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EXHIBIT 10.22
FIRST NAVAL MORTGAGE
on the Vessel
DEEPWATER MILLENNIUM
executed by
R&B FALCON CORPORATION,
as Shipowner
and
RBF FINANCE CO.,
as Mortgagee
FIRST NAVAL MORTGAGE dated April 12, 1999 by R&B Falcon Corporation, a
corporation organized and existing under the laws of the State of Delaware with
offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, U.S.A. (the "Shipowner") to
RBF Finance Co., a corporation organized and existing under the laws of the
State of Delaware, with offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
U.S.A. (the "Mortgagee").
FIRST: The Shipowner represents, warrants and covenants that:
A. The Shipowner is the sole owner of the whole of the vessel DEEPWATER
MILLENNIUM, duly documented in the name of the Shipowner under the laws and flag
of the Republic of Panama with Provisional Patente No. 28090-PEXT, Radio Call
Letters 3FJA9, of 60,083.00 gross tonnage, 18,025.00 net tonnage, and 205.69
meters in length, 42.00 meters in width and 20.00 meters in depth (the
"Vessel").
B. The Shipowner has entered into a Loan Agreement (the "Loan
Agreement") dated as of March 26, 1999 with the Mortgagee providing for advances
to up to an aggregate amount of USD 209,900,000.
Pursuant to the Loan Agreement, the Shipowner has executed and
delivered to the Mortgagee its promissory notes in the aggregate amount of USD
209,900,000 (collectively, the "Note") and is justly indebted to the Mortgagee
therefor. The Loan Agreement and Note, in the form of Exhibit A hereto evidences
the obligation of the Shipowner under the Loan Agreement.
C. The Shipowner has heretofore agreed to execute and deliver this
First Naval Mortgage (the "Mortgage") on the Vessel to secure the Shipowner's
indebtedness pursuant to the Loan Agreement
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and under the Note in the original principal amount of USD 209,900,000 and
interest thereon and all other amounts payable hereunder and to secure as well
the performance and observance of all agreements, covenants and conditions
contained herein and contained in the Loan Agreement and the Note. The formula
for the calculation of interest and the terms of its payment together with the
terms of the repayment of principal are provided in the Loan Agreement.
SECOND: In consideration of the premises and of other good and valuable
consideration, the receipt whereof is hereby acknowledged, and in order to
secure the payment of the indebtedness pursuant to the Loan Agreement and the
Note according to the terms thereof and the payment of all other sums that may
hereafter be secured by this Mortgage in accordance with the terms hereof (all
such indebtedness, interest and other sums being hereinafter sometimes
collectively called the "Indebtedness hereby secured") and to secure as well the
performance and observance of all agreements, covenants and conditions contained
herein and contained in the Loan Agreement and the Note, the Shipowner hereby
constitutes a first naval mortgage in accordance with the provisions of Chapter
V Title IV of Book Second of the Code of Commerce and other pertinent
legislation of the Republic of Panama in favor of the Mortgagee, its successors
and assigns, upon one hundred percent (100%) of the Vessel, together with all of
the boilers, engines, machinery, masts, spars, boats, anchors, cables, chains,
rigging, tackle, capstans, outfit, tools, pumps and pumping equipment, apparel,
furniture, fittings, equipment, spare parts and all other appurtenances
(including without limitation drilling masts, rotary tables, substructures, draw
work, engines, pumps, blowout prevention equipment, drill pipe and drill bits)to
said Vessel appertaining or belonging, whether now owned or hereafter acquired,
whether on board or not, and also any and all additions, improvements and
replacements in general effected subsequently on or to the Vessel, or any part
thereof, or appurtenance thereto, but always excluding therefrom leased
equipment and equipment owned by third parties;
PROVIDED, HOWEVER, and these presents are upon the condition, if the
Shipowner or its successors or assigns shall pay or cause to be paid to the
Mortgagee the Indebtedness hereby secured, as and when the same shall become due
and payable in accordance with the terms of this Mortgage, the Note and the Loan
Agreement, and shall duly perform the agreements, covenants and conditions
herein and in the Loan Agreement and the Note contained, then this Mortgage and
the rights hereby granted shall cease and be void, otherwise to remain in full
force and effect.
THIRD: The Shipowner certifies that a true form of the Loan Agreement
(including the Note) is attached to this Mortgage as Exhibit A and that the
terms and conditions of the Loan Agreement
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and the Note are incorporated by reference into this Mortgage and
form a part hereof.
FOURTH: The Shipowner represents, warrants, covenants and
agrees with the Mortgagee as follows:
ARTICLE I.
Covenants of the Shipowner
Section 1. The Shipowner agrees that it will promptly and faithfully
pay or cause to be paid the Indebtedness hereby secured and that it will perform
and observe all agreements, covenants and conditions express or implied
contained herein and in the Loan Agreement and the Note.
Section 2. The Shipowner is duly organized and validly existing as a
corporation under the laws of the State of Delaware; it is duly authorized to
mortgage the Vessel; all corporate action necessary as required by law for the
execution and delivery of this Mortgage has been duly and effectively taken; and
the Mortgage, the Note and the Loan Agreement are and will be valid obligations
of the Shipowner enforceable in accordance with their terms.
Section 3. The Shipowner lawfully owns and is lawfully possessed of the
Vessel free from any lien or encumbrance whatsoever other than for current
operating expenses incurred in the ordinary course of business (payment for
which is not overdue) and for liens covered (in excess of approved deductibles)
by insurance (collectively, the "Permitted Liens") or any commitment to make the
Vessel available to any governmental authority for charter, or sale or use, and
will warrant and defend the title and possession thereto and to every part
thereof for the benefit of the Mortgagee against the claims and demands of all
persons whomsoever.
