EXHIBIT 10.164
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LOAN AGREEMENT
Dated as of December 14, 1996
$38,000,000
TRB CORPORATION
as Borrower,
READING & ▇▇▇▇▇ (U.K.) LIMITED
and
NISSHO IWAI EUROPE PLC
as Lender
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TABLE OF CONTENTS
Page
Section 1. Definitions and Accounting Matters . . . . . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . 1
1.02 Accounting Terms and Determinations . . . . . . . . . . . . . . 10
Section 2. Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.01 Committed Loan . . . . . . . . . . . . . . . . . . . . . . . . 10
2.02 Changes of Commitment . . . . . . . . . . . . . . . . . . . . . 10
2.03 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.04 Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . 11
2.05 The Note . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.06 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 3. Borrowings and Payments . . . . . . . . . . . . . . . . . . . . 11
3.01 Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.02 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . 11
3.04 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.05 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.06 Certain Notices . . . . . . . . . . . . . . . . . . . . . . . . 13
3.07 Set-off; Sharing of Payments . . . . . . . . . . . . . . . . . 13
Section 4. Yield Protection and Illegality . . . . . . . . . . . . . . . . 13
4.01 Additional Costs . . . . . . . . . . . . . . . . . . . . . . . 13
4.02 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.03 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.04 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . 15
5.01 Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 6. Representations and Warranties . . . . . . . . . . . . . . . . 18
6.01 Corporate Existence . . . . . . . . . . . . . . . . . . . . . . 18
6.02 Information; Material Adverse Change . . . . . . . . . . . . . 19
6.03 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.04 No Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.05 Corporate Action . . . . . . . . . . . . . . . . . . . . . . . 19
6.06 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.07 ERISA and Pension Plans . . . . . . . . . . . . . . . . . . . . 20
6.08 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.09 Ownership and Use of Properties . . . . . . . . . . . . . . . . 20
6.10 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 20
Section 7. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.01 Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.02 Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . 24
7.03 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.04 Maintenance of Existence; Conduct of Business . . . . . . . . . 24
7.05 Maintenance of and Access to Properties . . . . . . . . . . . . 24
7.06 Compliance with Applicable Laws . . . . . . . . . . . . . . . . 24
7.07 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.08 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.09 Mergers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.10 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.11 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.12 Transactions with Affiliates . . . . . . . . . . . . . . . . . 25
7.13 Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.14 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 26
7.15 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.16 ERISA and Pension Plan Compliance . . . . . . . . . . . . . . . 26
7.17 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 26
7.18 Performance of Transaction Documents . . . . . . . . . . . . . 27
7.19 Amendment of Transaction Documents . . . . . . . . . . . . . . 27
7.20 Operation of Vessel . . . . . . . . . . . . . . . . . . . . . . 27
7.21 Sale or Modification of Vessel . . . . . . . . . . . . . . . . 27
7.22 Acknowledgment of Charter Assignment . . . . . . . . . . . . . 27
Section 8. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.01 Events of Default. . . . . . . . . . . . . . . . . . . . . . 27
8.02 Application of Proceeds . . . . . . . . . . . . . . . . . . . . 30
Section 9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.01 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.02 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.03 Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 31
9.04 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 31
9.05 Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . 32
9.06 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 32
9.07 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.08 Captions and Final Agreement . . . . . . . . . . . . . . . . . 33
9.09 No Usury Intended . . . . . . . . . . . . . . . . . . . . . . . 33
9.10 Invalidity . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.11 No Consequential Damages . . . . . . . . . . . . . . . . . . . 34
9.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL 34
9.13 Agent for Service of Process . . . . . . . . . . . . . . . . . 34
Exhibit 2.05 Note
Exhibit 3.01 Drawdown Notice
Exhibit 6.11 Insurance
Exhibit 7.08 Terms of Subordinated Debt
Exhibit A Form of Comfort Letter
Exhibit B Form of Opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Exhibit C Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
Exhibit D Form of Opinion of Icaza,, ▇▇▇▇▇▇▇▇-▇▇▇▇ & ▇▇▇▇▇▇
Exhibit E Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇
Exhibit F Form of Opinion of Cayman Islands Counsel
Exhibit G Form of Opinion of MacFarlanes
Exhibit H Form of Participation Letter
Exhibit I Form of Acknowledgment
Exhibit J Form of Option Agreement
Exhibit K Form of Ship Mortgage
Exhibit L Form of Assignment of Charter
Exhibit M Form of Collateral Assignment
Exhibit N Form of Amendment to Bareboat Charter Agreement
Exhibit O Form of Assignment of Insurances
Exhibit P Form of Debentures
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LOAN AGREEMENT
This LOAN AGREEMENT dated as of December 14, 1996 is between TRB
HOLDING CORPORATION, a Delaware corporation (the Borrower ), READING & ▇▇▇▇▇
(U.K.) LIMITED, a limited liability company organized under the laws of the
United Kingdom ( Reading & ▇▇▇▇▇ (U.K.) ; the Borrower and Reading & ▇▇▇▇▇
(U.K.), individually, a Company and collectively, the Companies ) and
NISSHO IWAI EUROPE PLC, an English corporation (the Lender ).
WHEREAS, the Borrower has requested the Lender to make available to
the Borrower, subject to the terms and conditions stated herein, a term loan
facility of $38,000,000 to be secured by a first naval mortgage on the oil
production vessel Seillean , a vessel of 50,928 gross tons, Call Letters
3FPF6 and Registration No. 25519-PEXT and with the home port of Panama City,
the Republic of Panama (the Vessel ), all revenue produced by such Vessel and
all rights of the Borrower or its Affiliates (as defined below) in any charter
of the Vessel; and
WHEREAS, the Lender is willing, upon and subject to the terms and
conditions hereof, to make such loan facilities available;
NOW THEREFORE, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or
in other provisions of this Agreement in the singular to have the same
meanings when used in the plural and vice versa):
Advance means any advance to the Borrower comprising a portion of
the Loan made pursuant to Section 2.01 hereof.
Affiliate means, as to any Person, any other Person which directly
or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, control (including, with
correlative meanings, controlled by and under common control with ) shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities
or partnership or other ownership interests, by contract or otherwise),
provided that, in any event, any Person which owns directly or indirectly more
than 50% of the securities having ordinary voting power for the election of
directors or other governing body of a corporation or more than 50% of the
partnership or other ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to control such
corporation or other Person.
Agreement means this Loan Agreement, as the same may from time to
time be amended or modified in accordance with the terms hereof.
Applicable Lending Office means the lending office of the Lender
(or of an Affiliate of the Lender) below its name on the signature pages
hereof or such other office of the Lender (or of an Affiliate of the Lender)
as Lender may from time to time specify in writing to the Borrower as the
office by which the Loan is to be made and/or issued and maintained.
Applicable Margin means 2% per annum.
Assignment and Assumption Agreement means the Novation Agreement
dated on or about the Drawdown Date among the Borrower, TRB Subsidiary and
RBDC.
Assignment of Charter means the General Assignments made by the
Borrower and Reading & ▇▇▇▇▇ (U.K.) in favor of the Lender, in the form of
Exhibit L attached hereto or other collateral documents.
Assignment of Insurance Proceeds means the Assignment of Insurances
made by the Companies in favor of the Lender respecting their interest in the
Vessel, in the form of Exhibit O.
Availability Period means the period from and including the date
hereof to but excluding the Commitment Termination Date.
Bankruptcy Law means any creditors right, debtor relief or similar
laws of the United States, England or the Republic of Panama or other
applicable jurisdiction.
Bareboat Charter means the Bareboat Charter Agreement dated as of
August 30, 1996 between Reading & ▇▇▇▇▇ (U.K.) and RBDC as amended by the
Bareboat Charter Amendment, as such agreement may be further amended from time
to time in accordance with the terms hereof.
Bareboat Charter Amendment means the amendment to the Bareboat
Charter dated as of December 14, 1996 between RBDC and RB (U.K.) in the form
of Exhibit N.
BP means BP Exploration Operating Company Limited, a company
organized under the laws of England.
Britoil means Britoil PLC, a company organized under the laws of
England.
Britoil (Beta) means Britoil (Beta) Limited, a company organized
under the laws of England.
Business Day means any day other than a day on which commercial
banks are authorized or required to close in New York City or London.
Capital Lease Obligations means, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP (including such
Statement No. 13).
Cash Flow means, for any period, all cash received by the Companies
from any Charter Agreement, including the Donan Charter Agreement, and any
other sources in respect of its ownership or operation of the Vessel during
such period, less all the Borrower s Operating Expenses and Dry Docking
Expenses for such period.
Charter Agreement means the Donan Charter Agreement or any other
charter agreement respecting the chartering of Vessel to any other Person.
Charter Novation Agreements means collectively, the Novation
Agreement dated July 10, 1996 among BP, Britoil and Britoil (Beta) and the
Novation Agreement dated August 30, 1996 among Britoil (Beta), Britoil and
Reading & ▇▇▇▇▇ (U.K.).
Closing Date means the date that this Agreement is executed and
delivered.
Code means the Internal Revenue Code of 1986, as amended, or any
successor statute and the regulations promulgated thereunder.
Collateral Assignment means the Collateral Assignment of Deposit
Account, Pledge and Security Agreement made by the Companies, the Lender and
the Lockbox Bank, in the form of Exhibit M attached hereto.
Comfort Letter means the letter from Reading & ▇▇▇▇▇ to the Lender
in the form of Exhibit A attached hereto.
Commitment means the obligation, subject to the terms and
conditions of this Agreement, of the Lender to make a loan to the Borrower
hereunder up to an aggregate amount equal to $38,000,000, as such amount may
be reduced pursuant to Section 2.02 hereof.
Commitment Termination Date means January 31, 1997, unless the
Commitment is sooner terminated pursuant to Section 2.02 hereof.
Debentures means the Debentures in the form of Exhibit P hereto.
Default means an Event of Default or an event which with notice or
lapse of time or both would, unless cured or waived, become an Event of
Default.
Dollars and $ means lawful money of the United States of America.
Donan Charter Agreement means the Amended Agreement dated March 30,
1995 between Britoil for itself and on behalf of the Donan Participants and
BP, as modified pursuant to the Charter Novation Agreements under which
Reading & ▇▇▇▇▇ (U.K.) has assumed the rights and obligations of BP, as the
same may from time to time be further amended or modified in accordance with
the terms hereof.
Donan Participants means Britoil, Conoco (U.K.) Limited, OMV (U.K.)
Limited, Croft Exploration Limited, Pict Petroleum plc and their successors
and assigns as parties to the Unitisation and Unit Operating Agreement dated
September 27, 1993, as amended.
Drawdown Date means the date of the drawdown of the Commitment
which shall occur no later than January 31, 1997.
Drawdown Notice means a notice of borrowing delivered by the
Borrower pursuant to Section 3.01 hereof.
Dry Docking Expense Account has the meaning assigned to such term
in the Collateral Assignment.
Dry Docking Expenses means a daily accrual of UK 1,829 per day that
the Vessel is under hire to cover drydock expenses for the Vessel; provided
that no Dry Docking Expenses shall be accrued if the aggregate amount of funds
held in the Dry Docking Expense Account exceeds UK 1,335,356.
Environmental Loss means any claim, demand, fine, penalty, cause of
action, liability, damage, forfeiture, judgment or loss, remediation, and
other clean up costs and natural resource damages respecting Hazardous
Substances or damage to the environment under applicable laws (including
without limitation, reasonable attorneys fees, defense and settlement costs,
and other reasonable costs and expenses incident thereto).
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
Event of Default has the meaning assigned to such term in Section
8.01 hereof.
Excess Cash Flow means, for any period, Cash Flow less Working
Capital.
GAAP means United States generally accepted accounting principles
as in effect from time to time consistently applied.
Governmental Approvals has the meaning specified in Section 6.10(a)
hereof.
Governmental Authority means the United States of America, United
Kingdom, the Republic of Panama, any state thereof, and any political
subdivision of any of the foregoing, including but not limited to courts,
departments, commissions, boards, bureaus, agencies, or other
instrumentalities.
Guaranteed Obligation by any Person means any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing
any Indebtedness of any other Person or any other obligation, direct or
indirect, contingent or otherwise, of any other Person (a) to purchase or pay
(or advance or supply funds for the purchase or payment of) such Indebtedness
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise, other than
agreements to purchase goods at an arm s length price in the ordinary course
of business) or other obligation or (b) entered into for the purpose of
assuring in any other manner the holder of such Indebtedness or other
obligation of the payment thereof or to protect such holder against loss in
respect thereof (in whole or in part); provided that the term Guaranteed
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
Hazardous Substance means waste (in any form or combination) which
is any toxic, caustic or otherwise hazardous substance, including petroleum,
its derivatives, by-products and other hydrocarbons, regulated under
applicable environmental statutes.
Indebtedness means, as to any Person (determined without
duplication): (a) indebtedness of such Person for borrowed money (whether by
loan or the issuance and sale of debt securities) or for the deferred purchase
or acquisition price of property or services, other than accounts payable and
accrued liabilities (other than for borrowed money) incurred in the ordinary
course of business of a term no longer than 120 days; (b) obligations of such
Person in respect of letters of credit or similar instruments issued or
accepted by banks and other financial institutions for the account of such
Person; (c) Capital Lease Obligations of such Person; (d) Operating Lease
Obligations of such Person; (e) obligations of such Person to redeem or
otherwise retire shares of capital stock of such Person; (f) indebtedness of
others of the type described in clause (a), (b), (c), (d) or (e) above secured
by a Lien on the property of such Person, whether or not the respective
obligation so secured has been assumed by such Person; and (f) indebtedness of
others of the type described in clause (a), (b), (c), (d), (e) or (f) above
which is a Guaranteed Obligation of such Person.
Indemnity Matters shall mean any and all actions, suits,
proceedings (including any investigations, litigation or inquiries), claims,
demands and causes of action made or threatened against a Person, and, in
connection therewith, all reasonable costs, losses, liabilities, damages or
expenses of any kind or nature whatsoever incurred by such Person.
Interest Payment Date means the last day of each Interest Period.
Interest Period means the period commencing on the date the Advance
is (a) made or (b) continued, and ending on the fifteenth (15th) calendar day
in the next month thereafter, provided that the first interest period shall
end on February 15, 1997. If such fifteenth (15th) day is not a Business day,
the Interest Period shall be extended to the next succeeding Business Day.
Investments has the meaning assigned to such term in Section 7.11
hereof.
LIBOR means, for each Interest Period, the arithmetic mean (rounded
upward, if necessary, to the nearest whole multiple of 1/16 of 1%) of the
one-month London Inter-Bank Offered Rates for deposits in United States
Dollars as quoted on Reuters monitor page LIBO at or about 11:00 a.m.,
London time on the date that is two (2) London Business Days prior to the
first day of such Interest Period. If only one such rate appears, LIBOR shall
be such rate. If no such rates appear, LIBOR shall be the rate (rounded
upwards if necessary to the nearest one sixteenth of one per cent) in respect
of any Interest Period determined by the Lender on the basis of the rates at
which deposits in Dollars are offered by the Reference Bank at or about 11:00
a.m., London time, on the day that is two (2) London Business Days prior to
the first day of such Interest Period or such other relevant period or at such
date, to prime banks in London interbank market for one (1) month period on
that Interest Payment Date and in amount equal to the outstanding Loan balance
(after giving effect to any Advance) or such other relevant amount outstanding
as of the first day of such Interest Period or such other relevant period.
Lien means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, any Person shall be deemed to own subject
to a Lien any asset which such Person has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
Liquid Investments means (a) certificates of deposit maturing
within 30 days of the acquisition thereof or demand deposits, denominated in
Dollars and, in each case, issued by the Lockbox Bank or a bank or trust
company having combined capital and surplus of at least $250,000,000, and
having (or the holding company controlling such institution having) a short-
term rating of A-2 or better by Standard & Poors Corporation, or P-2 or better
by ▇▇▇▇▇ s Investor Services, Inc., or a substantially equivalent rating by
any other rating agency satisfactory to the Lender; and (b) obligations issued
or guaranteed by the United States of America, with maturities not more than
one year after the date of issue.
Loan means the loan consisting of the Advance provided for by
Section 2.01 hereof.
Loan Documents means this Agreement, the Note, the Security
Instruments and any modifications, renewals or extensions thereof.
Lockbox means the account maintained at the Lockbox Bank pursuant
to the Collateral Assignment.
Lockbox Bank means Sanwa Bank Trust Company of New York, or any
other depositary selected by the Lender and approved by the Borrower, which
approval shall not be unreasonably withheld or delayed.
London Business Day means any day in which commercial banks are not
authorized or required to close in London, England.
Maturity Date means, subject to Section 8.01, February 15, 2002.
Maximum Rate means the maximum non-usurious rate of interest
permitted by applicable law, as defined in Section 9.09.
Minimum Payment means, for each Repayment Date, an amount to be
repaid by the Borrower on the Loan on such Repayment Date, that shall be equal
to the sum of: (a) the principal amount of the Loan outstanding on the prior
Repayment Date divided by the number of Repayment Dates remaining during the
period from and including such Repayment Date to and including the Maturity
Date plus (b) the accrued and unpaid interest on the Loan to such Repayment
Date.
Monthly Statement means, for any month, the bank account statement
for the Lockbox, and a report relating to the Vessel including but not limited
to the number of actual Operating Days of the Vessel for such month, the
status of operations when the Vessel is on-hire and prospectus of the next
employment of the Vessel when the Vessel is on off-hire;
Multiemployer Plan shall mean any Plan which is a multiemployer
plan (as such term is defined in section 4001(a)(3) of ERISA).
New York Business Day means any day in which commercial banks are
not authorized or required to close in New York, New York.
NIC means Nissho Iwai Corporation, a Japanese corporation.
NIC Parties means NIC and the Lender.
Note has the meaning assigned to such term in Section 2.05 hereof.
Obligations means all obligations of the Borrower now or hereafter
existing under the Loan Documents, whether for principal, interest, fees,
indemnities, costs, expenses or otherwise.
Operating Days means, for any period, the actual number of
operating days of the Vessel in that period.
