EXHIBIT 4.5
EXECUTION COPY
SENIOR SECURED NOTE SECURITY AND PLEDGE AGREEMENT
THIS SENIOR SECURED NOTE SECURITY AND PLEDGE AGREEMENT (the
"Agreement") is made and entered into as of November 1, 1999, by AMETHYST
FINANCIAL COMPANY LIMITED, a British Virgin Islands limited liability company
(the "Issuer"), in favor of WILMINGTON TRUST COMPANY, a banking corporation duly
organized and existing under the laws of the State of Delaware, as trustee (in
such capacity, the "Trustee") under the Indenture (as hereinafter defined), for
the holders of the Secured Notes (as hereinafter defined), and WILMINGTON TRUST
COMPANY, a banking corporation duly organized and existing under the laws of the
State of Delaware, as collateral agent (in such capacity, the "Collateral
Agent").
W I T N E S S E T H:
WHEREAS, the Issuer, as issuer, the Trustee, Pride International,
Inc., as guarantor ("Pride"), and Maritima Petroleo e Engenharia Ltda. have
entered into an indenture dated as of November 1, 1999 (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"Indenture"), pursuant to which the Issuer is issuing $53,000,000 in aggregate
principal amount of its 11 3/4% Senior Secured Notes due 2001 (the "Secured
Notes");
WHEREAS, the Issuer will use the proceeds of the Secured Notes to
purchase participation interests (each an "ISSUER LOAN") in the Mitsubishi Loan
Agreements. The Issuer Loans will be used by Petrodrill Six Limited and
Petrodrill Seven Limited to finance all or a portion of certain costs of
acquiring, constructing, altering, improving or repairing drilling rigs and
drillships or improvements to be used in connection therewith; and
WHEREAS, to secure its obligations under the Indenture and the
Secured Notes and the Security Agreements (as defined in the Indenture) to which
it is a party (the "Obligations"), the Issuer has agreed (i) to grant to the
Collateral Agent for the benefit of the Trustee and the equal and ratable
benefit of the Holders of the Secured Notes, Liens and security interests in and
to the Issuer Loans, the Mitsubishi Loan Agreements, the Mitsubishi Loan
Collateral Documents and the other Collateral (as defined herein) and (ii) to
execute and deliver this Agreement in order to secure the payment and
performance by the Issuer of the
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Obligations.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and in order to induce
the Holders of the Secured Notes to purchase the Secured Notes, the Issuer
hereby agrees with the Collateral Agent and with the Trustee for its benefit and
the equal and ratable benefit of the Holders of the Secured Notes as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning given to such terms in the Indenture. In
addition to any other defined terms used herein, the following term shall
constitute a defined term for the purposes of this Agreement:
"Permitted Liens" means Liens existing on the date on which the
Secured Notes are originally issued or provided for under the terms of
agreements existing on such date and listed on Schedule B attached hereto.
SECTION 2. CREATION OF SECURITY INTEREST. The Issuer hereby grants to the
Collateral Agent for the benefit of the Trustee, and for the equal and ratable
benefit of the Holders of the Secured Notes, Liens and a continuing security
interest in and to the collateral described in Section 3 hereof (the
"Collateral") in order to secure the payment and performance of all Obligations.
SECTION 3. COLLATERAL. The Collateral is:
(i) an undivided 53% interest in the Issuer Loans and all of the
Issuer's right, title and interest in and to the Mitsubishi Documents listed on
SCHEDULE A attached hereto (as such may be amended, modified or supplemented
from time to time), together with an undivided 53% interest in and to the
Issuer's right, title and interest in and to all agreements, documents, notes,
collateral documents and instruments relating to such Mitsubishi Documents, and
the security for the Issuer Loans provided for in the Mitsubishi Loan Collateral
Documents;
(ii) all of the Issuer's right, title and interest in and to all
replacements, additions, accessions, substitutions, repairs, proceeds and
products relating to or from all items described in this Section 3, whether now
owned or hereafter at any time acquired by the Issuer and wherever located, and
all
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documents, ledger sheets, files, books and records of the Issuer relating
thereto. Proceeds hereunder include (x) whatever is now or hereafter received by
the Issuer upon the sale, exchange, collection or other disposition of any item
of Collateral; (y) any property of the type or types described in clauses (i) or
(ii) now or hereafter acquired by the Issuer with any proceeds of Collateral
hereunder; and (z) any payments under any insurance or any indemnity, warranty
or guaranty, payable by reason of loss or damage to or otherwise with respect to
any of the foregoing Collateral.
SECTION 4. DELIVERY OF COLLATERAL. All certificates or instruments
representing or evidencing the Collateral shall be delivered to and held by or
on behalf of the Collateral Agent pursuant hereto and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance satisfactory to
the Collateral Agent, and shall be accompanied by any required transfer tax
stamps. Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall have the right, at any time in its discretion and
without notice to the Issuer, but subject to its compliance with the
requirements of applicable law, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Collateral. In
addition, upon the occurrence and during the continuance of an Event of Default,
but subject to its compliance with the requirements of applicable law, the
Collateral Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing any Collateral for certificates or
instruments of smaller or larger denominations.
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Issuer hereby represents
and warrants to the Collateral Agent and Trustee that:
(a) LEGAL POWER. The execution, delivery and performance by the
Issuer of this Agreement are within the Issuer's legal powers, have been duly
authorized by all necessary corporate action, require no action by or in respect
of, or filing with (except for any filings provided for hereunder), any
governmental authority, require no consent of any other Person and do not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the constitutive documents of the Issuer or of any agreement
(after giving effect to the use of proceeds of the issuance of the Secured
Notes),
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judgment, injunction, order, decree or other instrument binding upon the Issuer
or result in the creation or imposition of any Lien on any asset of the Issuer
(other than the Liens created by this Agreement and the Reserve Account
Agreement).
(b) TITLE TO COLLATERAL. The Issuer is the legal, record and
beneficial owner of the Issuer Loans existing on the Issue Date, free and clear
of any Lien or claims of any Person except for the Liens listed on SCHEDULE B
attached hereto and the Liens created by this Agreement and the Reserve Account
Agreement.
(c) ENFORCEABILITY. This Agreement has been duly executed and
delivered by the Issuer and constitutes a legal, valid and binding obligation of
the Issuer, enforceable against the Issuer in accordance with its terms, except
as such enforceability may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally or general principles of equity and
commercial reasonableness.
(d) PERFECTION; PRIORITY. Upon the execution and delivery of this
Agreement, and the filing of the UCC-1 financing statements and other documents
relating to the Collateral listed on SCHEDULE C attached hereto, to the extent
such security interests are created under United States federal or applicable
state laws or the law of the British Virgin Islands or England, the security
interests in the Collateral created pursuant to this Agreement are valid and
perfected first priority security interests, securing the payment of the
Obligations for the benefit of the Trustee and the Holders of the Secured Notes,
and enforceable as such against all creditors of the Issuer and any Persons
purporting to purchase any of the Collateral from the Issuer other than as
permitted by the Indenture; as of the date hereof (and after giving effect to
the use of proceeds of the issuance of the Secured Notes), there are no other
security interests in or Liens on the Collateral or any portion thereof, and no
financing statement, pledge, notice of Lien, assignment or collateral
assignment, mortgage or deed of trust covering the Collateral or any portion
thereof ("Lien Notice") exists or is on file in any public office, except with
respect to Liens listed on SCHEDULE B attached hereto and, the Liens created by
this Agreement and the Reserve Account Agreement.
(e) OFFICES. The Issuer's chief executive office is located at the
address listed as such in SCHEDULE D attached
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hereto ("Chief Executive Office"), and the Issuer has no place of business other
than that set forth in such Schedule D, except as permitted hereafter by Section
6(c) hereof.
(f) BUSINESS NAMES. The Issuer has not conducted its businesses
under any corporate, partnership or fictitious name during the five (5) years
preceding the date hereof other than Petrodrill Offshore.
(g) NO CONSENTS. No consent of any other Person and no consent,
authorization, approval, or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required either (i) for the
granting of the Liens by the Issuer on the Collateral pursuant to this Agreement
or for the execution, delivery or performance of this Agreement by the Issuer
(except for filings listed on Schedule C attached hereto, the filings or other
actions necessary to maintain the perfection of the Liens on the Issuer Loans
and perfect Liens on after-acquired Collateral or the proceeds of the
Collateral) or (ii) for the exercise by the Collateral Agent of the remedies in
respect of the Collateral pursuant to this Agreement, except, in each case, as
may be required under the Mitsubishi Documents or in connection with any such
disposition by laws affecting the offering and sale of the Issuer Loans
constituting Collateral or the collateral securing such Issuer Loans.