Section 4. The Shipowner will comply with and satisfy all of the
provisions of applicable law of the Republic of Panama in order to establish and
maintain this Mortgage as a first naval mortgage thereunder upon the Vessel and
upon all renewals, replacements and improvements made in or to the same.
Section 5. The Shipowner will not cause or permit the Vessel to be
operated in any manner contrary to applicable law and the Shipowner will not
engage in any unlawful trade or operations or violate any applicable law or
carry any cargo that will unreasonably expose the Vessel to penalty, forfeiture
or capture and will not do, or suffer or permit to be done, anything which can
or may injuriously affect the registration of the Vessel under the laws and
regulations of Panama and will at all times keep the Vessel duly documented
thereunder.
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Section 6. The Shipowner will pay and discharge when due and payable,
from time to time, all taxes, assessments, governmental charges, fines and
penalties lawfully imposed on the Vessel or any income therefrom; provided,
however, that the Shipowner shall not be required to pay and discharge any such
tax, assessment, governmental charge, fine or penalty so long as the legality
thereof shall be contested in good faith and by appropriate proceedings or other
acts and the Shipowner shall set aside on its books adequate reserves with
respect to any such tax, assessment, charge, fine or penalty so contested, and
the Vessel shall not have been arrested or detained therefor.
Section 7. Neither the Shipowner, any charterer, the Master of the
Vessel nor any other person has or shall have any right, power or authority to
create, incur or permit to be placed or imposed upon the Vessel, its freights,
profits or hire, any lien whatsoever other than this Mortgage and Permitted
Liens.
Section 8. The Shipowner will place, and at all times and places will
retain, a properly certified copy of this Mortgage on board the Vessel with her
papers and will cause such certified copy and the Vessel's marine document to be
exhibited to any and all persons having business therewith which might give rise
to any lien thereon other than liens for crew's wages and salvage, and to any
representative of the Mortgagee; and will place and prominently display in the
chart room and in the Master's cabin of the Vessel a framed printed notice in
plain type reading as follows:
"NOTICE OF MORTGAGE
This Vessel is owned by R&B Falcon Corporation ("the Owner") and is
subject to a First Naval Mortgage (the "Mortgage") in favor of RBF
Finance Co., Mortgagee. Under the terms of said Mortgage neither the
Owner, any Charterer, the Master of this Vessel nor any other person
has any right, power or authority to create, incur or permit to be
placed or imposed or continued upon this Vessel any lien whatsoever
other than said Mortgage and liens permitted by said Mortgage and liens
for crew's wages, general average and salvage, a copy of which is
available on board for inspection upon the request of any party having
business with the Vessel."
Section 9. Except for the lien of this Mortgage and Permitted Liens,
the Shipowner will not suffer to be continued any lien, encumbrance or charge on
the Vessel, and in due course and in any event within thirty (30) days after the
same becomes due and payable will pay or cause to be discharged or make adequate
provision for the satisfaction or discharge of all such claims or demands, or
will cause the Vessel to be released or discharged from any lien, encumbrance or
charge therefor.
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Section 10. If a libel or complaint be filed against the Vessel or the
Vessel is otherwise attached, levied upon or taken into custody or sequestered
by virtue of any legal proceeding in any court, the Shipowner will promptly
notify the Mortgagee thereof by telefax or telex confirmed by letter, at its
address specified in this Mortgage, and within thirty (30) days will cause the
Vessel to be released and all liens thereon (other than the lien of this
Mortgage and Permitted Liens) to be discharged and will promptly notify the
Mortgagee thereof in the manner aforesaid. The Shipowner will notify the
Mortgagee within forty-eight (48) hours after it has become known to the
Shipowner of any average or salvage incurred by the Vessel.
Section 11. (a) The Shipowner will at all times and without cost or
expense to the Mortgagee upgrade, maintain and preserve, or cause to be
upgraded, maintained and preserved, the Vessel in good running order and repair,
so that the Vessel shall be, insofar as due diligence can make it so, tight,
staunch, strong, in good condition, working order and repair and in all respects
seaworthy and fit for its intended service; and will keep the Vessel, or cause
it to be kept in such condition as will entitle it to the highest classification
and rating for vessels of the same age and type with American Bureau of
Shipping, or other classification society which is a member of the International
Association of Classification Societies and approved by the Mortgagee, and will
at the time of execution of this Mortgage, and annually thereafter on the
anniversary of the date of execution hereof will furnish to the Mortgagee a
certificate by such classification society that such classification is
maintained. The Vessel shall, and the Shipowner covenants that it will, at all
times comply with all applicable laws, treaties and conventions to which the
Republic of Panama is a party and rules and regulations issued thereunder, and
shall have on board as and when required thereby valid certificates showing
compliance therewith. The Shipowner will not make, or permit to be made, any
substantial change in the structure type or speed of the Vessel or change in its
rig without first receiving the written approval thereof by the Mortgagee.
(b) The Shipowner agrees, following receipt of written request by the
Mortgagee, to give the Mortgagee at least ten (10) days notice of the actual
date and place of any survey of the Vessel in order that the Mortgagee may have
representatives present if desired. The Shipowner agrees that at the Mortgagee's
request it will satisfy the Mortgagee that the expense of such survey or work to
be done thereat is within the Shipowner's financial ability and will not result
in a claim or lien against the Vessel in violation of the provisions of this
Mortgage.
Section 12. (a) The Shipowner will at all reasonable times afford the
Mortgagee or its authorized representatives full and complete access to the
Vessel for the purpose of inspecting the Vessel and its cargo and papers,
subject only to receipt of all
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necessary governmental approvals and consents of oil company operators, and, at
the request of the Mortgagee, the Shipowner will deliver for inspection copies
of any and all contracts and documents relating to the Vessel, whether on board
or not.
(b) The Shipowner hereby appoints the Mortgagee attorney-in-fact of the
Shipowner, whether or not an event of default shall have occurred or is
continuing, to appear before governmental bodies, classification societies and
insurers and to demand and receive to the same extent that the Shipowner itself
might, all information and certificates respecting (i) the corporate status of
the Shipowner under the laws of its jurisdiction of incorporation or any other
jurisdiction in which it may have qualified to do business, (ii) the status of
the Vessel under the laws and regulations of its country of registration and its
compliance with the requirements thereof, and (iii) the state of the records of
the Vessel or of the Shipowner in respect of the Vessel in any classification
society with which the Vessel may be classed or of any company, association or
club by whom the Vessel or the Shipowner in respect of the Vessel may be
insured; and the Shipowner hereby agrees that the Mortgagee may execute its
powers as attorney-in-fact as aforesaid through its agents, representatives and
attorneys. This power of attorney is coupled with an interest and shall be
irrevocable as long as any indebtedness from the Shipowner to the Mortgagee
remains outstanding.
Section 13. The Shipowner will not transfer or change the flag or port
of documentation of the Vessel without the prior written consent of the
Mortgagee and any such written consent to any one transfer or change of flag or
port of documentation shall not be construed to be a waiver of this provision
with respect to any subsequent proposed transfer or change of flag or port of
documentation.
Section 14. The Shipowner will not sell, mortgage, demise charter
(other than to an affiliate) for a period longer than six (6) months, transfer
or change the management of the Vessel without the prior written consent of the
Mortgagee, and any such written consent to any one sale, mortgage, demise
charter or transfer, shall not be construed to be a waiver of this provision
with respect to any subsequent proposed sale, mortgage, demise charter or
transfer of the Vessel. Any such sale, mortgage, demise charter (other than to
an affiliate) or transfer of the Vessel shall be subject to the provisions of
this Mortgage and the lien hereof.
Section 15. (a) The Shipowner will cause to be carried and maintained
on or in respect of the Vessel without expense to the Mortgagee, all risk
equivalent Hull and Machinery and Protection and Indemnity insurance with
responsible and reputable insurance companies, underwriters, associations, clubs
or funds reasonably acceptable to the Mortgagee in an amount not less than the
greater
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of (X) 110% of the amount of the outstanding Indebtedness hereby secured or (Y)
the fair market value of the Vessel's hull and machinery (the "agreed value"),
war risk and protection and indemnity and insurances in such amounts (with such
deductibles or franchises), against such risks (including but not limited to,
loss of or damage to hull or machinery; protection and indemnity; war risks in
the event the Vessel is located outside United States territorial waters or
waters above the outer Continental Shelf of the United States, and pollution
risks); in such form (including, without limitation, the form of the loss
payable clause) and in U.S. currency as the Mortgagee shall from time to time
reasonably require or approve and as provided hereafter; and providing for
deductibles no greater than USD 1,000,000.00 per occurrence. The Shipowner shall
maintain liability insurance including crew liability, cargo liability,
pollution liability, contractual liability and removal of wreck insurance in
amounts similar to that maintained by owners of similar vessels and reasonably
acceptable to the Mortgagee or, without expense to the Mortgagee, have the
Vessel fully entered in a responsible and reputable Protection and Indemnity
Association or club in good standing and reasonably acceptable to the Mortgagee.
The Shipowner will cause such association or club to issue to the Mortgagee a
Letter of Undertaking or certificate or cover note, noting the Mortgagee's
interest in such insurance in a form reasonably satisfactory to the Mortgagee.
The Shipowner will furnish the Mortgagee from time to time on request and in any
event at least annually a detailed report (including a list showing the insured
value of the Vessel) signed by a firm of marine insurance brokers reasonably
acceptable to the Mortgagee with respect to the insurance carried and maintained
on the Vessel, together with its report as to the compliance of such insurance
with the requirements of this Section 15. The Shipowner agrees that, unless the
insurances by its terms provide that they cannot cease without the Mortgagee
being informed and having the right to continue the insurances by paying any
premiums not paid by the Shipowner, receipts showing payment of premiums for
required insurance paid shall be in the hands of the Mortgagee at least two (2)
days before the risk in question commences.
(b) The Shipowner shall, at its own expense, furnish to the Mortgagee a
breach of warranty endorsement, including Additional Perils Pollution, providing
coverage for the Mortgagee in an amount equal to at least 110% of the amount of
the Indebtedness hereby secured. Such mortgagee's breach of warranty endorsement
insurance shall be maintained in the broadest form available in the American or
British markets for vessels of the same type as the Vessel through underwriters
reasonably acceptable to the Mortgagee. The Vessel shall not undertake any
construction operations, carry any cargoes or proceed in an area then excluded
by trading warranties under its marine or war risk policies (including
protection and indemnity) without obtaining all necessary additional coverage,
reasonably satisfactory in form and substance to the Mortgagee; and evidence of
which additional insurance shall be furnished to the Mortgagee.
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(c) The Shipowner will cause the relevant insurance brokers to agree
to, and the Shipowner hereby covenants and agrees that it will, advise the
Mortgagee of any expiration, termination, nonrenewal, alteration or cancellation
of any policy, any default in the payment of any premium and of any other act or
omission on the part of the Shipowner of which it has knowledge and which might
invalidate or render unenforceable, in whole or in part, any insurance on the
Vessel. To the extent obtainable from underwriters or brokers, all policies
required hereby shall provide for not less than thirty (30) days prior written
notice (ten (10) days with respect to non-payment of premiums and seven (7) days
with respect to war risks) to be received by the Mortgagee of the termination or
cancellation of the insurance evidenced thereby. All policies of insurance
maintained pursuant to this Article I, Section 15 shall contain provisions
waiving underwriters' rights of subrogation thereunder against any assured named
in such policy and any assignee of said assured.
