EXHIBIT 10.10
Execution Copy
APPENDIX 1
to
Participation Agreement
DEFINITIONS AND INTERPRETATION
I. RULES OF INTERPRETATION
A. General Rules of Interpretation. In each Transaction
Document, unless a clear contrary intention appears:
(i) the singular number includes the plural number and
vice versa;
(ii) reference to any Person (individually or in any
particular capacity) includes such Person's legal
representatives, successors and assigns but, if applicable,
only if such legal representatives, successors and assigns
are permitted by the Transaction Documents, and reference to
a Person in a particular capacity excludes such Person in
any other capacity or individually;
(iii) reference to any gender includes the other
gender;
(iv) reference to any agreement (including any
Transaction Document), document or instrument means such
agreement, document or instrument as amended or modified and
in effect from time to time in accordance with the terms
thereof and, if applicable, the terms of the other
Transaction Documents and reference to any promissory note,
certificate or other instrument includes any promissory
note, certificate or other instrument which is an extension
or renewal thereof or a substitute or replacement therefor;
(v) reference to any Applicable Law means such
Applicable Law as amended, modified, codified, replaced or
reenacted, in whole or in part, and in effect from time to
time, including rules and regulations promulgated thereunder
and reference to any section or other provision of any
Applicable Law means that provision of such Applicable Law
from time to time in effect and constituting the substantive
amendment, modification, codification, replacement or
reenactment of such section or other provision;
(vi) reference in any Transaction Document to any
Article, Section, Appendix, Schedule or Exhibit means such
Article or Section thereof or Appendix, Schedule or Exhibit
thereto;
(vii) "hereunder", "hereof", "hereto" and words of
similar import shall be deemed references to a Transaction
Document as a whole and not to any particular Article,
Section or other provision thereof;
(viii) "including" (and with correlative meaning
"include") means including without limiting the generality
of any description preceding such term; and
(ix) relative to the determination of any period of
time, "from" means "from and including" and "to" means "to
and excluding";
B. Accounting Terms. In each Transaction Document, unless
expressly otherwise provided, accounting terms shall be construed
and interpreted, and accounting determinations and computations
shall be made, in accordance with GAAP.
C. Legal Representation of the Parties. The Transaction
Documents were negotiated by the parties with the benefit of
legal representation and any rule of construction or
interpretation otherwise requiring the Transaction Document to be
construed or interpreted against any party shall not apply to any
construction or interpretation hereof or thereof.
D. Defined Terms. Unless a clear contrary intention
appears, terms defined herein have the respective indicated
meanings when used in each Transaction Document.
II. DEFINITIONS
"Account" means each of the Deferred Construction Costs
Reserve Account, the Event of Loss Proceeds Account, the
Reimbursement and Proceeds Account, the Operating Account, the
Permitted Contest Reserve Account, the Drillship Sales Proceeds
Account, the R&B Falcon Subcharter Proceeds Account, the Letter
of Credit Collateral Account and the Termination Proceeds
Account.
"Account Collateral" has the meaning specified in Section
2.2 of the Depository Agreement.
"Accredited Investor" has the meaning specified in Rule
501(a) of the Securities Act.
"Acquiror" means an entity that acquires all or
substantially all of the assets or outstanding Voting Stock of a
Person.
"Actual Knowledge" means the actual awareness of a
Responsible Officer.
"Adjustment Date" means the Initial Certificate Margin
Adjustment Date and every sixth Payment Date thereafter.
"Advance" has the meaning specified in Section 2.3 of the
Participation Agreement.
"Advance Date" means the Closing Date or, if the Advances
are postponed under Section 2.8 of the Participation Agreement,
any Postponed Advance Date.
"Advance Request" means each of the Advance Request issued
in connection with the Closing Date or, if the Advances are
postponed under Section 2.8 of the Participation Agreement, the
Advance Request issued under such Section, in each case in
substantially the form of Exhibit N to the Participation
Agreement with appropriate provisions and insertions.
"Affected Certificate Purchaser" is defined in Section 7.7
of the Participation Agreement.
"Affiliate" means, when used with respect to any Person, any
other Person directly or indirectly controlling or controlled by
or under direct or indirect common control with such Person. As
used in this definition, the term "control" shall mean (including
the correlative meanings of the terms "controlling," "controlled
by" and "under common control with"), as used with respect to any
Person, the possession directly or indirectly, of the power to
direct or cause the direction of the management policies of such
Person, whether through the ownership of voting securities or by
contract or otherwise.
"After Tax Basis" means, with respect to any payment to be
received, the amount of such payment increased so that, after
deduction of the amount of all Taxes required to be paid by the
recipient calculated at the maximum United States federal rates
then generally applicable to large widely held corporations and
at the marginal state and local rates certified by the recipient
as then applicable to such recipient (less any tax savings
realized and the present value of any tax savings projected to be
realized by the recipient as a result of the payment of the
indemnified amount), with respect to the receipt by the recipient
of such amount, such increased payment (as so reduced) is equal
to the payment otherwise required to be made.
"Agent" means the Documentation Agent.
"Alternate Rate" means, for any day, the higher of: (a)
0.50% per annum above the latest Federal Funds Rate; and (b) the
rate of interest in effect for such day as publicly announced
from time to time by Bank of America National Trust and Savings
Association ("BofA"), a national banking association, in San
Francisco, California, as its "reference rate." (The reference
rate is a rate set by BofA based upon various factors including
BofA's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below such announced
rate.) Any change in the reference rate announced by BofA shall
take effect at the opening of business on the day specified in
the public announcement of such change.
"Alternate Rate Advance" means any Advance for which any
Certificate Return on any related Certificates is calculated with
reference to the Alternate Rate.
"Applicable Law" means all applicable laws, rules,
regulations (including Environmental Laws), statutes, treaties,
conventions (including, if applicable, the Safety of Life at Sea
Convention) codes, ordinances, permits, certificates, orders and
licenses of, and interpretations by, all Government Authorities,
and applicable judgments, decrees, injunctions, writs, orders or
like action of any court, arbitrator or other administrative,
judicial or quasi-judicial tribunal agency of competent
jurisdiction (including those pertaining to health and safety and
those pertaining to the construction, use or operation of the
Vessel, the OFE and any Modifications).
"Applicable Office" means, with respect to each Certificate
Purchaser, the office, branch or Affiliate of such Certificate
Purchaser specified as its "Applicable Office" to Deepwater, the
Charter Trustee and the Investment Trust.
"Applicable Percentage" means:
(i) with respect to payments made or obligations
guaranteed by (A) R&B Falcon or its Affiliates (other than
Deepwater) or (B) Deepwater pursuant to the terms of Charter
Supplement No. 1, 60%; or
(ii) with respect to payments made or obligations
guaranteed by (A) Conoco or its Affiliates (other than
Deepwater) or (B) Deepwater pursuant to the terms of Charter
Supplement No. 2, 40%.
"Appraisal" means, with respect to the Drillship, an
appraisal delivered on the Closing Date, prepared by the
Appraiser.
"Appraiser" means American Appraisal Incorporated.
"Assumption Cure Right" has the meaning set forth in Section
9(a) of the Drilling Consent.
"Bank of America" has the meaning specified in Section
3.2(o) of the Participation Agreement.
"Bankruptcy Default" means a Default described in Section
4.1(e) or (f) of either Charter Supplement No. 1 or Charter
Supplement No. 2.
"Base Charter Term" has the meaning specified in Section 2.3
of the Master Charter.
"Base Rate" means a rate per annum equal to LIBOR.
"Base Rate Advance" means any Advance for which Certificate
Return is calculated with reference to the Base Rate.
"Basic Hire" has the meaning specified in Section 3.1 of the
Master Charter.
"Beneficial Owners" means those financial institutions who
are parties to the Charter Trust Agreement and identified therein
as "Beneficial Owners".
"▇▇▇▇ of Sale" means the instrument substantially in the
form set forth on Exhibit M to the Participation Agreement to be
delivered by Deepwater to the Charter Trustee.
"Blackout Period" means that period (1) beginning on the
earlier to occur of (i) the exercise of the Non-Assumption Cure
Right by a Non-Defaulting Drilling Party and (ii) the lending of
Credit Support, directly or indirectly, by a Non-Defaulting
Drilling Party to the other Drilling Party, and (2) ending on the
later to occur of (i) the first anniversary of the cure payment
or the provision of such Credit Support and (ii) the first day
following the Defaulting Drilling Party's sixth consecutive Day
Rate payment in accordance with the terms of its Drilling
Contract following the most recent exercise of the Non-Assumption
Cure Right or provision of Credit Support, as applicable.
"Board of Governors" means the Board of Governors of the
Federal Reserve System of the United States of America.
"Builder" means, collectively, Samsung Heavy Industries Co.,
Ltd., a Korean corporation, and Samsung Corporation, a Korean
corporation, as Builder under the Construction Contract.
"Builder's Bank" means the guarantor of any refund
obligations that the Builder may incur under the Construction
Contract.
"Business Day" means (i) except as set forth in clause (ii)
below, any day excluding (x) Saturday, (y) Sunday, and (z) any
day on which banks in New York, New York, Wilmington, Delaware,
or Houston, Texas, are authorized by law to close, and (ii) with
respect to all notices and determinations in connection with and
payments of Certificate Return any day which is a Business Day
described in (i) above and which is also a day for trading by and
between banks in U.S. dollar deposits in the London interbank
Eurodollar market.
"Buyer" means the "Buyer" under the Construction Contract.
"Casualty" means any damage or destruction of all or any
portion of the Drillship as a result of a fire or other casualty
which does not constitute an Event of Loss.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. ' 9601 et
seq., and its implementing regulations and amendments.
"Certificate" means each Investment Trust Certificate, each
Series A Trust Certificate and each Series B Trust Certificate.
"Certificate Margin" has the meaning specified in Section
2.4(c) of the Participation Agreement.
"Certificate Purchaser Amount" means, with respect to each
Certificate Purchaser, at any given time, the aggregate amount of
all Advances made by such Certificate Purchaser plus accrued but
unpaid Postponement Yield, if any, minus the amount of any
distributions paid to such Certificate Purchaser in reduction of
the Certificate Purchaser Amount.