Operating Expenses means, for any period, the expenses of operating
the Vessel for such period including direct payroll and employee benefits,
Vessel maintenance, catering, freight, other direct operating costs and
general and administrative expenses as allocated in a manner mutually
agreeable to the Lender and the Borrower which shall be equal to a daily
average in the aggregate of UK 18,209 (or $30,000 as determined by the
currency of the Charter Agreement in effect during such period) for each
Operating Day in such period.
Operating Lease Obligations shall mean, as to any Person, the
obligations of such person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property
which obligations are not required to be classified and accounted for as a
liability for a capital lease on a balance sheet of such Person and, for
purposes of this Agreement, the amount of such obligations shall be the
discounted present value of the lease payments, discounted in the same manner
a capital lease would be discounted according to GAAP.
Option Agreement means the Option Agreement dated as of
December 14, 1996 between the Borrower, TRB Subsidiary and NIC, substantially
in the form of Exhibit J attached hereto.
Overdue Interest Rate means, in respect of any principal of, or
interest on, the Loan or any other amount payable by the Borrower under any
Loan Document which is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period commencing on
the due date until such amount is paid in full equal to the sum of LIBOR in
effect for such period plus 5% per annum.
Participation Letter means the letter from Reading & ▇▇▇▇▇ to NIC
in the form of Exhibit H attached hereto.
Partnership has the meaning assigned to such term in the Option
Agreement.
Partnership Agreement means the organizational agreement entered
into pursuant to the Option Agreement to form the Partnership.
Permitted Liens means (a) liens created under the Security
Instruments or otherwise in favor of the Lender; (b) maritime liens on the
Vessel incurred and payable in the ordinary course of business and arising by
operation of law but which shall not exceed $500,000 in the aggregate
outstanding at any time and none of which shall be past due unless being
contested in good faith and by appropriate proceedings and for which adequate
reserves have been established on the books of the Borrower in accordance with
GAAP, provided provision is then made to the satisfaction of the Lender for
the eventual payment thereof in the event it is found that such is payable by
the Borrower; (c) liens for taxes, assessments or other governmental charges,
levies or claims not at the time delinquent or thereafter payable without
penalty or being contested in good faith, and for which adequate reserves in
accordance with GAAP have been made for the eventual payment thereof in the
event it is found that such is payable by the Borrower; (d) liens of carriers,
warehousemen, mechanics, materialmen, vendors or landlords incurred in the
ordinary course of business for sums not overdue or being contested in good
faith and by appropriate proceedings, provided provision is made to the
satisfaction of the Borrower for which adequate reserves in accordance with
GAAP have been made for the eventual payment thereof in the event it is found
that such is payable by the Borrower; (e) zoning restrictions, licenses,
easements, rights-of-way, and other similar charges or encumbrances or
restrictions that are not Liens against any interest in the Vessel and further
are not interfering in any material respect with the business of the Borrower
incurred in the ordinary course of business;
Person means an individual, a corporation, a company, a voluntary
association, a partnership, a trust, an unincorporated organization or a
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.
Plan means 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.
Property means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
R&B Drilling means Reading & ▇▇▇▇▇ Drilling Co., an Oklahoma
corporation.
R&B Parties means Reading & ▇▇▇▇▇, RBDC, TRB Subsidiary, Reading &
▇▇▇▇▇ (U.K.) and any other Subsidiary of Reading & ▇▇▇▇▇ that is a party to,
an assignee of, or subcontractor respecting, any Transaction Document, but in
any event not the Borrower.
Reading & ▇▇▇▇▇ means Reading & ▇▇▇▇▇ Corporation, a Delaware
corporation.
RBDC means Reading & ▇▇▇▇▇ Development Co., a Delaware corporation.
Reference Bank means Sanwa Bank Limited, London Branch.
Regulatory Change means, with respect to the Lender, any change on
or after the date of this Agreement in United States, English, Panamanian,
federal, state or foreign laws or regulations or the adoption or making on or
after such date of any interpretations, directives or written requests
applying to a class of banks including the Lender or its Applicable Lending
Office (whether or not having the force of law) of or under any United States
federal or state, English, Panamanian or any foreign, laws or regulations by
any court or governmental or monetary authority charged with the
interpretation or administration thereof.
Repayment Date means subject to Section 8.01, the last day of each
Interest Period.
Security Instruments means, collectively, the Collateral
Assignment, the Assignment of Charter, the Debenture, the Subordination
Agreement, the Ship Mortgage, the Assignment of Insurance Proceeds, the
Comfort Letter and any other agreements which may be delivered from time to
time to secure the obligations of the Borrower hereunder, and any amendments,
modifications, renewals or extensions thereof.
Ship Mortgage means the First Naval Mortgage dated December 14,
1996 made by the Borrower in favor of the Lender, as amended or modified in
accordance with this Agreement, in the form of Exhibit K attached hereto.
Subordination Agreement means the Subordination and Postponement
Letter dated December 14, 1996, among Reading & ▇▇▇▇▇ (U.K.), R&B Drilling and
the Lender.
Subsidiary means, with respect to any Person (the parent ), any
corporation or other entity of which at least a majority of the outstanding
shares of stock or other ownership interests having by the terms thereof
ordinary voting power to elect a majority of the board of directors of such
corporation or other governing body of such other entity (irrespective of
whether or not at the time stock of any other class or classes of such
corporation, or another ownership interest of such other entity, shall have or
might have voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by the parent or one or
more of the Subsidiaries of the parent or by the parent and one or more of the
Subsidiaries of the parent.
Taxes means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and any interest, penalties or other
liabilities with respect thereto, excluding, in the case of the Lender, (i)
taxes imposed on its net income and (ii) franchise or similar taxes imposed on
it, by the jurisdiction (or political subdivision thereof) in which it is
organized or has an Applicable Lending Office.
Transaction Documents mean collectively, the Loan Documents, the
Vessel Sales Agreement (and any guarantee of any R&B Parties obligations
thereunder), the Option Agreement, the Partnership Agreement, Assignment and
Assumption Agreement, the Bareboat Charter, the Charter Novation Agreements,
any Charter Agreement (and any guarantee of any R&B Parties obligations
thereunder) and the Donan Charter Agreement.
TRB Subsidiary means TRB Subsidiary Corporation, a Delaware
corporation.
Uniform Commercial Code means the Uniform Commercial Code as in
effect in the state or states referred to.
Vessel Sales Agreement means the Agreement for the Sale and
Purchase of OPV Seillean dated as of May 31, 1996 between Britoil (Beta)
Limited and RB Drilling Co., as novated under the Novation Agreement dated
August 30, 1996 among Britoil (Beta), RB Drilling Co. and RBDC, and as further
amended or modified in accordance with this Agreement.
Working Capital means, for any period, ten percent (10%) of the
Cash Flow.
1.02 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be delivered hereunder shall be prepared, in accordance with GAAP.
Section 2. Commitment.
2.01 Committed Loan. The Lender agrees, on the terms and subject
to the terms and conditions of this Agreement, from time to time during the
Availability Period, to make an Advance to the Borrower in an aggregate
principal amount up to but not exceeding the Commitment, as reduced from time
to time pursuant to Section 2.02 hereof. The Commitment is not revolving in
nature and the Borrower may not reborrow under this Section 2.01 any amount
that has been previously repaid or prepaid.
2.02 Changes of Commitment.
(a) Mandatory Reductions. Unless earlier terminated in
accordance with Section 8.01, the Commitment shall terminate on the Commitment
Termination Date. All unused portions of the Commitment not utilized on the
Commitment Termination Date shall be terminated.
(b) No Reinstatement. No portion of the Commitment once
terminated or reduced may not be reinstated.
2.03 Fees.
(a) Management Fee. The Borrower shall pay on the Drawdown Date
a management fee of 1.75% of the Loan.
(b) Commitment Fee. On the Drawdown Date, the Borrower shall
pay to the Lender a commitment fee of 0.75% per annum on the average daily
maximum amount of the Commitment calculated from the Closing Date to the
Drawdown Date.
(c) No Refund of Fees. Once paid, such fees are fully earned
and non-refundable.
2.04 Lending Offices. The Loan shall be made and maintained at
the Applicable Lending Office.
2.05 The Note. The obligation of the Borrower to repay the Loan
shall be evidenced by a single Note of the Borrower (the Note ) in
substantially the form of Exhibit 2.05 hereto, dated the date of this
Agreement, payable to the order of the Lender in a principal amount equal to
the Commitment, and otherwise duly completed. The Lender is hereby authorized
by the Borrower to endorse on the schedule (or a continuation thereof)
attached to the Note, to the extent applicable, the date and amount for the
Advance made by the Lender to the Borrower hereunder, and the amount of each
payment or prepayment of principal of such Advance received by the Lender,
provided that any failure by the Lender to make any such endorsement shall not
affect the obligations of the Borrower under the Note or hereunder in respect
of such Advance. Such records shall be deemed conclusive absent manifest
error.
2.06 Use of Proceeds. The proceeds of the Loan shall be used by
the Borrower to finance its purchase of the Vessel.
Section 3. Borrowings and Payments.
3.01 Borrowings. The Borrower shall notify the Lender in writing
of borrowing to be made hereunder at least three Business Days before the
Drawdown Date by delivery of its Drawdown Notice in the form of Exhibit 3.01
hereto, appropriately completed. Subject to the terms and conditions of this
Agreement, not later than 1:00 p.m. New York time on the Drawdown Date, the
Lender shall make available the amount of the Advance as set forth in the
Borrower s Drawdown Notice respecting such Advance, for the account of the
Borrower by transferring funds to, or for the account of, the Borrower at the
location specified in the Drawdown Notice.
3.02 Optional Prepayments. The Borrower shall have the right to
prepay the Loan, in full but not in part, on any Repayment Date after the
first anniversary of the Drawdown Date. The Borrower shall pay to the Lender
on the date of prepayment a prepayment premium of two percent (2%) of the
amount of the Loan prepaid. Such prepayment shall be accompanied by any
amounts payable under Section 4.03. The Borrower shall notify the Lender in
writing of such prepayment at least 60 days before the prepayment date. Such
notice shall be irrevocable and the amount specified in such notice shall be
due and payable on the prepayment date specified in such notice.
Notwithstanding anything to the contrary in this Section 3.02, the Borrower
shall have the right and obligation to prepay the Loan in part without a
prepayment premium or notice, pursuant to the Option Agreement.
3.03 Repayment of Loan. Subject to the terms of this Agreement
(including without limitation Section 8),
(a) The Borrower shall repay the Loan on each Repayment Date in
an amount equal to the greater of (i) Excess Cash Flow received during the
month prior to the month of each Repayment Date (the Monthly Period );
provided that the first Monthly Period shall be from the Closing Date until
January 31, 1997, and (ii) the Minimum Payment for such Repayment Date. Each
repayment shall be applied first to accrued and unpaid interest and then to
principal.
(b) In its sole discretion, the Lender may agree to an increase
of the amount of Working Capital in the event that Excess Cash Flow, as so
reduced, appears that it will be sufficient to repay the Loan in full prior to
the Maturity Date.
3.04 Interest.
(a) The Borrower shall pay to the Lender interest on the unpaid
principal amount of the Loan for the period commencing on the date the Loan is
made to but excluding the date the Loan shall be paid in full, at a rate per
annum equal to the lesser of (i) LIBOR plus the then Applicable Margin or (ii)
the Maximum Rate.
(b) Notwithstanding any of the foregoing, the Borrower will pay
to the Lender interest at a rate per annum equal to the lesser of (i) the
applicable Overdue Interest Rate or (ii) the Maximum Rate on any principal of,
or interest on, the Loan and on any other amount payable by the Borrower
hereunder to or for the account of the Lender, which shall not be paid in full
when due (whether at stated maturity, by acceleration or otherwise and whether
the failure to make such payment constitutes a Default or Event of Default,
regardless of the giving or receipt of notice or the lapse of any applicable
cure period), for the period commencing on the due date thereof until the same
is paid in full.
(c) Accrued and unpaid interest on the Loan shall be due and
payable on each Repayment Date and otherwise as set forth in Sections 3.02 and
3.03; provided that interest payable on the Loan, or other amounts payable
hereunder, accruing at the Overdue Interest Rate shall be payable from time to
time on demand of the Lender.
(d) Promptly after the determination of any interest rate
provided for herein or any change therein, the Lender shall use reasonable
efforts to notify the Borrower thereof; provided that the Lender s failure to
so notify the Borrower shall not affect the Borrower s obligation to pay the
Loan.
(e) Interest shall be computed on the basis of a year of 360
days for actual days elapsed (including the first day but excluding the last
day) occurring in the period for which such amounts are payable, unless such
calculation would exceed the Maximum Rate, in which case interest shall be
calculated on the per annum basis of a year of 365 or 366 days, as the case
may be.
3.05 Payments. Except to the extent otherwise provided herein,
all payments of principal, interest, and other amounts which are to be made by
the Borrower hereunder and under the Note shall be made in Dollars, in
immediately available funds to the Lockbox and such payments shall be
disbursed to the Lender from the Lockbox to the Lender s account number
▇▇▇▇▇▇▇▇ at The Chase Manhattan Bank, London Branch, not later than 11:00 a.m.
London time on the date on which such payment shall become due hereunder (each
such payment received after such time on such due date to be deemed for
purposes of calculating interest to have been made on the next succeeding
Business Day). The amount of such payment shall be calculated by the Lender
with notice of such amount to be given to the Borrower and the Lockbox Bank at
least four (4) Business Days prior to each Repayment Date. The failure of the
Lockbox to contain at any time sufficient funds to make any payment hereunder
shall not discharge or release the Borrower or any other Person obligated
therefor from its liability to make such payment on the due date therefor. If
the due date of any payment hereunder or under the Note would otherwise fall
on a day which is not a Business Day such date shall be extended to the next
succeeding Business Day and interest shall be payable for any payment (other
than interest) so extended for the period of such extension.
3.06 Certain Notices. Notices to the Lender of terminations or
reductions of the Commitment, of borrowings, continuations and prepayments of
the Loan shall be irrevocable and shall be effective only if received by the
Lender not later than 12:00 noon London time on the date specified for such
notice.
3.07 Set-off; Sharing of Payments. The Borrower agrees that, in
addition to (and without limitation of) any right of set-off, counterclaim or
other right or remedy the Lender may otherwise have, the Lender and its
Affiliates shall be entitled, at its option, to offset, appropriate and apply
any debt owing to and any other funds held in any manner for the account of
the Borrower against any principal of, or interest on, the Loan to the
Borrower hereunder, or other obligation of the Borrower hereunder, which is
not paid when due (regardless of whether such balances are then due to the
Borrower) in which case it shall promptly notify the Borrower thereof,
provided that the Lender s failure to give such notice shall not affect the
validity thereof.
Section 4. Yield Protection and Illegality.
4.01 Additional Costs.
(a) The Borrower shall pay to the Lender from time to time, on
an after-tax basis, such amounts as the Lender may determine to be necessary
to compensate it for any additional costs incurred by the Lender, or any
reduction in any amount receivable by the Lender hereunder, which the Lender
determines are attributable to its making or maintaining of the Loan hereunder
or its obligation to make the Loan hereunder (such additional costs and
reductions in amounts receivable being herein called Additional Costs ), in
each case resulting from any Regulatory Change which:
(i) other than changes which affect taxes measured by or imposed
on the overall net income of the Lender or of its Applicable Lending
Office for any of such Loan by the jurisdiction in which the Lender has
its principal office or such Applicable Lending Office, imposes any tax
with respect to the Loan, or changes the basis of taxation of any amounts
payable to the Lender under this Agreement or the Note in respect of any
of such Loan; or
(ii) imposes or modifies any reserve, special deposit, capital
adequacy or similar rule, regulation, or treaty requirements (including
without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System, the Bank of England, the
Japanese Central Bank or other monetary authority, but excluding with
respect to any of such Loan any such requirements included in an
applicable reserve requirement) relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, the Lender
(including any of such Loan or any deposits referred to in the definition
of LIBOR in Section 1.01 hereof); or
(iii) imposes any other condition affecting this Agreement (or any
of such extensions of credit or liabilities).
(b) Without limiting the effect of the foregoing provisions of
this Section 4.01, in the event that, by reason of any Regulatory Change, the
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of the Lender which includes deposits by reference to which the
interest rate on the Loan is determined as provided in this Agreement or a
category of extensions of credit or other assets of the Lender which includes
the Loan or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if the Lender so
elects by notice to the Borrower, the obligation of the Lender to make the
Loan hereunder shall be suspended until the date such Regulatory Change ceases
to be in effect.
(c) Determinations and allocations by the Lender for purposes of
this Section 4.01 of the effect of any Regulatory Change on its costs of
maintaining its obligations to make the Loan or of making or maintaining the
Loan or on amounts receivable by it in respect of Loans, and of the additional
amounts required to compensate the Lender in respect of any Additional Costs,
shall be conclusive, provided that such determinations and allocations are
made on a reasonable basis. In connection herewith the Lender shall not be
required to prove that it actually funded the Loan, in whole or in part, with
matching deposits in Dollars acquired from a prime bank in the London
interbank market.
4.02 Illegality. Notwithstanding any other provision of this
Agreement to the contrary, in the event that it becomes unlawful for the
Lender or its Applicable Lending Office to (a) honor its obligation to make
the Loan hereunder, or (b) maintain the Loan to the Borrower hereunder, then
the Lender shall promptly notify the Borrower thereof and the Lender s
obligation to make or maintain the Loan hereunder shall be suspended until
such time as the Lender may again make and maintain the Loan to the Borrower.
4.03 Compensation. The Borrower shall promptly pay to the
Lender, upon the request of the Lender, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Lender) to compensate it for any
loss, cost or expense incurred by it as a result of:
(a) any payment, prepayment of the Loan made to the Borrower for
any reason (including, without limitation, the acceleration of the Loan
pursuant to Section 8.01) on a date other than the last day of an Interest
Period for such Loan; or
(b) any failure by the Borrower for any reason (including
without limitation, the failure of any of the conditions precedent specified
in Section 5 to be satisfied) to borrow an Advance specified in a Drawdown
Notice delivered to the Lender on the date for such borrowing;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount so paid, prepaid or not borrowed for the period from the date
of such payment, prepayment or failure to borrow to the last day of the
Interest Period for such Advance (or, in the case of a failure to borrow, the
Interest Period for such Advance which would have commenced on the date of
such failure to borrow) at the applicable rate of interest for such Advance
provided for herein over (ii) the interest component (as reasonably determined
by the Lender) of the amount (as reasonably determined by the Lender) the
Lender would have bid in the London interbank market for Dollar deposits of
leading banks in amounts comparable to such principal amount and maturities
comparable to such period.
