Lender, appoints the Agents to act as its agents as
provided in the Loan Agreement and the Security Trustee Deed and
agrees to be bound by the Loan Agreement (including, but not limited
to, Clause 15 (Transfer)).
5. The Transferee undertakes with the Existing Lender and each of the other
parties to the Loan Agreement that it will perform, in accordance with
their terms, all those obligations which, by the terms of the Loan
Agreement, will be assumed by it upon delivery of the executed copy of
this Transfer Certificate to the Facility Agent.
6. On execution of this Transfer Certificate by the Facility Agent on their
behalf, the Borrower, the Lenders and the Agents accept the Transferee as
a party to the Loan Agreement in substitution for the Existing Lender with
respect to all those rights and obligations which, by the terms of the
Loan Agreement and other Security Documents, will be transferred to or
assumed by the Transferee after delivery of the executed copy of this
Transfer Certificate to the Facility Agent.
7. None of the Existing Lender, the other Lenders or the Agents:
(a) makes any representation or warranty or assumes any responsibility
with respect to the legality, validity, effectiveness, adequacy or
enforceability of any of the Loan Agreement and the Security
Documents or the Project Documents, or with respect to whether the
Borrower, the Guarantors or any other party to the Security
Documents or the Project Documents has complied with its obligations
thereunder (under Clause 3 (Conditions Precedent) of the Loan
Agreement); or
(b) assumes any responsibility for the financial condition of the
Borrower, the Guarantors or any other party to any Security Document
or Project Document or any other document or for the performance and
observance by the Borrower, the Guarantors or any other party to the
Security Documents or Project Documents or any other document of its
or their obligations and any and all conditions and warranties,
whether express or implied by law or otherwise, are hereby excluded.
8. The Existing Lender hereby gives notice that nothing herein or in the
Loan Agreement (or any document relating thereto) shall oblige the
Existing Lender to (i) accept a re-transfer from the Transferee of the
whole or any part of its rights, benefits and/or obligations under the
Loan Agreement transferred pursuant hereto or (ii) support any losses
directly or indirectly sustained or incurred by the Transferee for any
reason whatsoever including, without limitation, the non-performance by
the Borrower, the Guarantors or any other party to the Security Documents
(or any document relating thereto) of its obligations under any such
document. The Transferee hereby acknowledges the absence of any such
obligation as is referred to in (i) or (ii) above.
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9. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
10. The Transferee warrants and represents to the Facility Agent and each of
the Lenders that it is a Qualifying Lender as defined in Clause 1.1 of the
Loan Agreement.
THE SCHEDULE
1. Existing Lender:
2. Transferee:
3. Transfer Date:
4. Commitment:
Lender's Commitment Facility (Tranche A, Portion Transferred
(US$) B or C) (US$)
5. Outstandings:
Amount of Lender's Facility (Tranche A, Drawdown Date Portion
Participation (US$) B or C) Transferred
6. Transferee's Lending Office details:
Address:
Telephone Number:
Telex No:
Fax No:
7. Rights to be Assigned and/or Obligations to be Novated.
___________________________ ___________________________
[Existing Lender] [Transferee]
__________________________________
Facility Agent for itself and on behalf of
the Security Trustee and the Borrower
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SCHEDULE 7
PART 1 - THE PROJECT DOCUMENTS
1. (a) Shipbuilding Contract dated 9 April 1998 the "SHIPBUILDING
CONTRACT" between Daewoo Corporation and Daewoo Heavy Industries
Ltd. (collectively, the "BUILDER") and Petrodrill Offshore Inc.
(formerly called Petrodrill Construction Inc.) (the "OWNER") for the
purchase of a Dynamic Positioned Semi-Submersible Drilling Vessel
having the Hull No. 3015.
(b) Side Letter No. 1 dated as of 9 April 1998 between the Owner and the
Builder, whereby the Owner has agreed to certain amendments to the
Shipbuilding Contract as set forth therein.
(c) Side Letter No. 2, dated as of 9 April 1998 between the Owner and
the Builder, whereby the Owner has agreed to consider certain
proposals of the Builder as set forth therein.
(d) Main Contract Amendment Agreement dated 8 October 1998.
(e) Novation Agreement in respect of the Shipbuilding Contract dated 4
December 1998 between the Builder, the Owner and the Borrower.
(f) Letter of Confirmation as to continued validity of the Rig
Construction Contract.
