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EXHIBIT 10u
CREDIT AGREEMENT
dated as of December 17, 1996
between
ROWAN COMPANIES, INC.
as Shipowner
and
CITIBANK, N.A.
as the Lender
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Principles of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. THE CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.01 Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.02 Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.03 Disbursements and Minimum Amount of Utilizations . . . . . . . . . . . . . . . . . . . . . 2
2.04 Floating Rate Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. DISBURSEMENT REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.01 Disbursement Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. TERMS OF THE CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.01 Principal Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.02 Interest Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.03 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.04 Recapture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.05 Evidence of Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.06 Limit of United States Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.01 Conditions Precedent to Lender's Obligations Under this Agreement . . . . . . . . . . . . 6
5.02 Conditions Precedent to Each Disbursement . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 6. FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.02 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.03 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.04 Additional or Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 7. PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.01 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.02 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 8. REPRESENTATIONS AND WARRANTIES BY THE SHIPOWNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.01 Representations and Warranties of the Shipowner . . . . . . . . . . . . . . . . . . . . . 12
8.02 Agreements of the Shipowner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 9. CANCELLATION, SUSPENSION AND EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.01 Cancellation by the Shipowner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.02 [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.03 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 10. GOVERNING LAW AND JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.01 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.02 Submission to Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.03 Waiver of Security Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.04 No Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.01 Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11.03 Disposition of Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11.04 Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
11.06 Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.07 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.08 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.09 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.10 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.11 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11.12 Execution in Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.13 Shipowner Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
11.14 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Exhibits
Exhibit 1 Schedule of Definitions
Annexes
Annex A Form of Disbursement Requests
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THIS CREDIT AGREEMENT, dated as of December 17, 1996, is made by and
between ROWAN COMPANIES, INC., a Delaware corporation, as the Shipowner, and
CITIBANK, N.A., a national banking association, as the Lender.
BACKGROUND
WHEREAS:
(A) by this Agreement, the Lender has established a credit
facility (the "Credit Facility") in the amount of $153,091,000, pursuant to
which the Lender shall, subject to the terms and conditions hereof, extend
financing to the Shipowner (i) for the manufacture, construction, fabrication,
financing and purchase by the Shipowner of the Vessel; (ii) for the payment of
the related Construction Period Interest; and (iii) for the payment of the
Guarantee Fees;
(B) the establishment of the Credit Facility is in reliance upon
the commitment of the United States to guarantee the payment of the unpaid
interest on, and the unpaid balance of the principal of, the Floating Rate
Note, including interest accruing between the date of an Indenture Default
under the Floating Rate Note and the payment in full of the Guarantee;
(C) a condition to the Lender's extension of the Credit Facility
under this Agreement is the Lender's timely receipt of Certificates Authorizing
Disbursement and issuance of the Guarantee of the Floating Rate Note; and
(D) the Credit Facility may be utilized by the Shipowner in
accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.01 Defined Terms. For the purposes of this Agreement, unless
otherwise defined herein, defined terms shall have the meanings specified in
Exhibit 1 hereto.
1.02 Principles of Construction.
(a) The meanings set forth for defined terms in this Agreement
shall be equally applicable to both the singular and plural forms of the terms
defined.
(b) Unless otherwise specified, all references in this Agreement
to Annexes or Exhibits are to Annexes or Exhibits in or to this Agreement.
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(c) The headings of the Sections in this Agreement are included
for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement.
SECTION 2. THE CREDIT FACILITY
2.01 Amount. The Lender hereby establishes the Credit Facility,
upon the terms and conditions set forth in this Agreement, in favor of the
Shipowner in the maximum amount of $153,091,000 (the "Credit Facility Amount"),
to enable the Shipowner to finance: (i) the manufacture, construction,
fabrication, financing and purchase of the Vessel; (ii) Construction Period
Interest; and (iii) the Guarantee Fees. The Lender will, subject to the terms
and conditions provided herein, be obligated to fund under the Credit Facility
the amount (the "Available Amount") which is equal to the excess, if any, of
the Credit Facility Amount over the outstanding principal amount evidenced by
the Floating Rate Note ("Outstanding Principal").
2.02 Availability. Disbursements under the Credit Facility may be
made once a calendar month and up to and including the Final Disbursement Date.
"Final Disbursement Date" shall mean either October 31, 1998 or, if earlier,
the date on which the Available Amount under the Credit Facility is cancelled
in accordance with Section 9.01 or reduced to zero.
2.03 Disbursements and Minimum Amount of Utilizations. Upon
satisfaction of Sections 3.01, 5.01 and 5.02, disbursements shall be made by
advances from the Lender to the Shipowner ("Disbursements") in accordance with
Section 3.01. Notwithstanding anything in this Agreement to the contrary, the
Shipowner may not request a Disbursement under the Credit Facility for an
amount (a) less than the smaller of (i) $1,000,000 or (ii) the Available Amount
or (b) more than the Available Amount.
2.04 Floating Rate Note. Disbursements from the Credit Facility
shall become the indebtedness of the Shipowner to the Lender under the Floating
Rate Note.
SECTION 3. DISBURSEMENT REQUIREMENTS
3.01 Disbursement Procedures. Upon receipt of each Certificate
Authorizing Disbursement at least five Business Days prior to the proposed
disbursement date, the Lender shall disburse funds in accordance with the terms
of such Certificate Authorizing Disbursement to the Shipowner subject to the
terms of this Agreement; provided that, if the Certificate Authorizing
Disbursement and the request for disbursement referred to therein do not
specify a disbursement date, then the disbursement date shall be the fifth
Business Day (or such earlier or later Business Day as is requested by the
Shipowner and is acceptable to the Lender) following the Lender's receipt of
such Certificate Authorizing Disbursement. Promptly following each
Disbursement, the Lender shall transmit to the Indenture Trustee a copy of the
Certificate Authorizing Disbursement, a confirmation that the Disbursement was
made, and a copy of Exhibit A to the Floating Rate Note, updated to reflect
such Disbursement and other intervening, related events.
SECTION 4. TERMS OF THE CREDIT
4.01 Principal Repayment. The Shipowner shall repay all
Outstanding Principal in twenty-four (24) approximately equal, successive
semi-annual installments, with each such installment to be payable on a Payment
Date, provided that, on the last Payment Date, the Shipowner shall repay in
full the remaining Outstanding Principal.
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4.02 Interest Payment.
(a) On each Interest Payment Date the Shipowner shall pay interest
on the Outstanding Principal, calculated at an interest rate per annum equal to
the Applicable Interest Rate therefor, as determined for each successive
Interest Period. The interest rate on such amount shall be determined by the
Indenture Trustee pursuant to the definition of Applicable Interest Rate. From
time to time, the Lender will confirm LIBOR, Base Rate, and Applicable Interest
Rate to the Indenture Trustee, provided, however, such confirmation shall not
relieve the Indenture Trustee of its obligations under the Indenture to
determine the Applicable Interest Rate.
(b) The Shipowner shall pay to the Person entitled to any Unpaid
Amount, on demand, interest on such Unpaid Amount (to the extent permitted by
applicable law) for each Post Maturity Period at an interest rate per annum
equal to the sum (the "Post Maturity Interest Rate") of (1) two percent (2%),
plus (2) the Post Maturity Applicable Interest Rate. With respect to any
Unpaid Amounts, the "Post Maturity Applicable Interest Rate" shall mean either
(i) LIBOR on the Quotation Date therefor plus during the Construction Period,
nine-twentieths of one percent (0.45%) per annum and thereafter, one-half of
one percent (0.50%) per annum, or (ii) if, for any such Post Maturity Period,
LIBOR cannot be determined, the rate per annum reasonably determined by the
Person to whom such Unpaid Amount is owed before the last day of such Post
Maturity Period to be that which expresses as a percentage rate per annum the
cost which such Person would incur in funding such Unpaid Amount from whatever
source it reasonably deems appropriate for such Post Maturity Period plus
during the Construction Period, nine-twentieths of one percent (0.45%) per
annum and thereafter, one-half of one percent (0.50%) per annum or (iii) if any
such Unpaid Amount is an Accelerated Repayment, then during the first Post
Maturity Period the rate which would have been applicable to such Unpaid Amount
had it not so fallen due. In the absence of an Indenture Default, any interest
which shall have accrued under this Section 4.02(b) in respect of an Unpaid
Amount shall be due and payable and shall be paid by the Shipowner on demand on
such dates as the Person to whom such Unpaid Amount is owed may specify by
written notice to the Shipowner, or if there is an Indenture Default, any
interest which shall have accrued under this Section 4.02(b) in respect of an
Unpaid Amount shall be due and payable immediately and shall be paid by the
Shipowner without demand and any payment by, or on behalf of, the Shipowner
hereunder shall be governed by Section 7.02 and the provisions of the last
paragraph of Section 9.03.
As used herein, "Unpaid Amount" means all or any part of principal,
accrued interest, fees or other amounts owing to the Lender under this
Agreement or the Floating Rate Note which is not paid in full when and as due
and payable, whether at Stated Maturity, by acceleration or otherwise, or any
sum due and payable by the Shipowner to the Lender under any judgment of any
court or arbitral tribunal in connection with this Agreement which is not paid
on the date of such judgment; provided, however, that it is agreed that Unpaid
Amount shall not include any part of the principal and interest on the Floating
Rate Note, except that Unpaid Amount shall include all such amounts thereof as
are not paid by the Shipowner as and when they are due but are paid by the
Shipowner prior to payment thereof by the Secretary. "LIBOR" shall mean, in
relation to any Post Maturity Period (other than the first Post Maturity Period
contemplated by clause (iii) of Section 4.02(b)), the rate of interest per
annum (rounded upward, if necessary, to the nearest 1/16 of 1%) last quoted by
the principal London office of CITIBANK, N.A. prior to the close of business at
such London office on the Quotation Date for the offering to leading banks in
the London interbank market of U.S. Dollar deposits on an overnight basis and
in an amount comparable to the Unpaid Amount to which LIBOR is to apply.
"Accelerated Repayment" shall mean any part of the principal of the Floating
Rate Note which became due and payable on a day other than its Payment Date.
"Post Maturity Period" shall mean with respect to the period from the date an
Unpaid Amount was due until such amount shall have been paid in full, each
successive period, the first of which shall start on the date such Unpaid
Amount was due (or the date of any such judgment or arbitral award, if earlier)
and each other of which shall start on the last day of the preceding such
period, and the duration of each of which shall be one day, or if LIBOR
applies, then from and including the Quotation Date for such Post Maturity
Period to but excluding the next Quotation Date or such other duration selected
by the Person to whom such Unpaid Amount is due, provided, however, that in the
case of any Accelerated Repayment, the first such Post Maturity Period
applicable thereto shall be of a duration equal to the unexpired portion of its
then applicable Interest Period. "Quotation Date" in relation to any Post
Maturity Period means the day on which quotations would ordinarily be given by
CITIBANK, N.A. in the London interbank market
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for dollar deposits for delivery on the first day of that period, provided,
however, that if, for any such Post Maturity Period, quotations would
ordinarily be given on more than one date, the Quotation Date for that period
shall be the last of those dates.
4.03 Prepayment. (a) The Shipowner may from time to time prepay on
any Interest Payment Date all or part of the Outstanding Principal evidenced by
the Floating Rate Note, provided that: (i) any partial prepayment shall be in
a minimum principal amount of $10,000,000, unless otherwise required by the
Indenture; (ii) the Shipowner shall have given the Lender and the Indenture
Trustee prior written notice of the prepayment (which shall be not less than 40
nor more than 60 days); (iii) the Shipowner shall have paid in full all amounts
due under this Agreement as of the date of such prepayment, including, without
limitation, interest which has accrued to the date of prepayment on the amount
prepaid and all other amounts payable hereunder relating to the prepayment; and
(iv) any amount prepaid hereunder shall not be considered part of the Available
Amount.
(b) Upon delivery to the Shipowner and the Secretary of the
instrument satisfying and discharging the Indenture contemplated by Section
12.01 of the Exhibit 1 to the Indenture, all of the Shipowner's indebtedness,
liabilities and obligations under this Agreement and the Fee Letter shall
become immediately due and payable without demand upon, or notice to, the
Shipowner.
(c) Notwithstanding any other provision to the contrary herein, the
Shipowner or the Secretary (after the Secretary's assumption of the Floating
Rate Note pursuant to Section 6.09 of Exhibit 1 to the Indenture) may from time
to time prepay all or part of the principal amount of the Floating Rate Note
without any prepayment penalty or premium in accordance with Article III of
Exhibit 1 to the Indenture.
4.04 Recapture. (a) The Shipowner shall pay to the Lender, upon
the written request of the Lender, such amounts as shall be sufficient (in the
reasonable judgment of the Lender) to compensate the Lender for any loss,
expense or liability (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or redeployment of deposits
from third parties or in connection with obtaining funds to make or maintain
any Disbursement) which the Lender reasonably determines is attributable to:
(i) any failure to make scheduled payments on a Payment Date or any
payment due in connection with any Redemption; or
(ii) any failure by the Shipowner to borrow any advance for which a
Certificate Authorizing Disbursement has been issued; or
(iii) any revocation of a notice of prepayment given pursuant to
Section 4.03(a); or
(iv) any prepayment of the Floating Rate Note (including, without
limitation, due to the issuance of any fixed rate notes) other than on an
Interest Payment Date after giving five Business Days prior written notice to
the Lender.
(b) Without prejudice to any other provision hereof (and at the
Shipowner's expense), the Lender shall use such reasonable efforts as it shall
determine in its sole discretion to minimize any loss, expense or liability to
the extent possible.
4.05 Evidence of Debt. The Shipowner agrees that to evidence
further its obligation to repay all amounts disbursed under the Credit
Facility, with interest accrued thereon, it shall issue and deliver to the
Lender the Floating Rate Note. The Floating Rate Note shall (i) be in the form
of Exhibit 2 to the Indenture; (ii) bear the Secretary's Guarantee, and (iii)
be valid and enforceable as to its principal amount at any time only to the
extent of the aggregate amounts then disbursed and outstanding thereunder, and,
as to interest, only to the extent of the interest accrued thereon at the rate
guaranteed by the Secretary; with any interest in excess thereof being
evidenced by this Agreement.
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4.06 Limit of United States Guarantee. None of the interest, fees,
and expenses arising under Section 6 and none of the Indemnified Amounts,
commissions, Taxes, Other Taxes, Post Maturity Interest Rate, interest in
excess of 10.25% under the Floating Rate Note, the costs of obtaining any
interest rate protection, or any other charges, costs, expenses, or
indebtedness owed by the Shipowner under this Agreement to any Person is
guaranteed by the United States. The Guarantee of the United States extends
only to the principal and interest owed under the Floating Rate Note and only
to the extent specified therein.
SECTION 5. CONDITIONS PRECEDENT
5.01 Conditions Precedent to Lender's Obligations Under this
Agreement. The obligations of the Lender under this Agreement shall be subject
to the delivery to the Lender of the following documents on or before the
Closing Date:
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(a) This Agreement, the Floating Rate Note and the Fee Letter.
This Agreement and the Fee Letter, each fully executed by the parties thereto
in form and substance satisfactory to the Lender, which shall be in full force
and effect and the Floating Rate Note shall have been fully executed by the
Shipowner, endorsed by, or on behalf of, the United States, and delivered to
the Lender and all amounts then payable under the Fee Letter shall have been
paid to the Person entitled thereto.
(b) Existence. Evidence in form and substance satisfactory to the
Lender that the Shipowner is duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full power, authority
and legal right to own its property and to carry on its business as now
conducted.
(c) Authority. Evidence in form and substance satisfactory to the
Lender of the authority of the Shipowner to execute, deliver, perform and
observe the terms and conditions of this Agreement, the Floating Rate Note, and
the Indenture and evidence of authority (including specimen signatures) for
each Person who, on behalf of the Shipowner, signed this Agreement, the
Floating Rate Note, and the Indenture, or will otherwise act as representatives
of the Shipowner in the operation of the Credit Facility.