4.04 Taxes. (a) Any and all payments by the Borrower hereunder
shall be made, in accordance with Section 3.05, free and clear of and without
deduction or withholding for any Taxes, except to the extent required by
applicable law. If the Borrower shall be required to deduct or withhold any
Taxes from or in respect of any sum payable hereunder to Lender (i) the
Borrower shall make such deductions or withholding (ii) the Borrower shall
pay the full amount deducted or withheld to the relevant taxing authority or
other governmental authority in accordance with applicable law and (iii) the
sum payable shall be increased by the amount necessary so that after making
all required deductions or withholding of Taxes (including deductions or
withholdings of Taxes applicable to additional sums payable under this
Section 4.04) the Lender shall receive an amount equal to the sum it would
have received had no such deductions been made.
(b) The Borrower agrees to indemnify and hold harmless the
Lender for any Taxes imposed on or incurred by the Lender in respect of any
sum payable hereunder to the Lender (including any Taxes on amounts payable
under this Section 4.04). Payment under this indemnification shall be made
within 30 days after the date the Lender makes written demand therefor
describing such Taxes in reasonable detail.
(c) As soon as practicable after the date of any payment by the
Borrower of Taxes under this Section 4.04, the Borrower shall furnish the
Lender the original or a certified copy of an official receipt evidencing such
payment, or such other evidence of payment as may be reasonably satisfactory
to the Lender.
(d) Lender shall repay the Borrower for any Taxes paid by the
Borrower which the Lender utilizes against its tax liability.
Section 5. Conditions Precedent.
5.01 Advance. The obligation of the Lender to make the Advance
hereunder is subject to the following conditions precedent, each of which
shall have been fulfilled to the satisfaction of the Lender:
(a) Corporate Action. The Lender shall have received certified
copies of the charter and by-laws of the Borrower, Reading & ▇▇▇▇▇ (U.K.) and
TRB Subsidiary, all corporate action taken by the Borrower, Reading & ▇▇▇▇▇
(U.K.), TRB Subsidiary and R&B Drilling authorizing the execution, delivery
and performance of the Transaction Documents to which such Person is a party
(including, without limitation, a certificate of the Borrower setting forth
the resolutions of its Board of Directors authorizing the transactions
contemplated thereby).
(b) Incumbency. Each of the Borrower, Reading & ▇▇▇▇▇, TRB
Subsidiary, R&B Drilling, and Reading & ▇▇▇▇▇ (U.K.) shall have delivered to
the Lender a certificate in respect of the name and signature of each of the
officers (i) who is authorized to sign on its behalf the Transaction Documents
and (ii) who will, until replaced by another officer or officers duly
authorized for that purpose, act as its representative for the purposes of
signing documents and giving notices and other communications in connection
with the Transaction Documents to which it is a party. The Lender may
conclusively rely on such certificates until it receives notice in writing
from such Person to the contrary.
(c) Loan Documents and Lien Perfection. The Lender shall have
received counterparts of this Agreement executed and delivered by or on behalf
of each of the parties hereto. The Lender shall have received the Note, duly
completed and executed. Each of Security Instruments shall have been duly
executed and delivered, and such other action (including, without limitation,
filing of the Ship Mortgage, the Assignment of Charter, and appropriately
completed and duly executed Uniform Commercial Code financing statements and
other documents in the State of Texas, the Republic of Panama, the United
Kingdom and other jurisdictions) as may be necessary or as the Lender shall
have reasonably requested to perfect the security interests created pursuant
thereto as first priority liens shall have been taken.
(d) Lien Searches. The Lender shall have received filings
searches in the name of Reading & ▇▇▇▇▇ (U.K.) and the Borrower, TRB
Subsidiary and their respective predecessors in interest during the past five
years (to the extent subject to the Uniform Commercial Code) from English ship
and companies registries and Panamanian and U.S. registries showing no
filings of record except (i) those in favor of the Lender, (ii) those with
respect to Permitted Liens, or (iii) those for which releases or termination
statements are filed on or prior (or immediately subsequent) to the Closing
Date.
(e) Insurance. The Borrower and Reading & ▇▇▇▇▇ (U.K.) shall
have delivered to the Lender a certificate of an insurer reasonably
satisfactory to the Lender listing the coverages maintained by the Borrower,
which coverages shall be acceptable to the Lender and stating that the Lender
has been named loss payee with first priority to receive payments (except as
otherwise provided in the Ship Mortgage) in respect of any property insurance
on the Vessel and each of the NIC Parties as an additional insured thereunder.
(f) Fees and Expenses. The Borrower shall have paid to the
Lender all amounts due under Sections 2.03 and 9.03 hereof on or before the
Drawdown Date.
(g) Legal Opinions. The Lender shall have received the opinion
of (a) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, counsel to the Borrower, substantially in the form of
Exhibit B attached hereto, (b) ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P., counsel to the Lender,
substantially in the form of Exhibit C attached hereto, (c) Icaza, ▇▇▇▇▇▇▇▇-
▇▇▇▇ & ▇▇▇▇▇▇, Panamanian counsel to the Lender, substantially in the form of
Exhibit D attached hereto, (d) ▇▇▇▇▇▇ ▇▇▇▇, English counsel to the Lender,
substantially in the form of Exhibit E attached hereto, and (e) Cayman Islands
counsel, substantially in the form of Exhibit F with any changes that are
reasonably satisfactory to the Lender.
(h) Environmental Matters Limitation of Liability Legal Opinion.
The Lender shall have received the opinion of MacFarlanes, counsel to the
Borrower, in the form of Exhibit G attached hereto, with respect to the
environmental condition (including conditions with respect to oil pollution)
of the properties of the Borrower and Reading & ▇▇▇▇▇ (U.K.) in the form and
substance reasonable satisfactory to the Lender.
(i) Evidence of Approvals. The Lender shall have received
evidence in form and substance reasonably satisfactory to the Lender that each
R&B Party has obtained all orders, consents, approvals and authorizations and
have made all filings and other notifications (governmental or otherwise)
required in connection with this Agreement, or the transactions contemplated
hereby.
(j) Registered Agent. The Lender shall have received evidence
of the agreement by ▇▇▇▇▇▇▇▇-▇▇▇▇ Corporation System to act as agent for
service of process in New York on behalf of the Borrower with respect to the
Transaction Documents to which it is a party and that R&B (U.K.) has agreed to
act as agent for service of process in the United Kingdom on behalf of the
Borrower with respect to the Transaction Documents to which it is a party.
(k) Transaction Documents. The Lender shall have received
executed copies of each of the Transaction Documents, in form and substance
reasonably satisfactory to the Lender.
(l) No Material Adverse Change. There shall have been no
material adverse change since December 31, 1995 in the business, financial
condition, operations or properties of the Borrower, or the ability of the
Borrower or any other R&B Party to perform its obligations under the
Transaction Documents.
(m) Britoil Acknowledgment. Britoil shall, to protect the
Lender s Lien in the Donan Charter Agreement and the amounts payable
thereunder, acknowledge the assignment of such rights under the Assignment of
Charter and agree to direct its payments under the Donan Charter Agreement to
the Lockbox Account, in the form of Exhibit I attached hereto.
(n) Advance. The advance shall occur no later than January 31,
1997.
(o) No Default. No Default shall have occurred and be
continuing.
(p) Representations. The representations and warranties made by
the Companies, and to the best of the Companies knowledge, of the R&B Parties
and Britoil in each Transaction Document to which it is a party shall be true
on and as of the date of the making of such Advance in all material respects,
with the same force and effect as if made on and as of such date (except to
the extent such representations and warranties are expressly limited to an
earlier date or the Lender may expressly consent in writing to the contrary).
(q) No Violation. The making of such Advance shall not violate
any law, rule, regulation or order applicable to the Lender or the Borrower.
(r) Other Matters. The Lender shall have received such other
documents and assurances relating to the transactions contemplated hereby as
the Lender may reasonably request.
(s) Bareboat Charter Amendment. The Lender shall have received
an executed copy of the amendment to the Bareboat Charter Amendment.
(t) Comfort Letter and Participation Letter. The Lender shall
have received an executed copy of the Comfort Letter and Participation Letter.
(u) Partnership Agreement. The Partnership shall be formed in
accordance with the terms of the Option Agreement.
(v) Excess Cash. The Companies shall have deposited Excess Cash
for the period from the Closing Date to the Drawdown Date in the Lockbox
Account and the Lender shall have to receive the details of the computation of
such amount.
(w) Drawdown Notice. The Borrower shall have executed and
delivered the Drawdown Notice which shall constitute a certification by the
Borrower to the effect set forth in the conditions to the Advance have been
and will be satisfied (both as of the date of such notice and, unless the
Borrower otherwise notifies the Lender prior to the date of such borrowing or
issuance, as of the date of such borrowing or issuance).
Section 6. Representations and Warranties. Each of the Companies
represents and warrants to the Lender with respect to itself only as follows:
6.01 Corporate Existence. The Borrower: (a) is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware; (b) has requisite corporate power, and has all material
governmental licenses, authorizations, consents and approvals necessary, to
own its assets and carry on its business as now being conducted; and (c) is
qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure
so to qualify would have a material adverse effect on the financial condition,
prospects, operations, properties or business of the Borrower or on its
ability to perform its obligations under each Transaction Document to which it
is a party. Reading & ▇▇▇▇▇ (U.K.): (a) is a limited liability company, duly
organized, validly existing and in good standing under the laws of England;
(b) has requisite corporate power, and has all material governmental licenses,
authorizations, consents and approvals necessary, to own its assets and carry
on its business as now being conducted; and (c) is qualified to do business in
all jurisdictions in which the nature of the business conducted by it makes
such qualification necessary and where failure so to qualify would have a
material adverse effect on the financial condition, prospects, operations,
properties or business of Reading & ▇▇▇▇▇ (U.K.) or on its ability to perform
its obligations under each Transaction Document to which it is a party.
6.02 Information; Material Adverse Change. (a) Each Company has,
to its best knowledge, disclosed to the Lender in writing any and all facts
(other than general economic or industry information not specific to such
Company) which are reasonably likely to materially and adversely affect the
business, financial condition, prospects, operations or properties of such
Company or the ability of any Company or any R&B Party to perform its
obligations under each Transaction Documents to which it is a party.
(b) Since the execution date of this Agreement there has been no
material adverse change in the business, financial condition, prospects,
operations or properties of either Company or in its ability or, to the best
of the Companies knowledge, any R&B Party s ability to perform its
obligations under each Transaction Document to which it is a party.
6.03 Litigation. There is no litigation, legal, administrative
or arbitral proceeding, investigation or other action of any nature pending
or, to the knowledge of each Company, threatened against such Company or
affecting its property which could reasonably be expected to have a material
adverse effect on the business, financial condition, prospects, operations or
properties of such Company or on its ability to perform its obligations under
each Transaction Document to which it is a party.
6.04 No Breach. None of the execution and delivery of the
Transaction Documents by each Company, the consummation by each Company of the
transactions therein contemplated, or compliance by each Company and to the
best of the Companies knowledge, the R&B Parties with the terms and
provisions thereof will (a) conflict with or result in a breach of, or require
any consent not already obtained under, (i) the charter or by-laws of the
Companies or (ii) any law or regulation applicable to the Companies or
(iii) any order, writ, injunction or decree of any court or governmental
authority or agency applicable to the Companies, or (iv) the Transaction
Documents or any other material agreement or instrument to which either
Company is a party or by which it is bound or to which any of its properties
is subject, or (b) constitute a default under any such material agreement or
instrument, or (c) (except for the Liens created pursuant to, or permitted by,
this Agreement and the Security Instruments) result in the creation or
imposition of any Lien upon any assets of the Companies pursuant to the terms
of any such material agreement or instrument. No Default hereunder has
occurred and is continuing.
6.05 Corporate Action. Each Company has all necessary corporate
power and authority to execute, deliver and perform its obligations under the
Transaction Documents to which it is a party; and the execution, delivery and
performance by such Person of the Transaction Documents to which it is a party
have been duly authorized by all necessary corporate action; and this
Agreement and the other Transaction Documents to which each Company is a party
have been duly and validly executed and delivered by each Company and
constitute the legal, valid and binding obligation of each Company, in each
case, enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or moratorium
or other similar laws relating to the enforcement of creditors rights
generally and by general equitable principles. The Security Instruments
create legal, valid, and binding Liens in the Properties intended to be
encumbered thereby as security for the Obligations and such Liens have been
perfected, subject only to Permitted Liens.
6.06 Approvals. Each Company has obtained all authorizations,
approvals and consents of, and have made all filings and registrations with,
any court or governmental or regulatory authority or agency necessary for the
execution, delivery or performance by each of them of the Transaction
Documents to which such Person is a party, or for the validity or
enforceability thereof.
6.07 ERISA and Pension Plans. No accumulated funding deficiency
(as defined in section 302 of ERISA and section 412 of the Code), whether or
not waived, exists with respect to any Plan (other than a Multiemployer Plan).
No liability to the Pension Benefit Guaranty Corporation has been or is
expected by the Borrower or any ERISA Affiliate to be incurred with respect to
any Plan (other than a Multiemployer Plan) by the Borrower, any Subsidiary or
any ERISA Affiliate which is or would be materially adverse to the business,
condition (financial or otherwise) or operations of the Borrower and its
Subsidiaries taken as a whole. Neither the Borrower, any Subsidiary or any
ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or would be materially adverse to the business, condition (financial or
otherwise) or operations of the Borrower and its Subsidiaries taken as a
whole. The execution and delivery of this Agreement and the issuance and sale
of the Notes will be exempt from, or will not involve any transaction which is
subject to, the prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under section
502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the
Code.
6.08 Taxes. Each Company has filed all United States Federal,
Panamanian and English income tax returns and all other material tax returns
which are required to be filed by it and has paid all taxes due pursuant to
such returns or pursuant to any assessment received by it, except to the
extent the same may be contested as permitted by Section 7.02 hereof or any
failure to so file or pay which could not reasonably be expected to have a
material adverse effect on the business, financial condition, operations or
properties of such Company or on the ability of such Company to perform its
obligations under each Transaction Document to which it is a party. The
charges, accruals and reserves on the books of each Company in respect of
taxes and other governmental charges are, in the reasonable opinion of such
Company, adequate.
6.09 Ownership and Use of Properties. Each Company will have on
the date of the Advance and at all times thereafter good and marketable title
or ownership of, or the right to use pursuant to enforceable and valid
agreements or arrangements, all tangible property, both real and personal and
all franchises, licenses, copyrights, patents and know-how, other than such
property, the failure to own or otherwise hold might reasonably be expected to
have a material adverse effect on the business, financial condition,
operations or properties of such Company or the ability of such Company to
perform its obligations under each Transaction Document to which it is a
party. All of the assets and Properties of the Companies which are reasonably
necessary for the operation of their businesses are in good working condition
and are maintained in accordance with prudent business standards.
6.10 Environmental Matters.
(a) (i) Each Company is, and to the best knowledge of each
Company, each other R&B Party is, in compliance with all applicable
environmental laws respecting the Vessel and the Donan Charter Agreement
except for such noncompliance which could not reasonably be expected to have a
material adverse effect on the business, financial condition, operations or
properties or Vessel of such Company, or the ability of each Company to
perform its obligations under each Transaction Document to which it is a
party, (ii) each Company has, and to the knowledge of such Company, each other
R&B Party has, all decisions, permits, licenses, rulings, consents, agreements
and other authorizations of any applicable Governmental Authority
(collectively, the Governmental Approvals ) required to perform its
obligations respecting the Vessel and any Charter Agreement, including the
Donan Charter Agreement, (iii) each Company and to the knowledge of each
Company, each other R&B Party has not, received any written communication from
a Governmental Authority, court or third party that alleges that such Company
or such other R&B Party is not in full compliance with all applicable
environmental laws and Governmental Approvals respecting the Vessel and the
Donan Charter Agreement other than such noncompliance which could not have a
material adverse effect on the business, financial condition, operations or
properties of such Company or, to the knowledge of such Company, any R&B
Party, or the ability of such Company to perform its obligations under each
Transaction Document to which it is a party, (iv) to each Company s knowledge,
there are no circumstances that could reasonably be expected to prevent or
adversely interfere with such Company s compliance with environmental laws in
the future as far as such Company may reasonably foresee and which
noncompliance could have a material adverse effect on the business, financial
condition, operations or properties of such Company, or the ability of such
Company or any other R&B Party to perform its obligations under each
Transaction Document to which it is a party and shall keep the Lender fully
indemnified at all times against all losses, claims or demands whatsoever
arising directly or indirectly from any breach of this obligation, including
any liability in respect of such matters.
(b) To the knowledge of each Company, there are no past, present
or pending actions, activities, circumstances, conditions, events or
incidents, including, without limitation, the release, emission, discharge,
presence or disposal of any Hazardous Substance, that could reasonably be
expected to form the basis of any Environmental Loss against either Company
or, to the knowledge of each Company, any other R&B Party which could have a
material adverse effect on the business, financial condition, operations or
properties of either Company or the ability of either Company or any other R&B
Party to perform its obligations under each Transaction Document to which it
is a party.
6.11 Insurance. Each Company maintains insurance described on
Exhibit 6.11 and all such policies are in full force and effect, and no notice
of a material cancellation or termination (which has not been withdrawn or
revoked) has been received with respect to any such policy. Such policies are
sufficient for compliance with all material requirements of law and of all
material agreements to which each Company is a party.
6.12 Operations.
The Borrower has delivered to the Lender a true and complete copy of
each of the executed Transaction Documents. There have been no amendments or
modifications of such agreements (other than, after the date of this
Agreement, amendments or modifications permitted under Section 7.19), no party
to such agreements is in default of the terms thereof and such agreements are
in full force and effect. The representations and warranties of each Company,
and to the best knowledge of each Company, the other R&B Parties contained in
such agreements are true and correct in all material respects. Transaction
Documents currently required for the ownership, operation and maintenance of
the Vessel under the Charter are in full force and effect in all material
respects. There are no material agreements, instruments and undertakings
among the Companies and any other R&B Party relating to the Companies and the
Vessel other than the Transaction Documents.