2. (a) Refund Guarantee (the "REFUND GUARANTEE") issued by The
Export-Import Bank of Korea (the "REFUND GUARANTOR").
(b) Novation Agreement in respect of the Refund Guarantee dated 4
December 1998.
(c) Consent in respect of (f) above.
3. Chartering Contract (Contract No. [101.2.159.97-1] between Maritima
Navigacao e Engenharia Ltda (whose successor is Maritima) and Petrobras.
4. Services Rendering Contract (Contract no. [101.2.156.97-0] between
Maritima Navigacao e Engenharia Ltda (whose successor is Maritima) and
Petrobras.
5. Letter of Agreement dated 15 January 1998, relative to the aforesaid
Chartering Contract and Services Rendering Contract, between Maritima and
Petrobras.
6. A further Letter of Agreement dated 15 January 1998, relative to the
aforesaid Chartering Contract and Services Rendering
Contract, between Maritima and Petrobras.
7. Rider No. 01 for the assignment of rights and obligations arising from the
aforesaid Chartering Contract, dated 10 July 1998 and made between
Petrobras, Maritima and Petrodrill Seven Limited.
8. Rider No. 1 to the aforesaid Services Rendering Contract, dated 21 August
1998 and made between Maritima, Petrobras and Petrodrill Seven Limited.
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9. Letter dated 28 May 1998 from Petrobras to Maritima reference
E&P/SUEX-SSE-048-98.
10. Amethyst Seven Technical Services Agreement between Formaritima Ltd. and
Pride-Foramer S.A.;
11. Amethyst Seven Marine and Nautical Services Agreement between Formaritima
Ltd. and Workships Contractors BV;
12. Amethyst Seven Management Agreement between Petrodrill Seven Limited and
Formaritima Ltd.;
13. Amethyst Seven Supply Agreement between Petrodrill Engineering N.V. and
Maritima Petroleo e Engenharia Ltda;
14. Amethyst Seven Local Services Agreement between Formaritima Ltd. and
Maritima Petroleo e Engenharia Ltda;
15. Licensing Agreement between Bigem Holdings N.V. and Petrodrill Seven
Limited;
16. Amethyst Seven Supply Agreement between Petrodrill Engineering N.V. and
Pride-Foramer S.A;
17. Amethyst Seven Supply Agreement between Petrodrill Engineering N.V. and
Workships Contractors B.V.;
18. Amethyst Seven Construction Management Agreement between Petrodrill Seven
Limited and Petrodrill Engineering N.V.; and
19. Amethyst Financial Company Ltd's Shareholders' Agreement between
Drillpetro Inc., Techdrill Inc., and Westville Management Corporation.
20. Local Services Agreement between Maritima and Formaritima Ltd.
21. Technical Services Agreement between Pride-Foramer SA and Formaritima Ltd.
22. Supply Agreement between Pride-Foramer SA and Petrodrill Engineering Ltd.
23. Supply Agreement between Maritima and Petrodrill Engineering Ltd.
24. Supply Agreement between Workships Contractors BV and Petrodrill
Engineering Ltd.
PART 2 - THE SECURITY DOCUMENTS
1. Rig Construction Contract and Refund Guarantees Assignment
2. Rig Mortgage
3. Deed of Covenants
4. Charterparty Assignment
5. Services Rendering Contract Assignment
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6. Insurances Assignment
7. Management Account Charge
8. Reserve Account Charge
9. Services Contracts Assignment
10. Share Charge
11. Cross Guarantee
12. Deed of Guarantee and Undertaking
13. Assignment of Deed of Guarantee and Undertaking and Subordinated
Loan Facility Agreement
14. Mortgage Debenture
15. Security Trust Deed
16. The Additional Funding and Guarantee Agreement referred to in Clause 7.5
17. Inter-company Loan Assignment
18. The subordinated loan facility agreement referred to in Clause 7.1(xiii)
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SCHEDULE 8
INSURANCES
The Insurances to be effected and maintained throughout the Security Period
shall be effected and maintained (with the Security Agent, the Facility Agent
and each of the Lenders being named as a principal assured) with insurers
acceptable to the Facility Agent providing insurance cover against such risks as
are insured by the Temporary Confirmation of Insurance and on terms and
conditions no less favourable than are provided for by the Temporary
Confirmation of Insurance and (subject to such insurance being available in the
international insurance markets) otherwise as the Facility Agent may from time
to time at its discretion require.
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