"Certificate Purchaser Balance" means, at any given time,
the aggregate amount of all Advances made by the Certificate
Purchasers minus the amount of any distributions paid to the
Certificate Purchasers in reduction of the Certificate Purchaser
Balance.
"Certificate Purchaser Liens" means Liens on or against any
or all of the Drillship, the Trust Estate, the Investment Trust,
the Charter or any payment of Charter Hire which results from (a)
any act or omission of, or any Claim against any Certificate
Purchaser in any case unrelated to the transactions contemplated
by the Transaction Documents (including any Liens arising as a
result of a voluntary transfer of all or any portion of either
Trust Estate, other than any voluntary transfer after a Charter
Event of Default or a transfer to Deepwater pursuant to the
Charter), (b) any Tax owed by any such Person, except for any Tax
required to be paid by Deepwater under the Transaction Documents,
including any Tax for which Deepwater is obligated to indemnify
such Person under the General Tax Indemnity, or (c) any act or
omission of such Person that is in breach of any of the covenants
or agreements of the Transaction Documents.
"Certificate Purchaser Replacement Conditions" has the
meaning specified in Section 4.3 of the Participation Agreement.
"Certificate Purchasers" means those financial institutions
who are identified in the Charter Trust Agreement as "Beneficial
Owners" and in the Investment Trust Agreement as "Certificate
Purchasers."
"Certificate Return" means:
(i) except where clause (ii) of this definition is
applicable, for any Return Period, an amount equal to the
product of the applicable Certificate Return Rate times the
Certificate Purchaser Balance (or portion thereof) allocable
to such Return Period or
(ii) where one, but not both, of the Charter Supplements has
been accelerated pursuant to Section 4.2(a) thereof,
Certificate Return accruing after the termination of the
accelerated Charter Supplement shall be calculated as, for
any Return Period, an amount equal to the product of the
applicable Certificate Return Rate times the Certificate
Purchaser Balance that would have been in effect on such
date, but for the acceleration (such Certificate Purchaser
Balance being the amount set forth on Schedule I to the
Master Charter opposite the Charter Hire Payment Date under
the column marked "Charter Balance").
"Certificate Return Rate" means the Base Rate plus the
Certificate Margin or, to the extent that the Base Rate is
unavailable or illegal, the Alternate Rate plus the Certificate
Margin.
"Change of Control" means (i) as to any Person (including
Conoco and R&B Falcon), a sale, assignment or transfer by its
Affiliates of all or substantially all of the assets of such
Person and its Subsidiaries taken as a whole (whether in a single
transaction or a series of related transactions) to any "person"
or "group" (as the ultimate purchaser, assignee or transferee)
within the meaning of Section 13(d)(3) and Section 14(d)(2) of
the Securities Exchange Act of 1934 other than to its Affiliates;
(ii) as to any Person (including Conoco and R&B Falcon), its
Affiliates, directly or indirectly cease to beneficially own more
than 50% of the outstanding voting stock of such Person; (iii)
after the occurrence of the event described in clause (ii), the
first date on which the individuals who are directors of the
Relevant Entity and whose election or nomination for election by
the stockholders of the Relevant Entity is approved, or who were
elected by the affirmative vote of, at least two-thirds of the
directors who were members of the Board of Directors of the
Relevant Entity at the time of such nomination or election, will
cease to constitute a majority of the Board of Directors of the
Relevant Entity or its successor by merger, consolidation or sale
of assets; or (iv) the liquidation or dissolution of such Person.
For purposes of this definition, Relevant Entity means either
Conoco or R&B Falcon, or, if there is a Parent of such respective
Person, the Parent.
"Charter" means both charters created by the Master Charter,
as supplemented by Charter Supplement No. 1 and Charter
Supplement No. 2.
"Charter Commencement Date" means the Delivery Date.
"Charter Default" means any event or condition which, with
the lapse of time or the giving of notice, or both, would
constitute a Charter Event of Default.
"Charter Event of Default" has the meaning specified in
Section 16.1 of the Master Charter.
"Charter Extension Option" has the meaning specified in
Section 20.2 of the Master Charter.
"Charter Hire" means Basic Hire and Supplemental Hire.
"Charter Hire Payment Date" means the last Business Day of
each calendar month, commencing on the Initial Charter Hire
Payment Date, and the last day of the Charter Term.
"Charter Hire Payment Date Certificate" has the meaning
specified in Section 3.4(b) of the Depository Agreement.
"Charter Residual Risk Amount" means 18% of the Certificate
Purchaser Balance at the commencement of the Base Charter Term.
"Charter Supplement" means Charter Supplement No. 1 or
Charter Supplement No. 2.
"Charter Supplement No. 1" means that Charter Supplement No.
1 dated as of the Closing Date, between the Charter Trustee and
Deepwater.
"Charter Supplement No. 1 Event of Default" has the meaning
specified in Section 4.1 of Charter Supplement No. 1.
"Charter Supplement No. 1 Payment Date" has the meaning
specified in Section 3.1 of Charter Supplement No. 1.
"Charter Supplement No. 2" means that Charter Supplement No.
2 dated as of the Closing Date, between the Charter Trustee and
Deepwater.
"Charter Supplement No. 2 Event of Default" has the meaning
specified in Section 4.1 of Charter Supplement No. 2.
"Charter Supplement No. 2 Payment Date" has the meaning
specified in Section 3.1 of Charter Supplement No. 2.
"Charter Supplement Prepayment Amount" has the meaning
specified in Section 4.2(c) of the Depository Agreement.
"Charter Term" has the meaning specified in Section 2.3 of
the Master Charter.
"Charter Trust" means the trust created pursuant to the
Charter Trust Agreement.
"Charter Trust Agreement" means that Charter Trust Agreement
(Deepwater Charter Trust 1999-A), dated as of the Closing Date,
between the Charter Trustee, the Certificate Purchasers and the
Investment Trust.
"Charter Trustee" means Wilmington Trust Company, a Delaware
banking corporation, not in its individual capacity, except as
otherwise provided, but solely as trustee under the Charter Trust
Agreement.
"Charter Trustee Assignment" means the Charter Trustee
Assignment, dated as of the Closing Date, between the Charter
Trustee, the Investment Trustee and the Hedging Agreement
Counterparties (if any).
"Claims" has the meaning specified in Section 10.1 of the
Participation Agreement.
"Classification Society" has the meaning specified in
Section 10.1 of the Master Charter.
"Closing Date" means the date which each of the conditions
precedent set forth in Sections 3.2 and 4.1 of the Participation
Agreement have been satisfied or waived and the actions
contemplated in Sections 2.1 and 2.2 of the Participation
Agreement have been carried out.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means the Charter Trustee's rights in the
Drillship, the Account Collateral, the Collateral Documents and
all other assets or property over which a Lien or security
interest has purported to have been granted under the Security
Documents.
"Collateral Documents" has the meaning specified in Section
2.1 of the Depository Agreement.
"Commitment" means, with respect to each Certificate
Purchaser, the amount set forth on Schedule I to the Trust
Agreements opposite the name of each Certificate Purchaser, which
amount may be adjusted pursuant to Section 7.7, 7.9 or 9.1 of the
Participation Agreement.
"Commitment Percentage" means, with respect to each
Certificate Purchaser, the percentage beneficial interest held by
such Certificate Purchaser under the Charter Trust Agreement and
the Investment Trust Agreement from time to time determined in
accordance with the respective Trust Agreement.
"Competitor" means a Person who either (i) is engaged in the
exploration, development, production, refinement, marketing or
retailing of crude oil, petroleum products, natural gas or gas
liquids or in providing marine contract drilling services for
oil, gas or other hydrocarbons or (ii) has a material interest
(whether held directly or indirectly) in, or is otherwise an
Affiliate of, a Person that is engaged in the exploration,
development, production, refinement, marketing or retailing of
crude oil, petroleum products, natural gas or gas liquids or in
providing marine contract drilling services for oil, gas or other
hydrocarbons; provided, however, that a Person who is an
institutional investor or lender which is a passive investor or
lender in the financing of equipment or facilities used in the
exploration, development, production, refinement, marketing or
retailing of crude oil, petroleum products, natural gas or gas
liquids or in providing marine contract drilling services for
oil, gas or other hydrocarbons or a passive investor in any
Person described in clauses (i) or (ii) above shall not, solely
by the reason of such investment or loan (including by reason of
foreclosing on any facilities used by such Person), be deemed to
be a "Competitor".
"Condemnation" means (x) the permanent and complete
condemnation, requisition, confiscation, arrest, seizure or other
taking of title or leasehold interest to the Drillship or any
transfer made in lieu of any such actual or threatened action or
proceeding or (y) any condemnation other than a requisition of
temporary use or requisition of use for a period scheduled to
last beyond the end of the Charter Term or which in fact is
continuing on the Charter Termination Date even if not scheduled
to last beyond the Charter Term, in either case resulting in the
loss of use or possession of substantially all of the Drillship.
A "Condemnation" shall be deemed to have occurred on the earliest
of the dates that use, title or a leasehold interest is taken.
"Conoco" means Conoco Inc. (formerly Conoco Energy Company),
a Delaware corporation.
"Conoco Certificates" means the Conoco Series A Trust
Certificates and the Conoco Investment Trust Certificates.
"Conoco Charter" means the charter created by the Master
Charter, as supplemented by Charter Supplement No. 2.
"Conoco Drilling Contract" means that Deepwater Drillship
Contract, dated as of April 30, 1997, as assigned, amended and
restated, between Frontier Deepwater Drilling Inc. and Deepwater.
"Conoco Drilling Contract Guaranty" means the Amended and
Restated Deepwater Drillship Project, Conoco Inc. Guaranty, dated
as of August 31, 1999, given by Conoco Inc. in favor of
Deepwater.
"Conoco Drilling Party" means Frontier Deepwater Drilling
Inc.
"Conoco Guaranty" means the Conoco Guaranty, dated as of the
Closing Date, given by Conoco in favor of the Trustees, the
Investment Trust, the Agent, the Certificate Purchasers, the
Hedging Agreement Counterparties, if any, and the other
beneficiaries named therein.
"Conoco Investment Trust Certificate" means each certificate
issued to a Certificate Purchaser from the Investment Trust
pursuant to Section 2.1(d) of the Participation Agreement and in
accordance with the Investment Trust Agreement to evidence 40% of
the Investment Portion of the Certificate Purchaser Amount of
each such Certificate Purchaser.
"Conoco Series A Trust Certificate" means each certificate
issued to a Beneficial Owner from the Charter Trustee pursuant to
Section 2.1(b) of the Participation Agreement and in accordance
with the Charter Trust Agreement to evidence 40% of the Series A
Portion of the Certificate Purchaser Amount of each such
Beneficial Owner.
"Conoco Usage" means the number of days, rounded to the
nearest day, the Drillship has been utilized under the Conoco
Drilling Contract.
"Construction Contract" means the Contract for Construction
and Sale of a 103,000 Metric Tons Displacement Drillship (Hull
No. 1231), dated February 7, 1997, between the Buyer and the
Builder.
"Construction Costs" means, collectively: (i) the
installment payments under Article II, Section 4 of the
Construction Contract, (ii) costs of acquisition of any OFE,
(iii) [intentionally omitted], (iv) all amounts to be paid under
the Construction Contract or any Construction Document after the
Closing Date and any other costs or expenses relating to
completing construction of the Drillship, including Deferred
Construction Costs, (v) any Transaction Expenses, (vi)
[intentionally omitted], (vii) any Postponement Yield payable
under Section 2.8 of the Participation Agreement and (viii) all
fees, costs, expenses and other amounts (including interest on
the notional principal but excluding amounts payable in
connection with an early termination of the Deepwater Hedging
Agreements (if any)) due and payable prior to the commencement of
the Initial Charter Hire Payment Date to the Charter Trustee
under the Deepwater Hedging Agreements (if any).
"Construction Documents" means such agreements in addition
to the Construction Contract, which Deepwater deemed necessary or
desirable for the design, construction, testing and performance
of the Drillship in accordance with the Construction Contract and
the Transaction Documents.
"Consumer Price Index" means the Consumer Price Index all
Items for all Urban Consumers (1981-1983 = 100) published by the
Bureau of Labor Statistics of the United States Department of
Labor, as reported by the Wall Street Journal. If for any reason
the Bureau of Labor Statistics does not furnish the Consumer
Price Index, the parties instead shall mutually select, accept
and use such other index or comparable statistics on the cost of
living in Washington, D.C. that is computed and published by an
agency of the United States or a responsible financial periodical
of recognized authority.
"Counterpart Investment Trust Certificate" has the meaning
specified in Section 2.4(d) of the Participation Agreement.
"Counterpart Series A Trust Certificate" has the meaning
specified in Section 2.4(d) of the Participation Agreement.
"Coverage Ratio" means, (i) as of any Charter Hire Payment
Date occurring on or prior to the third Charter Hire Payment
Date, the ratio of (x) the projected Revenues for the next three
calendar months (beginning with the month following the month in
which such Charter Hire Payment Date occurs) to (y) the aggregate
amount of all payments (including projected Operation and
Maintenance Expenses) that will be required to be made under
clauses "first" through "eighth" of Section 3.4(b) of the
Depository Agreement during such three-month period, and (ii)
thereafter, as of any Charter Hire Payment Date, the ratio of (A)
the actual Revenues for the immediately preceding three calendar
months (including the month in which such Charter Hire Payment
Date occurs) to (B) the aggregate amount of all payments under
clauses "first" through "seventh" of Section 3.4(b) of the
Depository Agreement that were actually made during such three-
month period or that would have been made during such period if
there had been sufficient funds in the Operating Account at the
time such payments were required to be made.
"Credit Support" means (i) any direct or indirect payment by
one Drilling Party or its Affiliates to the other Drilling Party
for the purpose of allowing such payee Drilling Party to meet its
obligations under its respective Drilling Contract or (ii) any
guaranty or other credit support by one Drilling Party or its
Affiliates of the obligations of the other Drilling Party or its
Affiliates for the purpose of allowing such benefitted Drilling
Party to meet its obligations under its respective Drilling
Contract.
"Cross Charter Default" means, with respect to a Charter
Supplement, the Charter Event of Default listed in Sections
4.1(k) thereof.
"Day Rate" means the daily rate payable to Deepwater under
the Drilling Contracts for the use of the Drillship.
"Day Rate Commencement Date" means March 31, 1999.
"Deepwater" means Deepwater Drilling II L.L.C., a Delaware
limited liability company.
"Deepwater Assignment" means the Assignment Agreement, dated
as of the Closing Date, between Deepwater and the Charter
Trustee.
"Deepwater Hedging Agreements" has the meaning specified in
Section 6.5 of the Participation Agreement.
"Deepwater Obligations" means all of Deepwater's obligations
(monetary or otherwise) arising under, or in connection with, the
Transaction Documents.
"Deepwater Person" means Deepwater, any permitted
subcharterer or any other Person (other than the Charter Trustee,
the Investment Trustee, the Investment Trust or any Certificate
Purchaser) using or in possession of the Drillship or any
officer, director, employee or agent of any of the foregoing.
"Default" means any event or condition which, with the lapse
of time or the giving of notice, or both, would constitute an
Event of Default.
"Defaulting Drilling Party" means (i) Frontier Deepwater
Drilling Inc., where a Charter Supplement No. 2 Event of Default
exists (but not a Charter Supplement No.1 Event of Default, other
than a Cross Charter Default thereunder) or would exist but for
the exercise of the Assumption Cure Right, the Non-Assumption
Cure Right or the provision of Credit Support (except such Event
of Default arising solely from the Cross Charter Default
thereunder) or (ii) R&B Falcon Drilling (International &
Deepwater) Inc., where a Charter Supplement No. 1 Event of
Default exists (but not a Charter Supplement No.2 Event of
Default, other than a Cross Charter Default thereunder) or would
exist but for the exercise of the Assumption Cure Right, the Non-
Assumption Cure Right or the provision of Credit Support (except
such Event of Default arising solely from a Cross Charter Default
thereunder).
"Deferred Construction Costs" means (i) any costs of
mobilization of the Drillship to the port designated pursuant to
the Drilling Contracts and the Rig Sharing Agreement reasonably
likely to be incurred following the Closing Date, (ii) any
remaining Construction Costs reasonably likely to be incurred
following the Closing Date, and (iii) the reimbursement of any
Transaction Expenses reasonably likely to be paid by Deepwater
out of its own funds after the Closing Date.
"Deferred Construction Costs Disbursement Certificate" has
the meaning specified in Section 3.1(b) of the Depository
Agreement.
"Deferred Construction Costs Reserve Account" has the
meaning specified in Section 3.1(a) of the Depository Agreement.
"Delivery Date" means the Closing Date.
"Deposited Amounts" has the meaning specified in Section 2.1
of the Depository Agreement.
"Depository" means Wilmington Trust Company, a Delaware
banking corporation, as securities intermediary and depository
under the Depository Agreement.
"Depository Agreement" means the Depository Agreement, dated
as of the Closing Date, among Deepwater, the Charter Trustee, the
Investment Trust and the Depository.
"Disbursement Certificate" means a Deferred Construction
Costs Disbursement Certificate, a Prepayment Certificate, an
Event of Loss Certificate, a Reimbursement and Proceeds
Certificate, a Payment Date Certificate, a Permitted Contest
Reserve Certificate, a Trustee Default Notice, a Hedging
Agreement Default Notice, a Drillship Sales Proceeds Certificate,
a Termination Proceeds Certificate, a Letter of Credit Collateral
Certificate or a Permitted Contest Reserve Certificate.
"Disbursement Information" has the meaning specified in
Section 4.3 of the Depository Agreement.
"Documentation Agent" means BA Leasing & Capital
Corporation, a California corporation.
"Dollars", "US$" and "$" means dollars in lawful currency of
the United States.
"Drawing Condition" has the meaning ascribed thereto in
Section 6.9 of the Participation Agreement.
"Drilling Consent" means the Acknowledgment and Consent
Agreement, dated as of the Closing Date, by and among R&B Falcon
Drilling (International & Deepwater) Inc., Frontier Deepwater
Drilling Inc., Deepwater, the Charter Trustee and the Investment
Trust, substantially in the form of Exhibit I to the
Participation Agreement.
"Drilling Contract" means the Conoco Drilling Contract or
the R&B Falcon Drilling Contract.
"Drilling Contract Guaranty" means the Conoco Drilling
Contract Guaranty or the R&B Falcon Drilling Contract Guaranty.
"Drilling Party" means Frontier Deepwater Drilling Inc. or
R&B Falcon Drilling (International & Deepwater) Inc. or, when
used in the plural, both Frontier Deepwater Drilling Inc. and R&B
Falcon Drilling (International & Deepwater) Inc.
"Drilling Services Agreement Contractor" means R&B Falcon
Drilling Co.
"Drillship" has the meaning specified in the recitals to the
Participation Agreement.
"Drillship Cost" means the Certificate Purchaser Balance
immediately prior to the Initial Charter Hire Payment Date, which
in no event shall exceed the Maximum Drillship Cost.
"Drillship Sales Proceeds" has the meaning specified in
Section 3.6(a) of the Depository Agreement.
"Drillship Sales Proceeds Account" has the meaning specified
in Section 3.6(a) of the Depository Agreement.
"Drillship Sales Proceeds Certificate" has the meaning
specified in Section 3.6(b) of the Depository Agreement.
"Effective Date" has the meaning specified in Section 3.1(a)
of the Participation Agreement.
"Environmental Claim" means any Claim arising out of or
attributable to any Environmental Event, or Hazardous Activity.
"Environmental Event" means (i) any activity, occurrence or
condition that violates or results in noncompliance with any
Environmental Law; (ii) any release of or potential release of
any Hazardous Substance or Oil from the Drillship; (iii) any
incident in which any Hazardous Substance or Oil is released or
threatened to be released from a vessel other than the Drillship
and which involves a collision between the Drillship and such
other vessel or some incident of navigation or operation, in
either case, in connection with which the Drillship is actually
or potentially liable to be arrested and/or the Drillship or
Deepwater and/or any operator or manager is at fault or allegedly
at fault or otherwise liable to any legal or administrative
action; or (iv) any other incident in which any Hazardous
Substance or Oil is released or threatened to be released
otherwise than from the Drillship in connection with which the
Drillship is actually or potentially liable to be arrested and/or
where Deepwater and/or any operator or manager of the Drillship
is at fault or allegedly at fault or otherwise liable to any
legal or administrative action.
"Environmental Law" means all applicable international,
foreign, federal, state and local laws, regulations, conventions,
treaties, written governmental agreements and written
governmental policies that are legally binding, statutes,
ordinances, codes, rules, directives, orders, decrees, judicial
and administrative judgments and rules of common law, whether now
or hereafter in effect, that relate in any way to Oil or any
Hazardous Substance in connection with the regulation or
protection of human health, natural resources or the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"Event of Default" means a Charter Event of Default.
"Event of Loss" means a Condemnation or the occurrence of an
event that results or would result in the termination of either
Drilling Contract pursuant to Section 2.2.2 thereof.
"Event of Loss Certificate" has the meaning specified in
Section 3.2(b) of the Depository Agreement.
"Event of Loss Proceeds Account" has the meaning specified
in Section 3.2(a) of the Depository Agreement.
"Excess Certificate Return" means, for any Return Period, an
amount equal to the excess of (i) an amount equal to the product
of the applicable Certificate Return Rate times the Certificate
Purchaser Balance set forth on Schedule I to the Master Charter
opposite the Charter Hire Payment Date under the heading "Charter
Balance" over (ii) an amount equal to the product of the
applicable Certificate Return Rate times the actual Certificate
Purchaser Balance (or portion thereof) allocable to such Return
Period as of the first day of such Return Period.
"Excluded Accounts" means (i) the Permitted Contest Reserve
Account; (ii) the Event of Loss Proceeds Account, (iii) the
Reimbursement and Proceeds Account and (iv) unless a Charter
Supplement No. 1 Event of Default has occurred and is continuing,
the R&B Falcon Subcharter Proceeds Account and the Letter of
Credit Collateral Account.
"Extension Notice" has the meaning specified in Section 20.2
of the Master Charter.
"Extension Term" means any period which immediately follows
the end of the Base Charter Term with respect to which Deepwater
has requested an extension of the Charter Term pursuant to
Section 20.2 of the Master Charter, and such request has been
granted pursuant to such Section 20.2.
"Facility Fee" has the meaning specified in Section 2.14 of
the Participation Agreement.
"Federal Funds Rate" means, for any day, the rate set forth
in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank of
New York (including any such successor AH.15(519)") on the
preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such
day shall be the arithmetic mean as determined by the Charter
Trustee of the rates for the last transaction in overnight
Federal Funds arranged prior to 9 a.m. (New York City time) on
that day by each of the three leading brokers of Federal Funds
transactions in New York City selected by the Charter Trustee.
"Force Majeure Event" means any excused or permissible delay
under the Construction Contract or the Drilling Contracts, if
fulfillment has been delayed, hindered or prevented by any
circumstance of whatsoever nature, including financial or
economic conditions in general, hostilities, restraints of rulers
or people, revolution, civil commotion, strike, labor
disturbances, epidemic, accident, fire, lightning, flood, wind,
storm, earthquake, explosion, blow-out, crater, blockade,
embargo, lack of or failure of transportation facilities,
inability, despite Deepwater's best efforts, to arrange or secure
importation, exportation or permits, or any law, proclamation,
regulation, ordinance, demand or requirement of any government or
any government agency having or claiming to have jurisdiction
over the operations of or with respect to the Drillship or any
part thereof or the construction or manufacture of the Drillship
or any part thereof, or over Deepwater or the Builder or any act
of God, or any other act of government, act or omission of a
supplier or a construction contractor.
"Frontier Deepwater Drilling Inc." means Frontier Deepwater
Drilling Inc., a Delaware corporation.
"Frontier Portion" means with respect to any Return Period,
a fraction, the numerator of which is the number of hours,
rounded to the nearest half hour, the Drillship has been utilized
under the Conoco Drilling Contract during the relevant Return
Period and the denominator of which is the product of the actual
number of days in such Return Period and 24 hours.
"GAAP" means United States generally accepted accounting
principles (including principles of consolidation and
characterization), in effect from time to time, consistently
applied.
"General Indemnity" means the indemnity provided by
Deepwater to various parties pursuant to Section 10.1 (subject to
Section 10.2) of the Participation Agreement.
"General Tax Indemnity" means the indemnity provided by
Deepwater to various parties pursuant to Section 10.4 of the
Participation Agreement.
"Government Action" means all permits, authorizations,
registrations, consents, approvals, waivers, exceptions,
variances, orders, judgments, decrees, licenses, exemptions,
publications, filings, notices to and declarations of or with, or
required by, any Government Authority, or required by any
Applicable Law, and shall include, without limitation, all
environmental and operating permits and licenses that are
required for the full use and operation of the Drillship (or any
part thereof).
"Government Authority" means any nation or government, any
state, county, province, municipality or other political
subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of
or pertaining to government.
"Guaranty" by any Person, means any obligation or
arrangement, contingent or otherwise, of such Person directly or
indirectly guaranteeing or otherwise becoming contingently liable
upon any Indebtedness or other obligation of any other Person
and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or other
obligation of such other Person (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to provide collateral
security, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) to the extent that such an
arrangement would be considered to be a guaranty under GAAP,
entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness or other obligation of the payment
thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided, that the term Guaranty
shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guaranty" used as a verb
has a corresponding meaning.
"Guarantor's Percentage" means
(i) with respect to Conoco, (a) its Applicable Percentage of
the Certificate Purchaser Balance minus the Certificate
Purchaser Amounts purchased by Conoco pursuant to Section
9.4 of the Participation Agreement divided by (b) 100% of
the Certificate Purchaser Balance; provided, however, that
in no event shall the percentage calculated by this clause
(i) be less than 0%; and
(ii) with respect to R&B Falcon,(a) its Applicable
Percentage of the Certificate Purchaser Balance minus the
Certificate Purchaser Amounts purchased by R&B Falcon
pursuant to Section 9.4 of the Participation Agreement
divided by (b) 100% of the Certificate Purchaser Balance;
provided, however, that in no event shall the percentage
calculated by this clause (ii) be less than 0%.
"Hazardous Activity" means any activity, process, procedure
or undertaking that directly or indirectly (i) produces,
generates or creates any Hazardous Substance; (ii) causes or
results in (or threatens to cause or result in) the Release of
any Hazardous Substance into the environment (including air,
surface water, groundwater, drinking water, land (including
surface or subsurface) and plant, aquatic and animal life); (iii)
involves the containment or storage of any Hazardous Substance;
or (iv) would be regulated as hazardous waste treatment, storage
or disposal within the meaning of any Environmental Law.
"Hazardous Substance" means any of the following: (i)
explosives, radioactive materials, asbestos, polychlorinated
biphenyls, lead and radon gas; or (ii) any substance, material,
product, derivative, compound, mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally
occurring, human-made or the by-product of any process, that is
considered under any applicable Environmental Law to be toxic,
corrosive, flammable, carcinogenic, mutagenic or hazardous to the
environment or human health; provided, however, that the term
"Hazardous Substance" specifically does not include Oil.
"Head Lease" means the lease agreement (if any) under which
the Charter Trustee leases the Drillship from the Head Lessor in
accordance with Section 4.2 of the Participation Agreement.
"Head Lease Defeasance Arrangements" has the meaning
specified in Section 4.2 of the Participation Agreement.
"Head Lease Documents" means the Head Lease, the Head Lease
Loan, the Head Lease Defeasance Agreement and any other documents
entered into in connection with the Head Lease Transaction.
"Head Lease Loan" has the meaning specified in Section 4.2
of the Participation Agreement.
"Head Lease Transaction" has the meaning specified in
Section 4.2 of the Participation Agreement.
"Head Lessor" means the lessor under the Head Lease.
"Hedging Agreements" has the meaning specified in Section
6.5 of the Participation Agreement.
"Hedging Agreement Counterparty" means the counterparty
under any Hedging Agreement.
"Hedging Agreement Default Notice" has the meaning specified
in Section 4.2 of the Depository Agreement.
"Hedging Agreement Obligations" means all of the obligations
(monetary or otherwise) of the Charter Trustee arising under or
in connection with the Hedging Agreements.
"Illegality Event" has the meaning specified in Section 7.1
of the Participation Agreement.
"Indebtedness" of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments; (iii) whether or not so
included as liabilities in accordance with GAAP, all obligations
of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary
course of business; (iv) all obligations of such Person to
reimburse any bank or other Person in respect of amounts payable
under a banker's acceptance; (v) all obligations of such Person,
contingent or otherwise, relative to the face amount of all
letters of credit, whether or not drawn; (vi) all indebtedness
(including indebtedness arising under title retention or
conditional sales agreements) secured by a Lien on any asset of
any Person, whether or not such indebtedness is assumed by such
Person or is of limited recourse (provided, that, for purposes of
this clause (vi), non-recourse indebtedness in excess of the
value of the asset securing such indebtedness shall not be
counted); (vii) all obligations of such Person as lessee under
leases which have been or should be, in accordance with GAAP,
recorded as capital or operating leases; and (viii) all
indebtedness of others Guaranteed by such Person.
"Indemnified Party" has the meaning specified in Section
10.1 of the Participation Agreement.
"Independent Marine Surveyor" means ▇▇▇▇▇▇▇ Marine Services,
Inc.
"Initial Certificate Margin Adjustment Date" means October
1, 2001.
"Initial Charter Hire Payment Date" means the last Business
Day of the first full calendar month following the Closing Date.
"Institutional Investor" means any Accredited Investor,
excluding any individual or natural person.
"Insurance Beneficiary" has the meaning specified in Section
14.2(d) of the Master Charter.
"Insurance Requirements" means all terms and conditions of
any insurance policy either required by the Master Charter to be
maintained by Deepwater or required by the Construction Contract
to be maintained (or caused to be maintained) by the Builder, and
all requirements of the issuer of any such policy; provided,
however, that if Deepwater is entitled to self-insure certain
risks in lieu of maintaining the insurance coverages required
under Article XIV of the Master Charter, "Insurance Requirements"
means the standard terms of any insurance policies (including
casualty and general liability) and all requirements commonly
prescribed by the issuers of such policies which otherwise would
be required to be maintained by Deepwater absent the permitted
self-insurance.
"Interim Class Certificate" means a certificate issued by
the Classification Society evidencing the class of the Drillship
to be delivered by the Builder to Deepwater.
"Inverse R&B Usage Ratio" means the R&B Usage Ratio minus
one.
"Investment Balance" means, at any given time, the
Investment Portion of the Certificate Purchaser Balance.
"Investment Portion" means, with respect to any amount,
ninety seven percent (97%) of such amount.
"Investment Trust" means Deepwater Investment Trust 1999-A,
a Delaware business trust.
"Investment Trust Agreement" means the Investment Trust
Agreement (Deepwater Investment Trust 1999-A) dated as of August
23, 1999, between Wilmington Trust FSB, as trustee, and the
Certificate Purchasers.
"Investment Trust Amount" means, with respect to the
Investment Trust, at any given time, the aggregate amount of all
advances made by the Investment Trust to the Charter Trustee
pursuant to Section 2.6 of the Participation Agreement minus the
Investment Portion of any distributions paid to the Certificate
Purchasers to the extent that such distributions reduce the
Certificate Purchaser Balance.
"Investment Trust Certificates" means the Conoco Investment
Trust Certificates and the R&B Falcon Investment Trust
Certificates.
"Investment Trustee" means Wilmington Trust FSB, a Federal
savings bank, not in its individual capacity, except as otherwise
expressly provided, but solely as trustee under the Investment
Trust Agreement.
"Letter of Credit" means an irrevocable standby letter of
credit issued by a Qualified Bank substantially in form and
substance as attached to the Participation Agreement as Exhibit X
and which otherwise meets the requirements set forth in Section
6.9 of the Participation Agreement.
"Letter of Credit Collateral Account" has the meaning
specified in Section 3.16(a) of the Depository Agreement.
"Letter of Credit Collateral Certificate" has the meaning
specified in Section 3.16(b) of the Depository Agreement.
"LIBOR" means, for any Return Period, the rate per annum
equal to the offered rate (rounded upwards, if necessary, to the
next higher 1/100th of 1%) which appears on the Telerate Page
3750, British Bankers Association Interest Settlement Rates (or
such other system for the purpose of displaying rates of leading
reference banks in the London interbank market that replaces such
system) as of 11:00 a.m. (London time) for deposits in Dollars on
the day two (2) Business Days prior to the first day of such
Return Period in an amount approximately equal to the principal
amount of the Certificate Purchaser Amounts to which such Return
Period is to apply and for a period corresponding as nearly as
possible to such Return Period; provided, that, if no such rate
appears on Telerate Page 3750 it shall be (i), so long as any
Hedging Agreements are in effect, the "Floating Rate" as defined
in the Hedging Agreements or (ii) if no Hedging Agreements are in
effect, the rate of interest then offered to prime banks in the
London interbank Eurodollar market by Bank of America for
deposits in U.S. Dollars.
"Lien" means any mortgage, pledge, lien, charge,
encumbrance, lease, sublease, charter, subcharter, right,
security interest, rights in rem of any kind or claim of whatever
nature or description against any property or asset.
"LLC Agreement" means the LLC Agreement, dated as of
April 30, 1997, between the Members, as amended on or prior to
the Closing Date.
"Majority Certificate Purchasers" means, as of the date of
determination, Certificate Purchasers that hold, in the
aggregate, Certificates representing more than 50% of the sum of
the Certificate Purchaser Amounts of all Certificate Purchasers,
or, if no such amounts are outstanding, Certificate Purchasers
having, in the aggregate, obligations to make amounts available
which total more than 50% of the total of such obligations for
all such Certificate Purchasers. For purposes of this
definition, no Purchasing Party shall be considered a
"Certificate Purchaser" and no interest of any Purchasing Party
shall be considered to be "Certificate Purchaser Amounts."
"Marketing Period" means the period commencing on the date
which is 180 days prior to the Scheduled Charter Expiration Date
and ending on the Scheduled Charter Expiration Date.
"Master Charter" means the bareboat Master Charter, dated as
of the Closing Date, among Deepwater and the Charter Trustee,
excluding both Charter Supplement No. 1 and Charter Supplement
No. 2.
"Material Adverse Effect" means, with respect to Conoco, R&B
Falcon or Deepwater, an event or events, condition or conditions,
circumstance or circumstances which individually or in the
aggregate could be reasonably expected to:
(i) have a material adverse effect on the financial
condition, business, assets or operations of Conoco, R&B
Falcon or Deepwater;
(ii) have a material adverse effect on Deepwater's,
Conoco's or R&B Falcon's ability to perform its respective
obligations under the Transaction Documents to which it is a
party;
(iii) have a material adverse effect on the title,
priority or perfection of the Participants' interest in the
Drillship;
(iv) have a material adverse effect on the validity,
legality or enforceability of any material provision of any
Transaction Document or on the rights or remedies of any of
the Participants under the Transaction Documents;
(v) have a material adverse effect on the value,
utility or remaining useful life of the Drillship; or
(vi) result in criminal liability or material civil
liability to any Indemnitee or forfeiture or loss of the
Drillship.
"Material Default" means a Charter Default described in
Section 4.1(a), (e) or (f) of either Charter Supplement No. 1 or
Charter Supplement No. 2.
"Maximum Certificate Purchaser Commitment" means
$270,000,000.
"Maximum Drillship Cost" means the Maximum Certificate
Purchaser Commitment.
"Maximum Residual Guaranty Amount" means as of any date the
sum of:
(i) the Certificate Purchaser Balance on such date (reduced
by any payment of Charter Supplement Prepayment Amount of
Termination Value under Section 4.2(c) of the Depository
Agreement), plus any accrued and unpaid Certificate Return,
minus the Charter Residual Risk Amount as of such date; and
(ii) all accrued and unpaid Supplemental Hire (not included
in clause (i)).
"Member" means each of RBF Deepwater Exploration II Inc. and
Conoco Development II Inc.
"Minimum Specifications" means each of the following
criteria with respect to the Drillship: (i) upon final sea
trial, speed shall not be more than two (2) knots lower than the
guaranteed speed specified in Paragraph 2 of Article I of the
Construction Contract; (ii) actual fuel consumption shall not be
more than ten percent (10%) in excess of the guaranteed fuel
consumption specified in Paragraph 2 of Article I of the
Construction Contract; (iii) the capacity of the "Extended Well
Test" tanks, including slop tanks, shall not be less than 14,310
cubic meters; and (iv) the actual displacement of the Drillship
shall not vary by more than 3,500 metric tons (whether higher or
lower) from the guaranteed displacement of the Drillship
specified in Paragraph 2 of Article I of the Construction
Contract.
"Modifications" has the meaning specified in Section 11.1 of
the Master Charter.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Net Sales Proceeds" has the meaning specified in Section
20.3 of the Master Charter.
"Non-Assumption Cure Right" has the meaning specified in
Section 16.5(a) of the Master Charter.
"Non-Defaulting Drilling Party" means (i) Frontier Deepwater
Drilling Inc., provided that no Charter Supplement No. 2 Event of
Default exists (except such Event of Default arising solely from
the Cross Charter Default thereunder) or (ii) R&B Falcon Drilling
(International & Deepwater) Inc., provided that no Charter
Supplement No. 1 Event of Default exists (except such Event of
Default arising solely from the Cross Charter Default
thereunder).
"Non-Recourse Party" means any Member, its respective
Affiliates and its past, present or future officers, directors,
employees, shareholders, agents or representatives.
"OFE" means owner-furnished equipment, which is the
equipment to be furnished by the Buyer under the Construction
Contract, such equipment being more specifically listed in
Schedule 6 to the Participation Agreement.
"Officer's Certificate" means a certificate signed by any
individual holding the office of vice president, treasurer,
assistant treasurer or higher, which certificate shall certify as
true and correct the subject matter being certified to in such
certificate.
"Oil" means oil of any kind or in any form, including but
not limited to petroleum, fuel oil, sludge, oil refuse, and oil
mixed with wastes other than dredged spoil, but not including
petroleum (including crude oil or any fraction thereof) which is
specifically listed or designated as a hazardous substance under
subparagraphs (A) through (F) of Section 101(14) of CERCLA.
"Operating Account" has the meaning specified in Section
3.4(a) of the Depository Agreement.
"Operation and Maintenance Expenses" means all amounts
necessary for Deepwater to man, victual, navigate, operate,
supply, fuel, repair, maintain the Drillship in accordance with
the requirements of the Drilling Contracts and the Charter and
shall include, without limitation, payments under Deepwater's
contracts for marine and drilling services, payments to any
Permitted Service Provider, premiums on insurance policies, fees,
costs and expenses in connection with any Deepwater Hedging
Agreements or Hedging Agreements (excluding amounts payable in
connection with an early termination), property and other taxes
(other than income taxes), costs of fuel and fuel supply, waste
disposal, expenses for repairs and maintenance required in order
to maintain the Drillship in accordance with the Drilling
Contracts and in accordance with the Charter (including expenses
for inspections and drydocking maintenance), the costs of all
Modifications required or permitted under the Charter and all
shore-based support expenses and warehouse costs attributable to
any of the foregoing; provided, however, that Operation and
Maintenance Expenses shall not include any amounts for which
Deepwater is entitled to a Reimbursement.
"Optional Modifications" has the meaning specified in
Section 11.1 of the Master Charter.
"Other Supplement" (i) when used in Charter Supplement No.
1, means Charter Supplement No. 2 or (ii) when used in Charter
Supplement No. 2, means Charter Supplement No. 1.
"Overdue Rate" means the Certificate Return Rate plus two
percent (2%) per annum.
"Parent" means, with respect to any Person, a corporation
that is the direct or indirect beneficial owner of more than 50%
of the outstanding Voting Stock of such Person and that has
reporting obligations under Section 13 of the Securities Exchange
Act of 1934, as amended.
"Partial Condemnation" means the condemnation, requisition
for use, confiscation, arrest, seizure or other taking of title
or leasehold interest to the Drillship or any transfer made in
lieu of any such actual or threatened action or proceeding which
does not constitute a Condemnation.
"Participants" means the Certificate Purchasers, the
Trustees and the Investment Trust, collectively.
"Participation Agreement" means the Participation Agreement,
dated as of August 31, 1999 among Deepwater, the Trustees, the
Investment Trust, the Documentation Agent, the Certificate
Purchasers, solely with respect to Sections 2.15, 6.9, 9.4(a) and
12.13(b) thereof, R&B Falcon and Conoco, and solely with respect
to Sections 5.2 and 6.4, RBF Deepwater Exploration II Inc. and
Conoco Development II Inc.
"Payment Date" means the Initial Charter Hire Payment Date,
the last Business Day of each calendar month thereafter and the
last day of the Charter Term.
"Payment Date Certificate" has the meaning specified in
Section 3.4(b) of the Depository Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Charterer" means any Person that is or should be
consolidated with Conoco or R&B Falcon for financial reporting
purposes in accordance with GAAP.
"Permitted Contest" means a test, challenge, appeal or
proceeding for review of any Applicable Law, so long as (x) such
test, challenge, appeal or proceeding shall be prosecuted
diligently and in good faith in appropriate proceedings and (y)
such test, challenge, appeal or proceeding and any non-compliance
with Applicable Law during the pendency thereof does not (i) pose
any significant risk of foreclosure, forfeiture or loss of the
Drillship or any material part thereof, (ii) pose any material
risk of a loss of priority of the Lien of the Ship Mortgage (or
any other Lien on the Drillship) or any other Collateral, (iii)
pose any material risk of any criminal liability or any material
civil liability being imposed on either Trustee, the Investment
Trust, the Agent or any Certificate Purchaser, (iv) interfere in
any material manner with the use or operation of the Drillship or
(v) pose any material risk of interference with the payment of
Charter Hire.
"Permitted Contest Reserve Account" has the meaning
specified in Section 3.5(a) of the Depository Agreement.
"Permitted Contest Reserve Amount" means, as of the date of
calculation, an amount equal to Deepwater's reasonable estimate
of its potential or actual liability or additional costs and
expenses that it will be required to incur but only to the extent
that (a) such liability or costs and expenses exceed $500,000
with respect to a single Permitted Contest or $2,000,000 with
respect to all pending Permitted Contests and (b) such Claims are
not covered by insurance policies required to be maintained by
Deepwater under the Master Charter which are then in effect
(except that all Claims as to which the insurer has issued a
denial of coverage or as to which it has reserved its rights,
shall be deemed not to be covered by insurance for the purposes
of this clause (b)).
"Permitted Contest Reserve Certificate" has the meaning
specified in Section 3.5(b) of the Depository Agreement.
"Permitted Indebtedness" means (i) Subordinated Debt, (ii)
Indebtedness arising under the Transaction Documents and (iii)
any other Indebtedness owed to any Person other than a Member or
Affiliate of a Member in an aggregate amount not to exceed
$500,000 (provided that, (x) if such Indebtedness is in the form
of a loan, such limit shall be calculated by reference to the
principal of such loan and (y) if such Indebtedness is in the
form of a lease, such limit shall be calculated by reference to
the present value as of the date of determination of all lease
payments discounted at the then applicable Federal Funds Rate
plus sixty (60) basis points).
"Permitted Investments" has the meaning specified in Section
5.1 of the Depository Agreement.
"Permitted Liens" means (i) the respective rights and
interests of the Participants, as provided in any of the
Transaction Documents; (ii) any Lien as permitted and
contemplated by the Transaction Documents; (iii) Liens for Taxes
either not yet due or being contested pursuant to a Permitted
Contest (iv) Liens of suppliers, mechanics, crew, repairers,
employees, or operators of port authorities, Liens for salvage,
general or particular average, or other similar Liens securing
the payment of the price of goods or services rendered arising in
the ordinary course of business and for amounts the payment of
which is either not yet delinquent or is being diligently
contested pursuant to a Permitted Contest; (v) Liens arising out
of judgments or awards which are being appealed in good faith or
with respect to which at the time there shall have been secured a
stay of execution; (vi) salvage and similar rights of insurers
under policies of insurance maintained with respect to the
Drillship; (vii) Liens securing Permitted Indebtedness; (viii)
any other Lien with respect to which a bond or other security
shall have been provided either (x) through a normal and
customary letter of undertaking issued by the protection and
indemnity club providing the coverage maintained under Section
14.1(f) of the Master Charter or (y) by a surety and in a form,
both of which are acceptable to the Required Certificate
Purchasers in their sole discretion; (ix) Trust Liens; and (x)
Certificate Purchaser Liens.
"Permitted Service Provider" has the meaning specified in
Section 7(b) of the Drilling Consent.
"Person" means any individual, corporation, partnership,
joint venture, limited liability company, association, joint-
stock company, trust, unincorporated organization, Government
Authority or any other entity.
"Placement Agent" means Bank of America National Trust and
Savings Association.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Code.
"Plans and Specifications" means, with respect to the
Drillship, the plans and specifications, as amended, pursuant to
which the Drillship is to be constructed under the Construction
Contract.
"Postponed Advance" has the meaning specified in Section 2.8
of the Participation Agreement.
"Postponed Advance Date" has the meaning specified in
Section 2.8 of the Participation Agreement.
"Postponement Yield" has the meaning specified in Section
2.8 of the Participation Agreement.
"Prepayment Certificate" means the Prepayment Certificate
described in Section 3.1 of the Depository Agreement.
"Prepayment Notice" has the meaning specified in Section
9.4(a) of the Participation Agreement.
"Prepayment Change of Control Trigger Event" means the
occurrence of a Change of Control of either Conoco or R&B Falcon
unless (a) the rating of such person is not less than (i) in the
case of Conoco, Baa2 from ▇▇▇▇▇'▇ and BBB from S&P or (ii) in the
case of R&B Falcon, is not less than Ba2 from ▇▇▇▇▇'▇ and BB from
S&P or (b) in the event that such person is merged into or
acquired by an Acquiror (i) in the case of an Acquiror of Conoco,
such Acquiror has a rating of not less than Baa2 from ▇▇▇▇▇'▇ and
not less than BBB from S&P (ii) in the case an Acquiror of R&B
Falcon, such Acquiror has a rating of not less than Ba2 from
▇▇▇▇▇'▇ and BB from S&P, provided that the Acquiror assumes the
obligations of the acquired company under the Transaction
Documents pursuant to an assumption agreement and delivers an
opinion of counsel in connection therewith, each in substantially
the form of those attached to the Participation Agreement as
Exhibit K, or (c) Conoco or R&B Falcon, as applicable, will
provide to the Required Certificate Purchasers simultaneous with
a Change of Control credit support acceptable to the Required
Certificate Purchasers for any obligations of such person under
the Transaction Documents reasonably equivalent to that in effect
immediately prior to the Change of Control.
"Pricing Change of Control Trigger Event" means the
occurrence of a Change of Control with respect to R&B Falcon
unless (a) R&B Falcon has a rating of not less than Baa3 from
▇▇▇▇▇'▇ and BBB- from S&P, or (b) in the event that R&B Falcon is
merged into or acquired by an Acquiror, such Acquiror has a
rating of not less than Baa3 from ▇▇▇▇▇'▇ and BBB- from S&P,
provided that the Acquiror assumes R&B Falcon's obligations under
the Transaction Documents pursuant to an assumption agreement and
delivers an opinion of counsel in connection therewith, each in
substantially the form of those attached to the Participation
Agreement as Exhibit K, or (c) R&B Falcon will provide to the
Required Certificate Purchasers simultaneous with a Change of
Control credit support meeting the criteria acceptable to the
Required Certificate Purchasers for any of its obligations under
the Transaction Documents reasonably equivalent to that in effect
immediately prior to the Change of Control.
"Protocol of Delivery and Acceptance" shall have the meaning
as set forth in Section 4.1(a)(i) of the Participation Agreement.
"Provisional Patente" shall have the meaning as set forth in
Section 4.1(a)(iii) of the Participation Agreement.
"Purchase Notice" has the meaning specified in Section 20.1
of the Master Charter.
"Purchase Option" has the meaning specified in Section 20.1
of the Master Charter.
"Purchase Option Price" has the meaning specified in Section
20.1 of the Master Charter.
"Purchased Interest" means (i) where R&B Falcon is a
Purchasing Party, the Certificate Purchaser Amounts relating to
the R&B Falcon Certificates purchased by R&B Falcon pursuant to
Section 9.4 of the Participation Agreement or (ii) where Conoco
is a Purchasing Party, the Certificate Purchaser Amounts relating
to the Conoco Certificates purchased by Conoco pursuant to
Section 9.4 of the Participation Agreement .
"Purchasing Party" means (i) Conoco or R&B Falcon, if and
only if such Person has suffered a Prepayment Change of Control
Trigger Event and has or is required to purchase any Purchased
Interest under Section 9.4(a) of the Participation Agreement or
(ii) Deepwater or any Affiliate of any of the foregoing to the
extent such Person obtains an interest, directly or indirectly,
in a Purchased Interest.
"Purchasing Party Amount" means, at any given time with
respect to any Purchasing Party, its Purchased Interest minus the
amount of any distributions paid to such Purchasing Party in
reduction of its allocated portion of the Certificate Purchaser
Amounts or the Certificate Purchaser Balance.
"Qualified Bank" means a bank or other financial institution
with a long term unsecured debt rating of not less than AA- from
S&P and Aa3 from ▇▇▇▇▇'▇.
"Qualifying Letter of Credit" means a letter of credit in a
stated amount of not less than sixty percent (60%) of the Maximum
Residual Guaranty Amount, issued by a bank or other financial
institution with a long-term unsecured credit rating of not less
than A and A2 from S&P and ▇▇▇▇▇'▇, respectively; provided, that
if such issuer is downgraded below such rating of A or A2, such
letter of credit shall be replaced with a letter of credit issued
by a bank or other financial institution having such rating
within 30 days of the notice from S&P or ▇▇▇▇▇'▇ to the issuer of
such letter of credit R&B Falcon or Deepwater of such downgrade.
"R&B Falcon" means R&B Falcon Corporation, a Delaware
corporation.
"R&B Falcon Certificates" means the R&B Falcon Series A
Trust Certificates and the R&B Falcon Investment Trust
Certificates.
"R&B Falcon Charter" means the charter created by the Master
Charter, as supplemented by Charter Supplement No. 1.
"R&B Falcon Drilling Contract" means that Deepwater
Drillship Contract, dated as of April 30, 1997, as amended and
restated, between R&B Falcon Drilling (International & Deepwater)
Inc. and Deepwater
"R&B Falcon Drilling Contract Guaranty" means that Deepwater
Drillship Project, R&B Falcon Guaranty, dated as of August 31,
1999 given by R&B Falcon in favor of Deepwater.
"R&B Falcon Drilling (International & Deepwater) Inc." means
R&B Falcon Drilling (International & Deepwater) Inc., a Delaware
corporation.
"R&B Falcon Drilling Party" means R&B Falcon Drilling
(International & Deepwater) Inc.
"R&B Falcon Guaranty" means the R&B Falcon Guaranty, dated
as of the Closing Date, given by R&B Falcon in favor of the
Trustees, the Investment Trust, the Agent and the Certificate
Purchasers and the other beneficiaries named therein.
"R&B Falcon Investment Trust Certificate" means each
certificate issued to a Certificate Purchaser from the Investment
Trust pursuant to Section 2.1(d) of the Participation Agreement
and in accordance with the Investment Trust Agreement to evidence
60% of the Investment Portion of the Certificate Purchaser Amount
of each such Certificate Purchaser.
"R&B Falcon Series A Trust Certificate" means each
certificate issued to a Beneficial Owner from the Charter Trustee
pursuant to Section 2.1(b) of the Participation Agreement and in
accordance with the Charter Trust Agreement to evidence the 60%
of the Series A Portion of the Certificate Purchaser Amount of
each such Beneficial Owner.
"R&B Falcon Subcharter Proceeds Account" shall have the
meaning specified in Section 3.15(a) of the Depository Agreement.
"R&B Portion" means, with respect to any Return Period, a
fraction, the numerator of which is the number of hours, rounded
to the nearest half hour, the Drillship has been utilized under
the R&B Falcon Drilling Contract during the relevant Return
Period and the denominator of which is the product of the actual
number of days in such Return Period and 24 hours.
"R&B Usage" means the number of days, rounded to the nearest
full day, the Drillship has been utilized under the R&B Falcon
Drilling Contract.
"R&B Usage Ratio" means, from time to time, a fraction
(expressed as a percentage) the numerator of which is the maximum
number of days during which R&B Falcon Drilling (International &
Deepwater) Inc. is obligated, pursuant to the terms of the Rig
Sharing Agreement, to use the Drillship commencing on the most
recent Adjustment Date preceding the date the rate of the
Certificate Margin is to be determined and ending on the
scheduled termination of the Drilling Contracts divided by the
total number of days remaining during such period under the
Drilling Contracts.
"Reasonable Basis" means a reasonable basis within the
meaning of Section 6662(d)(2)(B)(ii)(II) of the Code or any
regulations thereunder.
"Reimbursement and Proceeds Account" has the meaning
specified in Section 3.3(a) of the Depository Agreement.
"Reimbursement and Proceeds Certificate" has the meaning
specified in Section 3.3(b) of the Depository Agreement.
"Reimbursements" has the meaning specified in Section 3.3(a)
of the Depository Agreement.
"Related Indemnified Party" means the Affiliates of an
Indemnified Party, the officers, directors, employees and agents
of the Indemnified Party and its Affiliates and, in the case of
the Certificate Purchasers and their Related Indemnified Parties,
the Charter Trustee and, in the case of the Charter Trustee and
the Investment Trust, the Certificate Purchasers and their
Related Indemnified Parties.
"Related Party" means (i) with respect to Charter Supplement
No. 1 and the charter created thereby, R&B Falcon and its
Affiliates (other than Deepwater) or (ii) with respect to Charter
Supplement No. 2 and the charter created thereby, Conoco and its
Affiliates (other than Deepwater).
"Release" means any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak,
flow, discharge, disposal or emission of Oil or a Hazardous
Substance.
"Replacement Certificate Purchaser" has the meaning
specified in Section 4.2 of the Participation Agreement.
"Replacement Certificate Purchaser Conditions" has the
meaning specified in Section 4.2 of the Participation Agreement.
"Required Certificate Purchasers" means, as of the date of
determination, Certificate Purchasers that hold, in the
aggregate, Certificates representing more than 2/3 of the sum of
the Certificate Purchaser Amounts of all Certificate Purchasers,
or, if no such amounts are outstanding, Certificate Purchasers
having, in the aggregate, obligations to make amounts available
which total more than 2/3 of the total of such obligations for
all such Certificate Purchasers. For purposes of this
definition, no Purchasing Party shall be considered a
"Certificate Purchaser" and no interest of any Purchasing Party
shall be considered to be "Certificate Purchaser Amounts."
"Required Modifications" has the meaning specified in
Section 11.1 of the Master Charter.
"Residual Guaranty Amount" means, (i) upon sale of the
Charter Trustee's interest in the Drillship pursuant to
Deepwater's exercise of its Return Option, the sum of:
(A) the Certificate Purchaser Balance on such date (reduced
by any payment of Charter Supplement Prepayment Amount of
Termination Value under Section 4.2(c) of the Depository
Agreement), plus any accrued and unpaid Certificate Return,
minus the Net Sales Proceeds; and
(B) all accrued and unpaid Supplemental Hire;
provided, however, that in no event shall the amount calculated
in this clause (i) exceed the Maximum Residual Guaranty Amount;
or (ii) if the Charter Trustee's interest in the Drillship is not
sold on or prior to the Scheduled Charter Expiration Date in
accordance with Section 20.3 of the Master Charter, the Maximum
Residual Guaranty Amount.
"Responsible Officer" means, with respect to any matter (i)
if a natural Person, such Person; or (ii) if not a natural
Person, a senior financial or legal officer or such other officer
of such Person who in the normal course of his operational duties
would have knowledge of such matter.
"Return Notice" has the meaning specified in Section 20.3 of
the Master Charter.
"Return Option" has the meaning specified in Section 20.3 of
the Master Charter.
"Return Period" means with respect to any determination of
Certificate Return (i) the period commencing on and including the
Advance Date and ending on but excluding the Initial Charter Hire
Payment Date, and (ii) thereafter with respect to the Certificate
Purchaser Balance, a period commencing on a Payment Date and
ending on but excluding the next succeeding Payment Date;
provided, that the last Return Period shall end on the last day
of the Charter Term.
"Revenues" means all amounts received by Deepwater from
whatever source, including all revenues from the Drilling
Contracts but excluding (i) those amounts to be deposited,
pursuant to the Depository Agreement, into the Deferred
Construction Costs Reserve Account, Event of Loss Proceeds
Account, Reimbursement and Proceeds Account, Permitted Contest
Reserve Account, Drillship Sales Proceeds Account or the
Termination Proceeds Account, (ii) those amounts which, on the
date of payment or receipt, may be properly distributed to
Deepwater (or as directed by Deepwater) under the Depository
Agreement, (iii) those amounts received by Deepwater from the
Members as capital contributions and (iv) those amounts received
by Deepwater that constitute proceeds of Subordinated Debt.
"Rig Sharing Agreement" means that Rig Sharing Agreement,
dated as of April 30, 1997, among the Conoco Drilling Party, the
R&B Falcon Drilling Party and Deepwater.
"S&P" means Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
"Scheduled Charter Expiration Date" means, the fifth
anniversary of the Day Rate Commencement Date and, with respect
to any Extension Term, the scheduled expiration of the such
Extension Term.
"Securities Act" means the Securities Act of 1933, as
amended, together with the rules and regulations promulgated
thereunder.
"Securities Intermediary" means Wilmington Trust Company, a
Delaware banking corporation, as securities intermediary and
depository under the Depository Agreement
"Security Documents" means the collective reference to the
Ship Mortgage, the Deepwater Assignment, the Depository
Agreement, the Drilling Contract Guaranties, the Charter Trustee
Assignment and all other security documents granting a Lien on
any asset or assets of any Person to secure the Deepwater
Obligations, the Series A Obligations or the Series B
Obligations.
"Series A Balance" means, as of the date of determination,
the Series A Portion of the Certificate Purchaser Balance.
"Series A Obligations" means the obligations (monetary or
otherwise) owed by the Charter Trustee to the Beneficial Owners
as evidenced by the Series A Trust Certificates.
"Series A Portion A means, with respect to any amount, three
percent (3%) of such amount.
"Series A Trust Certificates" means the Conoco Series A
Trust Certificates and the R&B Falcon Series A Trust
Certificates.
"Series B Obligations" means those obligations owed by the
Charter Trustee to the Investment Trust as evidenced by the
Series B Trust Certificates. Any event which reduces the
obligations owed by Deepwater to the holders of the Investment
Trust Certificates shall reduce the Series B Obligations to the
same extent.
"Series B Trust Certificate" means each certificate issued
to the Investment Trust from the Charter Trustee pursuant to
Section 2.1(f) of the Participation Agreement and in accordance
with the Trust Agreements to evidence the Investment Trust
Amount.
"Services Agreements" means the Marine Services Agreement,
dated as of October 31, 1996, between Deepwater and Conoco
Shipping Company, and the Drilling Services Agreement, dated as
of April 30, 1997, between Deepwater and R&B Falcon Drilling Co.
"Settlement Date" has the meaning specified in Section 15.2
of the Master Charter.
"Ship Mortgage" means (x) if the Head Lease Transactions are
not consummated, a mortgage substantially in the form set forth
in Exhibit T to the Participation Agreement given by the Charter
Trustee in favor of the Investment Trust and the Hedging
Agreement Counterparties and (y) if the Head Lease Transactions
are consummated on or prior to the Delivery Date (or after the
Delivery Date if reasonably required by the Certificate
Purchasers to protect their interests in the Drillship), a
mortgage securing the Deepwater Obligations given by the Head
Lessor in favor of the Charter Trustee and the Hedging Agreement
Counterparties and providing for the assignment thereof to the
Investment Trust and the Hedging Agreement Counterparties to
secure the Series B Obligations and the Hedging Agreement
Obligations, and otherwise substantially in the form set forth in
Exhibit T to the Participation Agreement (with appropriate
modifications to reflect the Head Lessor as mortgagor).
"Special Purchase Right" has the meaning specified in
Section 16.4 of the Master Charter.
"Subordinated Debt" means Indebtedness of Deepwater to its
Members or Affiliates of its Members which is by its terms
expressly subordinate to all payments of Charter Hire (including
Basic Hire and all amounts due and owing by Deepwater to the
other parties under the Transaction Documents) (as more fully set
forth on Schedule 7 to the Participation Agreement) and is
payable only out of funds available for distribution under
clauses "eighth" and "ninth" of Section 3.4(b) of the Depository
Agreement.
"Subordinated Notes" means promissory notes or other
instruments evidencing Subordinated Debt.
"Subordinated Operating Expenses" means those fees, costs
and expenses payable to Affiliates of R&B Falcon and Conoco under
the Services Agreements.
"Subsidiary" means, with respect to a Person, any
corporation or other entity of which securities or other
ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing
similar functions are at the time directly or indirectly owned by
such Person.
"Substitute Certificate Purchaser" is defined in Section 7.7
of the Participation Agreement.
"Supplemental Hire" means all amounts, liabilities and
obligations (other than Basic Hire) which Deepwater assumes,
agrees or is otherwise obligated to pay to the Charter Trustee,
the Investment Trust, any Certificate Purchaser or any other
Person under the Charter or any of the other Transaction
Documents, including breakage costs, indemnities, damages and
expenses. "Supplemental Hire" shall include all fees, costs and
expenses and other amounts payable by Deepwater during the Base
Charter Term to the Charter Trustee under the Deepwater Hedging
Agreements.
"Swap Termination Amount" means an amount due and payable by
the Charter Trustee under Section 6(d) or (e) of the Hedging
Agreements.
"Tax" or "Taxes" means any and all license, registration,
mortgage or security filing fee, stamp duties and documentation
fees and all taxes, assessments, levies, sales, use or transfer
tax, imposts, duties, charges, fees or withholdings of any nature
whatsoever, together with all penalties, fines or interest
thereon or other additions thereto, imposed by any federal, state
or local government, political subdivision, or taxing authority
in the United States, or by any governmental or taxing authority
of or in a foreign country or possession or territory or any
international authority.
"Tax Claim" means a claim for Taxes under the General Tax
Indemnity.
"Termination Proceeds" has the meaning specified in Section
3.7(a) of the Depository Agreement.
"Termination Proceeds Account" has the meaning specified in
Section 3.7(a) of the Depository Agreement.
"Termination Proceeds Certificate" has the meaning specified
in Section 3.7(b) of the Depository Agreement.
"Termination Value" means on any date, an amount equal to
the Certificate Purchaser Balance.
"Transaction Documents" means:
(i) the Participation Agreement;
(ii) the Trust Agreements;
(iii) intentionally omitted;
(iv) intentionally omitted;
(v) the Deepwater Hedging Agreements, if any;
(vi) the Hedging Agreements, if any;
(vii) the Drilling Consent;
(viii) the Charter;
(ix) the Protocol of Delivery and Acceptance;
(x) the Security Documents;
(xi) the Certificates;
(xii) the Conoco Guaranty; and
(xiii) the R&B Falcon Guaranty.
"Transaction Expenses" means:
(i) the fees and expenses of J&H ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
Inc., if any;
(ii) [intentionally omitted]
(iii) the fees and expenses of the Appraiser;
(iv) the fees and expenses of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇,
special counsel, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Knight, maritime counsel, and ▇▇▇▇▇, ▇▇▇▇▇▇▇ &
Fabrega, Panamanian counsel, to the Certificate
Purchasers (subject, in each case, to any
separate agreements between the Documentation
Agent and Deepwater);
(v) the fees and expenses of White & Case LLP,
special lease counsel to Deepwater;
(vi) the fees and expenses of the Placement Agent
other than legal fees and expenses;
(vii) the fees of the Documentation Agent other than
legal fees and expenses;
(viii) [Intentionally Omitted];
(ix) the fees and expenses of the Trustees;
(x) the fees and expenses of Delaware counsel to
the Investment Trustee, the Charter Trustee and
the Depository;
(xi) certain other expenses incurred in connection
with the negotiation and execution of the
Transaction Documents and the transactions
contemplated thereby (including fees or
expenses incurred in connection with the
translation, documentation or recordation of
the Ship Mortgage);
(xii) the fees and expenses of one local counsel, if
any, to the Certificate Purchasers, the
Trustees, the Investment Trust and the Agent in
connection with the review of the Head Lease
Documents, if any; and
(xiii) the fees and expenses of the Independent Marine
Surveyor.
"Transfer Restrictions" means the restrictions on transfer
of interest imposed on the Trustees and Certificate Purchasers
pursuant to Section 9 of the Participation Agreement.
"Trust Agreements" means the Charter Trust Agreement and the
Investment Trust Agreement.
"Trust Estate" means the sum of $1.00 (receipt of which from
the Certificate Purchasers is hereby acknowledged by the Charter
Trustee) and all estate, right, title and interest of the Charter
Trustee and/or the Investment Trust in, to and under (1) the
Charter, (2) the Depository Agreement, (3) the Drillship and (4)
each other Transaction Document to which the Charter Trustee
and/or the Investment Trust is a party.
"Trust Liens" means Liens on or against any or all of the
Drillship, the Trust Estate, the Charter Trust, the Investment
Trust, the Charter or any payment of Charter Hire which results
from (a) any act or omission of, or any Claim against, the
Investment Trust or the Trustees in any case unrelated to the
transactions contemplated by the Transaction Documents (including
any Liens arising as a result of a voluntary transfer of the
Drillship or all or any portion of the Trust Estate other than
any voluntary transfer after a Charter Event of Default), (b) any
Tax owed by any such Person, except for any Tax required to be
paid by Deepwater under the Transaction Documents, including any
Tax for which Deepwater is obligated to indemnify such Person
under the General Tax Indemnity, or (c) any act or omission of
such Person that is in breach of any of the covenants or
agreements of the Transaction Documents.
"Trustee Default Notice" has the meaning specified in
Section 4.2 of the Depository Agreement.
"Trustee's Account" has the meaning specified in Section
2.10 of the Participation Agreement.
"Trustees" means the Charter Trustee and the Investment
Trustee.
"Uniform Commercial Code" and "UCC" means the Uniform
Commercial Code as in effect in any applicable jurisdiction.
"United States" and "U.S." shall mean the United States of
America.
"Unsubordinated Operating Expense Amount" means, for each
day during any Return Period (or portion thereof) during the
Charter Term, $12,000 of Operation and Maintenance Expenses to be
adjusted from time to time as follows: (i) commencing in the
year 2000 on every January 1 during the Charter Term the
"Unsubordinated Operating Expense Amount" shall be adjusted
upwards or downwards by an amount determined in accordance with
the following equation: (a) the Consumer Price Index for
December 31 of the most recently ended calendar year shall be
divided by the Consumer Price Index for December 31 of the
calendar year immediately preceding the most recently ended
calendar year and (b) the quotient obtained through the
calculation set forth in clause (a) (expressed as a percentage)
shall be multiplied by the "Unsubordinated Operating Expense
Amount" (taking into account all prior adjustments) for the
immediately preceding calendar year; and (ii) for any period
during which the Day Rate is reduced pursuant to the Drilling
Contract during the Charter Term, the Unsubordinated Operating
Expense Amount shall be adjusted downwards by an amount
determined in accordance with the following equation: (x) the
Day Rate after such reduction divided by the Day Rate before such
reduction and (y) the quotient (expressed as a percentage)
determined in clause (x) shall be multiplied by the
Unsubordinated Operating Expense Amount (taking into account all
prior adjustments) in effect immediately prior to the reduction
of Day Rate.
"Vessel" means the 727-foot double-hulled vessel, bearing
Hull No. 1231, without the OFE, constructed pursuant to the
Construction Contract.
"Voting Stock" means the shares of capital stock of a
corporation having ordinary voting power to elect a majority of
the board of directors of such corporation, but excluding any
other class or classes of stock that have or might have voting
power upon the occurrence of a contingency.
"Warranties" means all of the right, title and interest in,
to and under any warranty, covenant, representation, service life
policy, performance guaranty, indemnity or product support
agreement of any contractor, subcontractor, manufacturer,
materialman, supplier, vendor or any other Person (excluding
Conoco, Frontier Deepwater Drilling Inc., R&B Falcon Drilling
(International & Deepwater) Inc., R&B Falcon, Deepwater, the
Members, the Investment Trust, the Trustees and the Certificate
Purchasers) (collectively, the "Warrantors") contained in any
contract or agreement, including the Construction Contract, to
the extent that such contracts and agreements relate to the
Vessel, the OFE or any part thereof; provided, however, that the
definition of "Warranties" shall not include adjustments to the
contract price pursuant to Article III of the Construction
Contract.
"Warrantors" has the meaning specified in the definition
"Warranties".