Section 7. Covenants. Unless the Lender shall agree otherwise as
contemplated by Section 9.05 hereof, each Company (with respect to all matters
in this Section 7) agrees, so long as any of the Commitment is in effect and
until payment in full of all the Loan all interest thereon and all other
amounts payable by the Borrower to the Lender hereunder, to comply in all
material respects with the covenants contained in this Section 7.
7.01 Statements. The Borrower shall deliver to Lender:
(a) as soon as available and in any event within 120 days after
the end of each fiscal year of each of the Borrower and Reading & ▇▇▇▇▇ the
audited consolidated statements of operations, stockholders equity and cash
flow of the Borrower and Reading & ▇▇▇▇▇, setting forth in each case in
comparative form the corresponding figures for the preceding fiscal year, and
accompanied by an opinion on such statements of an independent certified
public accounting firm of recognized national standing acceptable to the
Lender (such accountants being called herein Reporting Accountants ), which
opinion shall state that such financial statements present fairly, in all
material respects, the financial position of each of the Borrower and Reading
& ▇▇▇▇▇ as of the end of, and the respective results of operations of each of
the Borrower and Reading & ▇▇▇▇▇ for, such fiscal year, in conformity with
GAAP;
(b) as soon as available and in any event within 2 Business Days
after Borrower s receipt of the Lockbox bank account statement from the
Lockbox Bank, the Monthly Statement and a list of all Drydocking Expenses paid
in such month, with copies of all supporting documents, including the invoices
for Drydocking Expenses;
(c) promptly following the delivery thereof to the Borrower or
to the Board of Directors or management of the Borrower, a copy of any
management letter or written report by independent public accountants
addressed to the Board of Directors of the Borrower or any committee of any
such board with respect to the financial condition, operations or business of
the Borrower (except for such letters or reports which relate only to tax
planning for the Borrower);
(d) promptly after the Borrower knows or has reason to know that
any Default has occurred and is continuing, a notice of such Default,
describing the same in reasonable detail;
(e) promptly after delivery or receipt thereof, copies of all
notices or documents given or received by the Borrower pursuant to any of the
Transaction Documents concerning (i) any default or alleged default under,
breach or alleged breach of, or the noncompliance with, any provision of any
Transaction Document, (ii) any prospective inability to perform under any
provision of any Transaction Document, (iii) any termination or attempted
termination of any Transaction Document, (iv) any proposed amendment,
supplement or other modification of any Transaction Document that under the
Loan Documents requires the approval of Lender, or (v) any Force Majeure, in
each case, which might reasonably be expected to have a material adverse
effect on the Borrower;
(f) promptly and in any event within five Business Days after
the existence of any of the following conditions, a certificate of an
authorized officer of the Borrower specifying in reasonable detail the nature
of such condition and the Borrower s or other R&B Party s proposed response
thereto: (i) the receipt by the Borrower after the date hereof of any
communication (written or oral) from a Governmental Authority that alleges
that any R&B Party is not in compliance with applicable environmental laws or
Governmental Approvals which noncompliance could have a material adverse
effect on the business, financial condition, operations or properties of the
Borrower or the ability of the Borrower or any other R&B Party to perform its
obligations in any material respect under each Transaction Document to which
it is a party, (ii) the Borrower shall obtain actual knowledge that there
exists any Environmental Loss pending or threatened against any other R&B
Party which could have a material adverse effect on the business, financial
condition, operations or properties of the Borrower or the ability of the
Borrower or any other R&B Party to perform its obligations in any material
respect under each Transaction Document to which it is a party, or (iii) the
Borrower obtains actual knowledge of any release, emission, discharge or
disposal of any Hazardous Substance that could form the basis of any
Environmental Loss against any other R&B Party which could have a material
adverse effect on the business, financial condition, operations or properties
of the Borrower or the ability of the Borrower or any other R&B Party to
perform its obligations in any material respect under each Transaction
Document to which it is a party. The Borrower will also maintain at the
Vessel and make available for inspection by Lender and its agents and
employees, accurate and complete records of all investigations, studies,
sampling and testing conducted, and all material remedial actions taken, by
the Borrower or, to its knowledge and to the extent obtained by the Borrower,
by any Governmental Authority or other Person in respect of Hazardous
Substances on or affecting the Vessel;
(g) within 30 days after the Borrower s fiscal quarter, the
quarterly financial statements of the Borrower; and
(h) concurrently with the delivery by a Company to a charterer
under a Charter Agreement, a copy of any invoice of fees due under such
Charter Agreement (including the actual operating days in such period, the oil
volume rate for such period, and the tariffs paid for such period);
(i) within five Business Days of its execution, a copy of each
Charter Agreement; and
(j) from time to time such other information and reports
regarding the matters described above or otherwise concerning the Vessel or
the financial condition, operations, business or properties of the Borrower as
the Lender may reasonably request.
The Borrower will furnish to the Lender, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of
its chief executive officer or chief financial officer to the effect that no
Default has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and the action taken by
or proposed to be taken by the Borrower with respect thereto).
7.02 Taxes and Claims. Each Company will pay and discharge all
material taxes, assessments and governmental charges or levies imposed upon it
or upon its income or profits, or upon any property belonging to it, prior to
the date on which penalties attach thereto, and all lawful claims which, if
unpaid, might become a Lien (other than a Permitted Lien) upon the property of
such Company; provided that such Company shall not be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by appropriate proceedings if it maintains adequate reserves with respect
thereto.
7.03 Insurance. Each Company will maintain insurance with
responsible companies, in the amounts and against the risks as is set forth in
Schedule 6.11, which coverage shall be the maximum available in the market.
7.04 Maintenance of Existence; Conduct of Business. Each Company
will preserve and maintain its corporate or other legal existence and all of
its material rights, privileges and franchises necessary for the normal
conduct of its business. Except as permitted by this Agreement, each Company
will maintain in force and effect all permits, licenses, patents, patent
rights, trademarks, trademark rights, trade names, trade name rights and
copyrights, the release or termination of which would have a material adverse
effect on the business, financial condition, operations or properties of each
Company, or on the ability of each Company to perform in any material respect
its obligations under each Transaction Document to which it is a party.
7.05 Maintenance of and Access to Properties. Except with
respect to assets permitted to be disposed of pursuant to Section 7.09, each
Company will keep all of its properties necessary in its business in
reasonable working order and condition, ordinary wear and tear excepted, and
will permit representatives of the Lender during normal business hours to
inspect the Vessel, its other locations and other properties and to examine
and make such extracts and copies from the books and records of each Company
as they may reasonably request.
7.06 Compliance with Applicable Laws. Each Company will comply
with the requirements of all applicable laws, rules, regulations and orders of
any governmental body or regulatory authority, a breach of which would have a
material adverse effect on the business, financial condition, operations or
properties of such Company or on the ability of such Company to perform its
obligations in any material respect under each Transaction Document to which
it is a party, except where contested in good faith and by appropriate
proceedings.
7.07 Litigation. Each Company will promptly notify the Lender in
writing (a) of all judgments against such Company and (b) of all litigation
and of all proceedings of which it is aware before any courts, arbitrators or
governmental or regulatory agencies to which any Company or any R&B Party is a
party, affecting the Transaction Documents or making claims in excess of
$500,000 or litigation or proceedings which, individually or in the aggregate,
if adversely determined could reasonably be expected to have a material
adverse effect upon the business, financial condition, operations or
properties of either Company or on the ability of either Company to perform in
any material respect its obligations under each Transaction Document to which
it is a party.
7.08 Indebtedness. The Borrower will not create, incur or suffer
to exist any Indebtedness except:
(a) Indebtedness to the Lender hereunder;
(b) other Indebtedness owed to the R&B Parties so long as such
Indebtedness is not to be repaid prior to this Loan being paid in full,
and such Indebtedness is subordinated on terms no less favorable than the
terms set forth on Exhibit 7.08;
(c) other Indebtedness incurred with the prior written consent
of the Lender.
7.09 Mergers, Etc. Neither Company will be a party to any merger
or consolidation, or sell, lease, assign, transfer or otherwise dispose of any
assets, or acquire assets from any Person, other than in the ordinary course
of business, except:
(a) dispositions of obsolete inventory or obsolete or worn-out
equipment; or
(b) dispositions or acquisitions of Investments permitted under
Section 7.11 hereof.
7.10 Liens. The Borrower and RB (U.K.) will not create or suffer
to exist any Lien upon any of its property or assets, now owned or hereafter
acquired, securing any Indebtedness or other obligation except Permitted
Liens.
7.11 Investments. The Borrower will not make or permit to remain
outstanding any advances, loans or other extensions of credit or capital
contributions (other than prepaid expenses in the ordinary course of business)
to (by means of transfers of property or assets or otherwise), or purchase or
own any stocks, bonds, notes, debentures or other securities of, any Person,
other than itself (all such transactions being herein called Investments ),
except (a) Liquid Investments; and (b) other Investments made or outstanding
with the prior written consent of the Lender, which consent will not be
unreasonably withheld or delayed.
7.12 Transactions with Affiliates. Except as expressly permitted
by this Agreement, the Borrower will not directly or indirectly: (a) make any
Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any assets or provide any service to an Affiliate; (c) merge into
or consolidate with or purchase or acquire assets from an Affiliate; or (d)
enter into any other transaction directly or indirectly with or for the
benefit of an Affiliate (including, without limitation, guarantees and
assumptions of obligations of an Affiliate) other than under the Transaction
Documents; provided that the Borrower may enter into any transaction with an
Affiliate in the ordinary course of business if the terms (including, without
limitation, payment terms and monetary or business consideration) thereof are
no less advantageous to the Borrower as the terms which would be obtained in a
comparable arm s length transaction with a Person not an Affiliate.
7.13 Guarantees. The Borrower will not incur, assume or permit
to exist any Guaranteed Obligation of the Borrower, except
(a) in favor of the Lender contained in the Loan Documents;
(b) Guaranteed Obligations constituting Indebtedness permitted
by Section 7.08 hereof; and
(c) other Guaranteed Obligations entered into with the prior
written consent of Lender, which consent will not be unreasonably
withheld or delayed.
7.14 Further Assurances. At any time or from time to time upon
the request of the Lender, each Company shall execute and deliver (or cause to
be executed and delivered) such further documents and do such other acts and
things as the Lender may reasonably request in order to effect fully the
transactions contemplated by of the Transaction Documents.
7.15 Dividends. Without the prior written consent of the Lender,
the Borrower will not declare or pay any dividend, purchase, redeem or
otherwise acquire for value any of its stock now or hereafter outstanding,
return any capital to its stockholders, or make any distribution of its assets
to its stockholders.
7.16 ERISA and Pension Plan Compliance. The Borrower covenants
that it will not nor permit any Subsidiary to:
(a) terminate or withdraw from any Plan resulting in the
incurrence of any material liability to the Pension Benefit Guaranty
Corporation;
(b) engage in or permit any Person to engage in any prohibited
transaction (as defined in Section 4975 of the Code) involving any Plan
(other than a Multiemployer Plan) which would subject the Borrower or any
Subsidiary to any material tax, penalty or other liability.
(c) incur or suffer to exist any material accumulated funding
deficiency (as defined in Section 302 of ERISA and section 412 of the
Code), whether or not waived, involving any Plan (other than a
Multiemployer Plan); or
(d) allow or suffer to exist any risk or condition which
presents a risk of incurring a material liability to the Pension Benefit
Guaranty Corporation.
7.17 Environmental Matters. Except for violations, or situations
requiring remedial action, which would not have a material adverse effect on
the Vessel or the business, financial condition, operations or properties of
the Companies or on the ability of each Company to perform its obligations in
any material respect under each Transaction Document to which it is a party,
no Company will cause or permit any Property to be in violation of, or do
anything or permit anything to be done which will subject any such Property to
any remedial obligations under any applicable international, national or
European laws (including the common law) or liability under industry
agreements. Each Company will establish and implement such procedures as may
be reasonably necessary to, on a reasonably periodic basis, determine whether,
and assure that except for acts or omissions which would not have a material
adverse effect on the Vessel or the business, financial condition, operations
or properties of such Company or on the ability of such Company to perform in
all material respects its obligations under each Transaction Document to which
it is a party, each company shall not release, discharge, permit or cause the
escape or disposal of Hazardous Substances in a manner which may form the
basis of a future claim, violation or Environmental Loss, demand or action
seeking remedial action of any site, location, body of water including
international or national, coastal and inland waters or cause damages to
personal property or personal injury, disease or death, which would have a
material adverse effect on the Vessel or the operation, financial condition,
operating results or business prospects of each Company or the ability to
perform its obligations under each Transaction Document.
7.18 Performance of Transaction Documents. Each Company shall
perform all of its obligations under each Transaction Document to which it is
a party or by which it or its assets is bound except where such failure to
perform is not reasonably expected to have a material adverse effect on the
business, financial condition, operations or properties of such Company or the
ability of such Company to perform its obligations under each Transaction
Document to which it is a party.
7.19 Amendment of Transaction Documents. Without the prior
written consent of the Lender, neither Company shall (a) cancel or terminate
or agree to or permit any amendment, supplementation, or other modification
of, any Transaction Document, (b) waive timely performance or observance by
any Person (other than Lender) of any term or provision of such Transaction
Document, (c) exercise any options or remedies, make any elections under, or
give any consent under, any such Transaction Document, (d) compromise or
settle any claim against any R&B Party (other than Lender), (e) enter into any
additional Charter or other Transaction Documents, in each of the foregoing
cases, unless such action or inaction is not reasonably expected to have a
material adverse effect on the business, financial condition, operations or
properties of such Company or the ability of such Company to perform its
obligations under each Transaction Document to which it is a party.
7.20 Operation of Vessel. Neither Company nor its affiliates will
take any action that will cause the Vessel to be operated in the United
States, Mexican or Canadian waters.
7.21 Sale or Modification of Vessel. The Companies shall not
sell, transfer or otherwise encumber, the Vessel or any interest therein
without the prior written consent of the Lender, other than pursuant to the
Option Agreement, or in the case of any Lien, a Permitted Lien or upon
prepayment of the Loan in accordance with Section 3.02. Neither Company shall
modify the Vessel in any material respect without sixty (60) days prior
written notice to the Lender.
7.22 Acknowledgment of Charter Assignment. Each charterer under
each Charter Agreement shall, to protect the Lender s Lien in the Charter
Agreement and the amounts payable thereunder, acknowledge the assignment of
such rights under the Assignment of Charter and agree to direct its payments
under such Charter Agreement to the Lockbox Account.
Section 8. Defaults.
8.01 Events of Default. If one or more of the following events
(herein called Events of Default ) shall occur and be continuing:
(a) default in the payment of any Obligation when due and such
default shall continue for two Business Days thereafter (a Nonpayment ); or
(b) any Company shall default in the payment when due (including
any applicable grace period) of any principal of or interest on any
Indebtedness having an outstanding principal amount, individually or in the
aggregate, of at least $500,000 (other than the Loan or any other amount
payable hereunder); or any event or condition shall occur which results in the
acceleration of the maturity of any such Indebtedness or enables (or, with the
giving of notice or lapse of time or both, would enable) the holder of any
such Indebtedness or any Person acting on such holder s behalf to accelerate
the maturity thereof; or
(c) any representation or warranty made or deemed made by any R&
B Party herein or in any Transaction Document, or in any certificate or other
document furnished to the Lender pursuant to the provisions of any Transaction
Document, shall prove to have been false or misleading in any material respect
as of the time made or furnished and such representation and warranty
continues to be false and misleading in any material respect; or
(d) either Company shall default in any material respect in the
performance of any of its obligations or breach any of its covenants under
clause (d) of Section 7.01, or any of its obligations in Sections 7.04 or 7.08
through 7.22; Reading & ▇▇▇▇▇ (U.K.) shall default in the performance of any
of its obligations under the Donan Charter Agreement or the Bareboat Charter
Agreement; either TRB Subsidiary or the Borrower shall default in any material
respect in the performance of any of its obligations or duties under the
Option Agreement; or any R&B Party shall default in any material respect in
the performance of any of its obligations or breach any of its covenants in
any Transaction Document, and such default shall continue unremedied for a
period of 30 days after notice thereof to the Borrower by the Lender; or
either Company shall default in any material respect in the performance of any
of its other obligations or breach any of its other covenants in any Loan
Document, and such default shall continue unremedied for a period of 30 days
after the earlier of (i) the date the Borrower was required to notify the
Lender of such Default pursuant to Section 7.01(d) or (ii) notice thereof to
the Borrower by the Lender; or
(e) the Borrower or any R&B Party shall admit in writing its
inability to, or be unable or be deemed for the purposes of any law to be
unable to, pay its debts generally as such debts become due; or
(f) the Borrower or any R&B Party shall (i) apply for or consent
to the appointment of, or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its creditors,
(iii) commence a voluntary case under any Bankruptcy Law (as now or hereafter
in effect), (iv) file a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under any Bankruptcy Law, or (vi) take any corporate or
partnership action for the purpose of effecting any of the foregoing; or
(g) (i) a proceeding or case shall be commenced, without the
application or consent of the Borrower or any R&B Party in any court of
competent jurisdiction, seeking (x) its liquidation, reorganization,
dissolution or winding-up, or the composition or readjustment of its debts,
(y) the appointment of a trustee, receiver, custodian, liquidator,
administrative receiver, administrator or the like of such Person or of all or
any substantial part of its assets, or (z) similar relief in respect of it
under any law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in effect, for
a period of 90 days; or (ii) an order for relief against the Borrower or any
R&B Party shall be entered in an involuntary case under any Bankruptcy Law; or
(h) a final judgment or judgments for the payment of money shall
be rendered by a court or courts against the Borrower in excess of $500,000 in
the aggregate which is not covered by insurance, subject to a customary
deductible, and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not be
procured, within 45 days from the date of entry thereof, or the Borrower shall
not, within said period of 45 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal; or
(i) any of Transaction Documents shall be terminated prior to
the end of its stated term, or shall cease to be in full force and effect and
valid, binding and enforceable in accordance with its terms, for whatever
reason (other than by prepayment or with the consent of the Lender pursuant to
Section 9.05); or
(j) Reading &Bates shall fail to hold, directly or indirectly,
at least 100% of the outstanding shares of voting stock of the Borrower or
the Borrower fails to hold at least 90% of the partnership interest in the
Partnership; or
(k) any Transaction Document shall cease, for any reason, to be
in full force and effect (other than in accordance with its terms) or any
party thereto (other than (i) the Lender or (ii) an Affiliate of the Lender
not acting in good faith) shall so assert in writing; or any Security
Instrument shall cease to be effective to ▇▇▇▇▇ ▇ ▇▇▇▇ on the collateral
described therein with the priority purported to be created thereby;
(l) any R&B Party shall be in default under or shall have
breached any Transaction Document to which it is a party and any grace period
provided for therein with respect to such default or breach shall have lapsed
and such default would reasonably be expected to have a material adverse
effect on the business, financial condition, operations or properties of the
Borrower or the ability of the Borrower or any R&B Party to perform its
obligations under each Transaction Document to which it is a party; or
(m) any Person presents a petition for the winding-up of any R&B
Party (other than one which is frivolous or vexatious) and the same is not
withdrawn, dismissed or discharged within 7 Business Days; or
(n) any person presents a petition for the administration of any
R&B Party; or
(o) any order for the administration of any R&B Party is made or
an order is made or a resolution is passed (other than for the purposes of a
reconstruction or amalgamation previously approved in writing by the Lender)
for the winding-up of such R&B Party; or
(p) any Governmental Authority or any Person acting under any
Governmental Authority shall have commenced any proceedings (i) to condemn,
seize or appropriate all or any substantial part of the Vessel or (ii) to
displace the management of the Borrower or to curtail the Borrower s authority
to conduct its business; provided that no action of any Governmental Authority
or any other Person described in clause (ii) of this subsection shall
constitute an Event of Default unless and until (x) the Lender shall have
determined, in their sole discretion, that such action has had, or could
reasonably be expected to have, a material adverse effect on the business,
financial condition, operations or properties of the Borrower or the ability
of the Borrower or any R&B Party to perform its obligations under each
Transaction Document to which it is a party and (y) Borrower shall have been
given notice of such determination;
THEREUPON: the Lender may (a) declare the Commitment terminated (whereupon
the Commitment shall be terminated) and/or (b) declare the principal amount
then outstanding of and the accrued and unpaid interest on the Loan and
commitment fees and all other amounts payable hereunder and under the Note to
be forthwith due and payable, whereupon such amounts shall be and become
immediately due and payable, without notice (including, without limitation,
notice of intent to accelerate and notice of acceleration), presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by the Borrower and (c) proceed to enforce its rights under
the Security Instruments or otherwise available at law or in equity; provided
that in the case of the occurrence of an Event of Default referred to in
clauses (f) or (g) of this Section 8.01, the Commitment shall be automatically
terminated and the principal amount then outstanding of and the accrued
interest on the Loan and fees and all other amounts payable hereunder and
under the Note shall be and become automatically and immediately due and
payable, without notice (including, without limitation, notice of intent to
accelerate and notice of acceleration), presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower.