(d) Unless the Mortgagee shall otherwise agree, all insurance (other
than any Protection and Indemnity Association or Club) must name the Mortgagee
as an additional insured but without liability for premiums, club calls,
assessments, warranties or representations, and all amounts of whatsoever nature
payable under any insurance must be payable to the Mortgagee for distribution
first to itself and thereafter to the Shipowner or others as interest may
appear. Nevertheless, unless an Event of Default shall have occurred and is
continuing (i) amounts payable under any insurance on the Vessel with respect to
protection and indemnity risks may be paid directly to the Shipowner to
reimburse it for any loss, damage or expense incurred by it and covered by such
insurance or to the person to whom any liability covered by such insurance has
been incurred; provided, however, if the Mortgagee shall give notice that the
Shipowner is in default hereunder, all such payments shall be made to the
Mortgagee (with the exception of payments made under employers liability,
▇▇▇▇▇▇▇'▇ compensation and similar insurances) until the Indebtedness hereby
secured has been fully discharged, and (ii) unless an Event of Default has
occurred or is continuing amounts payable under any insurance with respect to
the Vessel involving any damage to the Vessel not constituting an actual or
constructive total loss, the underwriters may pay direct for the repair, salvage
or other charges involved or, if the Shipowner shall have first fully repaired
the damage or paid all of the salvage or other charges, may pay the Shipowner as
reimbursement therefor; provided, however, that if such amounts (including any
franchise or deductible) are greater than USD 1,000,000.00 the underwriters
shall not make such payment without first obtaining the written consent thereto
of the Mortgagee.
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(e) All amounts paid to the Mortgagee in respect of any insurance on
the Vessel shall be disposed of as follows:
(i) any amount which might have been paid at the time, in
accordance with the provisions of paragraph (d) above, directly to the
Shipowner or others shall be paid by the Mortgagee to, or as directed
by, the Shipowner;
(ii) all amounts paid to the Mortgagee in respect of an actual
or constructive or arranged total loss or requisition shall be applied
by the Mortgagee to the payment of the Indebtedness hereby secured in
full;
(iii) so long as no Event of Default shall have occurred and
be continuing all other amounts paid to the Mortgagee in respect of any
insurance on the Vessel shall be applied to the making of needed
repairs or other work on the Vessel, or to the payment of other claims
incurred by the Shipowner relating to the Vessel, or may be paid to the
Shipowner or whosoever may be entitled thereto;
(iv) all other amounts paid to the Mortgagee in respect of any
insurance on the Vessel may, in the Mortgagee's sole discretion, be
held and applied to the prepayment of the Indebtedness hereby secured.
(f) In the event that any claim or lien is asserted against the Vessel
for loss, damage or expense which is covered by insurance required hereunder and
it is necessary for the Shipowner to obtain a bond or supply other security to
prevent arrest of the Vessel or to release the Vessel from arrest on account of
such claim or lien, the Mortgagee, on request of the Shipowner, may, in the sole
discretion of the Mortgagee, assign to any person, firm or corporation executing
a surety or guarantee bond or other agreement to save or release the Vessel from
such arrest, all right, title and interest of the Mortgagee in and to said
insurance covering said loss, damage or expense, as collateral security to
indemnify against liability under said bond or other agreement.
(g) The Shipowner shall deliver to the Mortgagee certified copies or
originals whenever so requested by the Mortgagee in writing, of all certificates
of entry, cover notes, binders, evidences of insurance and policies for the
purpose of inspection or safekeeping, or, alternatively, satisfactory letters of
undertaking from the broker holding the same.
(h) The Shipowner agrees that it will not execute or permit or
willingly allow to be done any act by which any insurance may be suspended,
impaired or canceled, and that it will not permit or allow the Vessel to
undertake any construction operations or run any risk or transport any cargo
which may not be permitted by the policies in force, without having previously
insured the Vessel by additional coverage to extend to such construction
operations, risks or cargoes.
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(i) In case any underwriter proposes to pay less on any claim of total
loss (whether actual, constructive or compromised) than the amount thereof, the
Shipowner shall forthwith inform the Mortgagee and the consent of the Mortgagee
shall be required for any compromise thereof; and the Shipowner shall not agree
to any adjustment or compromise of any such loss except for the highest amount
reasonably obtainable thereon.
(j) The Shipowner will comply with and satisfy all of the provisions of
any applicable law, convention, regulation, proclamation or order concerning
financial responsibility for liabilities imposed on the Shipowner or the Vessel
with respect to pollution by any state or nation or political subdivision
thereof and will maintain all certificates or other evidence of financial
responsibility as may be required by any such law, convention, regulation,
proclamation or order with respect to the trade which the Vessel are from time
to time engaged in and the cargo carried by it or the construction projects
conducted by it.
(k) Any provision of this Section 15 to the contrary notwithstanding,
all aspects of the insurances on the Vessel (including risks covered, policy
terms, deductibles, forms of loss payable clauses, and underwriters or clubs)
shall at all times be fully satisfactory to and approved by the Mortgagee,
acting in its sole discretion. The Shipowner shall cause any insurance broker
arranging the insurances required by this Mortgage (who shall be approved by the
Mortgagee) to issue its letter of undertaking to the Mortgagee with respect to
such insurance matters as the Mortgagee shall request in accordance with usual
commercial practice.