(h) ACCURATE INFORMATION. As of the date hereof, all information set
forth herein relating to the Collateral is accurate and complete in all material
respects.
SECTION 6. COVENANTS.
(a) LIEN NOTICES. The Issuer will defend its interest in the
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein, and the Issuer will not permit any Lien
Notices with respect to the Collateral or any portion thereof to exist or be on
file in any public office for more than 10 days after the Issuer shall have
notice thereof, except with respect to Permitted Liens. The Issuer will advise
the Collateral Agent and the Trustee promptly, in reasonable detail, at the
addresses as specified in Section 16(a) of this Agreement, of any Lien (other
than Permitted Liens) on, or claim asserted against, any of the Collateral.
(b) LOCATION OF COLLATERAL. The Issuer will keep all of the
Collateral now held or subsequently acquired by it at the
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location specified on SCHEDULE D hereto, or at locations hereafter established
in compliance with Section 6(c) hereof (except for Collateral held by the
Collateral Agent, the Trustee or the Reserve Account Agent), unless the Issuer
shall have given the Collateral Agent and the Trustee prior written notice
thereof and shall have in advance executed and caused to be filed or delivered
to the Collateral Agent and the Trustee any financing statements or other
documents required by the Collateral Agent or the Trustee in order to perfect,
protect and preserve the Liens and security interest created hereby, all in form
and substance satisfactory to the Collateral Agent and the Trustee.
(c) LOCATION OF OFFICES; CORPORATION NAME; LEGAL STRUCTURE. The
Issuer will not change the location of its Chief Executive Office or establish
any place of business other than that set forth on Schedule D attached hereto,
or voluntarily or involuntarily change its name, identity or legal structure,
including without limitation any continuance, amalgamation, merger,
consolidation or sale of substantially all of its assets, unless the Issuer
shall have given the Collateral Agent and the Trustee at least 30 days prior
written notice thereof and shall have in advance executed and caused to be filed
and or delivered to the Collateral Agent and the Trustee any financing
statements or other documents required by the Collateral Agent and the Trustee
in order to perfect, protect and preserve the Liens and security interest
created hereby, all in form and substance reasonably satisfactory to the
Collateral Agent and the Trustee.
(d) ADDITIONAL COLLATERAL; FURTHER ASSURANCES. The Issuer agrees
that immediately upon becoming the beneficial owner of any additional
Collateral, it will pledge and deliver to the Collateral Agent for the benefit
of the Trustee and the equal and ratable benefit of the Holders of the Secured
Notes, the certificates, instruments and documents, if any, representing such
Collateral (as well as duly executed instruments of transfer or assignment in
blank), and grant to the Collateral Agent for the benefit of the Trustee and the
equal and ratable benefit of the Holders of the Secured Notes pursuant to
appropriate and necessary Security Agreements, a continuing first priority
security interest in and Lien on such other Collateral, all in form and
substance reasonably satisfactory to the Trustee. The Issuer shall also promptly
(and in any event within five Business Days after receipt thereof), subject to
its compliance with the requirements of applicable law, deliver to the
Collateral Agent any other documents of title, promissory notes, certificates or
instruments representing Collateral which it holds. The Issuer
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further agrees that it will promptly (and in any event within five Business Days
after such acquisition) deliver to the Collateral Agent and the Trustee an
amendment, duly executed by the Issuer, in substantially the form of SCHEDULE E
hereto (an "Additional Collateral Amendment"), with respect to the additional
Collateral that is to be pledged pursuant to this Agreement. The Issuer hereby
authorizes the Collateral Agent and the Trustee to attach each Additional
Collateral Amendment to this Agreement and agrees that any notes, instruments or
other forms of Investment or other property or assets listed on any Additional
Collateral Amendment delivered to the Collateral Agent or the Trustee and all
proceeds thereof shall for all purposes hereunder be considered Collateral. The
Issuer will promptly (i) execute and deliver, cause to be executed and filed, or
use its best efforts to give any notices, in all appropriate jurisdictions
(including foreign jurisdictions) or procure any financing statements, including
continuation statements, assignments, pledges or other documents, (ii) mark any
chattel paper constituting Collateral and deliver any certificates, chattel
paper or instruments constituting Collateral to the Collateral Agent or the
Trustee, (iii) execute and deliver or cause to be executed and delivered all
assignments, instruments and other documents, and (iv) take any other actions,
in each such case as necessary or, in the reasonable opinion of the Collateral
Agent or the Trustee, desirable to perfect or continue the perfection and the
priority of the Collateral Agent's security interest and Liens in the
Collateral, to protect the Collateral against the rights, claims, or interests
of third Persons other than holders of Permitted Liens or to effect the purposes
of this Agreement. The Issuer also hereby authorizes the Collateral Agent to
file any financing or continuation statements with respect to the Collateral
necessary or, in its reasonable opinion desirable, to perfect or continue the
perfection or priority of the Collateral Agent's Lien hereunder without the
signature of the Issuer to the extent permitted by applicable law.
(e) DISPOSITION OF COLLATERAL. The Issuer will not sell, transfer,
assign, pledge, collaterally assign, exchange or otherwise dispose of, or grant
any option or warrant with respect to, any of the Collateral except as permitted
by the Indenture or the Reserve Account Agreement. If the proceeds of any sale
of any Collateral are notes, instruments, documents of title, standby letters of
credit or chattel paper, such proceeds shall be promptly delivered to the
Collateral Agent to be held as Collateral hereunder. If the Collateral, or any
part thereof, is
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sold, transferred, assigned, exchanged, or otherwise disposed of in violation of
these provisions, the security interest and Liens of the Collateral Agent shall
continue in such Collateral or part thereof notwithstanding such sale, transfer,
assignment, exchange or other disposition, and the Issuer will hold the proceeds
thereof in an separate account for its benefit and the Holders of the Secured
Notes and the benefit of the Trustee and the Holders of the Secured Notes and
transfer such proceeds to the Collateral Agent in kind to be held as Collateral
hereunder.
(f) RESTRICTIVE AGREEMENTS. The Issuer agrees that, except for the
Mitsubishi Documents and any other existing agreements set forth on SCHEDULE F
attached hereto, it will not (i) enter into any agreement or understanding that
purports to or may restrict or inhibit the Collateral Agent's or the Trustee's
rights or remedies hereunder, including, without limitation, the Collateral
Agent's or the Trustee's right to sell or otherwise dispose of the Collateral or
amend or modify in any manner materially adverse to the Trustee the Mitsubishi
Documents or (ii) fail to pay or discharge any tax, assessment or levy of any
nature not later than five days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment with regard to the Collateral.
(g) RIGHTS OF COLLATERAL AGENT AND TRUSTEE. Upon the occurrence and
during the continuance of an Event of Default, the Collateral Agent and the
Trustee shall have the right at any time to make any payments and do any other
acts as the Collateral Agent or the Trustee may deem necessary to protect the
Liens and security interest of the Collateral Agent in the Collateral,
including, without limitation, the rights to pay, purchase, contest or
compromise any Lien which, in the judgment of the Collateral Agent or the
Trustee, appears to be prior to or superior to the Liens and security interest
granted hereunder, and challenge any action or proceeding purporting to affect
its Liens and security interest in the Collateral. The Issuer hereby agrees to
reimburse the Collateral Agent and the Trustee for all payments made and
expenses incurred under this Agreement, including reasonable fees, expenses and
disbursements of attorneys acting for the Collateral Agent or the Trustee,
including any of the foregoing payments under or acts taken to perfect or
protect its Liens and security interest in the Collateral, which amounts shall
be secured under this Agreement, and agrees that it shall be bound by any
payment made or act taken by the Collateral Agent or the Trustee hereunder.
Neither the Collateral Agent nor the Trustee shall have any obligation to
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make any of the foregoing payments or perform any of the foregoing acts.
(h) RECORDS. The Issuer will keep and maintain, at its own cost and
expense, satisfactory and complete records of the Collateral.