8.02 Application of Proceeds. All proceeds received after
maturity of the Note, whether by acceleration or otherwise shall be applied
first to reimbursement of reasonable expenses and indemnities provided for in
this Agreement and the Security Instruments; second to fees and other amounts
owing under this Agreement or the Loan Documents; third to accrued and unpaid
interest on the Note; fourth to principal outstanding on the Note; and, to the
extent of any excess to be paid to the Borrower or as otherwise required by
any court of competent jurisdiction.
Section 9. Miscellaneous.
9.01 Waiver. No failure on the part of the Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any
right, power or privilege under any Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege thereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The remedies provided in the
Loan Documents are cumulative and not exclusive of any remedies provided by
law.
9.02 Notices. All notices and other communications provided for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telegraph,
telecopy, cable or other writing and telexed, telecopied, telegraphed, cabled,
delivered or sent by certified or registered mail, return receipt requested,
to the intended recipient at the Address for Notices specified below its
name on the signature pages hereof; or, as to any party, at such other address
as shall be designated by such party in a notice to the Borrower and the
Lender given in accordance with this Section 9.02. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have
been duly given when transmitted by telex or telecopier (with receipt
confirmed by telex or telecopier), sent by the telegraph or cable office or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
9.03 Expenses, Etc. The Borrower, without duplication, agrees to
pay or reimburse the Lender for paying: (a) the reasonable fees and expenses
of counsel to the Lender in connection with (i) the preparation, execution and
delivery of this Agreement (including the Exhibits hereto) and the Security
Instruments and the making of the Loan, however such fee shall not exceed
$131,000, and (ii) any modification, supplement or waiver of any of the terms
of this Agreement, or any other Transaction Document; (b) all reasonable costs
and expenses of the Lender (including reasonable counsels fees) in connection
with the enforcement of this Agreement, or any other Transaction Document; (c)
all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement, or any other Transaction Document or any other document referred to
herein or therein; and (d) all costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration, recording or
perfection of any security interest contemplated by this Agreement or any
other Transaction Document referred to herein or therein.
9.04 Indemnification. The Borrower shall
(a) indemnify the Lender and each of their Affiliates and each
of their officers, directors, employees, representatives, agents, attorneys,
accountants and experts ( Indemnified Parties ) from, hold each of them
harmless against and promptly upon demand pay or reimburse each of them for
the Indemnity Matters which may be incurred by or asserted against or involve
any of them (whether or not any of them is designated a party thereto) as a
result of, arising out of or in any way related to (i) any actual or proposed
use by the Borrower of the proceeds of the Loan, (ii) the execution, delivery
and performance of this Agreement and the other Transaction Documents by the
R&B Parties thereto, (iii) the operations of the business of the Borrower,
(iv) the failure of the Borrower or any other R&B Party to comply with the
terms of any Transaction Documents, including this Agreement, or with any
applicable governmental requirement, (v) any inaccuracy of any representation
or any breach of any warranty of the Borrower set forth in this Agreement or
the other Transaction Documents, or (vi) any other aspect of this Agreement
and the Transaction Documents, including, without limitation, the reasonable
fees and disbursements of counsel and all other reasonable expenses incurred
in connection with investigating, defending or preparing to defend any such
action, suit, proceeding (including any investigations, litigation or
inquiries) or claim and including all Indemnity Matters arising by reason of
the ordinary negligence of any Indemnified Party, but excluding therefrom all
Indemnity Matters arising by reason of the gross negligence or wilful
misconduct of any Indemnified Party; and
(b) indemnify and hold harmless from time to time the
Indemnified Parties from and against any and all losses, claims, cost recovery
actions, administrative orders or proceedings, damages and liabilities to
which any such Person may become subject (i) under any environmental law
described in Section 6.10 hereof applicable to the Borrower or any of its
Properties, including without limitation, the treatment or disposal of
Hazardous Substances on any of its Properties, (ii) as a result of the breach
or non-compliance by the Borrower with any environmental law described in
Section 6.10 hereof applicable to the Borrower, (iii) due to past ownership by
the Borrower of any of its Properties or past activity on any of its
Properties or past activity on any of its Properties which, though lawful and
fully permissible at the time, could result in present liability, (iv) the
presence, use, release, storage, treatment or disposal of Hazardous Substances
on or at any of the Properties owned or operated by the Borrower, or (v) any
other environmental, health or safety condition in connection with this
Agreement, the Note or any other Transaction Documents, provided, however, no
indemnity shall be afforded under this Section 9.04(b) in respect of any
Property for any occurrence arising from the acts or omissions of the Lender
during the period after which such Person, its successors or assigns shall
have obtained possession of such Property (whether by foreclosure or deed in
lieu of foreclosure, as mortgagee-in-possession or otherwise).
(c) The Borrower s obligations under this Section 9.04 shall
survive any termination of this Agreement and the payment of the Note and
shall continue thereafter in full force and effect.
(d) The Borrower shall pay any amounts due under this Section
9.04 within thirty (30) days of the receipt by the Borrower of written notice
of the amount due.
9.05 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the Note, nor any consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be agreed or
consented to in writing by the Lender and the Borrower, which consent shall
not be unreasonably delayed or withheld, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
9.06 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign its rights or obligations hereunder or
under the Note without the prior written consent of the Lender. Lender may
not assign its rights or obligations hereunder without the prior written
consent of the Borrower (except as otherwise provided in subparagraphs (b) and
(c) below).
(b) The Lender may assign to one or more assignees that are the
Lender s Affiliates all or a portion of its rights and obligations under this
Agreement. The Lender shall give the Borrower prompt notice thereof.
(c) The Lender may transfer, grant or assign participations in
all or any part of its interests hereunder pursuant to this subsection to any
Person that is an Affiliate of the Lender. The Lender shall give the Borrower
prompt notice thereof.
(d) The Lender may furnish any information concerning the
Borrower in its possession from time to time to assignees and participants
(including prospective assignees and participants).
9.07 Survival. The obligations of the Borrower under Sections
4.01, 4.03, 4.04, 9.03 and 9.04 hereof shall survive the repayment of the Loan
and the termination of the Commitment. The other obligations of the parties
to this Agreement not previously accrued under the terms of this Agreement
shall terminate upon repayment of the Loan and the termination of the
Commitment.
9.08 Captions and Final Agreement. Captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
This Agreement, together with the other written agreements and papers executed
herewith in connection with this Agreement, represents the final agreement
among the parties hereto with respect to the subject matter hereof. This
Agreement and such writings supersede all prior proposals, negotiations,
agreements and understandings related to such subject matter. Each of the
Borrower and the Lender hereby represents and warrants that it is not relying
on any statement, representation, warranty, covenant or agreement of any kind
except for those set forth in this Agreement and such other documents. This
Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument and any of the parties
hereto may execute this Agreement by signing any such counterpart.
9.09 No Usury Intended. Notwithstanding any provision of this
Agreement or the Transaction Documents, if at any time the rate of interest
contracted for, charged or received on any Advance or the Loan or any other
amount payable as interest in connection with the Transaction Documents
exceeds the maximum non-usurious interest rate permissible for commercial
borrowers under applicable law ( Maximum Rate ), the rate of interest charged
hereunder shall be limited to the Maximum Rate. In such event, if the rate of
interest chargeable under this Agreement or the Transaction Documents on any
Advance or the Loan or any other amount at any time is subsequently less than
the Maximum Rate, the principal amount of such Advance or the Loan shall bear
interest at the Maximum Rate until the total amount of interest paid or
accrued hereunder equals the amount of interest which would have been paid or
accrued hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect. In the event, upon payment in full of all
amounts payable hereunder, the total amount of interest paid or accrued under
the terms of this Agreement or the Transaction Documents is less than the
total amount of interest which would have been paid or accrued if the rates of
interest set forth in this Agreement had, at all times, been in effect, then
the Borrower shall, to the extent permitted by applicable law, pay to the
Lender an amount equal to the difference between (a) the lesser of (i) the
amount of interest which it would have been charged if the Maximum Rate had,
at all times, been in effect or (ii) the amount of interest which would have
accrued on the Advance or the Loan to the Borrower if the rates of interest
set forth in this Agreement had at all times been in effect and (b) the amount
of interest actually paid or accrued on such Advance or Loan under this
Agreement. In the event the Lender ever receives, collects, charges or
applies as interest any sum in excess of the Maximum Rate, such excess amount
shall be applied to the reduction of the principal balance of the Loan or to
other amounts (other than interest) payable hereunder or the Transaction
Documents, and if no such principal is then outstanding, such excess or part
thereof remaining shall be paid to the Borrower.
9.10 Invalidity. In the event that any one or more of the
provisions contained in the Note, this Agreement, or in any other Loan
Document shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of the Note, this Agreement or any other Loan Document.
9.11 No Consequential Damages. Except as specifically provided
for herein to the contrary, neither the Borrower nor the Lender shall be
liable to the other for any consequential, incidental, indirect or punitive
damages of any kind or character, including, but not limited to, loss of use,
loss of profit, loss of revenue, loss of product or production, whether
arising under the Loan Documents or as a result of, relating to or in
connection with, the transactions contemplated hereby (the Excluded
Damages ), and no claim for Excluded Damages shall be made by the Borrower or
the Lender against the other Person, whether based on negligence,
seaworthiness, breach of warranty, breach of agreement, statute, strict
liability or otherwise.
9.12 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL.
(a) THIS AGREEMENT AND THE NOTE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
(b) THE BORROWER AND R&B (U.K.) HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
AND THE UNITED KINGDOM FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE
BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE BORROWER, R&B (U.K.), AND THE LENDER HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
9.13 Agent for Service of Process. The Borrower and R&B (U.K.)
hereby irrevocably designate The ▇▇▇▇▇▇▇▇-▇▇▇▇ Corporation Systems, Inc., with
offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, as agent to
receive for and on behalf of the Borrower service of process in New York. In
the event that The ▇▇▇▇▇▇▇▇-▇▇▇▇ Corporation Systems, Inc. resigns or ceases
to serve as the Borrower s or R&B (U.K.) s agent for service of process
hereunder, the Borrower and R&B (U.K.) agrees forthwith (a) to designate
another agent for service of process in the State of New York and (b) to give
prompt written notice to the Lender of the name and address of such agent.
The Lender agrees to cause a copy of such process served on such agent to be
promptly forwarded to the Borrower and R&B (U.K.) at its address set forth
underneath its signature below, and the Borrower and R&B (U.K.) agree that the
failure of the Borrower and R&B (U.K.) to receive such copy shall not impair
or affect in any way the validity of such service of process or of any
judgment based thereon. The Borrower and R&B (U.K.) agree that the failure of
its agent for service of process to give any notice of any such service of
process to the Borrower and R&B (U.K.) shall not impair or affect the validity
of such service or of any judgment based thereon. If, despite the foregoing,
there is for any reason no agent for service of process of the Borrower and
R&B (U.K.) available to be served, then the Borrower and R&B (U.K.) further
irrevocably consent to the service of process by the mailing thereof by the
Lender by registered or certified mail, postage prepaid, to the Borrower and
R&B (U.K.) at its address listed on the signature pages hereof. Nothing
(Remainder of Page Intentionally Deleted)
in this Section 9.13 shall affect the right of the Lender to serve legal
process in any other manner permitted by law or affect the right of the Lender
to bring any action or proceeding against the Borrower and R&B (U.K.) or their
property in the courts of any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
TRB HOLDING CORPORATION.
as Borrower
By:
▇.▇. ▇▇▇▇▇
Executive Vice President
Finance and Administration
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇, Executive Vice President
Finance and Administration
Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
READING & ▇▇▇▇▇ (U.K.) LIMITED
By:
▇.▇. ▇▇▇▇▇
Authorized Agent
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇, Executive Vice President
Finance and Administration
Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇
NISSHO IWAI EUROPE PLC,
as Lender
By:
▇. ▇▇▇▇▇
Attorney-in-Fact
Address for Notices:
Bastion House
140 London Wall
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: Manager of Marine Department
Telecopy Number: 011-4471-588-0391
With a copy to:
Nissho Iwai Corporation
▇-▇, ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇
Attention: Manager, Marine Project Section 2
Marine & Offshore Engineering Department
Telecopy Number: 011-813-3588-4547
and
▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Address for Applicable Lending Office:
See Address for Notices
EXHIBIT 2.05
Form of Note
NOTE
$38,000,000.00 New York, New York
______________, 199__
FOR VALUE RECEIVED, TRB Holding Corporation, a Delaware corporation
(together with its successors, the Borrower ), hereby promises to pay to the
order of Nissho Iwai Europe PLC (the Lender ), by disbursement from the
Lockbox maintained at the principal office of Sanwa Bank Limited, New York
Branch, New York, New York, the principal sum of $38,000,000 (or such lesser
amount as shall equal the aggregate unpaid principal amount of the Loan made
by the Lender to the Borrower under the Loan Agreement referred to below), in
lawful money of the United States of America and in immediately available
funds, on the dates and in the principal amounts provided in the Loan
Agreement (as defined below), and to pay interest on the unpaid principal
amount of each Advance, at such office, in like money and funds, for the
period commencing on the date of such Advance until such Advance shall be paid
in full, at the rates per annum and on the dates provided in the Loan
Agreement.
The Lender is hereby authorized by the Borrower to endorse on the
schedules (or a continuation thereof) attached to this Note, the amount and
date of each Advance made by the Lender to the Borrower under the Loan
Agreement, and the amount and date of each payment or prepayment of principal
of such Loan received by the Lender, provided that any failure by the Lender
to make any such endorsement shall not affect the obligations of the Borrower
under the Loan Agreement or under this Note in respect of such Advance.
This Note is the Note referred to in that certain Loan Agreement (as
modified and supplemented and in effect from time to time, the Loan
Agreement ) dated as of December 14, 1996 between the Borrower, Reading &
▇▇▇▇▇ (U.K.) Limited and the Lender, and evidences the Loan made by the Lender
thereunder. Capitalized terms used in this Note have the respective meanings
assigned to them in the Loan Agreement.
The Loan Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of the
Loan upon the terms and conditions specified therein.
The Loan Agreement further provides that this Note is secured by the
Security Instruments, as defined therein, covering the collateral described in
such Security Instruments.
This Note shall be governed by and construed in accordance with the
laws of the State of New York.
TRB HOLDING CORPORATION
By:
Name:
Title:
ADVANCE AND PAYMENTS OF PRINCIPAL AND INTEREST
Amount of Amount of
Principal Interest Unpaid
Borrowing Amount of Paid or Paid or Principal Notation
Date Loan Prepaid Prepaid Balance Made By
Exhibit 3.01
FORM
OF
DRAWDOWN NOTICE
Nissho Iwai Europe Plc (the "Lender")
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
England
Attention: Manager of Marine Department
Dear Sirs:
Reference is made to the Loan Agreement dated as of December 14, 1996
(the "Loan Agreement"), between TRB Holding Corporation (the "Borrower"),
Reading & ▇▇▇▇▇ (U.K.) Limited and the Lender. Capitalized terms used herein
and not otherwise defined herein have the meanings assigned to such terms in
the Loan Agreement.
The Borrower, hereby requests a borrowing under the Loan Agreement in
the aggregate principal amount of $38,000,000 (the "Proposed Borrowing").
Please make the proceeds of the Proposed Borrowing available to
Account No. _____________ at ________________________________________.