Section 16. The Shipowner will reimburse the Mortgagee promptly for any
and all expenditures which the Mortgagee may, from time to time, make, lay out
or expend in providing such protection in respect of insurance, discharge or
purchase of liens, taxes, dues, assessments, governmental charges, fines and
penalties lawfully imposed, repairs, attorneys' fees, necessary translation fees
for documents made in a language other than English and other matters as the
Shipowner is obligated herein to provide, but fails to provide. Such obligation
of the Shipowner to reimburse the Mortgagee shall be an additional indebtedness
due from the Shipowner, secured by this Mortgage, and shall be payable by the
Shipowner on demand. The Mortgagee, though privileged so to do, shall be under
no obligation to the Shipowner to make any such expenditures, nor shall the
making thereof relieve the Shipowner of any default in that respect.
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Section 17. The Shipowner will fully perform any and all charter
parties or contracts of affreightment which are, or may be, entered into with
respect to the Vessel.
Section 18. The Shipowner further covenants and agrees with the
Mortgagee that, so long as any part of the Indebtedness hereby secured remains
unpaid, there shall be no change in the ownership of the Vessel without the
prior written consent of the Mortgagee.
Section 19. (a) In the event of an actual or constructive or arranged
total loss or seizure or forfeiture or requisition or other taking, or any sale,
exchange, or other disposition of the Vessel by the Shipowner, whether or not
with the consent of the Mortgagee, then and in each such case the Shipowner
shall forthwith on demand prepay the Indebtedness hereby secured pursuant to
Section 2.3 of the Loan Agreement.
(b) This Mortgage shall extend to and constitute a lien upon, and the
Shipowner hereby grants the Mortgagee a security interest in, all proceeds
resulting from any of the events mentioned in subsection (a) above as security
for the Indebtedness hereby secured.
(c) The Shipowner hereby irrevocably authorizes the Mortgagee to file
and record financing statements under the Uniform Commercial Code in any
jurisdiction where the same may be in force or under any legislation having
similar effect for the purpose of perfecting or continuing the perfection of the
security interests granted by the Shipowner to the Mortgagee herein without
obtaining the signature of the Shipowner thereto. The Shipowner hereby
irrevocably authorizes the Mortgagee to execute any such financing statement or
similar document in the name of the Shipowner.
Section 20. In the event that this Mortgage or any provision hereof
shall be deemed invalidated in whole or in part by reason of any present or
future law or any decision of any authoritative court, or if the documents at
any time held by the Mortgagee shall be deemed by the Mortgagee for any reason
insufficient to carry out the true intent and spirit of this Mortgage, then from
time to time, the Shipowner will execute, on its own behalf, such other and
further assurances and documents as in the opinion of the Mortgagee may be
required more effectively to subject the Vessel to the payment of the
Indebtedness hereby secured, as in this Mortgage provided, and the performance
of the terms and provisions of this Mortgage, the Note and the Loan Agreement.
Section 21. From time to time on the request of the Mortgagee, the
Shipowner will furnish to the Mortgagee: (a) such favorable opinions of counsel,
including Panamanian and United States legal opinions, satisfactory in form and
substance to the Mortgagee and (b) such instruments executed by the Shipowner or
on
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its behalf or by any or all officers, shareholders or directors of the Shipowner
in each case relating to any of the transactions contemplated herein, including
this Mortgage, as the Mortgagee may reasonably request.
ARTICLE II.
EVENTS OF DEFAULT AND REMEDIES
Section 1. In case any one or more of the following events herein
termed "Events of Default" shall occur and be continuing:
(a) Any payment in respect of the Indebtedness hereby secured
has not been received by the Mortgagee when due after giving effect to
any applicable grace periods; or
(b) Any Event of Default has occurred under the Loan
Agreement; or
(c) The statements in Sections 2 and 3 of Article I above
shall prove to be untrue in a material way; or
(d) A default shall have occurred in the due and punctual
observance and performance of any of the provisions of Sections 4, 5,
6, 9, 10, 11, 13, 14, 15, 16, 18 or 19 of Article I hereof; or
(e) A default by the Shipowner in the observance or
performance of any other provision of this Mortgage unremedied for
thirty (30) days after written notice thereof shall have been given to
the Shipowner by the Mortgagee; or
(f) the Shipowner or any other obligor of any part of the
Indebtedness hereby secured: (i) is dissolved or its legal status is
lost or canceled by reason of any valid, judicial, extra-judicial, or
administrative proceeding shall have occurred, or (ii) dies or is
adjudicated a bankrupt, or (iii) shall admit in writing its inability
to pay its debts as they fall due, or (iv) shall make a general
assignment for the benefit of its creditors; or a receiver of the
property or business of the Shipowner or any obligor on or guarantor of
any part of the Indebtedness hereby secured is appointed by a court of
competent jurisdiction;
then, upon the occurrence and continuance of one or more Events of Default, (and
in each and every case), the Mortgagee shall have the right to:
(1) Declare the then unpaid Indebtedness hereby secured to be
due and payable immediately, and upon such declaration, the same,
including interest to the date of declaration, shall become and be
immediately due and payable.
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(2) Exercise all of the rights and remedies in foreclosure and
otherwise given to mortgagees by the laws and regulations of the
Republic of Panama or of any country wherein the Vessel may be found or
of any other applicable jurisdiction.
(3) Bring suit at law, in equity or in admiralty, in any court
of any nation of the world, as it may be advised, to recover judgment
for the Indebtedness hereby secured, and collect the same out of any
and all of the properties of the Shipowner, whether covered by this
Mortgage or otherwise.
(4) Take and enter into possession of the Vessel, at any time,
wherever the same may be, without legal process and without being
responsible for loss or damage, and the Shipowner or other person in
possession forthwith upon demand of the Mortgagee shall surrender to
the Mortgagee possession of the Vessel.
(5) Without being responsible for loss or damage, the
Mortgagee may hold, lay up, lease, charter, operate or otherwise use
the Vessel for such time and upon such terms as it may deem to be for
its best advantage, and demand, collect and retain all hire, day rates,
freights, earnings, issues, revenues, income, profits, return premiums,
salvage awards or recoveries, recoveries in general average, and all
other sums due or to become due in respect of the Vessel or in respect
of any insurance thereon from any person whomsoever, accounting only
for the net profits, if any, arising from such use of the Vessel and
charging upon all receipts from the use of the Vessel or from the sale
thereof by court proceedings or pursuant to subsection (6) next
following, all costs, expenses, charges, damages or losses by reason of
such use; and if at any time the Mortgagee shall avail itself of the
right herein given it to take the Vessel, the Mortgagee shall have the
right to dock the Vessel, for a reasonable time at any dock, pier or
other premises of the Shipowner without charge, or to dock her at any
other place at the cost and expense of the Shipowner.
(6) Sell the Vessel without judicial process and without being
responsible for any loss or damage arising therefrom, except as may be
directly and proximately caused by its willful misconduct, recklessness
or gross negligence, in such place, time and manner as the Mortgagee
may, in its sole judgment, deem fit. In the event that the Vessel shall
be offered for sale by private sale, reasonable notice must be given to
the Shipowner but need not be more than twenty (20) days before the
private sale, and no newspaper publication of notice shall be required,
nor notice of adjournment of sale; sale may be held at such place and
at such time as the Mortgagee by notice may have specified, or may be
adjourned by
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the Mortgagee from time to time by announcement at the time and place
appointed for such sale or for such adjourned sale, and without further
notice or publication the Mortgagee may make any such sale at the time
and place to which the same shall be so adjourned. At the sale, the
Mortgagee may acquire the Vessel in satisfaction of all or a portion of
the outstanding Indebtedness.
It is expressly agreed that upon payment of the purchase price, the
purchaser shall acquire good and peaceful title to the Vessel sold at any such
non-judicial sale, and shall not be affected by any claim or potential claim of
the Shipowner, whether or not such claim or potential claim comes to the
knowledge of the purchaser.
Any sale may be conducted without bringing the Vessel to the place
designated for such sale and in such manner as the Mortgagee may deem to be for
its best advantage.
Section 2. Any sale of the Vessel made in pursuance of this Mortgage,
whether under the power of sale hereby granted or any judicial proceedings,
shall operate to divest all right, title and interest of any nature whatsoever
of the Shipowner therein and thereto, and shall bar the Shipowner, its
successors and assigns, and all persons claiming by, through or under them, from
asserting any claim or right, title or interest therein or thereto. No purchaser
shall be bound to inquire whether notice has been given, or whether any default
has occurred, or as to the propriety of the sale, or as to the application of
the proceeds thereof.
Section 3. The Mortgagee is hereby appointed attorney-in-fact of the
Shipowner to execute and deliver to any purchaser aforesaid, and is hereby
vested with full power and authority to make, in the name and in behalf of the
Shipowner, a good conveyance of the title to the Vessel so sold. In the event of
any sale of the Vessel, under any power herein contained, the Shipowner will, if
and when required by the Mortgagee, execute such form of conveyance of the
Vessel as the Mortgagee may direct or approve.
Section 4. The Mortgagee is hereby appointed attorney-in-fact of the
Shipowner upon the happening of any Event of Default, in the name of the
Shipowner to demand, collect, receive, compromise and sue for, so far as may be
permitted by law, all freights, hire, earnings, issues, revenues, income and
profits of the Vessel and all amounts due from underwriters under any insurance
thereon as payment of losses or as return premiums or otherwise, salvage awards
and recoveries, recoveries in general average or otherwise, and all other sums
due or to become due at the time of the happening of any Event of Default in
respect of the Vessel or in respect of any insurance thereon from any person
whomsoever, and to make, give and execute in the name of the Shipowner
acquittances, receipts, releases or other discharges for the same, whether under
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seal or otherwise, all checks, notes, drafts, warrants, agreements and other
instruments in writing with respect to the foregoing.
Section 5. Whenever any right to enter and take possession of the
Vessel accrues to the Mortgagee, it may require the Shipowner to deliver, and
the Shipowner shall on demand, at its own cost and expense, deliver to the
Mortgagee the Vessel at the location designated by the Mortgagee.
Section 6. The Shipowner authorizes and empowers the Mortgagee or its
appointees or any of them to appear in the name of the Shipowner, its successors
and assigns, in any court of any country or nation of the world where a suit is
pending against the Vessel because of or on account of any alleged lien against
the Vessel from which the Vessel has not been released and to take such
proceedings as to them or any of them may seem proper towards the defense of
such suit and the purchase or discharge of such lien, and all expenditures made
or incurred by them or any of them for the purpose of such defense or purchase
or discharge shall be a debt due from the Shipowner, its successors and assigns,
to the Mortgagee and shall be secured by the lien of this Mortgage in like
manner and extent as if the amount and description thereof were written herein.
Section 7. The Shipowner covenants that upon the happening of and
continuance of any one or more of the Events of Default, upon written demand of
the Mortgagee, the Shipowner will pay to the Mortgagee the whole amount due and
payable on the Indebtedness hereby secured together with any other amounts due
hereunder or under the Loan Agreement; and in case the Shipowner shall fail to
pay same forthwith upon such demand, the Mortgagee shall be entitled to recover
judgment for the whole amount so due and unpaid, together with such further
amounts as shall be sufficient to cover the reasonable compensation to the
Mortgagee's agents, attorneys and counsel and any necessary advances, expenses
and liabilities made or incurred by it hereunder. All moneys collected by the
Mortgagee under this Article II, Section 7 shall be applied by the Mortgagee in
accordance with the provisions of Article II, Section 11 below.
Section 8. Each and every right, power and remedy herein given to the
Mortgagee shall be cumulative and shall be in addition to every other right,
power and remedy herein given or now or hereafter existing at law, in equity, in
admiralty or by statute, and each and every right, power and remedy whether
herein given or otherwise existing may be exercised from time to time and as
often and in such order as may be deemed expedient by the Mortgagee, and the
exercise or the beginning of the exercise of any right, power or remedy shall
not be construed to be a waiver of the right to exercise at the same time or
thereafter any other right, power or remedy. No delay or omission by the
Mortgagee or by the holder of
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any of the Indebtedness hereby secured in the exercise of any right or power or
in the pursuance of any remedy accruing upon any Event of Default shall impair
any such right, power or remedy or be construed to be a waiver of any such Event
of Default or to be an acquiescence therein; nor shall the acceptance by the
Mortgagee of any security or of any payment of or on account of the Indebtedness
hereby secured maturing after any Event of Default or of any payment on account
of any past default be construed to be a waiver of any right to take advantage
of any future Event of Default or of any past Event of Default not completely
cured thereby.
Section 9. If at any time after an Event of Default and prior to any
foreclosure action having been taken by the Mortgagee under any of the Loan
Documents to realize upon the security provided by such documents, the Shipowner
offers completely to cure all Events of Default and to pay all expenses,
advances and damages to the Mortgagee consequent to such Events of Default, with
interest at the rate provided for late payments herein, then the Mortgagee shall
be required to first time, and thereafter may, but shall not be required to,
accept such offer and payment and restore the Shipowner to its former position,
but such action shall not affect any subsequent Event of Default or impair any
rights consequent thereon.
Section 10. In case the Mortgagee shall have proceeded to enforce any
right, power or remedy under this Mortgage by foreclosure, entry or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Mortgagee, then and in every such
case the Shipowner and the Mortgagee shall be restored to their former positions
and rights hereunder with respect to the property subject or intended to be
subject to this Mortgage, and all rights, remedies and powers of the Mortgagee
shall continue as if no such proceedings had been taken.
Section 11. The proceeds of any sale of the Vessel received by the
Mortgagee and the net earnings of any charter operation or other use of the
Vessel received by the Mortgagee under any of the rights, powers or remedies
herein specified and any and all other moneys received by the Mortgagee pursuant
to or under the terms of this Mortgage or in any proceedings hereunder, the
application of which has not elsewhere herein been specifically provided for,
shall be applied as follows:
FIRST: To the payment of all expenses and charges, including
the expenses of any sale, the expenses of any retaking, attorney's
fees, court costs, and any other expenses or advances made or incurred
by the Mortgagee in the protection of its rights or the pursuance of
its remedies hereunder;
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SECOND: To the payment of the Indebtedness hereby secured
whether due or not, including interest thereon to the date of
such payment;
THIRD: To the payment of any surplus thereafter remaining
to the Shipowner or to whomever may be entitled thereto.
Section 12. Until one or more of the Events of Default shall happen,
the Shipowner (a) shall be suffered and permitted to retain actual possession
and use of the Vessel and (b) shall have the right, from time to time, in its
discretion, and without application to the Mortgagee, and without obtaining a
release thereof by the Mortgagee, to dispose of, free from the lien hereof, any
boilers, engines, machinery, masts, spars, sails, rigging, boats, anchors,
chains, tackle, apparel, furniture, fittings or equipment, or any other
appurtenances of the Vessel that are no longer useful, necessary, profitable or
advantageous in the operation of the Vessel, first or simultaneously having
provided for the replacement thereof by new boilers, engines, machinery, masts,
spars, sails, rigging, boats, anchors, chains, tackle, apparel, furniture,
fittings, equipment or other appurtenances of substantially equal value to the
Shipowner, which shall forthwith become subject to the lien of this Mortgage as
a first naval mortgage thereon.
Section 13. If the entire Indebtedness hereby secured is paid as and
when the same becomes due and payable, and if the Shipowner also pays or causes
to be paid all other sums payable by the Shipowner hereunder and under the Loan
Agreement and the Note then this Mortgage and the lien, rights and interest
hereby granted shall cease, determine and become null and void, and the
Mortgagee shall, at the request of the Shipowner, execute and deliver such
reasonable instrument or instruments of satisfaction as may be necessary to
satisfy and discharge the lien hereof; and forthwith the estate, right, title
and interest of the Mortgagee in and to all property subject to this Mortgage
shall thereupon cease, determine and become null and void.
ARTICLE III.
Sundry Provisions
Section 1. The names, surnames, civil status, occupation and domicile
of the Mortgagee and Shipowner are as follows:
MORTGAGEE:
Name: RBF Finance Co.
Civil Status: Corporation organized under the laws of the
State of Delaware
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Occupation: Lending Corporation
Domicile: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇)▇▇▇-▇▇▇▇
Telefax No.: (▇▇▇) ▇▇▇-▇▇▇▇
SHIPOWNER:
Name: R&B Falcon Corporation
Civil Status: Corporation organized under the laws of the
State of Delaware
Occupation: Shipowner
Domicile: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇)▇▇▇-▇▇▇▇
Telefax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Section 2. All of the covenants, promises, stipulations and agreements
of the Shipowner in this Mortgage contained shall bind the Shipowner and its
successors and assigns and shall inure to the benefit of the Mortgagee and its
successors and assigns. In the event of any assignment of this Mortgage, the
term "Mortgagee", as used in this Mortgage, shall be deemed to mean any such
assignee.
Section 3. Wherever and whenever herein any right, power or authority
is granted or given to the Mortgagee, such right, power or authority may be
exercised in all cases by the Mortgagee or such agent or agents as it may
appoint, and the act or acts of such agent or agents when taken shall constitute
the act of the Mortgagee hereunder.
Section 4. In the event that any provision of this Mortgage, the Loan
Agreement or the Note shall be deemed invalid or unenforceable by reason of any
present or future law or any decision of any authoritative court, the validity
and enforceability of the other provisions hereof or thereof shall not be
affected thereby.
Section 5. The Shipowner agrees to pay all costs and expenses in
connection with the preparation, execution and delivery of the Loan Agreement,
the Note, this Mortgage and any other instrument contemplated thereby (including
the fees and out-of-pocket expenses of counsel to the holder of the Note, the
Loan Agreement, and to the Mortgagee and of local counsel selected by said
counsel in any jurisdiction involved in the transactions contemplated by the
Loan Agreement and this Mortgage) and costs and expenses, including counsel
fees, in connection with the enforcement of the Loan Agreement, the Note, this
Mortgage and any other instrument
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contemplated thereby, as well as costs for translations and any and all stamp
and other taxes of every character, if any, now or hereafter in effect, whether
foreign or domestic, not including taxes imposed on the income or assets of the
Mortgagee by the United States of America or any political subdivisions thereof,
which may be payable or determined to be payable in connection with the
execution, delivery, performance or enforcement of the Loan Agreement, the Note,
and this Mortgage, and any other instrument contemplated thereby and the
payments to be made thereunder, whether any such tax be imposed upon the
Mortgagee and to save the Mortgagee harmless from any and all liabilities with
respect to or resulting from any delay or omission to pay such taxes.
Section 6. This Mortgage may be executed in any number of counterparts,
and all such counterparts executed and delivered each as an original shall
constitute but one and the same instrument. In case of any discrepancy between
an English counterpart and the Spanish and the Notarial version thereof in
Spanish, as between the parties hereto, the English counterpart shall control.
Section 7. (a) Any notice or other communication to be given pursuant
hereto shall be sent by hand or by postage prepaid letter or by cable or
telegram or telefax or telex confirmed by letter and addressed:
To the Shipowner:
R&B Falcon Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone No.: (▇▇▇)▇▇▇-▇▇▇▇
Telefax No.: (▇▇▇) ▇▇▇-▇▇▇▇
To the Mortgagee:
RBF Finance Co.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone No.: (▇▇▇)▇▇▇-▇▇▇▇
Telefax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Any notice of communication sent by postage prepaid letter
shall be deemed to be received three days after mailing. Any notice or
communication sent by telex or facsimile shall be deemed received at
the opening of business the day after transmission. Any notice or
communication sent by hand shall be deemed to be received on the day
sent if sent during normal business hours and otherwise at the opening
of business on the day following delivery.
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Section 8. No provision of this Mortgage, the Loan Agreement or the
Note shall be deemed to constitute a waiver by the Mortgagee of the preferred
status of this Mortgage given to foreign flag Vessel by 46 U.S.C. ss. 31325 and
31326, of the United States of America or comparable legislation of any other
jurisdiction where this Mortgage may be enforced, and any provision of or
incorporated in this Mortgage which would otherwise constitute such a waiver
shall to such extent be of no force or effect.
Section 9. All capitalized terms used in this Mortgage and not defined
herein shall have the meanings given to them in the Loan Agreement.
FIFTH: The Mortgagee hereby accepts all of the terms and
conditions set forth in this First Naval Mortgage and the First
Naval Mortgage granted hereby.
SIXTH: The Mortgagee and the Shipowner declare that they hereby confer
a special Power of Attorney on Messrs. ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, lawyers of
Panama, Republic of Panama, empowering each of them individually to take all
necessary steps to file and register this First Naval Mortgage in the
appropriate registries of the Republic of Panama.
IN WITNESS WHEREOF, the parties hereto have executed this Mortgage as
of the day and year first above written.
R&B FALCON CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Title: Executive Vice President
-----------------------------
RBF FINANCE CO.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------
Title: President
-----------------------------
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ACKNOWLEDGEMENT
STATE OF TEXAS )
)
COUNTY OF ▇▇▇▇▇▇ )
On this 12th day of April, 1999, before me personally appeared ▇▇▇▇▇▇
▇▇▇▇▇▇ known to me to be the Executive Vice President of R&B Falcon Corporation,
the party described in and that executed the foregoing instrument on behalf of
said corporation and acknowledged to me that he signed his name thereto by
authority of the Board of Directors of said corporation and as the free act and
deed of such corporation and that his signature on said instrument was set
thereon in my presence and is therefore authentic.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Notary Public
[Seal]
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ACKNOWLEDGEMENT
STATE OF TEXAS )
)
COUNTY OF ▇▇▇▇▇▇ )
On this 12th day of April, 1999, before me personally appeared ▇▇▇▇▇▇
▇▇▇▇▇▇▇ known to me to be the President of R&B Falcon Corporation, the party
described in and that executed the foregoing instrument on behalf of said
corporation and acknowledged to me that he signed his name thereto by authority
of the Board of Directors of said corporation and as the free act and deed of
such corporation and that his signature on said instrument was set thereon in my
presence and is therefore authentic.
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Notary Public
[Seal]
22