(i) ACCESS. Both the Collateral Agent and the Trustee shall at all
times have full and free access during normal business hours, on reasonable
notice to the Issuer, except during the continuation of a Default or Event of
Default when no such notice shall be required, to all the books, correspondence
and records of the Issuer relating to the Collateral, and the Collateral Agent
and its representatives and the Trustee and its representatives, may examine the
same, take extracts therefrom and make photocopies thereof, and the Issuer
agrees to render to each of the Collateral Agent and the Trustee, at the
Issuer's cost and expense, such clerical and other assistance, at all times and
in such manner as may be requested with regard thereto. The Collateral Agent and
its representatives and the Trustee and its representatives shall at all times
also have the right on reasonable notice to the Issuer, except during the
continuation of a Default or an Event of Default when no such notice shall be
required, to enter, during normal business hours, into and upon any premises
where any of the Collateral is located for the purpose of inspecting the same,
observing its use or otherwise protecting its interests therein. The Issuer
shall have the right to have a representative present during any examination or
inspection contemplated by this Section, unless an Event of Default has occurred
and it continuing.
(j) TAXES. The Issuer shall pay all taxes, assessments and
government charges and all claims as and to the extent required by Section 4.06
of the Indenture; provided that the Issuer shall in any event pay such taxes,
assessments or levies not later than five days prior to the date of any proposed
sale under any judgment, writ or warrant of attachment with regard to any
Collateral of the Issuer entered or filed against the Issuer as a result of the
failure to make such payment.
(k) ISSUER LOANS. The Issuer covenants with the Collateral Agent and
the Trustee, except as permitted by this Agreement, not to do or permit to be
done anything to impair the security of the Mitsubishi Documents; not to execute
any other assignment of its interest in the Issuer Loans or the Mitsubishi
Documents except as may be otherwise agreed to in writing by the
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Collateral Agent and the Trustee and except as provided herein, provided that
the Issuer may assign its interests in any portion thereof not constituting
Collateral if such assignment is permitted by the Indenture and is made subject
to the rights of the Trustee and the Collateral Agent under the Indenture,
hereunder and under the Reserve Account Agreement, including, without
limitation, the rights set forth in Section 7; except as permitted by the
Indenture, not to alter, modify or change the terms of the Issuer Loans or the
Mitsubishi Documents without the prior written consent of the Trustee, or,
except as permitted by the Indenture, cancel or terminate any of the Issuer
Loans or any of the security for such Issuer Loans or accept a surrender thereof
so as to effect directly or indirectly, proximately or remotely, a cancelation
or termination or diminution of the obligations of the parties thereunder; and
to execute and deliver, at the request of Collateral Agent or the Trustee, all
such further assurances, acknowledgments, and certificates for the purposes
hereof as Collateral Agent or the Trustee shall from time to time reasonably
require.
SECTION 7. VOTING RIGHTS; ISSUER LOAN PAYMENTS; ETC.
(a) At all times, whether or not Event of Default shall have
occurred and be continuing, only the Collateral Agent on behalf of the Trustee
or the Trustee directly shall be entitled to exercise any and all voting and
other consensual rights of the Issuer pertaining to the Issuer Loans and
Mitsubishi Documents. The Issuer hereby appoints and constitutes the Collateral
Agent and the Trustee, whether acting separately or jointly, as the Issuer's
attorneys-in-fact to exercise any and all such voting and other consensual
rights of the Issuer. This power of attorney is coupled with an interest in the
Trustee and the Collateral Agent as agent on behalf of the Trustee and is
irrevocable by the Issuer. The Issuer shall execute and deliver (or cause to be
executed and delivered) to the Collateral Agent or the Trustee all such proxies,
additional powers or attorney and other instruments as the Collateral Agent or
the Trustee may reasonably request for the purpose of enabling the Collateral
Agent or the Trustee to exercise or cause the exercise of the voting and other
rights that it is entitled to exercise pursuant to this Section 7(a).
(b) All payments made from time to time on, or with respect to the
Issuer Loans or other Collateral Loans received by the Issuer and all other
amount received by the Issuer with respect to the Collateral, whether interest,
principal,
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dividends, distributions or otherwise, shall be delivered to the Trustee for
deposit in the Reserve Account. The foregoing notwithstanding, the Issuer shall
make provision such that all payments made under the Mitsubishi Documents in
respect of the Issuer Loans shall be paid directly into the Reserve Account.
(c) All interest and principal payments, all distributions and all
other payments that are received by the Issuer contrary to the provisions of
this Section 7 shall be received in trust for the Collateral Agent for the
benefit of the Trustee and the equal and ratable benefit of the Holders of the
Secured Notes, shall be segregated from the other property or funds of the
Issuer and be forthwith delivered to the Collateral Agent or the Trustee as
Collateral in the same form as so received (with any necessary endorsements or
other instruments of transfer or assignment in blank), and all such payments
shall be deposited in the Reserve Account.
(d) So long as no Event of Default shall have occurred and be
continuing, neither the Collateral Agent nor the Trustee shall be under any
obligation to collect, attempt to collect, protect or enforce the Collateral,
which the Issuer agrees and undertakes to do at the Issuer's expense; provided
that the Collateral Agent and the Trustee shall cooperate with the Issuer and
take all such action as the Issuer may reasonably request to permit the Issuer
to collect, protect or enforce the Collateral. All expenses (including, without
limitation, reasonable attorneys' fees and legal expenses) actually incurred or
paid by the Collateral Agent or the Trustee in connection with or incident to
any such collection or attempt to collect, protect or enforce the Collateral
shall be borne by the Issuer or reimbursed by the Issuer to the Collateral Agent
and the Trustee upon demand.
SECTION 8. POWER OF ATTORNEY. In addition to all of the powers granted to
the Trustee pursuant to Article VI of the Indenture, the Issuer hereby appoints
and constitutes the Collateral Agent and the Trustee, whether acting separately
or jointly, as the Issuer's attorneys-in-fact to exercise all of the following
powers upon and at any time after the occurrence and during the continuance of
an Event of Default: (i) collection of proceeds of any Collateral; (ii)
conveyance of any item of Collateral to any purchaser thereof; (iii) giving of
any notices or recording of the security interest and the Liens under Section
6(d) hereof; (iv) making of any payments or taking any acts under Section 9
hereof and (v) paying or discharging taxes or Liens
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levied or placed upon the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by the Collateral Agent
in its sole discretion, and such payments made by the Collateral Agent to become
the Obligations of the Issuer to the Collateral Agent, due and payable
immediately upon demand. The Collateral Agent's authority hereunder shall
include, without limitation, the authority to endorse and negotiate any checks
or instruments representing proceeds of Collateral in the name of the Issuer, to
execute and give receipt for any certificate of ownership or any document
constituting Collateral, to transfer title to any item of Collateral, to sign
the Issuer's name on all financing statements (to the extent permitted by
applicable law) or any other Security Agreements or other documents deemed
necessary or appropriate by the Collateral Agent to preserve, protect or perfect
the Liens in the Collateral and to file the same, to prepare, file and sign the
Issuer's name on any notice of Lien, and to prepare, file and sign the Issuer's
name on a proof of claim in bankruptcy or similar document against any person
obligated upon any Collateral to, the Issuer, and to take any other actions
arising from or incident to the powers granted to the Collateral Agent in this
Agreement. This power of attorney is coupled with an interest in the Trustee and
the Collateral Agent as agent on behalf of the Trustee and is irrevocable by the
Issuer.
SECTION 9. COLLATERAL AGENT OR TRUSTEE MAY PERFORM. If the Issuer fails to
perform any covenant or agreement contained herein, the Collateral Agent or the
Trustee may, but shall not be obligated to, itself perform, or cause performance
of, such covenant or agreement, and the expenses of the Collateral Agent or the
Trustee incurred in connection therewith shall be payable by the Issuer under
Section 16(o) hereof.
SECTION 10. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and
powers granted to the Collateral Agent or the Trustee hereunder are being
granted in order to preserve and protect the Collateral Agent's Liens and
security interest in and to the Collateral granted hereby and shall not be
interpreted to, and shall not, impose any duties on the Collateral Agent or the
Trustee in connection therewith. Each of the Collateral Agent and the Trustee
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which the Collateral Agent or the Trustee
accords its own property, it being understood that neither the Collateral Agent
nor the Trustee shall have any responsibility for
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(i) ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not
the Collateral Agent or the Trustee has or is deemed to have knowledge of such
matters, (ii) taking any necessary steps to preserve rights against any parties
with respect to any Collateral, or (iii) inquiring into or verifying that the
Issuer has complied or will comply with its duty to furnish additional items of
Collateral to the Collateral Agent or the Trustee pursuant to Section 6(d)
hereof unless reasonably requested by the Issuer to do so at any time before an
Event of Default occurs and is continuing. Absent knowledge to the contrary, the
Collateral Agent and the Trustee may assume that the items of Collateral
actually delivered to it are all items required to be so delivered and may
assume that no other such items need be so delivered.
SECTION 11. SUBSEQUENT CHANGES AFFECTING COLLATERAL. The Issuer represents
to the Collateral Agent and the Trustee and the Holders of the Secured Notes
that the Issuer has made its own arrangements for keeping informed of changes or
potential changes affecting the Collateral (including, but not limited to,
payments of principal, premiums or interest, reorganization, restructuring or
other exchanges, tender offers and voting rights), and the Issuer agrees that
the Collateral Agent and the Trustee and the Holders of the Secured Notes shall
have no responsibility or liability for informing the Issuer of any such changes
or partial changes or for taking any action or omitting to take any action with
respect thereof. Except as not prohibited by the Indenture, the Issuer covenants
that it will not, without the prior written consent of the Trustee, vote to
enable, or take any other action to permit, anyone to sell or otherwise dispose
of, or grant any option with respect to, any of the Collateral or create or
permit to exist any Lien upon or with respect to any of the Collateral, except
for Permitted Liens and the Liens granted under this Agreement and the Reserve
Account Agreement. The Issuer will defend the right, title and interest of the
Collateral Agent and the Trustee and the Holders of the Secured Notes in and to
the Collateral against the claims and demands of all Persons, subject, HOWEVER,
to the rights of holders of Permitted Liens.
SECTION 12. REMEDIES UPON AN EVENT OF DEFAULT.
(a) Upon the occurrence and during the continuance of an Event of
Default, the Collateral Agent may, subject to the provisions of the Indenture,
this Agreement, and the Collateral Agent's and the Trustee's compliance with any
requirements of law
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(including, without limitation, the applicable Uniform Commercial Code or laws
of foreign jurisdictions) applicable to the action to be taken, without notice
to or demand upon the Issuer except as required by the Indenture, the Reserve
Account Agreement, this Agreement or applicable law, do any one or more of the
following:
(i) exercise any or all of the rights and remedies provided
for by the applicable Uniform Commercial Code or laws of foreign
jurisdictions specifically including, without limitation, the right to
recover the fees and expenses incurred by the Collateral Agent or the
Trustee in the enforcement of this Agreement or in connection with the
redemption of the Collateral, including reasonable fees, expenses and
disbursements of attorneys;
(ii) at its option, transfer or register, and the Issuer shall
register or cause to be registered upon request therefor by the Collateral
Agent or the Trustee, the Collateral or any part thereof on the books of
the Persons in whom any Investments constituting Collateral are made, into
the name of the Trustee's nominee(s);
(iii) personally, or by agents or attorneys, immediately
retake possession of the Collateral, or any part thereof, from the Issuer
or any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon the
Issuer's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of the Issuer;
(iv) sell, assign or otherwise liquidate, or direct the Issuer
to sell, assign or otherwise liquidated, any or all of the Collateral or
any part thereof, and take possession of the proceeds of any such sale or
liquidation;
(v) require the Issuer to assemble the Collateral or any part
thereof and make it available at one or more places as the Collateral
Agent or the Trustee may designate and to deliver possession of the
Collateral or any part thereof to the Collateral Agent or the Trustee;
(vi) use, in connection with any assembly, use or disposition
of the Collateral, any intellectual property,
15
intangibles or other technical knowledge or process used or utilized from
time to time by the Company;
(vii) sell or cause the same to be sold at any broker's board
or at public or private sale, in one or more sales or lots, at such price
or prices as the Collateral Agent may deem best, for cash or on credit or
for future delivery, without assumption of any credit; and the purchaser
of any or all Collateral so sold shall thereafter hold the same
absolutely, free from any claim, encumbrance or right of any kind
whatsoever;
(viii) enforce one or more remedies hereunder, successively or
concurrently, and such action shall not operate to estop or prevent the
Collateral Agent from pursuing any other or further remedy which it may
have, and any repossession or retaking or sale of the Collateral pursuant
to the terms hereof shall not operate to release the Issuer until full and
final payment of any deficiency has been made in cash;
(ix) in connection with any public or private sale under the
applicable Uniform Commercial Code or other applicable legislation, the
Collateral Agent shall give the Issuer at least ten Business Days' prior
written notice of the time and place of any public sale of its Collateral
or of the time after which any private sale or other intended disposition
thereof may be made, which shall be deemed to be reasonable notice of such
sale or other disposition. Such notice may be given to the Issuer in
accordance with the provisions of Section 17(a) hereof;
(x) proceed by an action or actions at law or in equity to
recover the Obligations or to foreclose this Agreement and sell the
Collateral, or any portion thereof, pursuant to a judgment or decree of a
court or courts of competent jurisdiction;
(xi) exercise any other rights and remedies provided by
applicable law and the other Security Agreements; and
(xii) if the Collateral Agent recovers possession of all or
any part of the Collateral pursuant to a writ of possession or other
judicial process, whether prejudgment or otherwise, the Collateral Agent
may thereafter retain, sell
16
or otherwise dispose of such Collateral in accordance with this Agreement
or the applicable Uniform Commercial Code or other applicable legislation,
and following such retention, sale or other disposition, the Collateral
Agent may voluntarily dismiss without prejudice the judicial action in
which such writ of possession or other judicial process was issued. The
Issuer hereby consents to the voluntary dismissal by the Collateral Agent
of such judicial action, and the Issuer further consents to the
exoneration of any bond that the Collateral Agent files in such action.
(b) In view of the fact that federal, state and foreign securities
laws may impose certain restrictions on the method by which a sale of the
Collateral may be effected after an Event of Default, the Issuer agrees that
upon the occurrence and during the continuance of an Event of Default, the
Collateral Agent may cause, from time to time, the sale of all or any part of
the Collateral by means of a private placement, restricting the prospective
purchasers to those who will represent and agree that they are purchasing for
investment only and not for distribution. In so doing, the Collateral Agent may
solicit, or may cause an investment manager to solicit, offers to buy the
Collateral, or any part of it, for cash, from a limited number of investors who
might be interested in purchasing the Collateral. The Issuer acknowledges and
agrees that any such private sale may result in prices and terms less favorable
than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a
commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay a sale of any of the Collateral for the period of time
necessary to permit the Issuer to cause an issuer or obligor to register such
securities for public sale under the Securities Act, or under applicable state
or foreign securities laws, even if the Issuer could cause the such issuer or
obligor, as the case may be, to do so.
(c) The Issuer further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Collateral pursuant to this Section 12 valid and
binding and in compliance with any and all other applicable requirements of
applicable law, PROVIDED, THAT the Issuer shall have no obligation to register
the Collateral for sale or other distribution under the securities laws of any
jurisdiction. The Issuer further agrees that a breach of any of the covenants
contained in this Section 12 will cause irreparable injury to the
17
Trustee and the Holders of the Secured Notes, that the Trustee and the Holders
of the Secured Notes have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section 12
shall be specifically enforceable against the Issuer, and the Issuer hereby
waives and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of Default has
occurred and is continuing.
(d) Any cash held by the Collateral Agent as Collateral and all cash
proceeds received by the Trustee in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral shall be applied by the
Collateral Agent:
FIRST, to the payment of the costs and expenses of such sale,
including, without limitation, expenses of the Collateral Agent and its
agents including the reasonable fees and expenses of its counsel, and all
expenses, liabilities and advances made or incurred by the Collateral
Agent in connection therewith or pursuant to Section 17(o) hereof;
NEXT, to the Trustee, for the payment in full of all amounts due
under Section 7.07 of the Indenture;
NEXT, to the Trustee, for distribution to the Holders of the Secured
Notes for the payment in full of the remaining Obligations; and
FINALLY, after payment in full of all of the Obligations, to the
Issuer, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same as a court of competent jurisdiction may
direct.
(e) If any sale or other disposition of Collateral by the Collateral
Agent or any other action of the Collateral Agent or the Trustee hereunder
results in reduction of the Obligations, to the extent permitted by applicable
law, such action will not release the Issuer from its liability for any unpaid
Obligations, including costs, charges and expenses incurred in the liquidation
of Collateral, together with interest thereon, and the same shall be immediately
due and payable to the Collateral Agent, the Trustee and the Holders of the
Secured Notes as provided for in the Indenture.
18
(f) The Collateral Agent may enforce its rights hereunder without
prior judicial process or judicial hearing, and to the extent permitted by law
the Issuer expressly waives any and all legal rights which might otherwise
require the Collateral Agent to enforce its right by judicial process.
SECTION 13. IRREVOCABLE AUTHORIZATION AND INSTRUCTIONS TO THE APPLICABLE
OBLIGOR. The Issuer hereby authorizes and instructs the applicable obligor or
issuer to comply with any instructions received by such obligor or issuer, as
the case may be, from the Collateral Agent or the Trustee that (i) states than
an Event of Default has occurred and is continuing and (ii) is otherwise in
accordance with the terms of this Agreement and applicable law, without any
other or further instructions from the Issuer, and the Issuer agrees that the
applicable issuers and obligors shall be fully protected in so complying.
SECTION 14. RESERVE ACCOUNT. All money received by the Issuer and required
to be deposited in the Reserve Account shall be promptly and without commingling
remitted to the Reserve Account Agent for deposit therein.
SECTION 15. WAIVERS.
(a) Except as may be required under the provisions of the Indenture
and to the fullest extent permitted under applicable law, neither the Collateral
Agent nor the Trustee shall be under any duty whatsoever to make or give any
presentment, notice of dishonor, protest, demand for performance, notice of
non-performance, notice of intent to accelerate, notice of acceleration, or
other notice or demand in connection with any Collateral or the Obligations, or
to take any steps reasonably necessary to preserve any rights against any
Obligor or other Person. The Issuer waives to the fullest extent permitted under
applicable law any right of marshaling in respect of any and all Collateral, and
waives to the fullest extent permitted under applicable law any right to require
the Collateral Agent or the Trustee to proceed against any Obligor or other
Person, exhaust any Collateral or enforce any other remedy which the Collateral
Agent or the Trustee now has or may hereafter have against any Obligor or other
Person.
(b) The Issuer waives to the fullest extent permitted under
applicable law (i) any and all notices of acceptance, creation, modification,
rearrangement, renewal or extension for any period of any instrument executed by
any Obligor in
19
connection with the Obligations and (ii) any defense of any Obligor by reason of
disability, lack of authorization, cessation of the liability of any Obligor or
for any other reason. The Issuer authorizes the Collateral Agent to the fullest
extent permitted under applicable law, without notice or demand and without any
reservation of rights against the Issuer and without affecting the Issuer's
liability hereunder or on the Obligations, from time to time to (w) take and
hold other property, other than the Collateral, as security for the Obligations,
and exchange, enforce, waive and release any or all of the Collateral, (x) after
the occurrence and during the continuance of an Event of Default and the
acceleration of the Secured Notes, apply the Collateral in the manner permitted
by this Agreement or the Indenture and (y) renew, extend for any period,
accelerate, amend or modify, supplement, enforce, compromise, settle, waive or
release the obligations of any obligor on, or any instrument or agreement of
such other Person with respect to the Issuer Loans and any or all of any other
Collateral.
SECTION 16. MISCELLANEOUS PROVISIONS.
(a) NOTICES. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner, and delivered to the Issuer at its address as set forth in Section
12.02 of the Indenture, to the Trustee at its address as set forth in Section
12.02 of the Indenture, and to the Collateral Agent at Wilmington Trust Company
c/o the Trustee at such address.
(b) SALES OF COLLATERAL. No sales of Collateral may be made in
contravention of the terms of the Indenture and the Mitsubishi Documents and the
cash proceeds of the sale of any Collateral shall be promptly and without
commingling remitted to the Collateral Agent or the Trustee for deposit in the
Reserve Account.
(c) NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Agreement
may not be used to interpret another pledge, security or debt agreement of the
Issuer or any Affiliate or Subsidiary of the Issuer. No such pledge, security or
debt agreement may be used to interpret this Agreement.
(d) SEVERABILITY. The provisions of this Agreement are severable,
and if any clause or provision shall be held invalid, illegal or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall
20
affect in that jurisdiction only such clause or provision, or part thereof, and
shall not in any manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this Agreement in any
jurisdiction.
(e) HEADINGS. The headings in this Agreement have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms or provisions hereof.
(f) COUNTERPART ORIGINALS. This Agreement may be signed in two or
more counterparts, each of which shall be deemed an original, but all of which
shall together constitute one and the same agreement.
(g) BENEFITS OF SECURITY AGREEMENT. Nothing in this Agreement,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and the Holders of the Secured Notes, any benefit or
any legal or equitable right, remedy or claim under this Agreement.
(h) AMENDMENTS, WAIVERS AND CONSENTS. Any amendment or waiver of any
provision of this Agreement and any consent to any departure by the Issuer from
any provision of this Agreement shall be effective only if made or given in
compliance with all of the terms and provisions of the Indenture, and neither
the Collateral Agent nor the Trustee nor any Holder of any Secured Note shall be
deemed, by any act, delay, indulgence, omission or otherwise, to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default or in any breach of any of the terms and conditions hereof, except as
set forth in such amendment or waiver. Failure of the Collateral Agent or the
Trustee to exercise, or delay in exercising, any right, power or privilege
hereunder shall not operate as a waiver thereof. No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent, the Trustee or any Holder of a Secured Note of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy that the Collateral Agent, the Trustee or any such
Holder would otherwise have on any future occasion. The right and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
(i) INTERPRETATION OF SECURITY AGREEMENT. All terms
21
not defined herein or in the Indenture shall have the meaning set forth in the
Uniform Commercial Code of the State of New York, except where the context
otherwise requires. To the extent a term or provision of this Agreement
conflicts with the Indenture, the Indenture shall control with respect to the
subject matter of such term or provision. Acceptance of or acquiescence in a
course of performance rendered under this Agreement shall not be relevant in
determining the meaning of this Agreement even though the accepting or
acquiescing party had knowledge of the nature of the performance and opportunity
for objection.
(j) CONTINUING SECURITY INTEREST; TRANSFER OF COLLATERAL. This
Agreement shall create a continuing Lien and security interest in the Collateral
and shall (i) unless otherwise provided in the Indenture or this Agreement
remain in full force and effect until payment in full of (A) the Secured Notes
under the terms of the Indenture and (B) all Obligations then due and owing
under the Indenture and the Security Agreements; PROVIDED, HOWEVER, that after
receipt from the Issuer by the Collateral Agent of a request for a release of
any Collateral permitted under the Indenture upon the sale, transfer,
assignment, exchange or other disposition of such Collateral not prohibited by
the Indenture and upon receipt by the Collateral Agent of all proceeds of such
sale, transfer, assignment, exchange or other disposition required to be
remitted to the Collateral Agent or the Trustee or the Collateral constituting
the proceeds of such sale, transfer, assignment, exchange or other disposition
being made subject to a Lien and security interest in favor of the Collateral
Agent for the benefit of the Trustee and the equal and ratable benefit of the
Holders of the Secured Notes, which Lien has the same priority as had the Lien
on the Collateral being sold, assigned or otherwise disposed of, such Collateral
shall be released from the Lien and security interest created hereunder and no
longer constitute Collateral. Upon the payment in full of (A) the Secured Notes
under the terms of the Indenture and (B) all Obligations then due and owing
under the Indenture and the Security Agreements, the Issuer shall be entitled to
the return (and release of any Lien), upon its request and at its expense, of
such of the Collateral pledged by it as shall not have been sold or otherwise
applied pursuant to the terms hereof. This Agreement shall be binding upon the
Issuer, its successors and assigns, and inure, together with the rights and
remedies of the Trustee hereunder, to the benefit of the Collateral Agent, the
Trustee, the Holders of the Secured Notes and their respective successors,
transferees and assigns.
22
(k) REINSTATEMENT. This Agreement shall continue to be effective or
be reinstated, as the case may be, if at any time any amount received by the
Collateral Agent, the Trustee or any Holder of a Secured Note in respect of the
Obligations is rescinded or must otherwise be restored or returned by the
Collateral Agent, the Trustee or any Holder of a Security Note upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization or the Issuer
or upon the appointment of any receiver, intervenor, conservator, trustee or
similar official for the Issuer or upon the appointment of any receiver,
intervenor, conservator, trustee or similar official for the Issuer or any
substantial part of its assets, or otherwise, all as though such payments had
not been made.
(l) SURVIVAL OF PROVISIONS. All representations, warranties and
covenants of the Issuer contained herein shall survive the execution and
delivery of this Agreement, and shall terminate only upon the full and final
payment and performance by the Issuer of the Obligations.
(m) AUTHORITY OF COLLATERAL AGENT AND TRUSTEE. Both the Collateral
Agent and Trustee shall have and be entitled to exercise all powers hereunder
that are specifically granted to the Collateral Agent and the Trustee by the
terms hereof, together with such powers as are reasonably incident thereto. The
Collateral Agent and the Trustee may perform any of their respective duties
hereunder or in connection with the Collateral by or through agents or employees
and shall be entitled to retain counsel and to act in reliance upon the advice
of counsel concerning all such matters. None of the Collateral Agent, any
director, officer, any attorney or agent of the Collateral Agent, the Trustee,
any director, officer, employee, attorney or agent of the Trustee or the Holders
of the Secured Notes shall be liable to the Issuer for any action taken or
omitted to be taken by it or them hereunder, except for its or their own gross
negligence or willful misconduct or a breach of a relevant agreement, nor shall
the Collateral Agent or the Trustee be responsible for the validity,
effectiveness or sufficiency hereof or of any document or security furnished
pursuant hereto. The Collateral Agent and its directors, officers, employees,
attorneys and agents, and the Trustee and its directors, officers, employees,
attorneys and agents shall be entitled to rely on any communication, instrument
or document reasonably in good faith believed by it or them to be genuine and
correct and to have been signed or sent by the proper person or persons. Neither
the Collateral Agent nor the Trustee shall be required
23
to, and shall not, expend or risk any of its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder.
The Issuer acknowledges that the rights and responsibilities of the
Trustee under this Agreement with respect to any action taken by the Collateral
Agent and the Trustee or the exercise or non-exercise by the Collateral Agent or
the Trustee of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
among the Collateral Agent, the Trustee and the Holders of the Secured Notes, be
governed by the Indenture and by such other applicable agreements with respect
thereto as may exist from time to time among them, but, as among the Collateral
Agent, the Trustee and the Issuer, the Collateral Agent and the Trustee shall be
conclusively presumed to be acting as agent for the Holders of the Secured Notes
with full and valid authority so to act or refrain from acting, and the Issuer
shall not be obligated or entitled to make any inquiry respecting such
authority.
In any case in which the Collateral Agent shall be required or
permitted to make any determination as to the extent to which the security
interest or Liens under this Agreement secures any obligations, the Collateral
Agent is authorized, without any direction from, or requirement for consent of
or authorization by, the Trustee, to institute proceedings in a court of
competent jurisdiction for the obtaining of any authoritative determination of
such matter. If the Collateral Agent institutes any such proceeding, it shall
give prompt written notice thereof to the Trustee and shall afford each of them
the opportunity to participate in such proceeding.
(n) RELEASE; TERMINATION OF SECURITY AGREEMENT.
(i) Subject to the provisions of Section 16(k) hereof, this
Agreement shall terminate upon payment in full of (A) the Secured Notes under
the terms of the Indenture and (B) all Obligations then due and owing under the
Indenture and the Security Agreements, except that the provisions of Section
16(o) hereof shall survive.
(ii) The Issuer agrees that it will not sell or dispose of any
of the Collateral in violation of the Indenture; PROVIDED, HOWEVER, that if the
Issuer shall sell or otherwise dispose of any of the Collateral in accordance
with the terms of
24
the Indenture and shall certify such compliance to the Collateral Agent and the
Trustee, the Collateral Agent shall, and the Trustee shall cause, at the request
of the Issuer, release or cause to be released the Collateral subject to such
sale or disposition free and clear of the Liens and security interest under this
Agreement.
(iii) Upon any termination of this Agreement or release of any
Collateral as permitted by the Indenture, the Collateral Agent and the Trustee
will, at the expense of the Issuer, execute and deliver to the Issuer such
documents and take such other actions as the Issuer shall reasonably request to
evidence the termination of this Agreement or the release of such Collateral, as
the case may be. Any such action taken by the Collateral Agent or the Trustee
shall be without warranty by or recourse to the Collateral Agent or the Trustee,
except as to the absence of any prior assignments by the Collateral Agent or the
Trustee of its interests in the Collateral, and shall be at the expense of the
Issuer. The Collateral Agent and the Trustee may conclusively rely on any
certificate delivered to it by the Issuer stating that the execution of such
documents and release of the Collateral is in accordance with and permitted by
the terms of this Agreement and the Indenture.
(o) PAYMENT OF FEES AND EXPENSES AND INDEMNITY. The Issuer will upon
demand pay to the Collateral Agent and the Trustee, without duplication, the
amount of any and all fees and expenses, including, without duplication, the
reasonable fees and disbursements of its counsel, that the Collateral Agent and
the Trustee may incur in connection with (i) administration of this Agreement,
(ii) the custody, preservation, use or operation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Trustee
hereunder or (iv) the failure by the Issuer to perform or observe any of the
provisions hereof. The Issuer shall be liable for and shall reimburse and
indemnify both the Trustee and the Collateral Agent and hold both the Trustee
and the Collateral Agent harmless from and against any and all claims, losses,
liabilities, costs, damages or expenses (including reasonable attorneys' fees
and expenses) (collectively, "Losses") arising from or in connection with or
related to this Agreement or being the Trustee or the Collateral Agent
hereunder; PROVIDED, HOWEVER, that nothing contained herein shall require the
Trustee or the Collateral Agent to be indemnified for Losses caused by their
respective gross negligence or willful misconduct or in connection with any
25
breach by the Collateral Agent or the Trustee of the Indenture or any document
executed in connection therewith.
(p) FINAL EXPRESSION. This Agreement, together with the Indenture,
the Security Agreements and any other agreement executed in connection herewith
or therewith, is intended by the parties as a final expression of this Agreement
and is intended as a complete and exclusive statement of the terms and
conditions hereof.
(q) ISSUER REMAIN LIABLE. Anything herein to the contrary
notwithstanding (a) the Issuer shall remain liable under any contracts and
agreements included in the Collateral, to the extent set forth therein, to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Collateral Agent
or the Trustee of any of the rights hereunder shall not release the Issuer from
any of its duties or obligations under the contracts and agreements included in
the Collateral and (c) the Collateral Agent and the Trustee shall not have any
obligation or liability under any contracts and agreements included in the
Collateral by reason of this Agreement, nor shall the Collateral Agent or the
Trustee be obligated to perform any of the obligations or duties of the Issuer
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
(r) RIGHTS OF HOLDERS. No Holder of a Secured Note shall have any
independent rights hereunder other than those rights granted to individual
Holders pursuant to Section 6.07 of the Indenture, provided that nothing in this
subsection (s) shall limit any rights granted to the Trustee under the Secured
Notes, the Indenture or the Security Agreements.
(s) NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
STOCKHOLDERS. No past, present or future director, officer, employee,
incorporator or stockholder of the Issuer, any Subsidiary of the Issuer or any
guarantor of the Notes, as such, shall have any liability for any obligations of
the Issuer under this Agreement or for any claim based on, in respect of, or by
reason of, such obligations or their creation.
(t) GOVERNING LAW; WAIVER OF JURY TRIAL; WAIVER
OF DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND
26
INTERPRETED UNDER THE LAWS OF THE STATE OF NEW YORK, AND ANY DISPUTE
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THE ISSUER, THE COLLATERAL AGENT, THE
TRUSTEE AND THE HOLDERS OF THE SECURED NOTES IN CONNECTION WITH THIS
AGREEMENT, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE,
SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE
CONFLICTS OF LAWS PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(ii) THE ISSUER AGREES THAT WILMINGTON TRUST COMPANY (OR ITS
SUCCESSOR AS COLLATERAL AGENT) SHALL, IN ITS CAPACITY AS COLLATERAL AGENT
OR IN THE NAME AND ON BEHALF OF THE TRUSTEE AND ANY HOLDERS OF SECURED
NOTES, AND THE TRUSTEE SHALL, IN ITS CAPACITY AS TRUSTEE OR IN THE NAME
AND ON BEHALF OF ANY HOLDERS OF SECURED NOTES, HAVE THE RIGHT, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE ISSUER OR ITS
PROPERTY IN A COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO
ENABLE THE TRUSTEE TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL AGENT OR THE
TRUSTEE. THE ISSUER AGREES THAT IT WILL NOT ASSERT ANY COUNTERCLAIMS,
SETOFFS OR CROSS-CLAIMS IN ANY PROCEEDING BROUGHT BY THE COLLATERAL AGENT
OR THE TRUSTEE TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR
OTHER COURT ORDER IN FAVOR OF THE COLLATERAL AGENT OR THE TRUSTEE. TO THE
EXTENT PERMITTED BY LAW, THE ISSUER WAIVES ANY OBJECTION THAT IT MAY HAVE
TO THE LOCATION OF THE COURT IN WHICH THE TRUSTEE HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(iii) TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE ISSUER,
THE COLLATERAL AGENT AND THE TRUSTEE EACH WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR INCIDENTAL TO
THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A
BENCH TRIAL WITHOUT A JURY.
(iv) THE ISSUER AGREES THAT NONE OF THE COLLATERAL AGENT, THE
TRUSTEE, AND ANY HOLDER OF A SECURED NOTE SHALL HAVE ANY LIABILITY TO THE
ISSUER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) FOR LOSSES
SUFFERED BY THE ISSUER IN
27
CONNECTION WITH, ARISING OUT OF, OR IN ANY WAY RELATED TO, THE
TRANSACTIONS CONTEMPLATED AND THE RELATIONSHIP ESTABLISHED BY THIS
AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT
OF A COURT THAT IS BINDING ON THE COLLATERAL AGENT, THE TRUSTEE OR SUCH
NOTEHOLDER, AS THE CASE MAY BE, THAT SUCH LOSSES WERE THE RESULT OF ACTS
OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT, THE TRUSTEE OR SUCH
HOLDER OF A SECURED NOTE, AS THE CASE MAY BE, CONSTITUTING NEGLIGENCE OR
WILLFUL MISCONDUCT OR A BREACH OF ANY RELEVANT AGREEMENT.
(v) THE ISSUER WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY
KIND PRIOR TO THE EXERCISE BY THE TRUSTEE OR ANY HOLDER OF A SECURED NOTE
OF ITS RIGHTS DURING THE CONTINUANCE OF AN EVENT OF DEFAULT TO REPOSSESS
THE COLLATERAL WITH JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON
THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS. THE ISSUER WAIVES
THE POSTING OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT, THE
TRUSTEE OR ANY HOLDER OF A SECURED NOTE IN CONNECTION WITH ANY JUDICIAL
PROCESS OR PROCEEDING TO OBTAIN POSSESSION OF, REPLEVY, ATTACH OR LEVY
UPON COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS, TO ENFORCE ANY
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE COLLATERAL AGENT,
THE TRUSTEE OR ANY HOLDER OF A SECURED NOTE OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT
INJUNCTION THIS AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT AMONG THE
ISSUER ON THE ONE HAND AND THE COLLATERAL AGENT, THE TRUSTEE AND/OR THE
HOLDERS OF THE SECURED NOTES ON THE OTHER HAND.
(u) APPOINTMENT OF COLLATERAL AGENT. The Trustee hereby appoints the
Collateral Agent, and the Collateral Agent accepts appointment, as collateral
agent under the terms of this Agreement. The Collateral Agent may resign at any
time by giving written notice thereof to the Trustee and may be removed at any
time with or without cause by the Trustee, with the consent of the Issuer (not
to be unreasonably withheld)unless an Event of Default has occurred and is
continuing. Prior to the effectiveness of any such resignation or removal, the
Trustee shall have the right to appoint a successor Collateral Agent (with the
consent of the Issuer (not to be unreasonably withheld) unless an Event of
Default has occurred and is continuing) which shall be a commercial bank or
trust company organized or chartered under the laws of the United States of
America or any
28
state thereof having combined capital and surplus of at least $50,000,000. If no
successor Collateral Agent shall have been so appointed by the Trustee and shall
have accepted such appointment within 30 days after the retiring Collateral
Agent's giving of notice of resignation or the Trustee's removal of the retiring
Collateral Agent, then the retiring Collateral Agent shall, prior to the
effectiveness of its resignation or removal, on behalf of the Trustee and the
Holders of the Secured Notes, appoint a successor Collateral Agent, which shall
be a commercial bank or trust company organized under the laws of the United
States of America or any State thereof having a combined capital and surplus of
at least $50,000,000. Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations under this Agreement other
than for existing claims for wilful misconduct, gross negligence or breaches of
the relevant agreements. After any retiring Collateral Agent's resignation or
removal hereunder as Collateral Agent, the provisions of this Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Collateral Agent under this Agreement. Any corporation into which the
Collateral Agent may be merged, or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Collateral
Agent shall be a party, shall be Collateral Agent under this Agreement without
the execution or filing of any paper or any further act on the part of the
parties hereto.
(v) AGENT FOR SERVICE: SUBMISSION TO JURISDICTION: WAIVER OF
IMMUNITIES. By the execution and delivery of this Agreement, the Issuer (i)
acknowledges that it has, by separate written instrument, irrevocably designated
and appointed CT Corporation System, 1633 Broadway, New York, New York 10019 (or
any successor), as its authorized agent upon which process may be served in any
suit or proceeding arising out of or relating to this Agreement that may be
instituted in any federal or state court in the State of New York, or brought
under federal or state securities laws, and acknowledges that CT Corporation
System has accepted such designation, (ii) submits to the jurisdiction of any
such court in any such suit or proceeding, and (iii) agrees that service of
process upon CT Corporation System (or any successor) and written notice of said
service to the Issuer shall be deemed in every respect effective service of
process upon the
29
Issuer in any such suit or proceeding. The Issuer further agrees to take any and
all action, including the execution and filing of any and all such documents and
instrument, as may be necessary to continue such destination and appointment of
CT Corporation System (or any successor) in full force and effect so long as the
Secured Notes shall be outstanding.
To the extent that the Issuer has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
Issuer hereby irrevocably waives such immunity in respect of its obligations
under this Agreement, to the extent permitted by law.
[SIGNATURE PAGE FOLLOWS]
30
IN WITNESS WHEREOF, the Issuer has caused this Agreement to be duly
executed and delivered as of the day and year first above written.
AMETHYST FINANCIAL COMPANY LIMITED
By: /s/ EARL W. MCNIEL
Name: Earl W. McNiel
Title: Treasurer
By its acceptance hereof, as of the day and year first above written, the
Collateral Agent and the Trustee agree to be bound by the provisions hereof.
WILMINGTON TRUST COMPANY, as
Collateral Agent and Trustee
By: /s/ CARYN M. O'MARA
Name: Caryn M. O'Mara
Title: Authorized Signer
SCHEDULE A to
Secured Note
Security and
Pledge Agreement
(Section 3(i))
MITSUBISHI DOCUMENTS
1. Loan Agreement dated as of December 19, 1998, among Lenders (Petro Dia
Three S.A. ("MC1") and Petro Dia Four S.A. ("MC2) as initial lenders),
Petrodrill Six Limited ("Petrodrill Six") (as borrower) and Mitsubishi
Corporation (UK) (as Facility Agent and Security Agent), providing for a secured
loan facility not exceeding US$160.0 million in connection with the acquisition
of a semi-submersible drilling rig t.b.n. "Amethyst 6" (the "Amethyst 6
Mitsubishi Credit Facility").
2. Loan Agreement dated as of December 19, 1998, among Lenders (MC1 and
MC2 as initial lenders), Petrodrill Seven Limited ("Petrodrill Seven") (as
borrower) and Mitsubishi Corporation (UK) (as Facility Agent and Security
Agent), providing for a secured loan facility not exceeding US$180.0 million in
connection with the acquisition of a semi-submersible drilling rig t.b.n.
"Amethyst 7" (the "Amethyst 7 Mitsubishi Credit Facility" and together with the
Amethyst 6 Mitsubishi Credit Facility, the "Mitsubishi Credit Facilities").
3. Fee Agreement dated as of December 19, 1998, among MC1 and MC2 (as
initial creditors), and Petrodrill Six and Petrodrill Seven (as borrowers), and
Pride International, Inc. ("Pride") and Maritima Petroleo e Engenharia Ltda.
("Maritima") (as sponsors).
4. Deeds of Guarantee and Undertaking dated as of December 19, 1998, each
relating to the Amethyst 6 Credit Facility and the Amethyst 7 Credit Facility,
among each of Petrodrill Six and Petrodrill Seven (as borrower), and Pride and
Maritima (as Sponsors), the Lenders (MC1 and MC2 as initial lenders) and
Mitsubishi (as Facility Agent and Security Agent).
5. Subordinated Loan Facility Agreements dated as of December 19, 1998,
among each of Petrodrill Six and Petrodrill Seven (as borrower), and Pride and
Maritima (as sponsors), the Lenders (MC1 and MC2 as initial lenders) and
Mitsubishi (as Facility Agent and Security Agent).
2
6. Floor Guarantee dated as of December 19, 1998, relating to the
Mitsubishi Credit Facilities, among Pride and Maritima (as sponsors) and MC1 and
MC2 (as beneficiaries).
7. Share Charges dated as of December 19, 1998, over each of the
Petrodrill Six and Petrodrill Seven shares, between Amethyst Financial Company
Limited (the "Company") (as shareholder) and Mitsubishi (as Security Agent).
8. Additional Funding and Guarantee Agreement dated as of December 19,
1998, among MC1 and MC2, Pride and Maritima (as sponsors) and Petrodrill Six and
Petrodrill Seven, as amended and restated as at July 1, 1999, incorporating
amendments made by Deeds of Release dated as of April 15, 1999, May 14, 1999,
June 15, 1999 and July 1, 1999.
9. Assignments of Charterparty, Earnings and Requisition Compensation
dated as of December 19, 1998, between each of Petrodrill Six and Petrodrill
Seven (as assignor), and Mitsubishi (as Security Agent), relating to each of the
semi-submersible drilling units having Daewoo Heavy Industries Ltd.'s Hull Nos.
3016 and 3015 t.b.n. "Amethyst 6" and "Amethyst 7", respectively.
10. Assignments of Deed of Guarantee and Undertaking and Subordinated Loan
Facility Agreement dated as of December 19, 1998, relating to each of the Credit
Facilities, between each of Petrodrill Six and Petrodrill Seven (as assignor),
and Mitsubishi (as Security Agent).
11. Assignments of Rig Construction Contract and Refund Guarantee dated as
of December 19, 1998, between each of Petrodrill Six and Petrodrill Seven (as
assignor), and Mitsubishi (as Security Agent), in respect of each of the
semi-submersible drilling units having Hulls Nos. 3016 and 3015 at Daewoo Heavy
Industries, Ltd., respectively.
12. Bridging Loan Agreement dated as of December 19, 1998, between MC1 (as
funder) and MC2 (as participant), providing for the funding of the participant's
participation in the Credit Facilities.
13. Debentures dated as of December 19, 1998, between each of Petrodrill
Six and Petrodrill Seven (as borrower), and Mitsubishi (as Security Agent).
14. Deed of Covenants dated as of December 19, 1998,
3
between each of Petrodrill Six and Petrodrill Seven (as owner), and Mitsubishi
(as Security Agent), relating to the First Priority Statutory Mortgage over each
of the semi- submersible drilling units "Amethyst 6" and "Amethyst 7" (formerly
Hulls Nos. 3016 and 3015 at Daewoo Heavy Industries, Ltd., respectively).
15. Insurances Assignments dated as of December 19, 1998, between each of
Petrodrill Six and Petrodrill Seven (as assignor), and Mitsubishi (as Security
Agent), relating to each of the semi-submersible drilling units having Daewoo
Heavy Industries Ltd.'s Hull Nos. 3016 and 3015 t.b.n. "Amethyst 6" and
"Amethyst 7", respectively.
16. Inter-Company Cross Guarantee dated as of December 19, 1998, among
Petrodrill Six, Petrodrill Seven and the Company (as guarantors), and Mitsubishi
(as Security Agent).
17. Loan Agreement dated as of December 19, 1998, between Petrodrill Six
(as borrower) and Petrodrill Seven (as lender), providing for a facility of
US$10.0 million repayable on demand.
18. Inter-Company Loan Agreement Assignment dated as of December 19, 1998,
between Petrodrill Seven (as assignor) and Mitsubishi (as Security Agent),
relating to the semi-submersible drilling unit having Daewoo Heavy Industries
Ltd.'s Hull No. 3015 t.b.n. "Amethyst 7".
19. Management Account Charges dated as of December 19, 1998, between each
of Petrodrill Six and Petrodrill Seven (as chargor), and Mitsubishi (as Security
Agent), relating to each of the semi-submersible drilling units having Daewoo
Heavy Industries Ltd.'s Hull Nos. 3016 and 3015 t.b.n. "Amethyst 6" and
"Amethyst 7", respectively.
20. Omnibus Contract Assignments dated as of December 19, 1998, between
each of Petrodrill Six and Petrodrill Seven (as assignor), and Mitsubishi (as
Security Agent), relating to each of the semi-submersible drilling units having
Daewoo Heavy Industries Ltd.'s Hull Nos. 3016 and 3015 t.b.n. "Amethyst 6" and
"Amethyst 7", respectively.
21. Performance Guarantee dated as of December 19, 1998, between
Mitsubishi (as guarantor) and Petrodrill Six and Petrodrill Seven (as
beneficiaries), relating to two semi-submersible drilling plataforms.
4
22. Reserve Account Charges dated as of December 19, 1998, between each of
Petrodrill Six and Petrodrill Seven (as chargor), and Mitsubishi (as Security
Agent), relating to each of the semi-submersible drilling units having Daewoo
Heavy Industries Ltd.'s Hull Nos. 3016 and 3015 t.b.n. "Amethyst 6" and
"Amethyst 7", respectively.
23. Security Trust Deed dated as of December 19, 1998, among Petrodrill
Six and Petrodrill Seven (as borrowers), Pride, Maritima and the Company (as the
other security parties), the Lenders (MC1 and MC2 as initial lenders) and
Mitsubishi (as Facility Agent and Security Agent).
24. Services Rendering Contract Assignments dated as of December 19, 1998,
between Maritima and each of Petrodrill Six and Petrodrill Seven (as assignors),
and Mitsubishi (as Security Agent), relating to each of the semi-submersible
drilling units having Daewoo Heavy Industries Ltd.'s Hull Nos. 3016 and 3015
t.b.n. "Amethyst 6" and "Amethyst 7", respectively.
25. Any and all exhibits, attachments, annexes and/or schedules to the
foregoing documents, as well as any and all other agreements, amendments,
assignments, deeds and instruments other than those referred to in Schedule 1
hereto, re-stating, supplementing, amending, providing a collateral to, or
otherwise pertaining or relating to the Mitsubishi Credit Facilities, together
with their relevant exhibits, attachments, annexes and/or schedules.
1
SCHEDULE B to
Secured Note
Security and
Pledge Agreement
(Section 5(b))
LIENS ON COLLATERAL
None
1
SCHEDULE C to
Secured Note
Security and
Pledge Agreement
(Section 5(d))
FILINGS
Secretary of State of New York UCC-1 Financing Statements
Secretary of State of Texas UCC-1 Financing Statements
Register of Encumbrance (British Virgin Islands)
1
SCHEDULE D to
Secured Note
Security and
Pledge Agreement
(Section 5(e) and
Section 6(b)
CHIEF EXECUTIVE OFFICE AND LOCATION OF COLLATERAL
Amethyst Financial Company Limited
c/o Arias Fabrega and
Fabrega Trust Co. BVI Limited
325 Waterfront Drive,
Omar Hodge Building, 2nd Floor
Wickham's Lay Road,
Tortola, British Virgin Islands
1
SCHEDULE E to
Secured Note
Security and
Pledge Agreement
(Section 6(d))
FORM OF ADDITIONAL COLLATERAL AMENDMENT
This Additional Collateral Amendment, dated _____________, is delivered
pursuant to Section 6(d) of the Security Agreement referred to below. The
undersigned hereby pledges to the Collateral Agent for the benefit of the
Trustee and the equal and ratable benefit of the Holders of the Secured Notes,
and grants to the Collateral Agent for the benefit to the Trustee and the equal
and ratable benefit of the Holders of the Secured Notes, continuing Liens and
security interest in all of its rights, title and interest in the Collateral
listed below.
The undersigned hereby agrees that this Additional Collateral Amendment
may be attached to the Secured Note Security and Pledge Agreement, dated as of
November 1, 1999, between the undersigned and Wilmington Trust Company, as
Collateral Agent and as Trustee (the "Security Agreement"); capitalized terms
used herein and not otherwise defined herein shall have the meanings given to
such terms in the Security Agreement; and the Collateral listed on this
Additional Collateral Amendment shall be deemed to be part of the Collateral,
and shall become part of the Collateral and shall secure all Obligations.
AMETHYST FINANCIAL COMPANY LIMITED
By:
____
Name:_____________________________
Title:____________________________
Description of
Investment
or other
Collateral EVIDENCED BY OBLIGOR DATE
SCHEDULE F to
Secured Note
Security and
Pledge Agreement
(Section 6(f))
RESTRICTIVE AGREEMENTS
Mitsubishi Documents