By each of the delivery of this Drawdown Notice and the acceptance of
the Advance made by the Lender in response to this Drawdown Notice, the
Borrower represents and warrants that the conditions to the Borrowing
specified in the Loan Agreement have been satisfied with respect to the
Proposed Borrowing.
Very truly yours,
TRB HOLDING CORPORATION
By:
Name:
Title:
cc: Nissho Iwai American Corporation
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇. ▇▇▇▇▇▇▇▇▇
EXHIBIT 6.11
COMPANIES INSURANCE
As specified in Exhibit 6.11, the Companies shall maintain the following
insurance coverage:
1. Workmen's Compensation and Employers' Liability Insurance
All of the Companies employees shall be covered for statutory benefits
as set forth and required by applicable law in the Vessel s area of
operation or such other jurisdiction under which the Companies may become
obligated to pay benefits. Employers' Liability insurance, including
appropriate maritime coverage covering all employees, shall be provided
with minimum primary policy limits as required by applicable statute, or
U.S. $1 million per occurrence, whichever is greater.
2. Comprehensive General Liability
Insurance coverage shall be provided for liability arising from all
operations of the Companies. The policy shall include coverage for
premises and operations, independent contractors, completed operations,
and contractual liability (or their equivalents). Insurance coverage
shall also be provided for all owned, hired, and nonowned vehicles. The
minimum primary policy limits shall be U.S. $1 million single limit per
occurrence under the General Liability policies. Automobile Liability
insurance shall have minimum policy limits of U.S. $1,000,000 single
limit per occurrence, or such greater amount as required by law.
3. Protection and Indemnity (Marine Liability) Insurance
Full form marine protection and indemnity insurance, including, but not
limited to, sudden and accidental pollution liability and contractual
liability coverage or equivalent insurance with such club or under forms
of policies approved by the Lender. Such protection and indemnity
insurance shall be maintained in the broadest forms generally available
in the United States market, shall be in an amount not less than that
carried by experienced and responsible companies engaged in the
production of petroleum, shall include a cross-liability endorsement and
shall be placed through independent brokers of recognized standing and
with first-class underwriters reasonably acceptable to the Lender. No
hull and machinery or protection and indemnity insurance shall provide
for a deductible amount in excess of $500,000 with respect to the Vessel
without the prior written consent of the Lender.
4. Excess Liability
The Companies shall carry Excess Liability Insurance in amounts not less
than $200 million each occurrence in addition to and in excess of all
primary Liability Coverages carried by Companies, including but not
limited to insurance required under Paragraphs 1 and 2 (oil pollution
sublimit $90 million per Paragraph 6).
5. Marine Physical Damage, Including Hull and Machinery
All risk Marine and hull and machinery shall be provided with a limit
equal to that normally carried by experienced and responsible companies
engaged in offshore drilling, but shall not be less than the greater of
(a) $105,000,000; or (b) the fair market sale value of the Vessel.
Coverage shall include collision liability and navigation limits adequate
for the Vessel's trade.
6. Oil Pollution Insurance
Oil pollution insurance coverage issued by the Vessel's P & I Club or
equivalent coverage in the amount of not less than US $90,000,000 per
occurrence, unless additional insurance or proof of financial
responsibility of a greater amount shall be required by a governmental
authority, in which case such greater amount shall be obtained and kept
in full force and effect by the Companies. The Companies shall maintain
insurance, if available, covering similar oil removal risks or
liabilities and civil or criminal penalties incident thereto and not
attributable to the action or inaction of the Lender under any law,
regulation or judicial decision of any of the United States of America or
foreign jurisdiction or jurisdictions or political subdivision thereof
applicable to the Vessel or its operations to the extent such insurance
is requested in writing by the Lender and recommended by a reputable
independent marine insurance broker as insurance which other responsible
tanker owners carry for their benefit and the benefit of their lenders
and which it would be imprudent not to carry for the protection of the
Companies and the Lender in view of the nature of the Vessel and the
Vessel's operations. Applicable when the Vessel is attached to the
wellhead, fixed entry coverage issued by the Vessel s P&I Club or
equivalent coverage in an amount of not less than $400,000,000 per
occurrence. Applicable when the Vessel is acting as a shuttle tanker,
mutual entry coverage issued by the Vessel s P&I Club or equivalent
coverage in an amount of not less than $500,000,000 per occurrence.
7. War, Political Risk, Confiscation and Expropriation Insurance
If and to the extent that the Vessel is operated outside of the
territorial waters and/or the Outer Continental Shelf of the United
States (and in addition to any coverage required by the Lender for such
operations under the Loan Documents), War, Political Risk, Confiscation
and Expropriation Insurance shall be provided for the Vessel with a limit
equal to the value insured under Paragraph 5 above.
8. Other Losses
Losses not covered by the above stated policies because of deductibles
and policy limits stated above shall be borne according to the liability
and indemnity provisions of the Loan Documents.
9. NIC Parties as Additional Insured
All coverages and other insurance policies carried by the Companies or
that the Companies are required at any time to maintain pursuant to the
Loan Documents shall name NIC Parties as additional insureds (other than
the protection and indemnity and oil pollution coverages extended by UK
P&I Club, foreign workers compensation and employer s liability
coverage) and loss payee for all risks and losses as provided in the Loan
Agreement and the Assignment of Insurance Proceeds.
10. Reporting Requirements
(a) On each anniversary of the Closing Date, and each time there is a
reduction or material change in the insurance coverage carried on the
Vessel, the Companies will furnish to the Lender a detailed report
signed by independent marine insurance brokers (who may be the
insurance brokers regularly employed by the Companies ) appointed by
the Companies and reasonably acceptable to the Lender, describing the
insurance policies then carried and maintained on the Vessel
(including the names of the underwriters, the types of risk covered
by such polices, the amount insured thereunder and the expiration
date thereof) and stating that in the opinion of said insurance
brokers such insurance is adequate and reasonable for protection of
the Lender, is in compliance with the terms of Section 6.11 and is
comparable with that carried by other responsible operators of
similar production vessels. The Companies will cause such firm to
agree to advise the Lender promptly of any lapse of any such
insurance by expiration, failure to renew or otherwise and of any
default in payment of any premium and of any other act or omission on
the part of the Companies of which it has knowledge and which might,
in its opinion, invalidate or render unenforceable, in whole or in
part, any insurance on the Vessel. The Companies shall also cause
such firm to agree to ▇▇▇▇ its records and to use its best efforts to
advise the Lender, at least ten (10) business days prior to the
expiration date of any insurance carried pursuant to the Loan
Agreement, that such insurance has been renewed or replaced with new
insurance which complies with the provisions of the Loan Agreement,
and such advice shall be in the same detail in respect of such
renewed or replacement insurance as is required in respect of
insurance described in the aforesaid reports.
(b) Copies of all insurance policies required to be maintained under
Section 6.11 of the Loan Agreement or certificates evidencing the
coverage thereof, shall be delivered to and held by the Lender, and
so long as the Loan Agreement remains in effect, the Companies shall
deliver to the Lender not later than January 31 of each year,
commencing January 31, 1998, a schedule certified to be correct by a
responsible officer setting forth all insurance in force as of
January 1 of that year including but not limited to the policy
numbers, the name and address of the insurers, the amount of each
policy, and the expiry date of each policy.
(c) In the event the Vessel suffers serious damage reasonably estimated
at the time to cost more than $500,000 to repair or to require the
Vessel be withdrawn from service and placed in drydock to effect such
repairs immediately, the Companies shall notify the Lender by
telegram within twenty-four (24) hours after the event shall have
come to its knowledge and in such event the Lender shall have come to
its knowledge and in such event the Lender shall have the right to
have an independent survey of the damage at the Companies s expense
and if such survey be requested the Companies shall lend all needed
assistance.
11. Additional Provisions
All policies (other than the protection and indemnity and oil pollution
coverages extended by UK P&I Club and the foreign workers compensation
and employers liabilitly coverages) shall include the following:
(i) breach of warranty protection to the NIC Parties, (ii) waiver of
subrogation clause, (iii) at least [10] [30] (or 7, in the case of war
risk) days prior written notice of cancellation or material
modification, and (iv) provide that the interests of the Lender under the
insurance policy shall not be impaired in any way by any change in the
title of ownership of the Vessel or by any omission or neglect or by the
performance of any act in violation of any terms or conditions of the
policy or because of any false statement concerning the policy or the
subject thereof by the insured or the insured s employees, agents or
representatives whether occurring before or after the date hereof or
whether before or after any loss. The insurance (other than pollution
coverage extended by UK P&I Club and the foreign workers compensation
and employers liabilitly coverages) shall be primary, without right of
contribution from any other insurance which may be carried by the NIC
Parties, and (other than the protection and indemnity and oil pollution
coverages extended by the UK P&I Club) contain a waiver of set off of
premiums against claims proceeds and provide for no recourse for premium
payments by the NIC Parties. Each of the Companies agree that it will
not do any act, nor voluntarily suffer nor permit any act to be done,
whereby any insurance required hereunder shall or may be suspended,
impaired or defeated and will not suffer nor permit the Vessel to engage
in any voyage, nor to carry any cargo not permitted under the policies of
insurance in effect, without first covering such Vessel with insurance
reasonably satisfactory in all respects, including the amount thereof, to
the Lender for such voyage or the carriage of such cargo.
EXHIBIT 7.08
FORM OF SUBORDINATION PROVISIONS
Subordination.
(a) The indebtedness ("Subordinated Debt") evidenced by this
instrument is subordinate and junior in right of payment to all Senior Debt
(as defined in subdivision (b)) of the Companies to the extent provided
herein.
(b) For all purposes of these subordination provisions the term
"Senior Debt" shall mean all principal of and premium, if any, and interest
and expenses under the Loan Agreement, dated as of December 14, 1996, among
the Companies and Nissho Iwai Europe Plc ( NIEP ), and (ii) all other
indebtedness of the Companies or any Subsidiary for borrowed money. The
Senior Debt shall continue to be Senior Debt and entitled to the benefits of
these subordination provisions irrespective of any amendment, modification or
waiver of any term of the Senior Debt or extension or renewal of the Senior
Debt.
(c) No direct or indirect payment (in cash, property or securities or
by setoff or otherwise) shall be made on account of the principal of or
premium, if any, or interest on any Subordinated Debt, or as a sinking fund
for the Subordinated Debt, or in respect of any redemption, retirement,
purchase or other acquisition of any of the Subordinated Debt until the Senior
Debt shall be paid in full in cash.
(d) In the event of:
(i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding
relating to the Companies, its creditors as such or its property,
(ii) any proceeding for the liquidation, dissolution or other
winding-up of the Companies, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Companies for the benefit of
creditors,
(iv) any other marshalling of the assets of the Companies, or
(v) any acceleration of any Senior Debt,
all Senior Debt (including any interest thereon accruing at the legal rate
after the commencement of any such proceedings and any additional interest
that would have accrued thereon but for the commencement of such proceedings)
shall first be paid in full before any payment or distribution, whether in
cash, securities or other property, shall be made to any holder of any
Subordinated Debt on account of any Subordinated Debt.
(e) So long as any Senior Debt remains outstanding, the holders of
the Subordinated Debt or any trustee or other representative acting on their
behalf may not declare all or any part of the Subordinated Debt due and
payable prior to maturity, and the holders of Subordinated Debt may take no
further action to declare such Subordinated Debt due and payable, or to
enforce obligations in respect of such Subordinated Debt, including, without
limitation, the exercise of any other remedy.
(f) If any payment or distribution of any character or any security,
whether in cash, securities or other property, shall be received by any holder
of Subordinated Debt in contravention of any of the terms hereof and before
all the Senior Debt shall have been paid in full, such payment or distribution
or security shall be received in trust for the benefit of, and shall be paid
over or delivered and transferred to, the holders of the Senior Debt at the
time outstanding in accordance with the priorities then existing among such
holders for application to the payment of all Senior Debt remaining unpaid, to
the extent necessary to pay all such Senior Debt in full. In the event of the
failure of any holder of any Subordinated Debt to endorse or assign any such
payment, distribution or security, each holder of Senior Debt is hereby
irrevocably authorized to endorse or assign the same.
(g) No present or future holder of any Senior Debt shall be
prejudiced in the right to enforce subordination of Subordinated Debt by any
act or failure to act on the part of the Companies. Nothing contained herein
shall impair, as between the Companies and the holder of this Subordinated
Debt, the obligation of the Companies to pay to the holder hereof the
principal hereof and interest hereon as and when the same shall become due and
payable in accordance with the terms hereof.
(h) Upon the payment in full of all Senior Debt, the holders of
Subordinated Debt shall be subrogated to all rights of any holders of Senior
Debt to receive any further payments or distributions applicable to the Senior
Debt until the Subordinated Debt shall have been paid in full, and, for the
purposes of such subrogation, no payment or distribution received by the
holders of Senior Debt of cash, securities or other property to which the
holders of the Subordinated Debt would have been entitled except for these
subordination provisions shall, as between the Companies and its creditors
other than the holders of Senior Debt, on the one hand, and the holders of
Subordinated Debt, on the other, be deemed to be a payment or distribution by
the Companies to or on account of Senior Debt.
(i) No Subordinate Debt may be secured or subject to credit
enhancement.
(j) The provisions in sections (a) through (i) above shall not be
amended or modified and no term or provision hereof shall be waived without
the express prior written consent of the holders of Senior Debt.
(k) The holders of this Subordinated Debt hereby (i) undertake and
agree to execute, verify, and deliver and file proofs of claim, consents,
assignments or other instruments which any holder of Senior Debt may at any
time reasonably require in order to provide and realize upon any rights or
claims pertaining to the Subordinated Debt held by such subordinated
noteholder and to effectuate the full benefit of the subordination contained
herein and (ii) authorizes each holder of Senior Debt to take any action made
in good faith as may be necessary or appropriate to effect the subordination
provided for herein and appoints each holder of Senior Debt his attorney-in-
fact for such purposes.
(l) Any holder of Senior Debt may extend, renew, modify or amend the
terms of Senior Debt or any security therefor and release, sell or exchange
such security and otherwise deal freely with the Companies or any affiliate to
the same extent as could any person, all without notice to or consent of the
holders of Subordinated Debt and without affecting the liabilities and
obligations of the holders of Subordinated Debt pursuant to the provisions
hereof.
Exhibit A
[Draft Comfort Letter]
January __, 1997
Nissho Iwai Corporation
Nissho Iwai Europe PLC
c/o Nissho Iwai Europe PLC
Bastion House
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Re: The Loan Agreement between TRB Holding Corporation ( TRBH ), Reading
& ▇▇▇▇▇ (U.K.) Limited ( R&B (U.K.) ) and Nissho Iwai Europe PLC,
dated as of December 14, 1996 (the Loan Agreement ; terms used and
not defined herein, shall have the meanings assigned in the Loan
Agreement)
Gentlemen:
This letter is provided to you in order to induce you to enter into
the above-referenced Loan Agreement and other documents in connection
therewith.
It is the intention of Reading & ▇▇▇▇▇ Corporation (a) that it will
continue its ownership interest in TRBH, TRB Subsidiary Corporation ( TRBS ),
R& B (U.K.), and Reading & ▇▇▇▇▇ Drilling Co. (collectively, the Companies )
as each is currently held, (b) that the Companies will continue to maintain
their corporate existence and remain financially viable, and (c) that the
TRBH, TRBS and the partnership or partnerships to be created pursuant to the
Option Agreement (the Partnership ) will perform their obligations under the
Loan Agreement and the Option Agreement dated December 14, 1996 between TRBH,
TRBS and Nissho Iwai Corporation (the Option Agreement ) and the documents
entered into in connection therewith. Reading & ▇▇▇▇▇ Corporation intends,
to the extent necessary, to continue to fund or cause to be funded working
capital to the TRBH, TRBS and the Partnership by means of an intercompany
revolving credit facility(ies) in order to allow TRBH, TRBS and the
Partnership to continue to meet any shortage of daily operating expenses, any
lay-up costs during stacked periods and any conversion or upgrade costs
necessary for a new charter contract, as well as minimum debt service required
under the Loan Agreement.
Reading & ▇▇▇▇▇ Corporation intends to cause (a) each of TRBH, TRBS
and the Partnership to perform its obligations, if any, under each Charter
Agreement and the Bareboat Charter, (b) R&B (U.K.) to continue performing
their obligations under the Amended Agreement dated March 30, 1995, between
Britoil PLC and BP Exploration Operating Company Limited, as amended,
supplemented and novated by Novation Agreements dated July 10, 1996 and
August 30, 1996 pursuant to which R&B (U.K.) has assumed thereunder all of the
rights, duties and obligations of Britoil (Beta) Limited and the documents
executed in connection therewith and (c) Reading & ▇▇▇▇▇ Drilling Co. to
perform its obligations under the Subordination Agreement.
Sincerely,
READING & ▇▇▇▇▇ CORPORATION
By:_______________________________
Name:_____________________________
Title:______________________________
Exhibit B
[Opinion of Borrower s Counsel]
December ___, 1996
Nissho Iwai Europe PLC
c/o Baker & ▇▇▇▇▇, L.L.P.
3000 One Shell Plaza
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
I am General Counsel to Reading & ▇▇▇▇▇ Development Co., a Delaware
corporation (the "Borrower"), Reading & ▇▇▇▇▇ (U.K.) Limited, a company
organized under the laws of the United Kingdom ("Reading & ▇▇▇▇▇ (U.K.)"),
Reading & ▇▇▇▇▇ Corporation, a Delaware corporation ( Reading & ▇▇▇▇▇ Co. ),
and Reading &Bates Drilling Co., an Oklahoma corporation ("RB Drilling"; the
Borrower, Reading & ▇▇▇▇▇ (U.K.), Reading & ▇▇▇▇▇ Co. and RB Drilling,
collectively, the "Companies"), in connection with the execution and delivery
of the Loan Agreement dated as of December 14, 1996 (the Loan Agreement )
between the Borrower, RB Drilling and you, pursuant to which you have made a
loan to the Borrower in order for the Borrower to finance the oil production
vessel Seillean , Gross Register Tons (GRT): 50,928.00, Net Register Tons:
15,278.00, Length: 236.47 meters, Width: 37 meters, Depth: 19.80 meters,
Permanent Navigation Patent No. ▇▇▇▇▇-▇▇, Radio Call Letters: 3FPF6, and
Registration No. 25519-PEXT, and with the home port of Panama City, the
Republic of Panama (the Vessel ). This opinion is being furnished to you
pursuant to Section 5.01(g) of the Loan Agreement. Capitalized terms not
otherwise defined herein have the meanings ascribed to them in the Loan
Agreement.