(d) Governmental and Other Authorizations. Copies, certified as
true copies by a duly authorized officer of the Shipowner, of each consent,
license, authorization or approval of, and exemption by, any Governmental
Authority and any governmental authorities within the United States or
elsewhere, which are necessary or advisable (i) for the execution, delivery,
performance and observance by the Shipowner of this Agreement, the Floating
Rate Note and the Indenture; and (ii) for the validity, binding effect and
enforceability of this Agreement, the Floating Rate Note and the Indenture, or
if none is necessary, a written certification from the Shipowner that none is
necessary.
(e) Legal Opinions. (1) Opinion of legal counsel for the
Shipowner concerning this Agreement, the Floating Rate Note, and the Indenture;
(2) Opinion of the Chief Counsel of the Maritime Administration dated the
Closing Date, signed by or on behalf of such Chief Counsel, addressed to the
Lender to the effect that the Guarantees and the Authorization Agreement have
been or will be duly authorized, executed and delivered by the United States of
America, and constitute legal, valid, and binding obligations of the United
States of America enforceable in accordance with their respective terms; and
(3) Opinion of Mayer, Brown & Platt addressed to the Lender and the Indenture
Trustee concerning this Agreement, the Indenture and the Floating Rate Note.
(f) Guarantee Commitment. A copy of the fully executed Guarantee
Commitment, which shall be in full force and effect until completion of the
Closing.
(g) Authorization Agreement. The fully executed Authorization
Agreement, which shall be in full force and effect.
(h) Indenture. The fully executed Indenture, which shall be in
full force and effect.
5.02 Conditions Precedent to Each Disbursement. The obligation of
the Lender to make any Disbursement, including the first Disbursement, shall be
subject only to the Lender's receipt of a Certificate Authorizing Disbursement
and the Lender may conclusively rely thereon.
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SECTION 6. FEES AND EXPENSES
6.01 Fees. The Shipowner shall pay or cause to be paid to the
Person entitled thereto such fees and other amounts as are set forth in that
certain Fee Letter (as amended, restated or otherwise modified from time to
time with the prior written consent of the Secretary, the "Fee Letter") dated
as of December 17, 1996 by the Shipowner and accepted by, among others, the
Lender, in each case when and as due.
6.02 Taxes.
(a) The Shipowner agrees to pay all amounts owing by it under this
Agreement or the Floating Rate Note free and clear of and without deduction for
any and all present and future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding in the case
of the Lender, taxes imposed on its income, and franchise taxes imposed on it
in lieu of income taxes, by either (i) the jurisdiction under the laws of which
the Lender is organized or any political subdivision thereof, or (ii) the
jurisdiction of the Lender's applicable lending office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). In addition, the Shipowner agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under the Floating Rate
Note or from the execution, delivery, or registration of, or otherwise with
respect to, this Agreement or the Floating Rate Note (hereinafter referred to
as "Other Taxes").
(b) The Shipowner further agrees:
(i) that, if the Shipowner is prevented by operation of law from
paying any such Taxes or Other Taxes, or if any such Taxes or Other Taxes are
required to be deducted or withheld, then the fees or expenses required to be
paid under this Agreement shall, on an after-tax basis, be increased by the
amount necessary to yield to the Lender fees or expenses in the amounts
provided for in this Agreement after the provision for the payment of all such
Taxes and Other Taxes;
(ii) that the Shipowner shall, at the request of the Lender,
execute and deliver to the Lender such further instruments as may be necessary
or desirable to effect the payment of the increased amounts as provided for in
subsection (i) above, provided, however, that the Shipowner may not amend the
Floating Rate Note without the prior written consent of the Secretary;
(iii) that the Shipowner shall hold the Lender harmless from and
against the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 6.02) and any and all liabilities (including,
without limitation, penalties, interest and expenses) arising from, or with
respect to, any Taxes or Other Taxes (whether or not properly or legally
asserted) and whether paid, or payable, by the Shipowner, the Lender or any
other Person;
(iv) that, at the request of the Lender, the Shipowner shall
provide the Lender within the later of thirty (30) calendar days after such
request or thirty (30) calendar days after the payment of such Taxes or Other
Taxes, a copy evidencing the payment of any Taxes or Other Taxes by the
Shipowner; and
(v) that each payment under this Section 6.02 shall be made within
30 days from the date the Lender makes written demand therefor. Each demand
for payment by the Lender under Section 6.02(b)(v) for amounts paid or incurred
by the Lender shall be accompanied by a certificate (with accompanying
documentation supporting the demand) showing in reasonable detail the basis for
the calculation of the amounts demanded, which certificate, in the absence of
manifest error, shall be conclusive and binding for all purposes.
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(c) Notwithstanding anything to the contrary contained herein, the
agreements in this Section 6.02 shall survive the termination of this Agreement
and the payment of the Floating Rate Note and all other amounts due hereunder.
6.03 Expenses. The Shipowner agrees, whether or not the
transactions hereby contemplated shall be consummated, to pay, or reimburse the
Lender promptly upon demand for the payment of all reasonable and duly
documented costs and expenses arising in connection with the preparation,
printing, execution, delivery, registration, implementation, modification of or
waiver or consent under this Agreement, the Floating Rate Note or the
Indenture, including, without limitation, the reasonable and duly documented
out-of-pocket expenses of the Lender (incurred in respect of
telecommunications, mail or courier service, travel and the like), and the fees
and expenses of counsel for the Lender. The Shipowner shall also pay all of
the costs and expenses (including, without limitation, the fees and expenses of
counsel) incurred by or charged to the Lender in connection with the amendment
or enforcement of this Agreement, the Floating Rate Note or the Indenture or
the protection or preservation of any right or claim of the Lender arising out
of this Agreement, the Floating Rate Note or the Indenture.
6.04 Additional or Increased Costs.
(a) If, due to either (i) the introduction of or any change in or
in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
cost to the Lender of agreeing to make or making, funding or maintaining the
Disbursements or the Credit Facility, then the Shipowner shall from time to
time, upon demand by the Lender, pay to the Lender additional amounts
sufficient to compensate the Lender for such increased cost.
(b) If the Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required to be maintained by the Lender or
any corporation controlling the Lender and that the amount of such capital is
increased by or based upon the existence of the Lender's commitment to lend
hereunder and other commitments of this type, then, upon demand by the Lender,
the Shipowner shall immediately pay to the Lender, from time to time as
specified by the Lender, additional amounts sufficient to compensate the Lender
or such corporation in the light of such circumstances, to the extent that the
Lender reasonably determines such increase in capital to be allocable to the
existence of the Lender's commitment to lend hereunder.
(c) The Lender shall take such reasonable steps as it shall
determine to minimize amounts demanded under this Section 6.04. In the event
that the Lender transfers the booking office of the Credit Facility or the
Floating Rate Note to minimize amounts demanded under this Section 6.04, any
costs and expenses incurred in such transfer shall be paid by the Shipowner.
(d) Each demand for payment by the Lender under this Section 6.04
shall be accompanied by a certificate showing in reasonable detail the basis
for the calculation of the amounts demanded, which certificate, in the absence
of manifest error, shall be conclusive and binding for all purposes.
(e) The Lender shall notify the Shipowner of any event occurring
after the date of this Agreement which entitles the Lender to compensation
pursuant to this Section 6.04, as promptly as practicable, and in any event
within ninety (90) days after it has knowledge of such event and has determined
that a request for compensation hereunder shall be made. The Shipowner shall
not be obligated to reimburse the Lender for any loss or cost incurred more
than ninety (90) days prior to delivery of notice to the Shipowner by the
Lender requesting compensation under this Section 6.04.
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SECTION 7. PAYMENTS
7.01 Method of Payment.
(a) All payments to be made by the Shipowner under this Agreement
and the Floating Rate Note shall be made without set-off or counterclaim in
Dollars in immediately available and freely transferable funds no later than
11:00 A.M. (New York City time) on the date on which due. The Shipowner shall
pay the principal and the guaranteed amount of the Applicable Interest Rate on
the Floating Rate Note to the Indenture Trustee and all other amounts due under
this Agreement directly to the Person entitled thereto, in each case, by wire
transfer in same day and immediately available and freely transferable funds.
Wire transfer instructions shall be provided to the Shipowner.
(b) Except as otherwise provided herein, whenever any payment
would otherwise fall due on a day which is not a Business Day, the due date for
payment shall be the immediately succeeding Business Day, and interest and fees
shall be computed in accordance with Section 11.01.
7.02 Application of Payments. In the absence of an Indenture
Default, the Lender shall apply payments received by it under this Agreement
and the Floating Rate Note (whether at Stated Maturity, by reason of
acceleration, prepayment or otherwise), in the following order of priority:
(i) interest due pursuant to Section 4.02(a); (ii) installments of principal
due; (iii) interest due pursuant to Section 4.02(b) other than the amount
described in clause (i) above; (iv) all amounts due under the Fee Letter; and
(v) all other amounts due under this Agreement and not otherwise provided for
in this Section 7.02. Upon the occurrence of an Indenture Default, the Lender
shall hold any payments it receives after an Indenture Default from, or on
behalf of, the Shipowner under this Agreement, the Fee Letter and any related
agreement (excluding the Floating Rate Note) and shall promptly deliver such
payments to the Secretary if the Secretary has been required to honor a
Guarantee as a result of said Indenture Default. All such amounts received
during an Indenture Default and delivered to the Secretary in accordance with
the preceding sentence shall be applied first to pay, satisfy and discharge all
amounts owed by the Shipowner to the Secretary under the Secretary's Note and
the Mortgage and then to pay, satisfy and discharge any and all amounts owed to
the Lender.
SECTION 8. REPRESENTATIONS AND WARRANTIES BY THE SHIPOWNER
8.01 Representations and Warranties of the Shipowner. The
Shipowner represents and warrants to the Lender that, as of the Closing Date:
(a) Existence and Authority. The Shipowner is duly organized,
validly existing under the laws of the State of Delaware, is in good standing
under the laws of the State of Delaware, has been duly qualified to do business
in, and is in good standing as a foreign corporation in each jurisdiction in
which the conduct of its business or the ownership of its properties requires
it to be so qualified, has full power, authority and legal right to own its
properties and conduct its business as it is presently now conducted, and is a
"citizen of the United States" within the meaning of Section 2 of the Shipping
Act, 1916, as amended, for the purpose of operating the Vessel in the trades or
manner in which the Shipowner proposes to operate the Vessel.
The Shipowner has full power, authority and legal right (i) to execute
and deliver this Agreement, the Floating Rate Note and the Indenture, (ii) to
perform and observe the terms and provisions of each of said documents to be
performed or observed by it, (iii) to consummate the transactions contemplated
thereby and (iv) to own its properties (including, without limitation, the
Vessel owned or to be owned by it) and conduct its business as presently
conducted.
(b) Government and Other Authorizations. All consents, licenses,
authorizations and approvals of, and exemptions by, any Governmental Authority
and any governmental authorities within the United States or elsewhere and any
other Persons that are necessary or advisable: (i) for the execution, delivery,
performance and
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observance by the Shipowner of this Agreement, the Floating Rate Note, and the
Indenture; and (ii) for the validity, binding effect and enforceability of this
Agreement, the Floating Rate Note, and the Indenture have been obtained and are
in full force and effect.
(c) Restrictions. The execution, delivery and performance or
observance by the Shipowner of the terms of, and consummation by the Shipowner
of the transactions contemplated by, this Agreement, the Floating Rate Note,
and the Indenture do not and will not conflict with or result in a breach or
violation of: (i) the charter, by-laws or similar documents of the Shipowner;
(ii) any federal or state law of the United States or any other ordinance,
decree, constitutional provision, regulation or other requirement of any
Governmental Authority (including, without limitation, any restriction on
interest that may be paid by the Shipowner); or (iii) any order, writ,
injunction, judgment or decree of any court or other tribunal. Further, the
execution, delivery and performance or observance by the Shipowner of the terms
of, and consummation by the Shipowner of the transactions contemplated by, this
Agreement, the Floating Rate Note, and the Indenture does not and will not
conflict with or result in a breach of any agreement or instrument to which the
Shipowner is a party, or by which it or any of its revenues, properties or
assets may be subject, or result in the creation or imposition of any Lien upon
any of the revenues, properties or assets of the Shipowner pursuant to any such
agreement or instrument. "Lien" shall mean any lien, lease, mortgage, pledge,
hypothecation, preferential arrangement relating to payments, or other
encumbrance or security interest.
(d) Binding Effect. This Agreement, the Floating Rate Note, and
the Indenture which have been executed on or before the date hereof have been
duly executed and delivered by the Shipowner. Each of the Agreement, the
Floating Rate Note, and the Indenture constitutes, and each of the Agreement,
the Floating Rate Note, and the Indenture as it may hereafter be amended will
constitute, a direct, general and unconditional obligation of the Shipowner
which is legal, valid and binding upon the Shipowner and enforceable against
the Shipowner in accordance with its respective terms. All obligations
evidenced by the Floating Rate Note will be entitled to the benefits of the
Guarantees and the Authorization Agreement.
(e) Choice of Law. Under applicable conflict of laws principles,
the choice of law provisions of this Agreement, the Floating Rate Note and the
Indenture are valid, binding and not subject to revocation by the Shipowner,
and, in any proceedings brought for enforcement of this Agreement, the
Indenture or the Floating Rate Note, the choice of the law of the State of New
York as the governing law of such documents will be recognized and such law
will be applied.
(f) Legal Proceedings. No legal proceedings are pending or, to
the best of the Shipowner's knowledge, threatened before any court or
governmental agency which might: (i) materially and adversely affect the
Shipowner's financial condition, business or operations; (ii) restrain or
enjoin or have the effect of restraining or enjoining the performance or
observance of the terms and conditions of any of this Agreement, the Indenture
or the Floating Rate Note; or (iii) in any other manner question the validity,
binding effect or enforceability of any of this Agreement, the Indenture or the
Floating Rate Note.
(g) Use of the Vessel. The Vessel will be used for lawful
purposes.
(h) Shipowner Financial Statements. The Shipowner Financial
Statements present fairly the financial condition of the Shipowner at the date
of such statements and the results of the operations of the Shipowner for such
fiscal year. The Shipowner Financial Statements have been prepared in
accordance with generally accepted accounting principles in the United States
consistently applied. Except as fully reflected in the Shipowner Financial
Statements, there are no liabilities or obligations with respect to the
Shipowner of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) for the period to which the Shipowner
Financial Statements relate that, either individually or in the aggregate,
would be material to the Shipowner. Since the date of the most recent audited
Shipowner Financial Statements, there has been no material adverse change in
the financial condition, business prospects or operations of the Shipowner.
"Shipowner Financial Statements" shall mean the financial statements of the
Shipowner furnished to the Lender prior to the date of this Agreement.
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(i) No Taxes. There is no Tax imposed on or in connection with:
(i) the execution, delivery or performance of this Agreement, the Indenture or
the Floating Rate Note; (ii) the enforcement of this Agreement, the Indenture
or the Floating Rate Note; or (iii) on any payment to be made to the Lender
under this Agreement or the Floating Rate Note.
(j) Laws. None of this Agreement, the Indenture, the Floating
Rate Note, the transactions contemplated thereunder nor any Person party to
this Agreement, the Indenture or the Floating Rate Note is required to qualify
under the Trust Indenture Act or register or qualify under any securities law.
(k) Defaults. No Event of Default has occurred and is continuing
and no event or circumstance has occurred and is continuing which with the
passage of time, the giving of notice or both would constitute an Event of
Default.
8.02 Agreements of the Shipowner. The Shipowner agrees that until
all amounts owing under this Agreement and the Floating Rate Note have been
paid in full, the Shipowner will, unless the Lender shall have consented in
writing:
(a) Interest Rate Protection. At all times that (1) a Floating
Rate Note exists and (2) the Applicable Interest Rate is greater than 9.5%, the
Shipowner (at its expense) within 15 Business Days thereafter, shall (A) enter
into, and thereafter maintain in full force and effect, an amortizing interest
rate cap agreement with a strike price providing for a cap based on the
Applicable Interest Rate not in excess of 10.25% per annum and otherwise
acceptable to the Lender, with a counterparty rated "A" or better by any
nationally recognized rating agency or such other counterparty reasonably
acceptable to the Lender, covering the Floating Rate Note and based on the
expected amortization schedule of such Note, and (B) execute such documents and
instruments as may be necessary, or in the opinion of the Lender desirable, to
effect the assignment of its rights thereunder to the Lender in every case with
such terms as are reasonably acceptable to the Lender for the protection of the
Lender. If the Shipowner fails to satisfy the requirements of this Section
8.02(a) within the 15 Business Days set forth above, the Lender may (in its
sole discretion) and if the Lender so elects, the Shipowner hereby authorizes
and directs the Lender to, satisfy the requirements of this Section 8.02(a),
all at the expense of the Shipowner, due on demand.
(b) Notice of Defaults. Promptly, but in no event later than ten
(10) days after the occurrence of an Indenture Default or an Event of Default
of which the Shipowner has knowledge, notify the Lender and the Indenture
Trustee of any report required by the Shipowner Documents (or any other
document entered into by the Shipowner in connection therewith), and send a
copy thereof to the Lender, in each case by telecopier or hand delivery.
(c) Financial Reports. Beginning with the fiscal year in which
this Agreement is executed and continuing until all amounts owing under this
Agreement and the Floating Rate Note have been paid in full, the Shipowner
shall furnish to the Lender a copy of all financial reports furnished to the
Secretary pursuant to the Title XI Reserve Fund and Financial Agreement.
(d) [Intentionally Omitted]
(e) Other Acts. From time to time, do and perform any and all
acts and execute any and all documents as may be necessary or as reasonably
requested by the Lender or the Indenture Trustee in order to effect the
purposes of this Agreement and to protect the interests of the Lender in the
Floating Rate Note and the interests of the Lender in the Guarantee.
(f) Use of Proceeds. Use proceeds from each Disbursement solely
to finance: (i) the manufacture, construction, fabrication, financing and
purchase of the Vessel; (ii) Construction Period Interest; and (iii) the
Guarantee Fees. Use the proceeds from the issuance of any fixed rate notes to
repay amounts owed under the
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Floating Rate Note or to finance: (i) the manufacture, construction,
fabrication, financing and purchase of the Vessel; (ii) Construction Period
Interest; and (iii) the Guarantee Fees.
(g) Successors. Require that any successor to all or
substantially all of its business as a result of any merger or consolidation
with any other entity; dissolution or termination of legal existence; sale,
lease, transfer or other disposal of any substantial part of its properties or
any of its properties essential to the conduct of its business or operations,
as now or hereafter conducted; any change in control; any agreement to do any
of, or any combination of, the foregoing, to assume all of the Shipowner's
indebtedness, liabilities and obligations under this Agreement and the Floating
Rate Note.
SECTION 9. CANCELLATION, SUSPENSION AND EVENTS OF DEFAULT
9.01 Cancellation by the Shipowner. The Shipowner may cancel at
any time all or any part of the Available Amount of the Credit Facility,
provided that (i) thirty (30) days' prior irrevocable written notice is given
to the Lender, the Indenture Trustee, and the Secretary and (ii) the Shipowner
shall have paid to the Lender any commitment fees accrued and unpaid under
Section 6.01 and all other amounts due and payable under this Agreement and the
Floating Rate Note as of the proposed date of cancellation. In the absence of
an Indenture Default, the Lender may not for any reason cancel at any time any
part of the Available Amount of the Credit Facility.
9.02 [Intentionally Omitted]
9.03 Events of Default. Upon the occurrence of any of the
following events or conditions (each, an "Event of Default"):
(a) any failure by the Shipowner to pay when and as due any amount
owing under this Agreement, but which is not guaranteed by the Secretary; or
(b) any failure by the Shipowner to comply with its obligations
under Section 8.02(b) or 8.02(f); or any failure by the Shipowner to perform or
comply with any of its agreements set forth in this Agreement (exclusive of any
events specified as an Event of Default in any other subsection of this Section
9.03 and exclusive of Section 8.02(a)), which failure, if capable of being
cured, remains uncured for a period of thirty (30) days after written notice
thereof has been given to the Shipowner by the Lender; or
(c) the Shipowner shall be unable to pay its debts when and as
they fall due or shall admit in writing its inability to pay its debts as they
fall due or shall become insolvent; or the Shipowner shall apply for or consent
to the appointment of any liquidator, receiver, trustee or administrator for
all or a substantial part of its business, properties, assets or revenues; or a
liquidator, receiver, trustee or administrator shall be appointed for the
Shipowner and such appointment shall continue undismissed, undischarged or
unstayed for a period of thirty (30) days, or the Shipowner shall institute (by
petition, application, answer, consent or otherwise) any bankruptcy,
arrangement, readjustment of debt, dissolution, liquidation or similar
executory or judicial proceeding; or a bankruptcy, arrangement, readjustment of
debt, dissolution, liquidation or similar executory or judicial proceeding
shall be instituted against the Shipowner and shall remain undismissed,
undischarged or unstayed for a period of thirty (30) days; or
(d) an Indenture Default has occurred;
then, and in any such event, and at any time thereafter, if such event is
continuing, and if there is no Indenture Default (or if there is an Indenture
Default, only after the Secretary has received all payments due under the
Secretary's Note and the Mortgage), the Lender (by written notice to the
Shipowner), shall have the right to institute any judicial or other proceedings
under this Agreement to recover all amounts owing under this Agreement. The
Lender agrees that so long as an Indenture Default exists, all amounts received
during such period from, or on
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behalf of, the Shipowner shall be applied in the manner set forth in Section
7.02. Notwithstanding an Event of Default, the Lender may not terminate the
Available Amount of the Credit Facility without the Secretary's consent;
provided, however, that the Shipowner's use of the Available Amount of the
Credit Facility shall remain subject to the requirements of Sections 2.02,
3.01, and 5.02. Except as expressly provided above in this Section 9.03,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived. Notwithstanding any other provision of this Agreement, if
Section 9.03(c) is applicable, the Lender may file appropriate claims in
connection therewith, but shall apply any funds collected as a consequence of
said filings in accordance with the provisions of Section 7.02 of this
Agreement.
SECTION 10. GOVERNING LAW AND JURISDICTION
10.01 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.02 Submission to Jurisdiction. Each of the Shipowner and the
Lender hereby irrevocably agrees that any legal suit, action or proceeding
arising out of or relating to this Agreement, or any of the transactions
contemplated hereby, may be instituted by the other parties hereto in the
Courts of the State of New York or the Federal Courts sitting in the Borough of
Manhattan, City of New York, State of New York. Each of the Shipowner and the
Lender hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may have now or hereafter to the laying of the venue or any
objection based on forum non conveniens, or based on the grounds of
jurisdiction with respect to any such legal suit, action or proceeding and
irrevocably submits generally and unconditionally to the jurisdiction of any
such court in any such suit, action or proceeding. Each of the Shipowner and
the Lender agrees that a judgment, after exhaustion of all available appeals,
in any such action or proceeding shall be conclusive and binding upon it and
may be enforced in any other jurisdiction by suit upon such judgment, a
certified copy of which shall be conclusive evidence of the judgment. Each of
the Shipowner and the Lender waives personal service of any summons, complaint,
or other process, which service may be made by such or any other means
permitted by New York law.
10.03 Waiver of Security Requirements. To the extent the
Shipowner may, in any action or proceeding arising out of or relating to this
Agreement be entitled under applicable law to require or claim that the Lender
post security for costs or take similar action, the Shipowner hereby
irrevocably waives and agrees not to claim the benefit of such entitlement.
10.04 No Limitation. Nothing in this Section 10 shall affect the
right of the Lender to serve process in any manner permitted by law or to
commence legal proceedings or otherwise proceed against the Shipowner in any
jurisdiction; provided, however, that except as provided in Section 9.03, in
the event of an Indenture Default, the Lender may not proceed against the
Shipowner without the Secretary's consent unless the Secretary has received
full payment under the Secretary's Note.
SECTION 11. MISCELLANEOUS
11.01 Computations. Each determination of an interest rate, fee
or other amounts by the Lender or any other Person pursuant to any provision of
this Agreement, the Fee Letter or the Floating Rate Note, in the absence of
manifest error, shall be conclusive and binding on the Shipowner. All
computations of interest and fees hereunder and under the Floating Rate Note
shall be made on the basis of a year of three hundred sixty-five (365) days
and actual days elapsed; provided, however, that LIBOR shall be determined on
the basis of a year of 360 days and actual days elapsed.
11.02 Notices. Except as otherwise specified, all notices given
hereunder shall be in writing, and shall be given by mail, telecopier, tested
telex or personal delivery and shall be deemed to be given for the purposes of
this Agreement on the day that such notice is received by the intended
recipient thereof. Unless otherwise
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specified in a notice delivered in accordance with this Section 11.02, all
notices shall be delivered to the parties hereto and to the Indenture Trustee
and the Secretary at their respective addresses indicated below:
To CITIBANK, N.A., as the Lender
Address: CITIBANK, N.A.
399 Park Avenue
New York, New York 10043
Attention: Structured Trade Finance
Facsimile: (212) 793-2330
Telephone: (212) 559-6787
with a copy to:
Citibank International Plc
335 Strand, 6th Floor
London WC2R1LS England
Attention: Alfred Rodrigues
Telephone: 01144171500 1394
Facsimile: 01144171500 0479
To the Shipowner
Address: ROWAN COMPANIES, INC.
5450 Transco Tower
2800 Post Oak Boulevard
Houston, Texas 77056
Attention: Chief Financial Officer
Telephone: (713) 960-7686
Facsimile: (713) 960-7660
To the Secretary
Address: SECRETARY OF TRANSPORTATION
c/o Maritime Administrator
400 Seventh Street, S.W.
Washington, D.C. 20590
Attention: Office of Ship Finance
Telephone: (202) 366-5744
Facsimile: (202) 366-7901
To the Indenture Trustee
Address: CITIBANK, N.A.
120 Wall Street
13th Floor
New York, New York 10043
Attention: Corporate Agency and Trust Department
Telephone: (212) 412-6243
Facsimile: (212) 480-1614
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11.03 Disposition of Indebtedness. Once the Shipowner has
completely drawn down on the Credit Facility and the Available Amount is zero,
the Lender may sell, assign, transfer, negotiate, or otherwise dispose of all
or any part of its interest in all or any part of the Shipowner's indebtedness
under this Agreement and the Floating Rate Note to any party (collectively, a
"Disposition of Indebtedness"), and any such party shall enjoy all the rights
and privileges of the Lender under this Agreement and the Floating Rate Note;
provided, however, that each Disposition of Indebtedness to any Person other
than a domestic Affiliate of the Lender shall require the prior written consent
of the Shipowner (which consent shall not be unreasonably withheld or delayed);
provided, further, however, that the Lender may pledge or grant participation
in all or any part of its interest in all or any part of the Shipowner's
indebtedness under this Agreement and the Floating Rate Note to any party at
any time without the Secretary's prior written consent so long as the Lender's
commitment to lend the Available Amount under this Agreement is not affected
thereby and without the Shipowner's prior written consent. The Shipowner
shall, at the request of the Lender, execute and deliver to the Lender or to
any party that the Lender may designate, any such further instruments as may be
necessary or desirable to give full force and effect to a Disposition of
Indebtedness by the Lender.
11.04 Disclaimer. The Lender shall not be responsible in any way
for the performance of the Construction Contract or any other Shipowner
Document, and no claim against the Shipbuilder or any other Person with respect
to the performance of the Construction Contract will affect the obligations of
the Shipowner under this Agreement or the Floating Rate Note.
11.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Lender in exercising any right, power or privilege under this
Agreement, the Floating Rate Note or the Indenture and no course of dealing
between or among the Shipowner and the Lender shall operate as a waiver of the
rights of the Shipowner and the Lender against each other under this Agreement;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under the Floating Rate Note or the Indenture preclude the
Shipowner and the Lender from exercising against each other any other right,
power or privilege hereunder. The rights and remedies expressly provided
herein are cumulative and not exclusive of any rights or remedies which the
Lender would otherwise have. No notice to or demand on the Shipowner in any
case shall entitle the Shipowner to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Lender under this Agreement to any other or further action in any circumstances
without notice or demand. Notwithstanding any other provision to the contrary
herein, no provision in this Agreement or any other related agreement preserves
any rights in favor of the parties against the Secretary in the event that
either party fails or delays to exercise any rights, powers, or privileges
under this Agreement, the Floating Rate Note or the Indenture or engages in any
particular course of dealing.
11.06 Currency. All payments of principal, interest, fees or
other amounts due hereunder and under the Floating Rate Note shall be made in
Dollars, regardless of any law, rule, regulation or statute, whether now or
hereafter in existence or in effect in any jurisdiction, which affects or
purports to affect such obligations.
11.07 Severability. To the extent permitted by applicable law,
the illegality or unenforceability of any provision of this Agreement shall not
in any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement.
11.08 Amendment or Waiver. This Agreement may not be changed,
discharged or terminated without the written consent of the parties hereto, and
no provision hereof may be waived without the written consent of the party to
be bound thereby. There may be no change, discharge, termination or claim of
waiver of the terms of this Agreement without the prior written consent of the
Secretary, who is entitled to enforce his rights under this Agreement as an
intended third party beneficiary to this Agreement. The parties hereto
acknowledge, however, that nothing in this Agreement creates in either the
Shipowner or the Lender any right whatsoever against the Secretary.
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11.09 Indemnification. Without limiting any other rights that the
Lender may have hereunder or under applicable law, the Shipowner hereby agrees
to indemnify the Lender from and against any and all damages, losses, claims,
liabilities and related costs and expenses, including reasonable attorneys'
fees and disbursements (all the foregoing being collectively referred to as
"Indemnified Amounts") awarded against or incurred by the Lender arising out of
or as a result of this Agreement or the Floating Rate Note excluding, however,
Indemnified Amounts to the extent resulting from gross negligence or willful
misconduct on the part of the Lender. In the event of an Indenture Default,
all amounts received by the Lender pursuant to such indemnification after an
Indenture Default shall be held and paid in the manner required by Section
7.02.
11.10 Benefit of Agreement. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that the Shipowner may not
assign any of its rights or obligations hereunder without the prior written
consent of the Lender and, to the extent set forth in paragraph 11.03 hereof,
the Secretary.
11.11 Waiver of Jury Trial. Each of the Shipowner and the Lender
waives its respective rights to a trial by jury of any claim or cause of action
based upon or arising out of or related to this Agreement, any assignment or
the transactions contemplated hereby, in any action, proceeding or other
litigation of any type brought by any party against the other parties, whether
with respect to contract claims, tort claims, or otherwise. Each of the
Shipowner and the Lender agrees that any such claim or cause of action shall be
tried by a court trial without a jury. Without limiting the foregoing, the
parties further agree that their respective right to a trial by jury is waived
by operation of this section as to any action, counterclaim or other proceeding
which seeks, in whole or in part, to challenge the validity or enforceability
of this Agreement, any assignment or any provision hereof or thereof. This
waiver shall apply to any subsequent amendments, renewals, supplements or
modifications to this Agreement or any assignment.
11.12 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.
11.13 Shipowner Documents. Notwithstanding the provisions of this
Agreement, in any conflict between this Agreement and the provisions of the
Shipowner Documents, the Shipowner Documents shall govern the agreement between
the parties hereto, but only with respect to the subject matter thereof.
Notwithstanding the previous sentence, any provision in the Indenture (or any
other agreement the Shipowner has entered into with any other Person)
purporting to release the Shipowner of any indebtedness, liability or
obligation shall not apply to any indebtedness, liability or obligation of the
Shipowner hereunder and no termination of the Indenture (or any other agreement
the Shipowner has entered into with any other Person) shall affect the
continued effectiveness of this Agreement, which shall continue in full force
and effect until the Credit Facility has been terminated and all indebtedness,
liabilities and obligations of the Shipowner have been fully discharged and
satisfied, the Floating Rate Note have been paid, satisfied and discharged in
full, and there has elapsed a year and a day from the last payment received
from, or on behalf, of the Shipowner. However, this Section 11.13 shall have
no affect on the relationships established and the agreements entered into by
the parties to the Shipowner Documents (and such other agreements the Shipowner
has entered into with any other Person), in each case to which the Lender is
not a party in its capacity as the Lender hereunder.
11.14 Entire Agreement. This Agreement, the Fee Letter and the
Floating Rate Note contain the entire agreement among the parties hereto
regarding the Credit Facility.
20
-17-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first above written.
ROWAN COMPANIES, INC. CITIBANK, N.A., as the Lender
By: E. E. Thiele By: Ae Kyong Chung
-------------------------- -------------------------
(Signature) (Signature)
Name: E. E. Thiele Name: Ae Kyong Chung
------------------------ -----------------------
(Print) (Print)
Title: Senior Vice President Title: Attorney-in-Fact
----------------------- ----------------------
(Print) (Print)
21
SCHEDULE OF DEFINITIONS
EXHIBIT 1 to
CREDIT AGREEMENT
22
Schedule of Definitions to Credit Agreement
Dated as of December 17, 1996
"Accelerated Repayment" shall have the meaning set forth in Section
4.02(b) of the Credit Agreement.
"Act" means the Merchant Marine Act, 1936, as amended, and in effect
on the Closing Date.
"Affiliate" or "Affiliated" means any Person directly or indirectly
controlling, controlled by, or under common control with, another Person.
"Applicable Interest Rate" shall mean a rate per annum equal to LIBOR
plus during the Construction Period, nine-twentieths of one percent (0.45%) per
annum and thereafter, one-half of one percent (0.50%) per annum; provided,
however, that, if the Lender shall have determined, prior to the commencement
of any Interest Period that: (A) Dollar deposits of sufficient amount and
maturity for funding a Disbursement are not available to such Lender in the
London interbank market in the ordinary course of business; or (B) by reason of
circumstances affecting the relevant market, adequate and fair means do not
exist for ascertaining the rate of interest to be applicable to a Disbursement;
or (C) the relevant rate of interest referred to in the definition of LIBOR
which is to be used to determine the rate of interest for a Disbursement does
not cover the funding cost to the Lender of making or maintaining the
Disbursement, then the Lender shall so notify the Indenture Trustee, who shall
give notice to the Shipowner of such condition and interest shall, effective as
of the date of such notice and so long as such condition shall exist, accrue
during each applicable Interest Period at the Base Rate; provided, further,
however that if, in the Lender's reasonable judgment, it becomes unlawful at
any time for such Lender to make or maintain Disbursements based upon LIBOR,
the Lender shall so notify the Indenture Trustee, who shall give notice to the
Shipowner of such determination and, effective as of the date of such notice
and so long as such condition shall exist, interest shall thereafter accrue
during each applicable Interest Period at the Base Rate.
"Authorization Agreement" means the Authorization Agreement, Contract
No. MA-13258, dated the Closing Date, between the Secretary and the Indenture
Trustee, whereby the Secretary authorizes the Guarantee of the United States of
America to be endorsed on the Floating Rate Note, as the same is originally
executed, or as modified, amended or supplemented in accordance with the
applicable provisions thereof.
"Available Amount" shall have the meaning set forth in Section 2.01 of
the Credit Agreement.
"Base Rate" means, for any Interest Period or any other period, a
fluctuating interest rate per annum as shall be in effect from time to time
which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Citibank,
N.A. in New York, New York, from time to time, as Citibank, N.A.'s
base rate; or
(b) 1/2 of one percent per annum above the latest
three-week moving average of secondary market morning offering rates
in the United States for three-month certificates of deposit of major
United States money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such day is not a
Business Day, on the next succeeding Business Day) for the three-week
period ending on the previous Friday by Citibank, N.A. on the basis of
such rates reported by certificate of deposit dealers to and published
by the Federal Reserve Bank of New York, or, if such publication shall
be suspended or terminated, on the basis of quotations for such rates
received by Citibank, N.A. from three New York certificate of deposit
dealers of recognized standing selected by Citibank, N.A., in either
case
- 1 -
23
adjusted to the nearest 1/4 of one percent or, if there is no nearest
1/4 of one percent, to the next higher 1/4 of one percent.
"Business Day" shall mean any day on which dealings in Dollar deposits
are carried on in the London interbank market and on which commercial banks in
London and New York City are open for domestic and foreign exchange business.
"Certificate Authorizing Disbursement" shall mean, with respect to a
Disbursement, the United States Certificate Authorizing Disbursement
substantially in the form set forth on page A-4 of Annex A to the Credit
Agreement.
"Closing Date" means December 17, 1996.
"Construction Contract" means that certain Mobile Platform
Construction Agreement (LeTourneau Hull No. 219), dated October 24, 1995, by
and between the Shipowner and the Shipyard, as the same may be amended,
modified or supplemented in accordance with the applicable provisions thereof.
"Construction Period" shall mean the period from the date hereof to
the Delivery Date.
"Construction Period Interest" shall mean all interest that accrues on
the Outstanding Principal during the Construction Period.
"Credit Facility" shall have the meaning set forth in Whereas Clause
(A) of the Credit Agreement.
"Credit Facility Amount" shall have the meaning set forth in Section
2.01 of the Credit Agreement.
"Credit Agreement" or "Agreement" shall mean the Credit Agreement
dated as of the Closing Date, between the Shipowner and CITIBANK, N.A.,
including any Annex, Exhibit, and other attachment thereto, as the same may be
amended, modified or supplemented in accordance with the application provisions
thereof.
"Delivery Date" means the date on which the Vessel is delivered to and
accepted by the Shipowner.
"Depository Agreement" means the Depository Agreement, Contract No.
MA-13262, dated the Closing Date, between the Shipowner, CITIBANK, N.A., as
Depository-Bailee, and the Secretary, as the same is originally executed, or
amended, modified or supplemented in accordance with the applicable provisions
thereof.
"Disbursements" shall have the meaning set forth in Section 2.03 of
the Credit Agreement.
"Disbursement Date" shall mean, in relation to any Disbursement, the
Business Day on which the Lender shall make such Disbursement.
"Disposition of Indebtedness" shall have the meaning set forth in
Section 11.03 of the Credit Agreement.
"Dollars," "U.S. Dollars," "U.S.D.," "U.S.$" or "$" shall mean the
lawful currency of the United States of America.
"Event of Default" shall have the meaning set forth in Section 9.03 of
the Credit Agreement.
- 2 -
24
"Fee Letter" shall have the meaning set forth in Section 6.01 of the
Credit Agreement.
"Final Disbursement Date" shall have the meaning set forth in Section
2.02 of the Credit Agreement.
"Floating Rate Note" shall mean the Note substantially in the form of
Exhibit 2 to the Indenture, appropriately completed.
"Governmental Authority" shall mean the government of any country, any
agency, department or other administrative authority or instrumentality
thereof, and any local or other governmental authority within any such country.
"Guarantee" or "Guarantees" means the guarantee of the Floating Rate
Note by the United States of America pursuant to Title XI of the Act, as
provided in the Authorization Agreement.
"Guarantee Commitment" means the Commitment to Guarantee Obligations,
Contract No. MA-13257, dated as of the Closing Date, executed by the Secretary
and accepted by the Shipowner with respect to the Guarantees, as originally
executed or as modified, amended or supplemented in accordance with the
applicable provisions thereof.
"Guarantee Fees" shall mean the amounts described in the Guarantee
Commitment payable in consideration for the commitment therein described and
payable as provided in such Guarantee Commitment.
"Holder" means each holder of the Floating Rate Note.
"Indemnified Amounts" shall have the meaning set forth in Section
11.09 of the Credit Agreement.
"Indenture" means the Trust Indenture dated as of the Closing Date,
between the Shipowner and the Indenture Trustee, as the same is originally
executed, or as modified, amended or supplemented in accordance with the
applicable provisions thereof.
"Indenture Default" has the meaning specified in Article VI of Exhibit
1 to the Indenture.
"Indenture Trustee" means CITIBANK, N.A., a national banking
association, and any successor trustee permitted under the Indenture.
"Interest Payment Date" means, with respect to the Floating Rate Note,
the date when any installment of interest on such Note is due and payable,
which are January 1 and July 1 of each year, beginning on July 1, 1997 and the
date of any prepayment of the Floating Rate Note.
"Interest Period" shall mean, with respect to any Disbursement, (i)
the period commencing on the Disbursement Date and extending up to, but not
including, the next Interest Payment Date; and (ii) thereafter the period
commencing on each Interest Payment Date and extending up to, but not
including, the next Interest Payment Date.
"Lender" shall mean CITIBANK, N.A., a national banking association,
and its permitted successors and assigns.
"LIBOR" shall mean (a) in relation to any Interest Period, the rate of
interest per annum (rounded upward, if necessary, to the nearest 1/16 of 1%)
quoted by the principal London office of CITIBANK, N. A., at
- 3 -
25
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for the offering to leading banks in the London
interbank market of U.S. Dollar deposits for a period and in an amount
comparable to such Interest Period and the principal amount upon which interest
is to be paid during such Interest Period and (b) in relation to any Post
Maturity Period, have the meaning set forth in Section 4.02(b) of the Credit
Agreement.
"Lien" shall have the meaning set forth in Section 8.01(c) of the
Credit Agreement.
"Maturity," when used with respect to the Floating Rate Note, means
the date on which the principal of, or interest on, such Note becomes due and
payable as therein provided, whether on a Payment Date, at the Stated Maturity
or by prepayment, repayment, redemption or declaration of acceleration or
otherwise.
"Mortgage" means the first preferred ship mortgage on the Vessel,
Contract No. MA-13260, between the Shipowner and the Secretary, as originally
executed or as modified, amended or supplemented in accordance with the
applicable provisions thereof.
"Obligation" means the Floating Rate Note.
"Other Taxes" shall have the meaning set forth in Section 6.02(a) of
the Credit Agreement.
"Outstanding Principal" shall have the meaning set forth in Section
2.01 of the Credit Agreement.
"Payment Date" shall mean January 1 and July 1 of each year, beginning
on January 1, 1999.
"Payment Default" has the meaning specified in Section 6.01(a) of
Exhibit 1 to the Indenture.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Post Maturity Applicable Interest Rate" shall have the meaning set
forth in Section 4.02(b) of the Credit Agreement.
"Post Maturity Interest Rate" shall have the meaning set forth in
Section 4.02(b) of the Credit Agreement.
"Post Maturity Period" shall have the meaning set forth in Section
4.02(b) of the Credit Agreement.
"Quotation Date" shall have the meaning set forth in Section 4.02(b)
of the Credit Agreement.
"Redemption" means with respect to the redemption of the Floating Rate
Note, the repayment or prepayment of the Floating Rate Note as applicable.
"Redemption Date" means, with respect to the Floating Rate Note, a
date fixed for the prepayment, repayment or redemption of such Note by or
pursuant to Section 4 of the Credit Agreement, Article Fourth of the Indenture,
or Article III of Exhibit 1 to the Indenture.
- 4 -
26
"Redemption Price" means, with respect to the Floating Rate Note, the
price at which the Floating Rate Note is to be prepaid, repaid, or redeemed
pursuant to Section 4 of the Credit Agreement, Article Fourth of the Indenture,
or Article III of Exhibit 1 to the Indenture.
"Secretary" means the Secretary of Transportation or any official or
official body from time to time duly authorized to perform the duties and
functions of the Secretary of Transportation under Title XI of the Act
(including the Maritime Administrator, the Acting Maritime Administrator, and
to the extent so authorized, the Deputy Maritime Administrator and other
officials of the Maritime Administration).
"Secretary's Note" means a promissory note issued and delivered by the
Shipowner to the Secretary described in Article Third of the Security Agreement
and shall also mean any promissory note issued in substitution for and
replacement thereof pursuant to the Security Agreement.
"Security Agreement" shall mean that certain security agreement,
Contract No. MA-13259, dated as of the Closing Date, with respect to the
Vessel, executed by the Shipowner and the Secretary relating to the security in
respect to the Guarantees, as originally executed or as modified, amended or
supplemented in accordance with the applicable provisions thereof.
"Shipowner" means ROWAN COMPANIES, INC., a Delaware corporation, and
for purposes of the Indenture and the Floating Rate Note, subject to the
provisions of Sections 6.09, 8.01 and 8.02 of Exhibit 1 to the Indenture, shall
also include its successors and assigns; provided, however, that for purposes
of the Credit Agreement, the term Shipowner shall also include the Shipowner's
permitted successors and assigns under the Credit Agreement.
"Shipowner's Documents" means the Security Agreement, the Mortgage,
the Title XI Reserve Fund and Financial Agreement, the Depository Agreement,
and the Secretary's Note.
"Shipowner Financial Statements" shall have the meaning set forth in
Section 8.01(h) of the Credit Agreement.
"Shipyard" or "Shipbuilder" means LETOURNEAU, INC., a Texas
corporation.
"Stated Maturity," when used with respect to the Floating Rate Note,
means the date determinable as set forth in such Note as the final date on
which the principal of such Note is due and payable, which shall include,
without limitation, each of the Payment Dates.
"Taxes" shall have the meaning set forth in Section 6.02(a) of the
Credit Agreement.
"Title XI Reserve Fund and Financial Agreement" means that certain
Title XI Reserve Fund and Financial Agreement, Contract No. 13261, dated as of
the Closing Date, executed by the Shipowner and the Secretary, as amended,
modified or supplemented in accordance with the applicable provisions thereof.
"United States" means the United States of America.
"Unpaid Amount" shall have the meaning set forth in Section 4.02(b) of
the Credit Agreement.
"Vessel" means the Shipowner's self-elevating mobile offshore
drilling unit to be named the GORILLA V and constructed by LETOURNEAU, INC. in
accordance with the Construction Contract, including all work and
- 5 -
27
material heretofore or hereafter performed upon or installed in or placed on
board such Vessel, together with related appurtenances, additions,
improvements, and replacements.
- 6 -
28
FORM OF DISBURSEMENT REQUESTS
Annex A
to
Credit Agreement
-1-
29
ROWAN COMPANIES, INC.
5450 Transco Tower
2800 Post Oak Boulevard
Houston, Texas 77056
__________, 1996
Secretary of Transportation
c/o Maritime Administrator
Department of Transportation
400 Seventh Street, S.W.
Washington, D.C. 20590
Ladies and Gentlemen:
We are enclosing herewith our disbursement Request No. ___ and
Certificate plus the following documents for disbursement from the Credit which
has been established for LeTourneau Hull No. 219:
1. Shipyard's Certificate of no Liens pursuant to
Section 2.04(d) of Exhibit 1 to the Security
Agreement.
2. Wire transfer instructions for Shipyard, Shipowner,
or Lender.
3. Request for Actual Cost Approval and Reimbursement
(___________) with Supplemental Schedules Nos. __ and
___.
4. Certificate Authorizing Disbursements
The amount requested, U.S.$ __________ represents:
Progress payment No. __ for LeTourneau Hull No. 219.
Very truly yours,
ROWAN COMPANIES, INC.
By:______________________
Title:___________________
A-1
30
ROWAN COMPANIES, INC.
DISBURSEMENT REQUEST NO. __
AND CERTIFICATE
TO ACCOMPANY DISBURSEMENT
FROM CREDIT FOR
HULL 219
__________, 1996
Secretary of Transportation
c/o Maritime Administration
Department of Transportation
400 Seventh Street, S.W.
Washington, D.C. 20590
Rowan Companies, Inc. (the "Shipowner") hereby requests the
Secretary of Transportation, acting by and through the Maritime Administrator
(the "Secretary") to approve disbursement from the Credit Facility for Hull No.
219 under the Credit Agreement dated December 17, 1996, (the "Agreement"), in
accordance with the accompanying wire transfer instructions. In support of
said request and in order to induce the Secretary to approve said disbursement,
the Shipowner hereby certifies:
I. That the Termination Date of the Credit Facility has
not occurred and that there is no default under the Security Agreement dated
December 17, 1996, Contract No. MA-13259 (the "Security Agreement").
II. That the requested Disbursement is properly due and
payable to the following payee(s), in the following amount(s) and in respect of
the following items(s):
Payee Amount Item
______________ $___________ ____________________________
III. That all prior Disbursements (if any) from the Credit
Facility have been used for the purposes stated in prior certificates furnished
to the Secretary.
IV. That the requested Disbursement is not to be used to
pay, or to reimburse the Shipowner for the payment of, any item(s) or amount(s)
paid or reimbursed from any prior Disbursement(s) from the Credit.
V. That the amount (if any) stated in II above to be
paid to the _____________ for the payment of interest, is the amount of
interest on the Obligations equal to the interest payable on
______________________, 199___.
VI. That the amount(s) (if any) stated in II above to be
paid to the Lender, Shipyard or other persons entitled thereto, or to the
Shipowner as reimbursement for amounts which it shall have paid or have caused
to be paid to said parties, is (are) properly payable from the Credit because:
A-2
31
A. The total amount paid by or for the account of the
Company on account of the items, amounts and increases set
forth or referred to in Article First of the Special
Provisions of the Security Agreement from sources other than
the proceeds of the Obligations equals at least 12-1/2% of
the Actual Cost of the Vessel stated in the Security
Agreement. (1)
B. The amount(s) (if any) stated in II above to be paid
to the Company would not have the effect of reducing the total
amount paid referred to in A above, below the minimum set
forth in A above;
All terms used herein shall have the same meaning as they have
in the Security Agreement.
ROWAN COMPANIES, INC.
By:
Title:
____________________
(1) If such Actual Cost has been redetermined by the Secretary, add: "as the
same was redetermined by the Secretary on ____________________, 199__.
A-3
32
CERTIFICATE AUTHORIZING DISBURSEMENT
Date ___________________
CITIBANK, N.A., as Lender
New York, New York
Subject: Credit Agreement dated December 17, 1996
Rowan Companies, Inc.
Certificate Authorizing Disbursement No. ____
Ladies and Gentlemen:
In accordance with the terms and conditions of the Credit
Agreement ("Agreement"), dated as of December 17, 1996, by and among ROWAN
COMPANIES, INC., a Delaware corporation (the "Shipowner" or "Borrower") and
CITIBANK, N.A., a national banking association (the "Lender"), and with the
Shipowner's Request for Disbursement, we hereby authorize the Lender to make a
Disbursement under the Credit Facility in the amount of U.S. $________ on or
after ___________ , 199_, by paying to the Lender from the proceeds of the
Disbursement the Construction Period Interest payable to such Lender in the
amount of U.S. $___________________, and then paying the balance of the
proceeds of the Disbursement to the account of [identify the Shipowner's
account as it is carried on the books of the payee bank] at [complete name and
address of the payee bank].
The defined terms in this Certificate shall have the
respective meanings specified in the Credit Agreement.
UNITED STATES OF AMERICA
SECRETARY OF TRANSPORTATION
Attest: By: Maritime Administration
By:
- -------------------------- -------------------------
Assistant Secretary Secretary
Maritime Administration Maritime Administration
A-4
33
CERTIFICATE OF NO LIENS
LeTourneau, Inc., a Texas corporation (the "Shipyard"), does
hereby certify that, on the date hereof, the Vessel being constructed pursuant
to that certain construction contract dated October 24, 1995, as amended,
between the Shipyard and Rowan Companies, Inc., a company organized and
existing under the laws of Delaware, (the "Shipowner") (the "Construction
Contract"), which is identified as Shipbuilder's Hull No. 219, and its
component parts are free of any liens and rights in rem.
IN WITNESS WHEREOF, the Shipyard has caused this Certificate
to be duly executed and delivered this _____ day of ________________________.
LETOURNEAU, INC.
a Texas Corporation
By:
Name:
Title:
A-5
34
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUMMARY SHEET
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
TX 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-57606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Type of Vessel Mobile self-contained and elevating drilling Platform
LOA LBP BEAM DEPTH SHP
Submittal No. Date
Period Covered From: ______________ to: ____________ Final Cost Submittal [ ]
Date of Last Previous Submittal: ____________________
A-6
35
INSTRUCTIONS TO SHIPOWNER
Requests for actual cost approvals and remittances must be submitted on this
form and on the supplemental schedules listed below as applicable. Specific
instructions are included on each supplemental schedule.
===============================================================================================================
Previous Cumulative
Supplemental Cumulative Actual Cost Actual Cost
Remittances to Shipyard Schedule No. Total This Submittal to Date
- ---------------------------------------------------------------------------------------------------------------
Contract Base Cost 1
Escalation
Changes & Extras
Other Items
------------------------------------------------------------------
1
------------------------------------------------------------------
2 & 2A
------------------------------------------------------------------
3
- ---------------------------------------------------------------------------------------------------------------
1. Subtotal-Actual Construction Cost
- ---------------------------------------------------------------------------------------------------------------
Owner Furnished Items 4
Design, Engineering and Inspection at
Owner's Cost
2. Subtotal-Actual Owner's Cost
------------------------------------------------------------------
5
------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
TOTAL (1&2) ACTUAL CONSTRUCTION
& OUTFITTING COST:
LESS: ITEMS OF FOREIGN COST
------------------------------------------------------------------
6
- ---------------------------------------------------------------------------------------------------------------
3. Subtotal-Actual Construction and
Owner's Outfitting Cost
- ---------------------------------------------------------------------------------------------------------------
Financing Costs: Commitment Fees 7
Interest Fees
Interest Income
------------------------------------------------------------------
------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
4. Subtotal-Financing Costs
- ---------------------------------------------------------------------------------------------------------------
TOTAL-ACTUAL COST
- ---------------------------------------------------------------------------------------------------------------
5. Source of Payments
- ---------------------------------------------------------------------------------------------------------------
Credit
Shipowner
General Fund
TOTAL
------------------------------------------------------------------
------------------------------------------------------------------
------------------------------------------------------------------
===============================================================================================================
Notes, Comments, Etc.
A-7
36
CERTIFICATION OF PAYMENT
The undersigned has examined the records of N/A
and certifies the above cost figures and the supplemental schedules to
accurately state the actual costs, both paid and to be paid, of ___ in
accordance with generally accepted accounting practices.
Date:
A-8
37
U.S. DEPARTMENT OF TRANSPORTATION
MARITIME ADMINISTRATION
TITLE XI
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUPPLEMENTAL SCHEDULE NO. 1
CONTRACT BASE COST AND ESCALATION
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
Texas 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-75606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Submittal No. Date
INSTRUCTIONS TO SHIPOWNER
List all remittances made to the shipyard for the construction of the vessel as
shown in the contract specifications. Include escalation, if applicable, as
defined in the contract. Do not include the cost of subsequent amendments to
the contract or changes and extras which are to be listed on Schedules 2 and
2A.
DATE OF NOTES OR COMMENTS CONTRACT
PAYMENT (IF REQUIRED) BASE COST ESCALATION TOTAL
- ------- ------------- --------- ---------- -----
A-9
38
U.S. DEPARTMENT OF TRANSPORTATION
MARITIME ADMINISTRATION
TITLE XI
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUPPLEMENTAL SCHEDULE NO. 2
INDEX OF CHANGES AND EXTRAS
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
Texas 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-75606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Submittal No. Date
INSTRUCTIONS TO SHIPOWNER
List all changes and extras in numerical order as indicated below. Fill in all
information requested. Show total cost claimed at the end of the list. Attach
Schedule 2A with information requested arranged in the same sequence.
If preferred, the Applicant may request the shipyard to forward this schedule
and Schedule 2A directly to Chief, Division of Cost Estimates and Analysis,
Maritime Administration, Code MAR-722, Room 2122, 400 Seventh Street, S.W.,
Washington, D.C. 20590.
CHANGE NO. DESCRIPTION OR IDENTIFICATION SUBCONTRACTOR (IF APPLIC.) COST PER SHIP
- -----------------------------------------------------------------------------------------------------------------------
A-10
39
U.S. DEPARTMENT OF TRANSPORTATION
MARITIME ADMINISTRATION
TITLE XI
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUPPLEMENTAL SCHEDULE NO. 2A
CHANGE AND EXTRA DETAILS
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
Texas 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-75606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Submittal No. Date
INSTRUCTIONS TO SHIPOWNER
Enter below the details requested for each change order in the same sequence as
listed in Schedule 2. The scope of work for each change should be briefly
described. Major items of material and/or labor should be set forth
individually-whether added or deleted. Sufficient detail should be included
to justify the cost added or deleted for each change. Include as many changes
as possible on each sheet.
TITLE OR CHANGE/SCOPE OF NET COST
CHANGE WORK BY PHASES/MATERIAL MATERIAL COST LABOR OF CHANGE
NO. DESCRIPTION/LABOR DESCRIPTION UNIT TOTAL HOURS COST (+)OR(-)
- ------------------------------------------------------------------------------------------------------------------------
A-11
40
U.S. DEPARTMENT OF TRANSPORTATION
MARITIME ADMINISTRATION
TITLE XI
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUPPLEMENTAL SCHEDULE NO. 3
OTHER ITEMS
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
Texas 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-75606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Submittal No. Date
INSTRUCTIONS TO SHIPOWNER
List below all items paid directly to the shipyard which qualify as
construction cost, but do not belong in the categories of basic contract cost,
changes, extras, and escalation. Example: insurance, storage of owner
furnished items, performance bond; if such items are not provided for in
construction contract.
ITEM NO. DESCRIPTION COST
- ------------------------------------------------------------------------------------------------------------------------
A-12
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U.S. DEPARTMENT OF TRANSPORTATION
MARITIME ADMINISTRATION
TITLE XI
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUPPLEMENTAL SCHEDULE NO. 4
OTHER FURNISHED ITEMS
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
Texas 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-75606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Submittal No. Date
INSTRUCTIONS TO SHIPOWNER
List below all furnished materials, equipment and services where the total cost
per invoice exceeds $2,500. At the end of the list include all invoices
costing less than $2,500 in a lump sum opposite the description "Miscellaneous
Owner Items." Description of individual items listed should include quantity,
material specification, model No., horse power, capacity, etc., as applicable
to allow review for reasonability of cost and eligibility as Title XI actual
cost. Invoices containing the above information may be submitted in lieu of
filling this form out provided a summary of all such invoices is provided with
each submittal.
ITEM DESCRIPTION OR MANUFACTURE'S NAME VENDOR'S COST PER
NO. QUANTITY IDENTIFICATION CITY AND COUNTY INVOICE NO. SHIPSET
- -----------------------------------------------------------------------------------------------------------------------
A-13
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U.S. DEPARTMENT OF TRANSPORTATION
MARITIME ADMINISTRATION
TITLE XI
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUPPLEMENTAL SCHEDULE NO. 5
DESIGN, INSPECTION AND ENGINEERING AT OWNER'S COST
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
Texas 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-75606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Submittal No. Date
INSTRUCTIONS TO SHIPOWNER
List below expenditures paid by the Applicant for design, inspection and
engineering in sufficient detail to permit review for Title XI eligibility and
reasonability of cost.
NAMES OF APPLICANT'S EMPLOYEES AND/OR
ITEM NAMES OF SUBCONTRACTORS NO. OR INVOICE NO.
NO. NATURE OF WORK PERFORMED HOURS RATE/HOUR COST
- ---------------------------------------------------------------------------------------------------------------------
A-14
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U.S. DEPARTMENT OF TRANSPORTATION
MARITIME ADMINISTRATION
TITLE XI
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUPPLEMENTAL SCHEDULE NO. 6
ITEMS OF FOREIGN MANUFACTURE, GROWTH OR ORIGIN
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
Texas 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-75606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Submittal No. Date
INSTRUCTIONS TO SHIPOWNER
Under Maritime Administration policy all items of foreign manufacture, growth
or origin are ineligible as Title XI actual cost. It is the responsibility of
the Applicant to furnish the information listed below for each such item. This
includes both goods and services. The total cost of the items listed will be
deducted from the total actual cost eligible for Title XI Guarantee unless a
waiver has been requested by letter from Maritime and granted by Maritime by
letter.
ITEM DESCRIPTION OR VENDOR'S NAME VENDOR'S COST PER
NO. QUANTITY IDENTIFICATION CITY AND COUNTRY INVOICE NO. SHIP
- ------------------------------------------------------------------------------------------------------------------------
A-15
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U.S. DEPARTMENT OF TRANSPORTATION
MARITIME ADMINISTRATION
TITLE XI
REQUEST FOR ACTUAL COST APPROVAL AND REIMBURSEMENT
SUPPLEMENTAL SCHEDULE NO. 7
INTEREST AND COMMITMENT FEES
Shipowner's Name Rowan Companies, Inc.
Shipowner's Address 5450 Transco Tower, 2800 Post Oak Blvd., Houston,
Texas 77056
Shipyard's Name LeTourneau, Inc.
Shipyard's Address P. O. Box 2307-75606, Longview, Texas 75606
Name of Vessel GORILLA V Shipyard Hull No. 219
Submittal No. Date
INSTRUCTIONS TO SHIPOWNER
Fill out the information requested below concerning the commitment fees for
which you are requesting reimbursement in the submittal.
PERIOD CHECK WHICH PAID PRINCIPAL INTEREST AMOUNT
COVERED INT. FEE TO AMOUNT RATE PAID
- ---------------------------------------------------------------------------------------------------------------------
A-16
45
Document 3
TRUST INDENTURE
Relating to United States Government
Guaranteed Ship Financing Obligations
A-1
46
_________________________________________________________
TRUST INDENTURE
Relating to United States Government Guaranteed
Ship Financing Obligations
Between
ROWAN COMPANIES, INC.
Shipowner
AND
CITIBANK, N.A.
Indenture Trustee
Dated as of December 17, 1996
A-2
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_________________________________________________________
TRUST INDENTURE
Between
ROWAN COMPANIES, INC.
Shipowner
AND
CITIBANK, N.A.
Indenture Trustee
Dated as of December 17, 1996
A-3
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TABLE OF CONTENTS TO SPECIAL PROVISIONS OF THE INDENTURE (1/)
Page
----
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE FIRST
Incorporation of General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE SECOND
The Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE THIRD
Interest Rate Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE FOUR
Certain Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
__________________
(1) This Table of Contents is not a part of the Indenture and has no bearing
upon the interpretation of any of its terms and provisions.
A-4
49
ARTICLE FIFTH
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE SIXTH
Additions, Deletions and Amendments to Exhibit 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
EXHIBITS TO TRUST INDENTURE
SCHEDULE A Schedule of Definitions to Trust Indenture
EXHIBIT 1 General Provisions of the Indenture
Incorporated by Reference
EXHIBIT 2 Form of Floating Rate Note
EXHIBIT 3 Form of Fixed Rate Note
EXHIBIT 4 Authorization Agreement
EXHIBIT 5 Form of Secretary Supplemental Indenture
A-5
50
TRUST INDENTURE
SPECIAL PROVISIONS
THIS TRUST INDENTURE, is dated as of December 17, 1996 (said Trust
Indenture, as the same may be amended, modified or supplemented from time to
time as permitted hereunder, herein called the "Indenture"), is between (i)
ROWAN COMPANIES, INC., a Delaware corporation (herein called the "Shipowner"),
and (ii) CITIBANK, N.A., a national banking association, (said bank, any
successor or assign hereunder, herein called the "Indenture Trustee").
RECITALS:
A. As provided in Article Fifth hereof, the terms defined in Schedule
A to this Indenture shall have the respective meanings stated in said Schedule;
B. The Shipowner has duly executed this Indenture, and duly authorized
the issuance hereunder of $153,091,000 principal amount of its Obligations
pursuant to Section 2.03 of Exhibit 1 to this Indenture (herein together with
any Obligations issued in respect thereof pursuant to Sections 2.09, 2.10, 2.12
and 3.10(b) of said Exhibit 1, called the "Obligations") designated "United
States Government Guaranteed Ship Financing Obligations, GORILLA V Series;"
C. The Obligations will be issued by the Shipowner to aid in the
financing of the cost of construction of a self-elevating mobile offshore
drilling unit to be named the GORILLA V (the "Vessel");
D. To aid in financing the construction of the Vessel, the
Shipowner has entered into a credit agreement (the "Credit Agreement") with
CITIBANK, N.A., a national banking association as Lender, providing for the
delivery of no more than $153,091,000 principal amount of note designated
"United States Government Guaranteed Ship Financing Obligations, GORILLA V
Series";
E. Under the Authorization Agreement in the form set forth as Exhibit
4 hereto, the Secretary, on behalf of the United States, has agreed and will
agree to execute on the Obligations to be issued, a Guarantee of the payment of
the unpaid interest to the date of such payment on, and the unpaid balance of
the principal of, such Obligation under the provisions of Title XI of the Act,
and the Indenture Trustee is authorized to cause the Guarantees, bearing the
facsimile signature of the Secretary, and the facsimile seal of the United
States Department of Transportation, to be imprinted on the Obligations, and to
authenticate and deliver the Obligations and the Guarantees issued on the
Closing Date and from time to time thereafter, such agreements and
authorizations being subject to the conditions set forth in the Authorization
Agreement;
F. Pursuant to Section 1104(b)(5) of the Act, the Secretary will
determine that the interest to be borne by the Obligations (exclusive of
charges for the guarantee fee and service charges, if any) is reasonable; and
G. All actions necessary have been or will be taken in order (1) to
make the Obligations, when executed by the Shipowner, authenticated by the
Indenture Trustee and issued under the Indenture, the valid, binding and legal
obligations of the Shipowner in accordance with their terms, (2) to make the
Guarantees to be endorsed on the
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51
Obligations, when executed on behalf of the Secretary, authenticated by the
Indenture Trustee and delivered under this Indenture, the valid, binding and
legal obligations of the United States in accordance with their terms, and (3)
to make this Indenture the valid, binding and legal agreement of the parties
hereto in accordance with its terms.
NOW THEREFORE, in consideration of the premises, of the mutual
covenants herein contained, of the purchase of the Obligations by the Holder
and of other good and valuable consideration, the receipt and adequacy of which
the parties hereby acknowledge, and for the equal and proportionate benefit of
the present and future Holder, the parties hereto agree as follows:
ARTICLE FIRST
INCORPORATION OF GENERAL PROVISIONS
This Indenture shall consist of two parts: the Special Provisions and
the General Provisions attached hereto as Exhibit 1, made a part of this
Indenture and incorporated herein by reference.
2
52
ARTICLE SECOND
THE OBLIGATIONS
(a) The Obligations issued hereunder shall be designated "United
States Government Guaranteed Ship Financing Obligations, GORILLA V Series," and
shall be in the form of Exhibit 2 to this Indenture; and, the principal amount
of Obligations which may be issued under this Indenture shall not exceed
$153,091,000 except as provided in Sections 2.09, 2.10, 2.12 and 3.10(b) of
Exhibit 1 hereto.
(b) The Obligations shall be in the denominations of $1,000 or any
integral multiple thereof.
(c) The Shipowner shall at all times cause to be maintained in the
City of Houston, State of Texas an office or agency for the purposes specified
in Section 5.03 of Exhibit 1 to this Indenture.
(d) The Indenture Trustee shall at all times have its Corporate Trust
Office in the City of New York, State of New York.
ARTICLE THIRD
INTEREST RATE CALCULATIONS
Upon the terms and subject to the conditions contained in the
Obligations, the Indenture Trustee will calculate the Applicable Interest Rate
on the Obligations in the manner and at the times provided in the Obligations
and shall communicate the same to the Shipowner, the Secretary and any paying
agent identified to it in writing as soon as practicable after each
determination. The Indenture Trustee will, upon the request of the Holder of
the Obligations, determine the Applicable Interest Rate then in effect with
respect to the Obligations.
3
53
ARTICLE FOURTH
CERTAIN REDEMPTIONS
(a) Scheduled Mandatory Redemption. The Obligations are subject to
redemption at a Redemption Price equal to 100% of the principal amount thereof,
together with interest accrued thereon to the applicable Redemption Date,
through the operation of scheduled repayment providing for the semi-annual
redemption on January 1 and July 1 of each year, commencing January 1, 1999, of
$6,380,000 principal amount of Obligations (or such lesser principal amount of
Obligations as shall then be outstanding), which amount represents
approximately one twenty-fourth (1/24) of the Original Principal Amount of
Obligations, plus interest accrued thereon to the Redemption Date. There shall
be a final redemption of the remaining outstanding principal on the earlier of
(i) July 1, 2000, or (ii) two (2) years after the Delivery Date.
Notwithstanding the foregoing provisions of this subsection (a), if
the principal amount of Outstanding Obligations shall be reduced by reason of
any redemption pursuant to Section 3.04 of Exhibit 1 to this Indenture, the
principal amount of Obligations to be redeemed pursuant to this subsection (a)
on each subsequent Redemption Date for such Obligations shall be reduced by an
amount equal to the principal amount of such Obligations retired by reason of
such redemption pursuant to Section 3.04 of Exhibit 1 hereto divided by the
number of Redemption Dates (including the Stated Maturity of such Obligations)
scheduled thereafter to July 1, 2000 (subject to such increase as shall be
necessary so that the total principal amount of Obligations to be redeemed on
any such Redemption Date shall be an integral multiple of $1,000); provided
that, the entire unpaid principal amount of the Outstanding Obligations shall
be paid not later than July 1, 2000. The Shipowner shall, in accordance with
Section 3.02(d) of Exhibit 1 hereto, promptly after each redemption pursuant to
said Section 3.04, furnish to the Secretary, the Indenture Trustee and each
Holder a revised table of scheduled repayments reflecting the reductions made
pursuant to this subsection (a) as a result of such redemption.
(b) Optional Redemption of Obligations Without Premium.
At its option, the Shipowner may without premium,
(i) prepay on any Interest Payment Date the Obligation, in
whole or in part, in a minimum principal amount of $10,000,000, at a Redemption
Price equal to 100% of the principal amount thereof together with interest
accrued thereon to the Redemption Date, or
(ii) redeem or prepay the Obligation, in whole or in part, on
a Redemption Date designated by the Shipowner, from the proceeds from the
issuance of fixed rate notes.
(c) If the Shipowner shall elect to make any such optional
redemptions pursuant to this Article, the Shipowner shall, at least 40 days but
not more than 60 days prior to the date fixed for redemption, deliver to the
Indenture Trustee a Request stating that the Shipowner intends to exercise its
rights as above set forth to make such optional redemptions and specifying the
Redemption Date and the principal amount which the Shipowner intends to redeem
on such date.
4
54
ARTICLE FIFTH
DEFINITIONS
For all purposes of this Indenture, unless otherwise expressly
provided or unless the context otherwise requires:
(1) All references herein to Articles, Sections or
other subdivisions, unless otherwise specified, refer to the
corresponding Articles, Sections and other subdivisions of
this Indenture;
(2) The terms "hereof," "herein," "hereby," "hereto,"
"hereunder" and "herewith" refer to this Indenture; and
(3) The terms used herein and defined in Schedule A
to this Indenture shall have the respective meanings stated in
said Schedule.
ARTICLE SIXTH
ADDITIONS, DELETIONS AND AMENDMENTS TO EXHIBIT 1
The following additions, deletions and amendments are hereby made to
Exhibit 1 to this Indenture.
(a) Concerning Citibank, N.A. Citibank, N.A. and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of
business with, the Shipowner, any of its subsidiaries or affiliates, and any
Person who may do business with or own securities of the Shipowner or any such
subsidiary or affiliates, all as if Citibank, N.A. were not the Indenture
Trustee and without any duty to account therefor to the Holder.
(b) Concerning Immediately Available Funds. Notwithstanding any
provision in Exhibit 1 to this Indenture to the contrary, all payments are to
be made in immediately available funds.
(c) Concerning Mandatory Scheduled Redemptions. The terms "sinking
fund payment" and "sinking fund redemption" in Exhibit 1 to this Indenture
refer to the mandatory scheduled redemption.
(d) Concerning Section 2.02. Section 2.02(c) is revised to read as
follows:
(c) If the Maturity of any Obligation or an Interest Payment Date for
any Obligation shall be a day other than a Business Day, then such
payment may be made on the next succeeding Business Day, with the same
force and effect as if made on the Interest Payment Date for such
payment, provided, however, that interest shall accrue thereon for the
period after said Interest Payment Date (whether or not such next
succeeding Business Day occurs in a succeeding month).
(e) Concerning Section 2.04. Prior to the earlier of (i) July 1,
2000, or (ii) two (2) years from the Delivery Date, the Shipowner and the
Indenture Trustee may enter into a Supplemental Indenture, and the Indenture
Trustee may enter into a supplement to the Authorization Agreement, pursuant to
Section 2.04 of Exhibit 1 to this Indenture, to provide for the issuance of
fixed rate obligations in the form of Exhibit 3 hereto for the purpose of
repaying the Obligations, provided however, that the Shipowner and Indenture
Trustee have obtained the prior written consent of the Secretary.
5
55
(f) Concerning Section 2.06. Interest at the Applicable Interest
Rate shall be due on each Disbursement at the end of each Interest Period. The
Indenture Trustee will determine the Applicable Interest Rate for each Interest
Period.
(g) Concerning Section 2.10. Section 2.10(c) is revised to read as
follows:
(c) The Shipowner or the Indenture Trustee shall not be required to
register transfers or make exchanges of (1) Obligations for a period
of 15 days immediately prior to (A) an Interest Payment Date or (B)
any selection of Obligations to be redeemed, (2) Obligations after
demand for payment of the Guarantees and prior to the payment thereof
or rescission of such demand pursuant to Section 6.02(a), or (3) any
Obligation which has been selected for redemption in whole or in part,
except as to the unredeemed portion of any Obligation being redeemed
in part.
(h) Concerning Section 2.12. With respect to clause (1) of the
proviso to Section 2.12 of Exhibit 1 to the Indenture, a written agreement of
indemnity which is satisfactory in form and substance to the Secretary, the
Shipowner, and the Indenture Trustee, executed and delivered by an
institutional Holder having a capital and surplus of at least $100,000,000
shall be considered sufficient indemnity to the Secretary, the Shipowner, and
the Indenture Trustee in connection with the execution, authentication and
delivery of any new Obligations or the making of any payment as contemplated by
said Section 2.12.
(i) Concerning Payment of the Obligations. Notwithstanding
anything to the contrary in Exhibit 1 hereto, the Obligations to be issued
hereunder shall be payable as to principal, premium (if any), and interest, at
an office or agency maintained by the Shipowner for such purpose at the
Corporate Trust Office of the Indenture Trustee, or at the option of the
Shipowner, as to payments of principal, premium (if any), or interest by wire,
in immediately available funds, by such Corporate Trust Office to the Obligees
as appear in the Obligation Register, subject in any event to the provisions
hereof concerning home office payment and subject to the Indenture Trustee's
prior receipt of funds sufficient for the payment of principal, premium (if
any) or interest by wire or other immediately available funds. The Indenture
Trustee shall have no obligation to determine whether such wires or payments
were received by the Obligees.
(j) Concerning Section 3.02. Section 3.02(c) and (d) are revised to
read as follows:
(c) Scheduled Redemptions. If the Obligations of any series and
Stated Maturity or the Special Provisions hereof or the Supplemental
Indenture establishing such series shall so provide, such Obligations
shall be subject to (i) scheduled redemption through the operation of
a mandatory redemption schedule, in such amounts, at such times and
subject to such credits (if any) as may be specified therein, and (ii)
redemption at the option of the Shipowner, in connection with the
operation of any such mandatory redemption schedule, in such
additional amounts and subject to such conditions as may be specified
therein.
(d) Adjustments of Redemption Payments. If the Obligations of any
series and Stated Maturity or the Special Provisions hereof or of the
Supplemental Indenture establishing such series provide for an
adjustment in scheduled redemption payments as a result of any
redemption or cancellation of Obligations, the Shipowner shall
recompute the remaining scheduled redemption payments pursuant to such
provisions and shall, at least 60 days prior to the next Interest
Payment Date which occurs at least 60 days following any such
redemption or cancellation of Obligations of such series requiring
such recomputation, submit to the Secretary for his review such
recomputation to ascertain compliance with the provisions of such
Obligations or the Special Provisions hereof or such Supplemental
Indenture, and table of revised
6
56
mandatory redemption schedule payments on the Obligations of such
series reflecting the adjustments made pursuant to such provisions as
a result of such redemption or cancellation. Upon advice by the
Secretary that he finds such recomputation to comply with such
provisions, the Shipowner shall submit said table to the Indenture
Trustee and the Indenture Trustee shall promptly submit a copy thereof
to each Holder of an Obligation of such series.
(k) Concerning Section 3.03. The date required by Section 3.03 of
Exhibit 1 hereto is the earlier of July 1, 2000, or (ii) two (2) years from the
Delivery Date.
(l) Concerning Section 3.06. Section 3.06 of Exhibit 1 hereto is
hereby amended in its entirety to read as follows:
SECTION 3.06. Redemption After Assumption by the Secretary. Upon
receipt by the Indenture Trustee of written instructions from the
Secretary stating that the principal amount of Obligations specified
in such instructions are required to be redeemed on the date specified
therein (which shall be not less than 40 nor more than 60 days from
the receipt of such instructions by the Indenture Trustee) at the
option of the Secretary at any time after the Secretary's assumption
of the Obligations pursuant to Section 6.09, the Indenture Trustee
shall promptly give notice as provided in Section 3.08 of the
redemption on the Redemption Date of the principal amount of
Obligations specified in such instructions and the Indenture Trustee
shall, on such Redemption Date, redeem such Obligations together with
interest accrued thereon to such Redemption Date; provided that, the
Secretary shall redeem at the principal amount thereof and interest
accrued thereon the Outstanding Obligations relating to the Vessel if
the Vessel has been sold pursuant to Section 8.02 to a purchaser or
purchasers who have not assumed such Obligations by notice to the
Indenture Trustee in accordance with this Section 3.06 within 40 days
of the nonassumption of the Obligations by such purchaser.
(m) Concerning Section 3.07. Section 3.07(a) is revised to delete
the phrase "or 3.05."
(n) Concerning Section 3.09. Section 3.09 is revised to read as
follows:
SECTION 3.09. Deposit of Redemption Moneys. No later than 11:00 a.m.
in New York City on any Redemption Date, the Shipowner shall, except
as contemplated by Section 3.08(b), deposit or cause to be deposited
with the Indenture Trustee or with any Paying Agent an amount in
immediately available funds sufficient for such redemption (after
taking into account any amounts then held by the Indenture Trustee or
such Paying Agent and available for such redemption) with irrevocable
directions to it to so apply the same.
(o) Concerning Section 4.01. Section 4.01(b) of Exhibit 1 hereto
is hereby amended in its entirety to read as follows:
"(b) Cash held by the Indenture Trustee or any Paying Agent
(other than the Shipowner) under this Indenture -
(i) need not be segregated;
(ii) shall not be invested except as permitted by
clause (iv) of this Section 4.01(b);
7
57
(iii) shall not bear interest except as the
Shipowner and the Indenture Trustee (or such Paying
Agent) may agree in writing; and
(iv) if the Shipowner shall have deposited or caused
to be deposited with the Indenture Trustee funds
sufficient for the payment of the Obligations at
their Maturity, including interest to the date of
Maturity, and the date of Maturity is more than one
(1) Business Days after the deposit of such funds,
the Indenture Trustee upon the Request of the
Shipowner shall invest such funds, as directed by the
Shipowner in writing, in direct obligations of the
United States Government maturing at or prior to the
date of Maturity of such Obligations and having a
principal amount equal to not less than the amount of
the funds so invested. Such investments shall be
held in trust for the purpose for which the funds so
invested were held. After the Obligations in respect
of which the funds were deposited have been paid in
full (except as to unclaimed amounts as referred to
in Section 4.03) any of such funds (including
interest received in respect of such investments and
gain on matured investments purchased at a discount)
held by the Indenture Trustee in excess of amounts to
which Holders of such Obligations are entitled shall
upon the Request of the Shipowner be paid by the
Indenture Trustee to the Shipowner but only in the
absence of a Default hereunder."
(p) Concerning Section 4.02. The appointment of a Paying Agent by
the Shipowner is subject to the prior consent of the Secretary and Indenture
Trustee, which consent shall not be unreasonably withheld.
(q) Concerning Section 4.03. Section 4.03 is revised to read as
follows:
SECTION 4.03. Unclaimed Amounts. Any moneys received by the
Indenture Trustee or a Paying Agent, for the payment of Obligations or
Guarantees and remaining unclaimed by the Holders thereof for 6 years
after the date of the Maturity of said Obligations or the date of
payment by the Secretary of the Guarantees shall, upon delivery to the
Indenture Trustee of a Request by the Shipowner, be paid to the
Shipowner; provided that, not less than 30 days prior to such payment,
the Shipowner shall publish notice thereof to the Obligees at least
once in the Authorized Newspapers. In such event, such Holders shall
thereafter be entitled to look only to the Shipowner (and the settlor
or settlors of any trust for which the Shipowner is trustee, to the
extent paid over to it or them) for the payment thereof, and the
Indenture Trustee or such Paying Agent, as the case may be, shall
thereupon be relieved from all responsibility to such Holders
therefor. No such Request, publication or payment shall be construed
to extend any statutory period of limitations which would have been
applicable in the absence of such Request, publication or payment.
(r) Concerning Sections 5.01 and 5.02. Sections 5.01 and 5.02 are
revised to read as follows:
SECTION 5.01. Authorization, Execution and Delivery of Indenture and
Performance. The Shipowner has duly authorized the execution, delivery
and performance of this Indenture.
SECTION 5.02. Payment and Procedure for Payment of Obligations. The
Shipowner will duly and punctually pay the principal of (and premium,
if any) and interest on the Obligations according to the terms thereof
and of this Indenture. The Shipowner will deposit with the Indenture
Trustee or (subject to Section 3.09) a Paying Agent no later than
11:00 a.m. in New York City on each date fixed for such payment or as
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otherwise provided by the Special Provisions hereof an amount in
immediately available funds sufficient for such payment (after taking
into account any amounts then held by the Indenture Trustee or such
Paying Agent and available for such payment) with irrevocable
directions to it to so apply the same; provided that, payments of
interest may be made as provided in Section 2.02(b)(4); and provided
further, that except with the consent of the Secretary the Shipowner
shall not deposit any such amount more than ten days prior to the date
of the payment for which such amount is deposited, unless otherwise
provided by the Special Provisions hereof.
(s) Concerning Section 6.06. Section 6.06(a) revised to read as
follows:
SECTION 6.06. (a) Obligees' Right to Direct Indenture Trustee after
Indenture Default. During the continuance of any Indenture Default,
the Holders of a majority in principal amount of the Outstanding
Obligations shall have the right, by an Act of Obligees, to direct the
Indenture Trustee:
(1) to exercise or to refrain from exercising any
right or to enforce any remedy granted to it by this
Indenture; and
(2) to direct the time, method and place of the
exercise of any such right or the enforcement of any such
remedy;
provided that, subject to Section 7.03, the Indenture Trustee shall
have the right not to take any such action if it shall determine in
good faith that the action would involve it in personal liability, or
would be unjustly prejudicial to the Obligees not parties to such
direction.
Anything in this Section 6.06(a) to the contrary notwithstanding, the
Indenture Trustee shall be obligated to demand payment of the
Guarantees as provided in Section 6.02(a) unless the Holders of all
Outstanding Obligations shall have elected to terminate the Guarantees
as provided in Section 6.04(a)(2), in which case the Indenture Trustee
shall be obligated to refrain from making such demand.
(t) Concerning Section 6.09. The reference to "Exhibit 4" in Section
6.09 is revised to read "Exhibit 5."
(u) Concerning Section 7.02. The reference to "$3,000,000" in
Section 7.02 is revised to read "$75,000,000."
(v) Concerning Section 7.03. Section 7.03(h) and (o) are revised to
read as follows:
(h) In all cases where this Indenture does not make express provision
as to the evidence on which the Indenture Trustee may act or refrain
from acting, the Indenture Trustee shall be entitled to receive and
shall be protected (subject to paragraph (c) of this Section) in
acting or refraining from acting hereunder in reliance upon an
Officer's Certificate as to the existence or nonexistence of any fact.
(o) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers.
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(w) Concerning Section 7.04. Section 7.04 is revised to read as
follows:
SECTION 7.04. Compensation, Expenses and Indemnification of Indenture
Trustee. The Shipowner shall (1) pay such compensation to the
Indenture Trustee as they may agree upon in writing from time to time
and reimburse it for its reasonable expenses and disbursements
(including counsel fees and expenses) and (2) indemnify the Indenture
Trustee for, and hold it harmless against, any loss, liability or
expense which it may incur or suffer without negligence or bad faith
in acting under this Indenture or the Authorization Agreement. The
compensation of the Indenture Trustee shall not be limited to the
compensation provided by law for a trustee acting under an express
trust. The obligations of the Shipowner under this Section 7.04 shall
survive the termination of the Indenture and resignation or removal of
the Indenture Trustee.
(x) Concerning Sections 8.01 and 8.02. Sections 8.01 and 8.02 are
revised to read as follows:
SECTION 8.01. Consolidation, Merger or Sale by Shipowner. Nothing in
this Indenture shall prevent any lawful consolidation or merger of the
Shipowner with or into any other Person, or any sale of the Vessel to
any other Person lawfully entitled to acquire and operate the Vessel
or any sale by the Shipowner of all or substantially all of its assets
to any other Person; provided that, except where the Shipowner shall
be the Person surviving a merger or consolidation, the Person formed
by or surviving such consolidation or merger, or to which the sale of
the Vessel shall be made, shall, by Supplemental Indenture, expressly
assume the payment of the principal of and interest (and premium, if
any) on the Outstanding Obligations relating to the Vessel in
accordance with the terms of the Obligations and of the Indenture and
shall expressly assume the performance of the agreements of the
Shipowner in the Indenture; provided further, that to the extent the
Outstanding Obligations are not so assumed, the Shipowner shall redeem
or cause to be redeemed the Outstanding Obligations, such redemption
to be in accordance with the terms of the Obligations and of the
Indenture. When a Person so assumes this Indenture and the
Outstanding Obligations, the Supplemental Indenture shall discharge
and release the Shipowner from any and all obligations thereunder
relating to the Outstanding Obligations. In the event of such an
assumption by a Person to whom the Vessel has been sold (a) such
Person shall succeed to, and be substituted for, and may exercise
every right and power of the original Shipowner with the same effect
as if such successor Shipowner had been named as the Shipowner herein
and (b) the Outstanding Obligations shall be surrendered to the
Indenture Trustee for appropriate notation or for the issuance of new
Obligations in exchange for the Outstanding Obligations in the name of
the successor Shipowner, as required by the Secretary.
SECTION 8.02. Sale of the Vessel by the Secretary. Nothing contained
in this Indenture shall prevent the sale of the Vessel to any other
Person by the Secretary, by a court of law or by the Shipowner
following, in connection with or in lieu of a foreclosure or similar
action. Following any such sale (1) the Person to whom the Vessel has
been sold may, by Supplemental Indenture, expressly assume the payment
of principal and interest (and premium, if any) on all of the
Outstanding Obligations in accordance with the terms of the
Obligations and the Indenture and shall expressly assume the
performance of the agreements of the Shipowner in the Indenture; and
(2) in the event such Person does not so assume, the Secretary shall
prepay or redeem all of the Outstanding Obligations without premium
pursuant to Section 3.06 hereof; provided that, the Secretary shall
allow or permit the sale of the Vessel to the original Shipowner or to
any affiliate of the original Shipowner only if (i) the Secretary has
not prepaid or redeemed such Obligations prior to such sale, and (ii)
such purchaser assumes all of the Outstanding Obligations as
contemplated by the preceding clause (1). When a Person so assumes
this Indenture and all of the Outstanding Obligations, the
Supplemental Indenture shall discharge and release the Secretary from
any and all obligations
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thereunder in the Secretary's capacity as Shipowner relating to the
Outstanding Obligations. In the event of such an assumption by a
Person to whom the Vessel has been sold (a) such Person shall succeed
to, and be substituted for, and may exercise every right and power of
the original Shipowner with the same effect as if such successor
Shipowner had been named as the Shipowner herein and (b) the
Outstanding Obligations shall be surrendered to the Indenture Trustee
for appropriate notation or for the issuance of new Obligations in
exchange for the Outstanding Obligations in the name of the successor
Shipowner, as required by the Secretary. Any such sale or the
execution of a Supplemental Indenture by an successor Shipowner shall
not discharge or in any manner affect the obligation of the United
States to pay the Guarantees pursuant to the terms thereof.
(y) Concerning Notices. Subject to the provisions of Section 13.01
of Exhibit 1 to this Indenture, any notice, request, demand, direction,
consent, waiver, approval or other communication to be given to a party
hereto or the Secretary, shall be deemed to have been sufficiently given or
made when addressed to:
The Indenture Trustee as: CITIBANK, N.A.
120 Wall Street, 13th Floor
New York, New York 10043
Attn: Corporate Agency and
Trust Department
The Shipowner as: ROWAN COMPANIES, INC.
5450 Transco Tower
2800 Post Oak Boulevard
Houston, Texas 77056-6196
Attn: Chief Financial Officer
The Secretary as: SECRETARY OF TRANSPORTATION
c/o Maritime Administrator
Department of Transportation
400 Seventh Street, SW
Washington, D.C. 20590
Attention: Office of the Chief Counsel
(z) Concerning Applicable Law. This Indenture and each Obligation
shall be governed by the laws of the State of New York, and to the extent
applicable, the laws of the United States.
(aa) Execution of Counterparts. This Indenture may be executed in any
number of counterparts. All such counterparts shall be deemed to be originals,
and shall constitute but one and the same instrument.
(bb) Concerning Disbursement Notations. Upon receipt from the Lender
of documents confirming Disbursements, the Indenture Trustee shall review
Exhibit A of the Floating Rate Note (The "Grid"), and calculate principal and
applicable interest thereon. If the Indenture Trustee's calculations are not
consistent with those of the Lender, the calculations of the former shall
prevail. The Indenture Trustee shall promptly thereafter send a copy of the
Grid bearing its calculations to the Holder, who shall endorse the Indenture
Trustee's calculations on the original Exhibit A to the Floating Rate Note, and
send a copy thereof, so noted, to the Indenture Trustee, who, in turn, shall
promptly send a copy thereof to the Secretary.
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IN WITNESS WHEREOF, this Trust Indenture has been duly executed by the
parties hereto as of the day and year first above written.
[SEAL] ROWAN COMPANIES, INC.
Shipowner
ATTEST:
Mark H. Hay By: E.E. Thiele
- -------------------- -----------------------------------
Secretary Senior Vice President
CITIBANK, N.A.
Indenture Trustee
[SEAL]
ATTEST:
Carol Ng By: Authur Aslasian
- -------------------- -----------------------------------
Vice President Vice President
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DISTRICT OF COLUMBIA )
) SS:
CITY OF WASHINGTON )
On this 17th day of December, 1996, before me personally appeared
Edward E. Thiele to me known, who being by me duly sworn, did depose and say
that he is the Senior Vice President of ROWAN COMPANIES, INC., that he knows
the seal affixed to said instrument is such corporation's seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
In testimony whereof, I have hereunto set my hand and seal this 17th
day of December, 1996.
Lisa M. Henshaw
---------------
NOTARY PUBLIC
[NOTARIAL STAMP AND SEAL]
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STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
Be it known this 17th day of December, 1996, personally
appeared before me, Arthur W. Aslanian, who after being duly sworn, deposed and
said that he/she is a Vice President of CITIBANK, N.A., a national banking
association, which is described in and executed the instrument hereto annexed,
and that he/she signed the instrument hereto annexed by order of the Board of
Directors of the said national banking association, and acknowledged the
annexed instrument to be the free act and deed of the said national banking
association.
In testimony whereof, I have hereunto set my hand and seal this 17th
day of December, 1996.
Karen Katlan
-------------
NOTARY PUBLIC
[NOTARIAL STAMP AND SEAL]
64
Document 4
SCHEDULE OF DEFINITIONS
SCHEDULE A to
Trust Indenture
65
Schedule of Definitions to Trust Indenture
Dated as of December 17, 1996
"Act" means the Merchant Marine Act, 1936, as amended, and in
effect on the Closing Date.
"Act of Obligees" means any request, demand, authorization,
direction, notice, consent, waiver or other action to be given or taken by the
Obligees and embodied in one or more documents of the type, and executed in the
manner, required by the Indenture.
"Actual Cost" means the actual cost of the Vessel as
determined and re-determined by the Secretary pursuant to Sections 1101(f) and
1104(b)(2) of the Act.
"Actual Knowledge" means actual knowledge of a Responsible
Officer of a Person.
"Affiliate" or "Affiliated" means any Person directly or
indirectly controlling, controlled by, or under common control with, another
Person.
"Applicable Interest Rate" shall mean the rate per annum equal
to the lesser of (i) 10.25% per annum, or (ii) LIBOR plus during the
Construction Period, nine-twentieths of one percent (0.45%) per annum and
thereafter, one-half of one percent (0.50%) per annum; provided, however,
that, if the Lender shall have determined, prior to the commencement of any
Interest Period that: (A) Dollar deposits of sufficient amount and maturity
for funding a Disbursement are not available to such Lender in the London
interbank market in the ordinary course of business; or (B) by reason of
circumstances affecting the relevant market, adequate and fair means do not
exist for ascertaining the rate of interest to be applicable to a Disbursement;
or (C) the relevant rate of interest referred to in the definition of LIBOR
which is to be used to determine the rate of interest for a Disbursement does
not cover the funding cost to the Lender of making or maintaining the
Disbursement, then the Lender shall so notify the Indenture Trustee, who shall
give notice to the Shipowner of such condition and interest shall, effective as
of the date of such notice and so long as such condition shall exist, accrue
during each applicable Interest Period at the Base Rate; provided, further,
however that if, in the Lender's reasonable judgment, it becomes unlawful at
any time for such Lender to make or maintain Disbursements based upon LIBOR,
the Lender shall so notify the Indenture Trustee, who shall give notice to the
Shipowner of such determination and, effective as of the date of such notice
and so long as such condition shall exist, interest shall thereafter accrue
during each applicable Interest Period at the Base Rate.
"Authorization Agreement" means the Authorization Agreement,
Contract No. MA-13258, dated the Closing Date, between the Secretary and the
Indenture Trustee, whereby the Secretary authorizes the Guarantee of the United
States of America to be endorsed on each of the Obligations, as the same is
originally executed, or as modified, amended or supplemented in accordance with
the applicable provisions thereof.
"Authorized Newspapers" means The Wall Street Journal (all
editions) and The Journal of Commerce. Whenever successive weekly publications
in the Authorized Newspapers are required under any agreement or other
document, such publications may be made (unless otherwise expressly provided
under any agreement or other document) on the same or different days of the
week and in the same or in different Authorized Newspapers. If it is impossible
or impractical to publish any notice required under any agreement or other
document in the manner therein provided, then such publication in lieu thereof
as shall be made with the approval of the
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Secretary (in the case of notice under the Authorization Agreement or Security
Agreement), or approval of the Indenture Trustee (in the case of notice under
this Indenture), shall constitute a sufficient publication of such notice.
"Base Rate" means, for any Interest Period or any other
period, a fluctuating interest rate per annum as shall be in effect from time
to time which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by
Citibank, N.A. in New York, New York, from time to time, as
Citibank, N.A.'s base rate; or
(b) 1/2 of one percent per annum above the latest
three-week moving average of secondary market morning offering
rates in the United States for three-month certificates of
deposit of major United States money market banks, such
three-week moving average being determined weekly on each
Monday (or, if any such day is not a Business Day, on the next
succeeding Business Day) for the three-week period ending on
the previous Friday by Citibank, N.A. on the basis of such
rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York, or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank, N.A. from
three New York certificate of deposit dealers of recognized
standing selected by Citibank, N.A., in either case adjusted
to the nearest 1/4 of one percent or, if there is no nearest
1/4 of one percent, to the next higher 1/4 of one percent
but in neither event shall the Base Rate exceed 10.25% per annum.
"Borrower" means the Shipowner.
"Business Day" shall mean any day on which dealings in Dollar
deposits are carried on in the London interbank market and on which commercial
banks in London and New York City are open for domestic and foreign exchange
business.
"Certificate Authorizing Disbursement" shall mean, with
respect to a Disbursement, the United States Certificate Authorizing
Disbursement substantially in the form set forth in Annex A to the Credit
Agreement.
"Closing Date" means December 17, 1996.
"Construction Contract" means that certain Mobile Platform
Construction Agreement (LeTourneau Hull No. 219), dated October 24, 1995, by
and between the Shipowner and the Shipyard, as the same may be amended,
modified or supplemented in accordance with the applicable provisions thereof.
"Construction Period" shall mean the period from the date
hereof to the Delivery Date.
"Construction Period Interest" shall mean all interest that
accrues on the Disbursements during the Construction Period.
"Corporate Trust Office" means the principal corporate trust
office of the Indenture Trustee at which, at any time, its corporate trust
business shall be principally administered, which office at the date of
execution of the Indenture is located at 120 Wall Street, 13th Floor, New York,
New York, 10043, Attention: Corporate Agency and Trust Department, except that
for purposes of presentation of Obligations for payment or registration or
transfer exchange, "Corporate Trust Office" means the office of the Indenture
Trustee at which, at any time, its corporate agency business shall be
principally administered, which office at the date of execution of the Indenture
is located at 111 Wall Street, 5th Floor, New York, New York 10043.
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"Credit Agreement" or "Agreement" shall mean the Credit
Agreement dated as of the Closing Date between the Shipowner and CITIBANK,
N.A., including any Annex, Exhibit, and other attachment thereto, as the same
may be amended, modified or supplemented in accordance with the applicable
provisions thereof.
"Credit Facility" shall have the meaning set forth in Whereas
Clause (A) of the Credit Agreement.
"Delivery Date" means the date on which the Vessel is
delivered to and accepted by the Shipowner.
"Depreciated Actual Cost" means the depreciated actual cost of
the Vessel as determined and redetermined by the Secretary pursuant to
Sections 1101(g) and 1104(b)(2) of the Act.
"Disbursement" shall have the meaning set forth in Section
2.03 of the Credit Agreement.
"Disbursement Date" shall mean, in relation to any
Disbursement, the Business Day on which the Lender shall make such
Disbursement.
"Dollars," "U.S. Dollars," "U.S.D.," "U.S.$" or "$" shall
mean the lawful currency of the United States of America.
"Final Disbursement Date" shall have the meaning set forth in
Section 2.02 of the Credit Agreement.
"Floating Rate Note" shall mean the Obligation substantially
in the form of Exhibit 2 to the Indenture, appropriately completed.
"Governmental Authority" shall mean the government of any
country, any agency, department or other administrative authority or
instrumentality thereof, and any local or other governmental authority within
any such country.
"Guarantee" or "Guarantees" means the guarantee of an
Obligation by the United States of America pursuant to Title XI of the Act, as
provided in the Authorization Agreement.
"Guarantee Commitment" means the Commitment to Guarantee
Obligations, Contract No. MA-13257, dated as of the Closing Date, executed by
the Secretary and accepted by the Shipowner with respect to the Guarantees, as
originally executed or as modified, amended or supplemented in accordance with
the applicable provisions thereof.
"Guarantee Fees" shall mean the amounts described in the
Guarantee Commitment payable in consideration for the commitment therein
described and payable as provided in such Guarantee Commitment.
"Holder" means the holder of an Obligation.
"Indenture" means the Trust Indenture dated as of the Closing
Date, between the Shipowner and the Indenture Trustee, as the same is
originally executed, or as modified, amended or supplemented in accordance with
the applicable provisions thereof.
"Indenture Default" has the meaning specified in Article VI of
Exhibit 1 to the Indenture.
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"Indenture Trustee" means CITIBANK, N.A., a national banking
association, and any successor trustee permitted under the Indenture.
"Interest Payment Date" means, with respect to any Obligation,
the date when any installment of interest on such Obligation is due and
payable, which are January 1 and July 1 of each year, beginning on July 1, 1997
and the date of any prepayment of any Obligation.
"Interest Period" shall mean, with respect to any
Disbursement, (i) the period commencing on the Disbursement Date and extending
up to, but not including, the next Interest Payment Date; and (ii) thereafter
the period commencing on each Interest Payment Date and extending up to, but
not including, the next Interest Payment Date.
"Lender" shall mean CITIBANK, N.A., a national banking
association, and its successors and assigns.
"LIBOR" shall mean, in relation to any Interest Period, the
rate of interest per annum (rounded upward, if necessary, to the nearest 1/16
of 1%) quoted by the principal London office of CITIBANK, N. A., at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for the offering to leading banks in the London
interbank market of U.S. Dollar deposits for a period and in an amount
comparable to such Interest Period and the principal amount upon which interest
is to be paid during such Interest Period.
"Maturity," when used with respect to any Obligation, means
the date on which the principal of, or interest on, such Obligation becomes due
and payable as therein provided, whether on a Payment Date, at the Stated
Maturity or by prepayment, repayment, redemption or declaration of acceleration
or otherwise.
"Mortgage" means the first preferred ship mortgage on the
Vessel, Contract No. MA-13260, between the Shipowner and the Secretary, as
originally executed or as modified, amended or supplemented in accordance with
the applicable provisions thereof.
"Obligation" or "Obligations" shall mean the Floating Rate
Note of the Shipowner bearing a Guarantee and authenticated and delivered
pursuant to the Indenture and the Authorization Agreement.
"Obligee" means each Holder.
"Officer's Certificate" means a certificate conforming to
Section 1.02 of Exhibit 1 to the Indenture and signed by a Responsible Officer
of the Person giving such certificate.
"Opinion of Counsel" means an opinion of counsel conforming to
Section 1.02 of Exhibit 1 to the Indenture.
"Outstanding," when used with reference to the Obligations,
shall mean all Obligations theretofore issued under the Indenture, except:
(1) Obligations Retired or Paid; and
(2) Obligations in lieu of which other
Obligations have been issued under the
Indenture.
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For the purposes of Articles VI and X of Exhibit 1 to the Indenture, and also
in determining whether the Holders of a stated percentage of the principal
amount of Outstanding Obligations have taken any Act of Obligees required or
permitted by the Indenture, Obligations owned by the Shipowner or by any
Affiliate of the Shipowner (excluding (a) Obligations held by an Affiliate of
the Shipowner when such Affiliate is acting in a fiduciary capacity if it is
established to the satisfaction of the Indenture Trustee that neither the
Shipowner nor another Affiliate has a beneficial interest therein and (b)
Obligations pledged in good faith by the Shipowner or by any Affiliate of the
Shipowner, if the pledgee (i) is not an Affiliate of the pledgor and (ii)
establishes to the satisfaction of the Indenture Trustee that the pledgee has
the right to vote such Obligations) shall be disregarded and deemed not to be
Outstanding; provided however that, for the purpose of determining whether the
Indenture Trustee shall be protected in relying on any such Act of Obligees,
only Obligations which the Indenture Trustee has actual knowledge are so owned
shall be so disregarded and deemed not to be Outstanding. Obligations which
are not Outstanding shall not be entitled to any rights or benefits provided in
the Indenture.
"Note" shall mean the Floating Rate Note.
"Paying Agent" means any bank or trust company having the
qualifications set forth in clauses (1), (3), (4) and (5) of Section 7.02(a) of
Exhibit 1 to the Indenture, which shall be appointed by the Shipowner in
accordance with Section 4.02 of Exhibit 1 to the Indenture to pay the principal
of (and premium, if any) or interest on the Obligations on behalf of the
Shipowner.
"Payment Date" shall mean January 1 and July 1 of each year,
beginning on January 1, 1999.
"Payment Default" has the meaning specified in Section 6.01(a)
of Exhibit 1 to the Indenture.
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means the place at which an Obligation is
to be redeemed pursuant to Article III of Exhibit 1 to the Indenture.
"Principal Office," when used with respect to the Shipowner,
means the office of the Shipowner at which, at any particular time, its
corporate business is principally administered, which office at the date of
execution of the Indenture is located at 5450 Transco Tower, 2800 Post Oak
Boulevard, Houston, Texas 77056.
"Redeem" means with respect to the redemption of Obligations,
to repay or prepay.
"Redemption" means with respect to the redemption of
Obligations, the repayment or prepayment of Obligations as applicable.
"Redemption Date" means, with respect to any Obligation, a
date fixed for the prepayment, repayment or redemption of such Obligation by or
pursuant to Article Fourth of the Indenture or Article III of Exhibit 1 to the
Indenture.
"Redemption Price" means, with respect to any Obligation, the
price at which an Obligation is to be prepaid, repaid, or redeemed pursuant to
Article Fourth of the Indenture or Article III of Exhibit 1 to the Indenture.
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"Request" means a written request to a Person for the action
therein specified, signed by the Person making such request or a Responsible
Officer thereof.
"Responsible Officer" means (i) in the case of any business
corporation, the chairman of the board of directors, the president, any
vice-president, the secretary, assistant secretary, the treasurer or assistant
treasurer thereof, (ii) in the case of any commercial bank, the chairman or
vice-chairman of the executive committee of the board of directors or trustees,
the president, any vice president, the secretary, the treasurer, any trust
officer, any executive, senior, second or assistant vice president or any
officer or assistant officer customarily performing functions similar to those
performed by the persons who at the time shall be such officers or to whom any
related matter is referred because of his/her knowledge of and familiarity with
the particular subject, (iii) in the case of the Indenture Trustee, any senior
trust officer or trust officer, or any vice president associated with the
Corporate Agency and Trust Department, (iv) with respect to the signing or
authentication of Obligations and Guarantees by the Indenture Trustee, any
person specifically authorized by the Indenture Trustee to sign or authenticate
Obligations.
"Retired or Paid," as applied to Obligations and the
indebtedness evidenced thereby, means that such Obligations shall be deemed to
have been retired or paid and shall no longer be entitled to any rights or
benefits provided in the Indenture if:
(1) such Obligations shall have been paid in full
in immediately available funds;
(2) such Obligations shall have been cancelled by
the Indenture Trustee or shall have been
delivered to the Indenture Trustee for
cancellation; or
(3) such Obligations shall have become due and
payable at Maturity and funds sufficient for
the payment of such Obligations (including
interest to the date of Maturity, or in the
case of a payment after Maturity, to the date
of payment, together with any premium
thereon) and available for such payment
(whether as a result of payment pursuant to
the Guarantees or otherwise) shall be held by
the Indenture Trustee or any Paying Agent
pursuant to Section 4.02 of Exhibit 1 to the
Indenture (or shall have been so held and
shall thereafter have been paid to the
Shipowner pursuant to Section 4.03 of Exhibit
1 to the Indenture) in trust for the purpose
or with irrevocable directions, to apply the
same;
provided that, the foregoing definition is subject to the provisions of Section
6.08 of Exhibit 1 to the Indenture.
"Secretary" means the Secretary of Transportation or any
official or official body from time to time duly authorized to perform the
duties and functions of the Secretary of Transportation under Title XI of the
Act (including the Maritime Administrator, the Acting Maritime Administrator,
and to the extent so authorized, the Deputy Maritime Administrator and other
officials of the Maritime Administration).
"Secretary's Note" means a promissory note issued and
delivered by the Shipowner to the Secretary described in Article Third of the
Security Agreement and shall also mean any promissory note issued in
substitution for and replacement thereof pursuant to the Security Agreement.
"Secretary's Notice" means a notice from the Secretary to the
Indenture Trustee to the effect that (a) a default, within the meaning of
Section 1105(b) of the Act, has occurred under a mortgage, loan agreement, or
other security agreement that has been entered into between the Secretary, the
Shipowner and any other parties in order to protect the interests of the
United States of America in connection with the Guarantees, (b) such notice is
given for the purposes of Section 6.01(b) of Exhibit 1 to the Indenture in
order to protect the security interests of the
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United States of America under such mortgage, loan agreement or other security
agreement, and (c) the Guarantees will terminate upon the expiration of 60 days
from the date of such notice if the Indenture Trustee and each Obligee shall
have failed to demand payment of the Guarantees as provided in the Indenture,
the Guarantees or the Act. Such notice shall be given (i) in writing, by
registered mail, return receipt requested, deposited in the United States Mail
on the date of such notice and addressed to a Responsible Officer in the
Corporate Trust Office of the Indenture Trustee in accordance with the Special
Provisions of the Indenture, (ii) by telegram, telex, telecopy or similar means
of transmission dispatched on such date and addressed to the Responsible
Officer in the Corporate Trust Office of the Indenture Trustee, as aforesaid,
and (iii) by collect telephone call made on such date to a Responsible Officer
in the Corporate Trust Office of the Indenture Trustee. A Secretary's Notice
shall not be deemed to have been given unless it shall have been given in
accordance with all the provisions of this definition, and the date of any
Secretary's Notice shall be deemed to be the last date on which it is so given
pursuant to clauses (i) through (iii) above.
"Secretary's Supplemental Indenture" means a Supplemental
Indenture evidencing the succession, pursuant to Section 6.09 of Exhibit 1 to
the Indenture, of the Secretary to the Shipowner, and the assumption by the
Secretary of the obligations of the Shipowner under the Indenture.
"Section 1104" means Section 1104A of the Act, and when used
with reference to subsections of Section 1104, means subsections of Section
1104A.
"Security Agreement" shall mean that certain security
agreement, Contract No. MA-13259, dated as of the Closing Date, with respect to
the Vessel, executed by the Shipowner and the Secretary relating to the
security in respect to the Guarantees, as originally executed or as modified,
amended or supplemented in accordance with the applicable provisions thereof.
"Shipowner" means ROWAN COMPANIES, INC., a Delaware
corporation, and subject to the provisions of Sections 6.09, 8.01 and 8.02 of
Exhibit 1 to the Indenture, shall also include its successors and assigns.
"Shipyard" or "Shipbuilder" means LETOURNEAU, INC., a Texas
corporation.
"Stated Maturity," when used with respect to any Obligation,
means the date determinable as set forth in such Obligation as the final date
on which the principal of such Obligation is due and payable, which shall
include, without limitation, each of the Payment Dates.
"Supplemental Indenture" shall mean any indenture supplement
to the Indenture entered into pursuant to Article X thereof.
"Title XI" means Title XI of the Act.
"Title XI Reserve Fund and Financial Agreement" means that
certain Title XI Reserve Fund and Financial Agreement, Contract No. 13261,
dated as of the Closing Date, executed by the Shipowner and the Secretary, as
amended, modified or supplemented in accordance with the applicable provisions
thereof.
"United States" means the United States of America.
"Vessel" means the Shipowner's self-elevating mobile offshore
drilling unit to be named the GORILLA V and constructed by LETOURNEAU, INC. in
accordance with the Construction Contract, including all work and material
heretofore or hereafter performed upon or installed in or placed on board such
Vessel, together with related appurtenances, additions, improvements, and
replacements.
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