In this connection and as a basis for the opinions hereinafter expressed, I
have examined executed originals of the following documents:
(1) the Loan Agreement;
(2) the Note;
(3) the Bareboat Charter;
(4) the Donan Charter Agreement;
(5) the Collateral Assignment;
(6) the Assignment of Charter;
(7) the Ship Mortgage;
(8) the Option Agreement;
(9) the Comfort Letter;
(10) the Assignment of Insurance Proceeds;
(11) the financing statements (the "Financing Statements") executed by
the Charterer in connection with the Collateral Assignment, in favor of the
owner as the secured party;
(12) the Subordination Agreement; and
(13) the Debentures.
(collectively referred to as the "Documents").
As General Counsel to the Companies, I am familiar with the relevant corporate
proceedings and have examined such documents and records of the Companies and
have obtained such other information as I have deemed necessary to form a
basis for the opinions expressed below.
Based upon the foregoing and having regard to the legal considerations I deem
relevant, and subject to the assumptions, limitations, qualifications and
exceptions set forth herein, it is my opinion that:
1. Each of the Companies is a corporation duly organized and validly
existing in good standing under the laws of the state of its
incorporation and has the corporate power and authority (i) to own or
lease and operate its properties and carry on its business as carried on
at the date hereof, and (ii) to execute and deliver, and to consummate
the transactions contemplated by, the Documents to which it is a party.
2. Each of such Companies has taken all necessary corporate action to
authorize the execution and delivery of, and the consummation of the
transactions contemplated by, each of the Documents to which it is a
party. Such execution and delivery, and consummation of the transactions
contemplated by the Documents, will not (i) result in a violation of each
such Company's certificate of incorporation or bylaws, or to my knowledge
any law, order or governmental regulation to which each such Company is
subject, (ii) result in a violation of or constitute a breach of or
default under any agreement or order binding upon and material to such
Company, or (iii) violate any requirement of law applicable to such
Company. Each of the Documents to which each of the Companies is a party
has been duly authorized, executed and delivered by each of the
Companies.
3. Each of the Documents constitutes the legal, valid and binding obligation
of each of the Companies a party thereto.
4. If, notwithstanding the choice of New York law contained therein, Texas
law were applied to the Documents, each of the Documents would constitute
the legal, valid and binding obligations of each of the Companies a party
thereto.
5. The execution and delivery of, and the consummation of the transactions
by, each of the Companies of the Documents to which it is a party do not
require, with respect to any of such Companies, the consent or approval
of any regulatory authority or governmental body of the United States or
the State of Texas (except for the filings referred to herein) or any
regulatory authority or governmental authority in connection with any
application of the General Corporation Law of the State of Delaware.
6. No consent or approval of the U. S. Department of Transportation Maritime
Administration, the United States Coast Guard ("USCG") or any other
entity having jurisdiction over the Vessel or any of the Companies is
required to consummate the transactions contemplated under or by the
Documents.
7. The Financing Statements are in the proper form for filing pursuant to
the Uniform Commercial Code in effect in the State of Texas (the "UCC"),
and upon filing with the Secretary of State of the State of Texas
pursuant to the UCC, will perfect your security interest in all right,
title and interest of the applicable debtor in the collateral described
in such Financing Statements.
8. No action, suit or proceeding is pending or, to my knowledge, threatened
against any of the Companies before or by any court, arbitration panel or
administrative agency which, if adversely determined, could reasonably be
expected to result in a material adverse change in the business or
condition of any of the Companies or prevent any of the Companies from
performing any of its obligations under the Documents.
My opinions are subject to the following additional qualifications,
limitations and assumptions:
(i) the effect of applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or conveyance or other laws
affecting creditors' rights generally and the general
principles of equity (regardless of whether considered in a
proceeding in equity or at law);
(ii) the due organization and existence of all parties to the
Documents other than the Companies;
(iii) the legal right and the corporate power and authority of all
parties to the Documents (other than the Companies) to execute
and deliver, and to consummate the transactions contemplated by,
the Documents to which they are parties;
(iv) the due authorization, execution and delivery of the Documents by
all parties to the Documents (other than the Companies);
(v) certain remedial, waiver and other provisions of the Documents
are or may be unenforceable in whole or in part under Texas law
or the law of the United States, but the inclusion of such
provisions will not make the rights and remedies provided for
in such Documents, taken as a whole, inadequate for the
practical realization of the rights and benefits provided thereby;
(vi) no opinion is expressed as to the enforceability of choice of
law, choice of jurisdiction and forum selection clauses contained
in the Documents; and
(vii) (a) you will comply with usury laws which may apply to the
provisions of the Loan Agreement or other Documents, (b) in
connection therewith you will take into account any
consideration, in whatsoever form, which could constitute or be
deemed to constitute interest under Texas law, (c) there is no
other consideration paid or to be paid by the Borrower in
connection with the Loan Agreement other than that reflected
therein, and (d) Alamo Lumber Company v. Gold, 661 S.W.2d 926
(Tex. 1984) would not be extended and/or applicable to the
transactions described in the Loan Agreement and other Documents.
With respect to my opinions set forth above about the corporate power and
authority, and due authorization, execution and delivery of the Documents, I
have relied on certificates of public authorities in the relevant
jurisdictions of incorporation, corporate documents relating to the formation
and maintenance of each of such Companies prepared by counsel in those
jurisdictions, and practices and procedures that I have customarily followed
(and believe to be proper) in acting as General Counsel to such Companies.
I express opinions on the matters set forth herein only insofar as they relate
to the laws of the State of Texas and the State of Oklahoma, the General
Corporation Law of the State of Delaware, and applicable federal laws
(including maritime laws) of the United States.
The opinions expressed herein are rendered solely for the benefit of you and
your counsel and may not be relied upon or used by any other person without
our prior written consent.
Very truly yours
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
and General Counsel
Exhibit C
[Opinion of ▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.]
December ___, 1996
Nissho Iwai Europe PLC
c/o Baker & ▇▇▇▇▇, L.L.P.
3000 One Shell Plaza
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We acted as your counsel in connection with the execution and
delivery of the Loan Agreement dated as of December 14, 1996 (the Loan
Agreement ) between TRB Holding Corporation, a Delaware corporation (the
"Borrower"), Reading & ▇▇▇▇▇ (U.K.) Limited, a company organized under the
laws of the United Kingdom ("Reading & ▇▇▇▇▇ (U.K.)"), and you, pursuant to
which you have made loans to the Borrower in order for the Borrower to
refinance the oil production vessel "Seillean", a vessel of 50,928 gross
registered tons, Call Letters 3FPF6 and Registration No. 25519-PEXT and with
the home port of Panama City, the Republic of Panama (the "Vessel").
Capitalized terms not otherwise defined herein have the meanings assigned to
them in the Loan Agreement.
In this connection and as a basis for the opinions hereinafter
expressed, we have examined executed originals of the following documents:
(1) the Loan Agreement;
(2) the Note;
(3) the Option Agreement; and
(4) the Assignment of Insurance Proceeds;
(collectively referred to as the "Documents").
In rendering the opinions expressed below, we have assumed, with
respect to the Documents that:
(a) the Documents constitute legal, valid, binding and enforceable
obligations of, all of the parties to such documents other than the
Borrower, Reading & ▇▇▇▇▇ (U.K.) and TRB Subsidiary Corporation, a
Delaware corporation ("TRB Subsidiary"; the Borrower, Reading & ▇▇▇▇▇
(U.K.) and TRB Subsidiary, collectively, the "Loan Parties");
(b) the Documents have been duly authorized by and have been duly
executed and delivered by each of the parties thereto, and all
signatories to the Documents have been duly authorized; and
(c) all of the other parties to the Documents are duly organized and
validly existing and have the power and authority (corporate,
partnership, regulatory, fiduciary, contractual and other) to
execute, deliver and perform such documents.
Based upon the foregoing and subject to the assumptions, exclusions,
limitations and qualifications set forth below, we are of the opinion that
each of the Documents constitutes the legal, valid and binding obligations of
the Loan Party thereto, enforceable against such Person in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws relating to or affecting
the rights of creditors generally, and by general principles of equity
(regardless of whether considered in a proceeding in equity or at law),
including, without limitation, (i) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy, and
(ii) concepts of materiality, reasonableness, good faith and fair dealing.
The foregoing opinions are subject to the following assumptions,
exclusions, limitations and qualifications:
(a) We express no opinion as to the enforceability of (i) any provision
purporting to establish any evidentiary standard or to waive either
illegality as a defense to the performance of contract obligations or
any other defense to such performance which cannot, as a matter of
law, be effectively waived; (ii) any provision purporting to waive
notice; (iii) any severability provision or, to the extent purporting
to protect any person from the consequences of such person's
negligence or misconduct, any indemnity provisions; or (iv) any
provision purporting to irrevocably appoint any person as attorney-
in-fact for any Obligor.
(b) We express no opinion with respect to title to any property or the
perfection or priority of any Lien created under the Documents.
The foregoing opinions are limited in all respects to the existing
laws of the State of New York, and the federal laws of the United States, each
as in effect on the date hereof, and no opinion is expressed herein as to any
matters governed by the laws of any other jurisdiction. We undertake no
obligation or responsibility to update or supplement our opinions set forth
herein in response to subsequent changes in the law or future events affecting
any transaction contemplated by any Document.
This opinion letter is, pursuant to Section 5.01(g) of the Loan
Agreement and may not be relied upon by any other person.
Very truly yours,
SK
Exhibit D
_____________, 1997
Nissho Iwai Europe plc
RE: Seillean
Ladies and Gentlemen:
We have acted as your special Panamanian counsel in connection with
the transactions contemplated by Loan Agreement dated as of December 14, 1996
(the Loan Agreement ), among TRB Holding Corporation, a Delaware corporation,
Reading & ▇▇▇▇▇ (U.K.) Limited, an English limited liability company, and you.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned thereto in the Loan Agreement.
In issuing this opinion, we have examined drafts or executed copies
of the following documents (the Transaction Documents ):
(a) the Loan Agreement;
(b) the Ship Mortgage; and
(c) the Assignment of Charter.
We have also examined provisions of Panamanian laws and regulations as we have
deemed relevant.
In issuing this opinion, we have assumed the following: (i) the due
organization, existence and good standing of all of the parties to the
Transaction Documents and the sufficiency of their individual, corporate or
limited liability company, as the case may be, capacity to enter into, be
bound by and perform their respective rights and obligations under such deeds
or contracts; (ii) the taking of all necessary corporate or other action by
all of the parties to the Transaction Documents to enter into said deeds or
contracts and to be bound thereby in accordance with their respective terms
other than such corporate actions required by the laws of Panama; (iii) the
conformity of all material terms with the original executed documents of all
documents submitted to us as drafts or copies; and (iv) the genuineness of all
signatures not placed before us or recognized to be authentic before a
Panamanian Notary Public or ultimately before a Panamanian Consul.
Based on the foregoing, we are of the following opinions:
1. The vessel Seillean is registered in the name of TRB
Holding Corporation.
2. The Ship Mortgage, the Assignment of Charter and the Loan
Agreement, are valid binding and enforceable as between the parties thereto in
accordance with their respective terms, subject to limitations imposed by
bankruptcy, insolvency, reorganization or other laws affecting creditors
rights generally.
3. The Ship Mortgage has been preliminary registered the Panama
Public Registry, (Microfilm) Mercantile Section, at Microjacket ___________,
Frame _____, since __________________, 1997. As a result of said preliminary
registration, the Ship Mortgage constitutes a first naval mortgage lien on the
Vessel fully effective against third parties and, except as hereinafter
provided, having priority over all other liens or privileges on the Vessel,
and it shall continue to constitute such a first naval mortgage lien as of the
date of preliminary registration so long as the Ship Mortgage is filed for
definite registration within six months of the said date of preliminary
registration and the definite registration is completed.
By statute, the following liens or privileges have priority over the
naval mortgage:
(a) Amounts due the Panamanian government for the Annual Tax of
the Vessel;
(b) Court costs incurred in the common interest of maritime
creditors;
(c) Expenses, indemnities and wages for aid and salvage due from
the last voyage;
(d) Wages, compensations and indemnities of the master and crew
due from the last voyage;
(e) Wages and stipends due to stevedores and other wharfers
engaged directly by the owner, agent or master of the vessel
for the loading and unloading of the vessel upon last
arrival;
(f) Compensation for damages incurred through fault or
negligence; and
(g) Contributions to general average.
4. Except for the aforesaid definite registrations the Ship
Mortgage, there are no further registrations, recordings, filings or similar
procedure necessary or desirable in the Republic of Panama in connection with
the Transaction Documents in order to create, perfect or preserve their
respective validity or enforceability.
5. No consents, licenses, approvals, authorizations or
exemptions of any governmental or other regulatory authority, bureau or agency
of the Republic of Panama are required for or in connection with the validity
or enforceability of the Transaction Documents.
6. No payments, deductions or withholdings must be made for
taxes in the Republic of Panama in respect to compliance with or enforcement
of the Transaction Documents.
7. Except for any preliminary and definite registration fees of
the Ship Mortgage,, which have already been paid, and except that if any of
the Transaction Documents are to be used in evidence in the courts of the
Republic of Panama, stamp taxes at the rate of US$0.10 for each US$100.00 of
face value must be adhered thereto, there are no stamps or registration or
similar taxes, fees or charges payable in respect of the execution, delivery
of enforcement of the Ship Mortgage. With regards to the Ship Mortgage, the
amounts paid in notarial paper for their respective protocolization and in
registration fees would be deducted from the applicable stamp tax. In any
event, such stamp taxes are not due unless and until the respective
Transaction Document is used in evidence as indicated in this paragraph.
8. The choice of New York Law, English law, and of the Federal
Laws of the United States, as the case may be, to govern the Loan Agreement
and the Assignment of Charter, respectively, constitute a valid choice of law
and should be recognized by the courts of the Republic of Panama.
9. Under the law of the Republic of Panama, the perfection and
effect of perfection of the Lender s security interest and lien in the
Charters and Rents (as such terms are defined in the Assignment of Charter)
shall be governed by the law of the State of New York and the jurisdiction
under which the Charters and Rents are created.
We are attorneys qualified to practice law only in the Republic of
Panama. Accordingly we express no opinion with respect to the laws of any
other jurisdiction.
Yours truly,
Exhibit E
January __, 1997
Nissho Iwai Europe plc
RE: Seillean
Ladies and Gentlemen:
We have acted as your special English counsel in connection with the
transactions contemplated by Loan Agreement dated as of December 14, 1996 (the
Loan Agreement), among TRB Holding Corporation, a Delaware corporation,
Reading & ▇▇▇▇▇ (U.K.) Limited, an English limited liability company, and you.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned thereto in the Loan Agreement.
In issuing this opinion, we have examined drafts or executed copies
of the following documents (the Transaction Documents ):
(a) the Loan Agreement;
(b) the Ship Mortgage;
(c) the Assignment of Charter; and
(d) the Debentures
We have also examined provisions of English laws and regulations as we have
deemed relevant.
In issuing this opinion, we have assumed the following: (i) the due
organization, existence and good standing of all of the parties to the
Transaction Documents and the sufficiency of their individual, corporate or
limited liability company, as the case may be, capacity to enter into, be
bound by and perform their respective rights and obligations under such deeds
or contracts; (ii) the taking of all necessary corporate or other action by
all of the parties to the Transaction Documents to enter into said deeds or
contracts and to be bound thereby in accordance with their respective terms
other than such corporate actions required by English law; (iii) the
conformity of all material terms with the original executed documents of all
documents submitted to us as drafts or copies; and (iv) the genuineness of all
signatures.
Based on the foregoing, we are of the following opinions:
1. The Assignment of Charter and the Debentures are valid,
binding and enforceable against the Borrower and Reading ▇▇▇▇▇ (U.K.). If
notwithstanding the express choice of law contained therein, the following
documents were to be construed in accordance with English law, the Ship
Mortgage and the Loan Agreement, are valid, binding and enforceable as between
the parties thereto in accordance with their respective terms, but the
enforceability thereof may be subject to limitations imposed by bankruptcy,
insolvency, reorganization or other laws affecting creditors rights
generally.
2. There are no further registrations, recordings, filings or
similar procedure necessary or desirable in the United Kingdom in connection
with the Transaction Documents in order to create, perfect or preserve their
respective validity or enforceability.
3. No consents, licenses, approvals, authorizations or
exemptions of any governmental or other regulatory authority, bureau or agency
of the United Kingdom are required for or in connection with the validity or
enforceability of the Transaction Documents.
4. No payments, deductions or withholdings must be made for
taxes in the United Kingdom in respect to compliance with or enforcement of
the Transaction Documents.
5. The choice of New York Law and Panamanian law, as the case
may be, to govern the Loan Agreement and the Ship Mortgages respectively,
constitute a valid choice of law and should be recognized by the courts of the
United Kingdom.
6. Under the law of the United Kingdom, the perfection and
effect of perfection of the Lender s security interest and lien in the
Earnings (as such terms are defined in the Assignment of Charter) shall be
governed by the law of the United Kingdom. Upon [describe actions] the
Lender s security interest and lien in the Earnings shall be perfected.
7. Under the law of the United Kingdom, you, as a leader under
the transactions contemplated by the Loan shall not be liable for the
pollution and other liabilities of the Borrower or Reading & ▇▇▇▇▇ (U.K.).
Under the law of the United Kingdom, NIC as a [limited partner] in the
Partnership, shall not be liable for the pollution and other liabilities of
the Partnership, the Borrower or Reading & ▇▇▇▇▇ (U.K.).
Yours truly,
Exhibit F
January __, 1997
Nissho Iwai Corporation
▇-▇, ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇-▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇
Nissho Iwai Europe Plc
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
Reading & ▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as your special Cayman Islands counsel in connection
with the creation of RB FPSO L.P., a Cayman Islands limited partnership (the
Partnership), and the Partnership's Limited Partnership Agreement (the
Partnership Agreement) and the transactions contemplated by (a) the Loan
Agreement dated as of December 14, 1996 (the Loan Agreement ), among Nissho
Iwai Europe Plc (the Lender ), TRB Holding Corporation, a Delaware
corporation ( TRBH ), Reading & ▇▇▇▇▇ (U.K.) Limited, an English limited
liability company ( RBUK ), as amended by the First Amendment to Loan
Agreement dated as of January ___, 1997, and Nissho Iwai Europe PLC, an
English corporation, and (b) the Option Agreement (the Option Agreement )
dated as of December 14, 1996, among TRBH, TRB Subsidiary Corporation, a
Delaware corporation ( TRBS ), and Nissho Iwai Corporation ( NIC ).
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned thereto in the Loan Agreement.
In issuing this opinion, we have examined drafts or executed copies
of the following documents (the Transaction Documents ):
(a) the Loan Agreement;
(b) the Option Agreement;
(c) the Partnership Agreement;
(d) the ▇▇▇▇ of Sales made by TRBH and TRBS in favor of the Partnership;
(e) the Bareboat Charter;
(f) the Amendment to Bareboat Charter;
(g) the Ship Mortgage as amended by the First Amendment to First Naval
Mortgage dated as of __________, 1997; and the Second Amendment to
First Naval Mortgage dated as of ____________, 1997;
(h) the Novation Agreement dated as of January __, 1997 among TRBH, TRBS,
the Partnership and RBUK.
The foregoing documents are herein referred to as the Transaction
Documents.
We have also examined provisions of the Cayman Islands laws and regulations as
we have deemed relevant.
In issuing this opinion, we have assumed the following: (i) the
conformity of all material terms with the original executed documents of all
documents submitted to us as drafts or copies; and (ii) the genuineness of all
signatures.
Based on the foregoing, we are of the following opinions:
1. The Partnership is duly formed and validly existing in good
standing under the laws of the Cayman Islands. The Partnership Agreement is
the valid, binding and enforceable obligation of each of TRBH, TRBS and the
Partnership.
2. TRBH is duly qualified and in good standing as a foreign
corporation in the Cayman Islands.
3. The Transaction Documents to which the Partnership is a
party have been duly authorized, executed and delivered on behalf of the
Partnership.
4. The Option Agreement creates a valid and enforceable option
in favor of NIC to purchase TRBS 10% limited partnership interest in the
Partnership.
5. There are no registrations, recordings, filings or similar
procedure necessary or desirable under Cayman Islands law in connection with
the Transaction Documents.
6. The execution and delivery by the Partnership, TRBH, TRBS,
RBUK, NIC or the Lender of the Transaction Document to which it is a party,
and the performance of its obligations thereunder do not conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in any violation of, or result in the creation of any
Lien upon any of the properties or assets of such Obligor pursuant to, or
require any authorization, consent, approval, exception or other action by or
notice to or filing with any court, administrative or governmental body or
other Person pursuant to (a) any Cayman Islands statute, rule or regulation or
(b) the Partnership Agreement.
7. There are no taxes, fees or other governmental charges
payable under Cayman Islands law in connection with the transactions
contemplated by the Transaction Document.
8. Under the law of Cayman Islands, no limited partner in
the Partnership shall be liable or otherwise obligated for the pollution and
other liabilities or obligations of the Partnership, the general partner of
the Partnership or RBUK.
Very truly yours,
Exhibit H
[Letterhead of Reading & ▇▇▇▇▇]
December __, 1996
Nissho Iwai Corporation ( Nissho Iwai )
▇-▇, ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇-▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Re: The Loan Agreement dated as of December 14, 1996 between TRB
Holding Corporation, Reading & ▇▇▇▇▇ (U.K.) Limited and Nissho
Iwai Europe PLC ( NIEP ) (the Loan Agreement )
Ladies and Gentlemen:
In order to induce NIEP to enter into the Loan Agreement, Reading
& ▇▇▇▇▇ agrees that Nissho Iwai will have a first refusal right to arrange
future financing facilities as and when needed for upgrading and conversion of
the Seillean. Nissho Iwai will be given five business days to elect to make
the proposed financing on terms which are substantially equivalent to those
proposed or more favorable to Reading & ▇▇▇▇▇. In addition, Reading & ▇▇▇▇▇
agrees that Nissho Iwai shall be given opportunities to be involved in trading
transactions for any future upgrading and conversion work on the Seillean,
including the opportunity to provide materials, supplies and services. Nissho
Iwai will be given a reasonable time to elect to be involved in the proposed
trading transaction on terms which are substantially equivalent to those
proposed or more favorable to Reading & ▇▇▇▇▇.
Sincerely,
READING & ▇▇▇▇▇ CORPORATION
OPTION AGREEMENT
OPTION AGREEMENT (this Agreement ) dated as of December ___,
1996, among RB Drilling Co., an Oklahoma corporation ( RB Drilling ) and
Nissho Iwai Corporation, a Japanese corporation (the NIC );
W I T N E S S E T H:
WHEREAS, NISSHO IWAI EUROPE PLC, an English corporation (the Lender ),
has made loans (the Loan ) to READING & ▇▇▇▇▇ DEVELOPMENT CO., a Delaware
corporation (the Borrower ), pursuant to the Loan Agreement dated as of
December ___, 1996 between the Lender and the Borrower (such agreement, as it
may be amended, restated, supplemented, extended, renewed or otherwise
modified from time to time, being the Loan Agreement );
WHEREAS, the Borrower and RB Drilling have agreed to form a limited
partnership (the Partnership ) in a jurisdiction mutually agreeable to the
Lender, RB Drilling and the Borrower soon after the execution of the Loan
Agreement;
WHEREAS, the Borrower has agreed to contribute that certain vessel known
as Seillean , Gross Register Tons (GRT): 50,928.00, Net Register Tons:
15,278.00, Length: 236.47 meters, Width: 37 meters, Depth: 19.80 meters,
Permanent Navigation Patent No. ▇▇▇▇▇-▇▇, Radio Call Letters: 3FPF6, and
Registration No. 25519-PEXT, and with the home port of Panama City, the
Republic of Panama (the Vessel ), to the Partnership as the Borrower's
initial capital contribution which shall entitle the Borrower to a ninety
percent (90%) general partnership interest in the Partnership, and which
Vessel shall be encumbered only by the mortgage lien of the Lender;
WHEREAS, RB Drilling has agreed to contribute Four Million Dollars
($4,000,000) to the Partnership as its initial capital contribution which
shall entitle RB Drilling to a ten percent (10%) limited partnership interest
in the Partnership;
WHEREAS, as a condition precedent to the Lender making the Loan to the
Borrower, RB Drilling has granted to NIC an option to purchase RB Drilling s
ten percent (10%) limited partnership interest in the Partnership;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises herein contained and for other good and valuable
consideration, the receipt, adequacy and sufficiency of which are hereby
acknowledged, RB Drilling and NIC hereby agree as follows:
1. Definitions. For purposes of this Agreement, the following terms shall
have the meanings set forth below:
Authorized CAPEX shall mean the aggregate amount, on the Option
Closing Date, of capital expenditures determined in accordance with GAAP (a)
incurred by the Partnership on the Vessel during the Option Period, (b) which
are within the definition of a capital expenditure attached hereto as Exhibit
A, and (c) less $__________ per year (prorated based on a 365-day year) for
the Option Period.
GAAP means generally accepted accounting principles in the
United States of America, consistently applied.
Option Closing Date shall mean the date specified in the Option
Exercise Notice as the date on which NIC shall exercise the option.
Option Period shall mean the period of time between the date of
this Agreement and the Option Closing Date.
Reimburseable CAPEX shall mean the book value of all Authorized
CAPEX on the Option Closing Date. In no event shall Reimburseable CAPEX be a
negative number.
2. Option.
(a) Grant of Option. Subject to the terms and conditions
of this Agreement, NIC shall have the right and option (the Option ) at any
time during the term of this Agreement, but not the obligation (unless and
until NIC has delivered to RB Drilling written notice of intent to exercise
the option (the Option Exercise Notice )), to purchase and accept from RB
Drilling a ten percent (10%) limited partnership interest in the Partnership
(the Option Interest ).
(b) Option Exercise Price. The purchase price of RB
Drilling s ten percent (10%) interest in the Partnership (the Full Option
Interest ) to be paid on the Option Closing Date by NIC, upon the exercise of
the Option by NIC pursuant to, and in accordance with, Section 2(c) of this
Agreement, shall be an amount equal to Four Million Two Hundred Twenty-Five
Thousand Dollars ($4,225,000) plus ten percent (10%) of Reimbursable CAPEX.
In its sole discretion, NIC may purchase less than the Full Option Interest
(the Diluted Option Interest ) by paying on the Option Closing Date, upon the
exercise of the Option by NIC pursuant to, and in accordance with, Section
2(c) of this Agreement, an amount equal to Four Million Two Hundred Twenty-
Five Thousand Dollars ($4,225,000) (the Diluted Option Price ). The amount
of the Diluted Option Interest shall be determined by dividing Four Million
(4,000,000) by the aggregate of Forty Million (40,000,000) plus Reimbursable
CAPEX.
(c) Exercise of Option. The Option may be exercised by NIC
at any time prior to December ___, 1999. NIC shall exercise the Option by
delivering the Option Exercise Notice to RB Drilling at least thirty (30) days
prior to the Option Closing Date, stating that NIC is exercising the Option,
subject to the terms and conditions of this Agreement, to acquire the Option
Interest or the Diluted Option Interest on the Option Closing Date.
(d) Instrument of Transfer. RB Drilling shall execute and
deliver to NIC an assignment of the Option Interest on the Option Closing Date
in substantially the form of the Assignment attached hereto as Exhibit B.
(e) Repayment of Loan. RB Drilling hereby agrees that all
monies paid by NIC to purchase the Option Interest may be paid by NIC directly
to the Lender for the purpose of repaying the Loan.
3. Transfer of Interests. As long as this Agreement is in effect NIC may
assign or transfer any portion of the Option Interest to any affiliate.
4. Miscellaneous Provisions.
(a) Notices. All notices, claims, requests, demands and
other communications hereunder shall be in writing and shall be duly given
(including telegraphic, telex or telecopy communication) and telegraphed,
telexed, telecopied, delivered by hand, sent by prepaid certified or
registered mail or by overnight courier and addressed as follows:
i) If to NIC:
Nissho Iwai Corporation
▇-▇, ▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇-▇▇,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Telecopy No.: ▇▇-▇-▇▇▇▇-▇▇▇▇
ii) If to RB Drilling:
RB Drilling Co.
Telecopy No.:
or such other addresses as the person to whom notice is to be given may have
previously furnished to the other parties hereto in writing in the manner set
forth above. Any notice or other communication shall be deemed to have been
given, made and received (i) except as set forth in clauses (ii) and (iii)
below, upon receipt, (ii) in the case of a facsimile transmission, upon
transmission thereof by the sender and issuance by the transmitting machine of
a confirmation slip indicating that the number of pages included in the notice
have been transmitted without error or (iii) in the case of a telex, upon
receipt of an answer back. In the case of notices sent by facsimile
transmission or telex, the sender shall contemporaneously mail a copy of the
notice to the addressee at the address provided above. However, such mailing
shall in no way alter the time at which the facsimile notice or telex is
deemed received.
(b) Waiver. The waiver by any party of a breach of any
provision of this Agreement shall not be deemed a continuing waiver or a
waiver of any subsequent breach, whether of the same or of another provision
hereof.
(c) Headings. The headings of the sections of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
(d) Severability of Provisions. Any provision of this
Agreement which is illegal, invalid, prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such illegality, invalidity, prohibition or unenforceability without
invalidating or impairing the remaining provisions hereof, and any such
illegality, invalidity, prohibition or unenforceability shall not effect the
legality, validity or enforceability of such provision in any other
jurisdiction.
(e) Survival. The covenants, representations and
warranties of the parties hereto contained in this Agreement or in any
schedule or document delivered pursuant to or in connection with this
Agreement shall survive the purchases and sales and assumptions contemplated
hereby.
(f) Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(g) Successors and Assigns. This Agreement shall inure to
the benefit of, and be binding upon, the parties hereto and their respective
successors and assigns.
(h) Term. The term of this Agreement shall be three (3)
years from the date of this Agreement.
(i) Governing Law. This Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the State of New
York without giving effect to any conflicts of law provisions of such laws.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
RB DRILLING CO.
By:
Name:
Title:
NISSHO IWAI CORPORATION
By:
Name:
Title:
Exhibit N
AMENDMENT TO BAREBOAT CHARTER AGREEMENT
This Amendment to Bareboat Charter Agreement (this Amendment ) is
made as of December 14, 1996, by and between Reading & ▇▇▇▇▇ (U.K.) Limited,
an English limited liability company with its registered office at ▇▇▇▇▇▇
House, 1 ▇▇▇▇▇▇ Street, Uxbridge, Middlesex, UB8 1QQ ( Charterer ), and TRB
Holding Corporation, a Delaware corporation, with its principal offices
located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇.▇.▇. ( Owner ).
RECITALS
1. Owner is the sole owner of the whole of that certain vessel known
as Seillean , Gross Register Tons (GRT): 50,928.00; Net Register Tons:
15,278.00, Length: 236.47 meters, Width: 37 meters, Depth: 19.80 meters,
Permanent Navigation Patent No. ▇▇▇▇▇-▇▇, Radio Call Letters: 3FPF6, and
Registration No. 25519-PEXT, and with the home port of Panama City, the
Republic of Panama (the Vessel ); and
2. Britoil PLC, a company organized under the laws of the United
Kingdom ( Britoil ), for itself and on behalf of the Donan Participants, as
defined therein, and BP Exploration Operating Company Limited, an English
limited liability company ( BP ) entered into that Amended Agreement dated
March 30, 1995, as amended, supplemented and novated by the Novation Agreement
dated July 10, 1996 among Britoil, BP and Britoil (Beta) Limited, an English
limited liability company ( Britoil (Beta) ) (the Amended Agreement ); and
3. Charterer has assumed all of the rights, duties and obligations of
Britoil (Beta) to the Amended Agreement pursuant to the Novation Agreement
dated August 30, 1996 among Britoil, Britoil (Beta) and Charterer (the Donan
Charter Agreement ); and
4. Owner bareboat chartered the Vessel to Charterer pursuant to the
Bareboat Charter Agreement between Charterer and the Owner, dated August 30,
1996 (the Original Bareboat Charter ), in order to permit Charterer to
operate the vessel and to fulfill its obligations under the Donan Charter
Agreement; and
5. Owner, Charterer and Nissho Iwai Europe PLC, an English
corporation (the "Lender") entered into the Loan Agreement (the Loan
Agreement ) dated as of December 14, 1996 whereby Lender agreed to lend Owner
certain sums (the Loans ) to be secured by the Vessel and all rights of Owner
therein; and
6. Owner and Charterer have agreed to amend the Original Bareboat
Charter in order to allow Charterer and Owner to perform their obligations
under the Loan Agreement (the Original Bareboat Charter, as amended hereby, is
hereinafter referred to as the Bareboat Charter Agreement ).
NOW THEREFORE, in consideration of the mutual promises herein
contained and for other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Bareboat
Charter Agreement shall be and hereby is amended as follows:
Section 1. Definitions. Capitalized terms used herein and not
otherwise defined herein shall have the meaning set forth in the Original
Bareboat Charter.
Section 2. Amendments to the Original Bareboat Charter. The
Original Bareboat Charter is hereby amended as follows effective as of the
date hereof:
1. Section 4. Charter Hire of the Original Bareboat Charter is hereby
amended by deleting such section in its entirety and replacing it with the
following:
4. CHARTER HIRE
A. AMOUNT
The Charter Hire payable pursuant to this Agreement, for any
period, shall be determined on a monthly basis by subtracting from
all revenues earned by Charterer in connection with the ownership
or operation of the Vessel during such period, the sum of
Predetermined Expenses during such period. Predetermined
Expenses for any period shall consist in their entirety of
UK 18,209 per day for operating expenses during such period. If
the results of the proceeding subtraction are positive, the
positive amount so determined shall be Charter Hire payable by
Charterer to Owner in accordance with Article 4B below. If the
results of the proceeding subtraction are negative, the negative
amount so determined shall be carried over to the next period and
netted with the revenues from such future period. Charterer will
be reimbursed for Dry Docking Expenses as provided in the Loan
Agreement and the Collateral Assignment.
B. PAYMENT
Charterer and Owner shall cause the charterer under the Donan
Charter Agreement to make all payments under such charter
agreement directly to the Lockbox Account (as defined in the Loan
Agreement) so long as the Loan Agreement is in effect. The amount
of Predetermined Expenses shall be disbursed to Charterer from the
Lockbox Account in accordance with the terms of the Collateral
Assignment (as defined in the Loan Agreement).
2. Sections (A) and (B) of Exhibit C to the Original Bareboat
Charter are hereby deleted in their entirety.
3. Section 9. Owner Restrictions, Part B, of the Original Bareboat
Charter is hereby amended by deleting Part B, in its entirety and replacing it
with the following:
B. Owner agrees that it shall not further mortgage or
otherwise encumber the Vessel at any time during the term hereof,
except as contemplated in the Loan Agreement.
4. The Original Bareboat Charter is hereby amended by adding the
following new subsection E. to Section 21:
E. All sums payable by Charterer hereunder shall be paid free of
and without any rights of counterclaim or set off and without deducting
or withholding on any ground whatsoever.
5. The Original Bareboat Charter is hereby amended by adding the
following new Section 24. Loan Agreement Controlling:
24. LOAN AGREEMENT CONTROLLING
To the extent that any provision of this Agreement is in conflict with
any provision of the Loan Agreement, the Loan Agreement shall control.
Nothing herein is intended to prevent the parties hereto from performing
their obligations, duties and covenants under the Loan Agreement.
Section 3. Consents. Charterer hereby consents to Owner s
mortgage, sale and transfer of the Vessel and Owner s assignment of the
Bareboat Charter Agreement, all as contemplated in the Transaction Documents.
Section 4. Original Contract Remains Effective. Except for the
amendments to the Original Bareboat Charter set forth in Section 2 hereof, the
Original Bareboat Charter remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of
the date first above written.
READING & ▇▇▇▇▇ (U.K.) LIMITED
By:
Name:
Title:
TRB HOLDING CORPORATION
By:
Name:
Title: