Exhibit 10.1
Performance guarantee issuance facility of $105,210,000
Dated 22 December
2005
J. Ray McDermott Middle East, Inc.
(as Applicant)
J. Ray
McDermott, S.A. (as Guarantor)
Mashreqbank psc
(as Arranger)
The financial institutions specified in Schedule 1
(as Original Banks)
The Commercial Bank of Qatar (Q.S.C.)
(as Issuing Bank)
Mashreqbank psc
(as Facility Agent)
DentonWildeSapte
26th Floor
Sheikh Zayed Road
PO Box 1756 Dubai
United Arab Emirates
T +971 4 331 0220
F +971 4 331 0201
dubai@dentonwildesapte.com
www.dentonwildesapte.com
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Contents
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Section 1 - Interpretation
4
1
Definitions and construction
4
Section 2 - The Facility
14
2
The Facility
14
3
Purpose
14
4
Conditions of Issue
14
5
Issue
15
6
Performance Guarantees
16
Section 3 - Cash cover, reduction and
cancellation
19
7
Cash cover, reduction and cancellation
19
Section 4 - Costs of issue and
participation
21
8
Commission
21
9
Other fees
22
10
Default interest
22
Section 5 - Additional payment obligations
24
11 Tax
gross-up and indemnities
24
12
Increased Costs
26
13
Other indemnities
27
14
Mitigation by the Banks
28
15
Costs and expenses
28
Section 6 - Guarantee
29
16
Guarantee and indemnity
29
Section 7 - Subordination of Inter-Company
Note
31
17
Subordination
31
Section 8 - Representations, warranties,
undertakings and Events of Default
33
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Contents (i)
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18
Representations and warranties
33
19
Information undertakings
36
20
Positive undertakings
39
21
Negative undertakings
41
22
Events of Default
42
Section 9 - Bank accounts
45
23
Opening and operation of Proceeds Account and Cash Cover Account
45
24 Cash
Cover Account
45
25
Proceeds Account
45
Section 10 - Changes to Parties
47
26
Changes to the Banks
47
27
Changes to the Obligors
50
Section 11 - The Finance Parties
51
28 The
Issuing Bank
51
29 The
Facility Agent and the Arranger
52
30
Conduct of business by the Finance Parties
57
31
Sharing among the Finance Parties
57
Section 12 - Administration
59
32
Payment mechanics
59
33
Set-off
61
34
Notices
61
35
Calculations and certificates
64
36
Partial invalidity
64
37
Remedies and waivers
65
38
Amendments and waivers
65
39
Counterparts
66
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Contents (ii)
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Section 13 - Governing law and enforcement
67
40
Governing law
67
41
Enforcement
67
Schedule 1 - The Original Banks
68
Schedule 2 - Initial conditions precedent
70
Schedule 3 - Issue Request
72
Schedule 4 - Form of Transfer Certificate
73
Schedule 5 - Form of Instruction Letter
75
Schedule 6 - Forms of Performance Guarantee
77
Schedule 7 - Form of Inter-Company Note
81
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36099.07
Contents (iii)
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Dated 22 December 2005
Between
(1) J. Ray
McDermott Middle East, Inc., a company incorporated in Panama
and whose address is c/o McDermott International, Inc.,
Edificio
Vallarino, 7vo Piso, Calle 52 y Elvira Mendez, Apartado Postal
0819-07145, Panama 6, Panama, having a branch registered in the
Jebel
Ali Free Zone, License No. 00747, with its address at PO Box
16961,
Plot 42, Jebel Ali Free Zone, Dubai, United Arab Emirates (the
Applicant);
(2) J. Ray
McDermott, S.A., a company incorporated in Panama and whose
address is c/o McDermott International, Inc., Edificio Vallarino,
7vo
Piso, Calle 52 y Elvira Mendez, Apartado Postal 0819-07145, Panama
6,
Panama (the Guarantor);
(3)
Mashreqbank psc as arranger (the Arranger);
(4) The
financial institutions listed in Schedule 1 as banks (the
Original
Banks);
(5) The
Commercial Bank of Qatar (Q.S.C.), a bank incorporated in Qatar
with its principal office at Grand Hamad Avenue, P. O. Box 3232,
Doha,
Qatar, as issuer of the Performance Guarantees (the Issuing Bank);
and
(6)
Mashreqbank psc, a bank incorporated in the United Arab Emirates
with
its principal office at PO Box 1250, Dubai, United Arab Emirates,
as
agent of the other Finance Parties (the Facility Agent).
It is agreed:
Section 1 - Interpretation
1
Definitions and construction
1.1
Definitions
In this Agreement:
Affiliate means, in relation to any person, a Subsidiary of that
person
or a Holding Company of that person or any other Subsidiary of
that
Holding Company.
Approved Debt means the Inter-Company Note, the Senior Secured
Notes
and the Calyon Facility Agreement.
Auditors means, at any time, PricewaterhouseCoopers LLP or any one
of
its Affiliates or any firm of chartered accountants of
internationally
recognised standing who, at that time, are the auditors of the
Guarantor.
Authorisation means an authorisation, consent (including an
Environmental Consent), permission, approval, resolution,
licence,
exemption, filing, notarisation or registration.
Availability Period means the period from and including the date
of
this Agreement to and including the date falling 30 days after the
date
of this Agreement or such other date as the Facility Agent
(after
consultation with the Issuing Bank and the Banks) may agree.
Available Commitment means a Bank's Commitment minus:
4
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(a) the amount of its
maximum liability in respect of any issued
Performance Guarantees; and
(b) in relation to any
proposed Performance Guarantee, the amount of
its maximum liability
in respect of any Performance Guarantees
that are due to be issued on or before the proposed Issue Date.
Available Facility means the amount then available to be utilised
for
the issuance of Performance Guarantees, being the amount equal to
the
aggregate for the time being of each Bank's Available
Commitment.
Bank means:
(a) any Original Bank;
and
(b) any bank,
financial institution, trust, fund or other entity
which has become a Party in accordance with Clause 26 (Changes
to
the Banks),
which in each case has not ceased to be a Party in accordance with
the
terms of this Agreement.
Business Day means, for the purposes of any payment, a day (other
than
a Friday, Saturday or Sunday) on which banks are open for
general
interbank business in London, Dubai and New York and for any
other
purpose, a day (other than a Friday, Saturday or Sunday) on which
banks
are open for general interbank business in Dubai.
Calyon Facility Agreement means the $25,000,000 letter of
credit
facility agreement dated 25 August 2004 among the Guarantor, Calyon
New
York Branch and certain others.
Cash Cover means sums paid or to be paid by the Applicant to the
Cash
Cover Account in accordance with this Agreement and as further
described in Clause 1.2.4 (Construction) below.
Cash Cover Account means the account to be opened and held with
the
Facility Agent in the name of the Applicant for the purpose of
crediting Cash Cover payable by the Applicant, the opening and
maintenance of which is irrevocably and unconditionally authorised
by
the Applicant.
Certified Copy means a copy of an original document which is
certified
by an officer or director of the relevant Obligor as being a copy
of
that document.
Commission Period means, in relation to each issued Performance
Guarantee, each period determined in accordance with Clause 8.3
(Commission Period).
Commitment means:
(a) in relation to an
Original Bank, the amount set opposite its name
under the heading "Commitment" in Schedule 1 (The Original
Banks)
and the amount of any other Commitment transferred to it under
this Agreement; and
(b) in relation to any
other Bank, the principal amount of any
Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under
this
Agreement.
Contract means the RL2 Contract or the RL3 Contract.
Default means an Event of Default or any event or circumstance
specified in Clause 22 (Events of Default) which would (with the
expiry
of a grace period, the giving of notice or the making of any
determination under Clause 22 (Events of Default) or any
combination of
any of the foregoing) be an Event of Default.
5
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Disruption Event means either or both of:
(a) a material
disruption to those payment or communications systems
or to those financial markets which are, in each case, required
to operate in order for payments to be made in connection with
the Facility or any Performance Guarantee (or otherwise in
order
for the
transactions contemplated by the Finance Documents to be
carried out) which disruption is not caused by, and is beyond
the
control of, any of the Parties; or
(b) the occurrence of
any other event which results in a disruption
(of a technical or systems-related nature) to the treasury or
payments operations of a Party preventing that or any other
Party:
(i) from performing
its payment obligations under the Finance
Documents or the Performance Guarantees; or
(i) from communicating
with other Parties in accordance with the
terms of the Finance Documents or with the Project Owners in
accordance
with the terms of the Performance Guarantees,
and which (in either such case) is not caused by, and is beyond
the
control of, the Party whose operations are disrupted.
Dollars or $ means the lawful currency for the time being of the
United
States of America.
Environment means ecological systems, living organisms (including
human
beings) and all or any of the following media (whether alone or
in
combination): air (including air within buildings or other
structures
and whether above or below ground); land (including buildings and
any
other structures or erections in, on or under it or any soil
and
anything below the surface of the land); land covered with water;
and
water (including water under or within land or in pipe or
sewerage
systems and sea, ground and surface water).
Environmental Consent means any consent, agreement, permit,
licence,
authorisation or approval required by any Environmental Law.
Environmental Law means all applicable laws and regulations in
force at
any time relating to Environmental Matters or the Environment.
Environmental Matters means all or any of:
(a) waste (including
packaging waste);
(b) contaminated
land;
(c) discharges to
land, ground, surface and coastal waters and
sewers;
(d) the abstraction of
water;
(e) the extraction of
natural resources;
(f) emissions to
air;
(g) noise, vibration
and light;
(h) common law and
nuisance, trespass and negligence;
(i) statutory
nuisance;
6
<PAGE>
(j) radiation,
radioactive substances and materials; and
(k) the conservation
or protection of species, habitats,
biodiversity, flora and fauna.
Event of Default means any event or circumstance specified as such
in
Clause 22 (Events of Default).
Expiry Date means, in respect of each Performance Guarantee, the
date
on which:
(a) that Performance
Guarantee is cancelled (as construed in
accordance with Clause 1.2.6) (Construction); or
(b)
the Issuing Bank has
fully paid the maximum amount payable in
respect of that Performance Guarantee,
and neither the Issuing Bank nor any of the Banks have any
further
liability under or in respect of that Performance Guarantee.
Facility means the facility for the issuance of Performance
Guarantees
described in Clause 2 (The Facility).
Facility Office means the office or offices notified by a Bank to
the
Facility Agent in writing on or before the date it becomes a Bank
(or,
following that date, by not less than five Business Days'
written
notice) as the office or offices through which it will perform
its
obligations under this Agreement.
Facility Period means the period starting on the date of this
Agreement
and ending on the date on which all of the known liabilities of
the
Obligors under each Finance Document and in respect of each
Performance
Guarantee are irrevocably discharged in full, each Performance
Guarantee is cancelled (as determined in accordance with Clause
1.2.6
(Construction)) and no Finance Party has any commitment or
known
liability in relation to the Facility.
Fee Letter means any letter or letters between the Arranger or
the
Facility Agent and the Applicant setting out any of the fees
referred
to in Clause 9 (Other Fees).
Finance Documents means this Agreement, the Mandate Letter, each
Fee
Letter, each Instruction Letter, each Instruction Acknowledgement
and
any other document designated as such by the Facility Agent and
the
Applicant.
Finance Party means the Arranger, the Facility Agent, the Issuing
Bank
or a Bank.
Financial Indebtedness means any indebtedness for or in respect of
(i)
moneys borrowed, (ii) any amount raised by way of bonds, notes,
debentures, loan arrangements or any similar instrument, (iii)
any
amounts raised under any other transaction having the commercial
effect
of a borrowing and (iv) any liability in respect of any guarantee
or
indemnity in respect of any such indebtedness.
GAAP means, in relation to each Obligor, generally accepted
accounting
principles in the United States of America. Holding Company means,
in
relation to a company or corporation, any other company or
corporation
in respect of which it is a Subsidiary.
Instruction Acknowledgement means each acknowledgement,
substantially
in the form attached in Schedule 5 (Form of Instruction Letter) and
in
any case in form and substance reasonably satisfactory to the
Facility
Agent, signed by the relevant Project Owner and delivered or to
be
delivered to the Facility Agent, acknowledging the instructions
contained in the relevant Instruction Letter.
7
<PAGE>
Instruction Letter means a letter, substantially in the form set
out in
Schedule 5 (Form of Instruction Letter) and in any case in form
and
substance reasonably satisfactory to the Facility Agent, delivered
or
to be delivered by McDermott Mauritius to each Project Owner
irrevocably instructing each Project Owner to pay all Proceeds into
the
Proceeds Account.
Inter-Company Note means the promissory note in the amount of
$90,000,000 issued by the Guarantor to the Subordinated
Creditor
pursuant to which the Subordinated Creditor has agreed to, inter
alia,
subordinate its rights against the Guarantor thereunder to the
rights
of the Finance Parties against the Guarantor under this Agreement,
in
the form set out in Schedule 7 (Form of Inter-Company Note), and
any
amendment, restatement, extension or other modification thereto so
long
as the terms of subordination in such promissory note are not
less
favourable to the Finance Parties.
Issue Date means the date on which a Performance Guarantee is
issued by
the Issuing Bank.
Issue Request means a notice substantially in the form set out
in
Schedule 3 (Issue Request).
Majority
Banks means:
(a) until the Total
Commitments have been reduced to zero, a Bank or
Banks whose Commitments aggregate more than 66(2)/3 per cent of
the Total Commitments (or, if the Total Commitments have been
reduced to zero, aggregated, more than 66(2)/3 per cent of the
Total Commitments immediately before the reduction); or
(b) at any other time,
a Bank or Banks the amount of whose
liabilities in relation to the Performance Guarantees then
issued
aggregate more than 66(2)/3 per cent of the amount of all the
Banks' liabilities in relation to such Performance Guarantees.
Mandate Letter means the mandate letter dated 4 November 2005 among
the
Applicant, the Guarantor and the Arranger.
Material Adverse Effect means a material adverse effect on: (a)
the
ability of any Obligor to comply in all material respects with any
of
its obligations under any Finance Document; (b) the ability of
McDermott Mauritius to comply in all material respects with its
obligations under any Contract; (c) the ability of the
Subordinated
Creditor to subordinate its rights under the Inter-Company Note to
the
rights of the Finance Parties under this Agreement; (d) the
business,
financial condition or assets of any of the Obligors or
McDermott
Mauritius; or (e) the validity or enforceability of any Finance
Document.
McDermott Mauritius means J. Ray McDermott Eastern Hemisphere
Limited,
formerly known as J. Ray McDermott Middle East (Indian Ocean)
Limited,
a company organised and existing under the laws of Mauritius and
having
its registered office at 5th Floor, Anglo Mauritius House,
Intendance
Street, Port-Louis, Mauritius.
Month means a period starting on one day in a calendar month and
ending
on the numerically corresponding day in the next calendar month,
except
that:
(a) if the numerically
corresponding day is not a Business Day, that
period shall end on the next Business Day in that calendar
month
in which that period is to end if there is one or, if there is
not, on the immediately preceding Business Day; and
(b) if there is no
numerically corresponding day in the calendar
month in which that period is to end, that period shall end on
the last Business Day in that calendar month.
The above rules will only apply to the last Month of any
period.
Obligor means the Applicant or the Guarantor.
8
<PAGE>
Original Financial Statements means, in relation to the Guarantor,
its
audited consolidated financial statements (including all
additional
information and notes to the accounts) together with the
relevant
auditors' report for its financial year ended 31 December 2004.
Party means a party to this Agreement.
Performance Guarantee means the RL2 Performance Guarantee or a
RL3
Performance Guarantee.
Performance Guarantee Limit means:
(a) in respect of the
RL2 Performance Guarantee, $49,470,000; and
(b) in respect of the
RL3 Performance Guarantees, $55,740,000, in the
aggregate.
Proceeds means all moneys whatsoever which are now, or later
become,
payable to McDermott Mauritius under or in connection with any of
the
Contracts or the projects contemplated under the Contracts,
including,
for the avoidance of doubt, all moneys (if any) which are at any
time
payable under insurances or claims for breach of contract.
Proceeds Account means the Dollar denominated account held with
the
Facility Agent in the name of the Applicant with designation "J.
Ray
McDermott Eastern Hemisphere Ltd." and account number
0448469708.
Project Owner means RL2 or RL3.
Repeating Representations means each of the representations and
warranties set out in Clauses 18.1 (Status) to 18.5 (Validity
and
admissibility in evidence) and Clauses 18.10 (Compliance with Tax
laws)
and 18.15 (No proceedings pending or threatened).
Relevant Proportion means, in relation to a Bank in respect of
any
Performance Guarantee, the proportion (expressed as a percentage)
borne
by that Bank's Available Commitment to the Available Facility
immediately prior to the issue of that Performance Guarantee,
adjusted
to reflect any assignment or transfer under this Agreement to or
by
that Bank.
RL2 means Ras Laffan Liquefied Natural Gas Company Limited (II),
a
company organised and existing under the laws of the State of Qatar
and
having its registered office in Doha, State of Qatar.
RL2 Contract means:
(a) the contract dated
1 April 2001 entered into between RL2 and
McDermott Mauritius pursuant to which McDermott Mauritius is to
provide engineering, procurement, fabrication and installation
works and services in relation to the offshore platform and
pipeline facilities of RL2 in the State of Qatar (referred to
as
the RasGas Expansion Project); or
(b) any renewal or
replacement of the contract referred to in
paragraph (a) above (being on terms acceptable to the Facility
Agent (acting on the instructions of the Majority Banks)).
RL2 Performance Guarantee means the performance guarantee,
substantially in the relevant form set out in Schedule 6 (Forms
of
Performance Guarantee)
and in any case in form and substance reasonably
satisfactory to the Facility Agent (acting on the instructions of
the
Majority Banks) and the Issuing Bank, issued or to be issued by
the
Issuing Bank to RL2 at the request of the Applicant under the
Facility
on behalf of and in relation to the obligations of McDermott
Mauritius
under the RL2 Contract.
9
<PAGE>
RL3 means Ras Laffan Liquefied Natural Gas Company (3), a
company
organised and existing under the laws of the State of Qatar and
having
its registered office in Doha, State of Qatar.
RL3 Contract means:
(a) the contract dated
15 September, 2005 entered into between RL3
and McDermott Mauritius pursuant to which McDermott Mauritius
is
to provide engineering, procurement and construction works and
services for the expansion of LNG facilities of RL3 in the
State
of Qatar (referred to as the RasGas Offshore Expansion Project
-
Phase 2); or
(b) any renewal or
replacement of the contract referred to in
paragraph (a) above (being on terms acceptable to the Facility
Agent (acting on the instructions of the Majority Banks)).
RL3 Performance Guarantee means each performance guarantee,
substantially in the relevant form attached in Schedule 6 (Forms
of
Performance Guarantee) and in any case in form and substance
reasonably
satisfactory to the Facility Agent (acting on the instructions of
the
Majority Banks) and the Issuing Bank, issued or to be issued by
the
Issuing Bank to RL3 at the request of the Applicant under the
Facility
on behalf of and in relation to certain obligations of
McDermott
Mauritius under the RL3 Contract.
Security means a mortgage, charge, pledge, lien, assignment by way
of
security, retention of title provision, trust or flawed asset
arrangement (for the purpose of, or which has the effect of,
granting
security) or any other security interest securing any obligation of
any
person or any other agreement or arrangement in any jurisdiction
having
a similar effect.
Senior Secured Notes means the $200,000,000 aggregate principal
amount
of 11 per cent senior loan notes due 15 December 2013 issued by
the
Guarantor pursuant to an indenture dated 9 December 2003 between
the
Guarantor and The Bank of New York (as trustee).
Subordinated Creditor means McDermott International, Inc., a
company
incorporated in Panama and whose registered address is Edificio
Vallarino, 7vo Piso, Calle 52 y Elvira Mendez, Apartado Postal
0819-07145, Panama 6, Panama.
Subsidiary means, in relation to any company or corporation,
any
company or corporation (an undertaking) where that first company
or
corporation:
(a) holds a majority
of the voting rights in the undertaking; or
(b) holds a membership
interest and has the right to appoint or
remove the majority of the members of the executive body of the
undertaking; or
(c) is a member of the
undertaking and controls alone, or pursuant to
an agreement with other members, a majority of the voting
rights
in the undertaking.
Tax means any tax, levy, impost, duty or other governmental charge
or
withholding of a similar nature (including any penalty or
interest
payable in connection with any failure to pay or any delay in
paying
any of the same).
Termination Date means:
(a) in respect of the RL2 Performance
Guarantee, the date RL2 issues
the "Final Completion Certificate" under the RL2 Contract; and
(b) in respect of the
RL3 Performance Guarantees, the date RL3 issues
the "Final Completion Certificate" under the RL3 Contract.
10
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Total Commitments means the aggregate of the Commitments, being
$105,210,000 at the date of this Agreement.
Transfer Certificate means a certificate substantially in the form
set
out in Schedule Schedule 4 (Form of Transfer Certificate) or any
other
form agreed between the Facility Agent and the Applicant.
Transfer Date means, in relation to a transfer, the later of:
(a) the proposed
Transfer Date specified in the Transfer Certificate;
and
(b) the date on which
the Facility Agent executes the Transfer
Certificate.
VAT means value added tax as provided for in the Value Added Tax
Act
1994 and any other tax of a similar nature.
1.2
Construction
1.2.1 Unless a contrary
indication appears, any reference in this Agreement
to:
(a) assets includes
rights to receive revenues, property and rights
of every kind, present, future, actual and contingent and
whether
tangible or intangible (including uncalled share capital);
(b) Clauses, Schedules
and Exhibits are to be construed as references
to the clauses of, and schedules and exhibits to, this
Agreement;
(c) a guarantee
includes any guarantee or indemnity, bond, letter of
credit, documentary or other credit, or other assurance against
financial loss;
(d) the words
include(s), including and in particular shall be
construed as being by way of illustration or emphasis only and
shall not be construed as, nor shall they take effect as,
limiting the
generality of any preceding words;
(e) indebtedness
includes any obligation whether incurred as
principal or as surety for the payment or repayment of money,
whether present or future, actual or contingent and whether
owed
jointly or severally or in any other capacity;
(f) liabilities
includes any obligation whether incurred as principal
or as surety, whether or not in respect of indebtedness,
whether
present or future, actual or contingent and whether owed
jointly
or severally or in any other capacity;
(g) the words other
and otherwise shall not be construed ejusdem
generis with any preceding words where a wider construction is
possible;
(h) any person
includes any person, firm, company, corporation,
government, state or agency of a state or any association,
trust
or partnership (whether or not having separate legal
personality)
and of that person's assigns, transferees and successors in
title
(in the case of a Party, in so far as such assigns, transferees
and successors in title are permitted); (i) a regulation
includes
any regulation, rule, official directive, request or guideline
(whether or not having the force of law) of any governmental,
intergovernmental or supranational body, agency, department or
regulatory, self-regulatory or similar authority or
organisation;
(j) any statute or
statutory provision includes any statute or
statutory provision which amends, extends, consolidates or
replaces it, or which has been amended, extended, consolidated
or
replaced by it, and any orders, regulations, instruments or
other
subordinate legislation made under it;
11
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(k) any Finance
Document or any other agreement or instrument is a
reference to that Finance Document or other agreement or
instrument as amended, restated, varied, novated, supplemented
or
replaced from time to time;
(l) accounting terms
shall be construed so as to be consistent with
GAAP;
(m) any amount, limit
or threshold specified in Dollars, in
ascertaining whether or not that amount, limit or threshold has
been attained, broken or achieved, as the case may be, a
non-Dollar amount shall be counted on the basis of the
equivalent
in Dollars of that amount using the Facility Agent's relevant
spot rate of exchange; and
(n) a time of day is a
reference to Dubai time.
1.2.2 Section, clause and
schedule headings are for ease of reference only.
1.2.3 A Default (other than
an Event of Default) is continuing if it has not
been remedied or waived in writing and an Event of Default is
continuing if it has not been waived in writing.
1.2.4 Payment of Cash Cover
for a Performance Guarantee means the Applicant
paying an amount in the currency of that Performance Guarantee to
the
Cash Cover Account and the amount paid by the Applicant is no less
than
the total aggregate amount of the liabilities of the Banks under or
in
respect of that Performance Guarantee.
1.2.5 A Performance
Guarantee is issued if it has been signed by the Issuing
Bank upon notification by the Facility Agent and delivered to
the
relevant Project Owner and issue shall be construed
accordingly.
1.2.6 A Performance
Guarantee is:
(a) cancelled if the
Facility Agent has received the original of that
Performance Guarantee marked as "cancelled" or, if such
original
is unable to be delivered, a written confirmation of release
from
the relevant Project Owner (in form and substance reasonably
satisfactory to the Facility Agent and the Issuing Bank); and
(b) reduced if and to
the extent that the maximum liability or amount
payable under or in relation to that Performance Guarantee is
reduced (as unconditionally confirmed in writing by the
relevant
Project Owner in form and substance reasonably satisfactory to
the Facility Agent and the Issuing Bank),
and, in either case, the Issuing Bank and the Banks are
otherwise
satisfied that they have no further liability or, as the case may
be,
have a reduced liability under or in respect of that
Performance
Guarantee and cancellation and reduction shall be construed
accordingly.
1.2.7 Amounts outstanding, a
liability, or a participation under or in
relation to a Performance Guarantee at any time includes, as the
case
may be:
(a) if it is an issued
but undrawn Performance Guarantee, the amount
for the time being of the maximum aggregate liabilities of the
Issuing Bank or the Banks (without double counting) under or in
respect of that Performance Guarantee, being equal to the
maximum
amount that is or may become payable by the Issuing Bank in
respect of that Performance Guarantee as at that time; and
(b) if it is an issued
and drawn Performance Guarantee, the aggregate
amount for the time being of (i) payments made by the Issuing
Bank under that Performance Guarantee and, if applicable,
payments made by the Banks (without double counting) in respect
of that Performance Guarantee plus (ii) the maximum aggregate
liabilities of the Issuing Bank or the Banks (without double
counting) under or in respect of any undrawn portion of that
Performance Guarantee less (iii) any amounts repaid or
reimbursed
by any Obligor under this Agreement.
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1.2.8 Any reference in this
Agreement to a Bank's liability or participation
under or in relation to a Performance Guarantee at any time
shall
include the maximum amount that is or may become payable by that
Bank
in respect of that Performance Guarantee as at that time.
1.2.9 For the purposes of
this Agreement, the maximum amount that is or may
become payable under or in respect of a Performance Guarantee at
any
time means the maximum payable amount as at that time (being
the
guaranteed amount set out in the Performance Guarantee except to
the
extent confirmed as reduced in accordance with Clause 1.2.6
(Construction)), (the Current Amount) and the maximum amount that
is or
may become payable by a Bank under or in respect of that
Performance
Guarantee as at that time means that Bank's pro rata share (in
the
proportion of its Commitment to the Total Commitments) of the
Current
Amount.
1.3 Third
party rights
1.3.1 Unless expressly
provided to the contrary in this Agreement a person
who is not a Party has no right under the Contracts (Rights of
Third
Parties) Act 1999 (the Third Parties Act) to enforce or to enjoy
the
benefit of any term of this Agreement.
1.3.2 Notwithstanding any
term of any Finance Document, the Parties may
rescind, vary, waive, release, assign, novate or otherwise dispose
of
all or any
of their respective rights or obligations under this
Agreement without the consent of any person who is not a Party.
1.4 Effect on
Fee Letters and Mandate Letter
To the extent that any provision of this Agreement is inconsistent
with
any provision of any Fee Letter or the Mandate Letter, the
provisions
of this Agreement shall prevail.
13
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Section 2 - The Facility
2
The Facility
2.1 The
Facility
Subject to the terms of this Agreement, the Finance Parties
make
available to the Applicant a facility for the issuance of
performance
guarantees in an aggregate amount equal to the Total
Commitments.
2.2 Finance
Parties' rights and obligations
2.2.1 The obligations of
each Finance Party under the Finance Documents and
in relation to the Performance Guarantees are several. Failure by
a
Finance Party to perform its obligations under the Finance
Documents or
in relation to the Performance Guarantees does not affect the
obligations of any other Party under the Finance Documents or
in
relation to the Performance Guarantees. No Finance Party is
responsible
for the obligations of any other Finance Party under the
Finance
Documents or in relation to the Performance Guarantees.
2.2.2 The rights of each
Finance Party under or in connection with the
Finance Documents are separate and independent rights and any
debt
arising under the Finance Documents to a Finance Party from an
Obligor
shall be a separate and independent debt.
2.2.3 A Finance Party may,
except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance
Documents.
3
Purpose
3.1
Purpose
The Facility shall be utilised by the Applicant only for the
purpose of
providing Performance Guarantees to the Project Owners in relation
to
McDermott Mauritius' obligations under the respective Contracts,
in
accordance with the terms and conditions of this Agreement.
3.2
Monitoring
No Finance Party is bound to monitor or verify the application of
any
Performance Guarantee or any amount utilised by way of
Performance
Guarantee pursuant to this Agreement.
4
Conditions of Issue
4.1 Initial
conditions precedent
The Applicant may not deliver an Issue Request unless the
Facility
Agent has received all of the documents and other evidence listed
in
Schedule 2 (Initial conditions precedent) in form and substance
satisfactory to the Facility Agent. The Facility Agent shall notify
the
Applicant, the Issuing Bank and the Banks promptly upon being
so
satisfied.
4.2 Maximum
number of Performance Guarantees
The Applicant may not deliver an Issue Request if as a result of
the
proposed Performance Guarantee, more than one RL2 Performance
Guarantee
and two RL3 Performance Guarantees would be issued.
14
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5
Issue
5.1 Delivery
of an Issue Request
The Applicant may request a Performance Guarantee to be issued
by
delivery to the Facility Agent of a duly completed Issue
Request
substantially in the form of Schedule 3 (Issue Request) not later
than
11 a.m. on the fifth Business Day before the proposed Issue Date of
the
Performance Guarantee.
5.2 Completion
of an Issue Request
Each Issue Request for a Performance Guarantee is irrevocable and
will
not be regarded as having been duly completed unless:
(a) it specifies which
Performance Guarantee and Contract it is for;
(b) the proposed Issue
Date is a Business Day within the Availability
Period;
(c) the currency and
amount of the Performance Guarantee comply with
Clause 5.3 (Currency and amount);
(d)
the form of
Performance Guarantee is attached;
(e) the scheduled or
expected Termination Date is specified;
(f) the delivery
instructions for the Performance Guarantee are
specified; and
(g) the beneficiary of
the Performance Guarantee is the appropriate
Project Owner.
5.2.2 Only one Performance
Guarantee may be requested in each Issue Request.
5.3 Currency
and amount
5.3.1 The currency specified
in an Issue Request must be Dollars.
5.3.2 The amount of the
proposed Performance Guarantee must be an amount
which (in the case of a RL3 Performance Guarantee, when aggregated
with
the amount of any issued RL3 Performance Guarantee or any other
proposed RL3 Performance Guarantee that is due to be issued) would
not
cause to be exceeded:
(a) the applicable
Performance Guarantee Limit; or
(b) if there has been
a reduction in the Available Facility, the
proportion of the Available Facility borne by that Performance
Guarantee Limit to the Available Facility at the date of this
Agreement.
5.4 Issue of
Performance Guarantees
5.4.1 The Facility Agent
shall notify the Issuing Bank and each Bank of the
details of the requested Performance Guarantee.
5.4.2 If the conditions set
out in this Agreement have been met, the Facility
Agent shall notify the Issuing Bank and the Issuing Bank shall
issue
the Performance Guarantee on the Issue Date to the appropriate
Project
Owner.
5.4.3 The Facility Agent and
the Issuing Bank will only be obliged to comply
with Clause 5.4.2 if on the date of the Issue Request and on
the
proposed Issue Date:
(a) no Default is
continuing or would result from the issue of the
proposed Performance Guarantee;
15
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(b) the Repeating
Representations to be made by each relevant Obligor
are true in all material respects; and
(c) none of the events
set out in Clauses 22.5 (Insolvency), 22.6
(Insolvency proceedings), 22.7 (Creditors' process), 22.9
(Cessation of business), 22.10 (Unlawfulness) or 22.11
(Repudiation) apply to the Project Owners.
5.4.4 Upon the issuance by
the Issuing Bank of a Performance Guarantee, each
Bank will have assumed (by way of its obligation to reimburse
and
indemnify the Issuing Bank under Clause 6 (Performance Guarantees))
a
participation in the liabilities relating to that Performance
Guarantee
in an amount equal to its Relevant Proportion of such
liabilities.
6
Performance Guarantees
6.1 Immediate
payment
Notwithstanding any other term of this Agreement, if any amount
relating to a Performance Guarantee is paid by a Finance Party,
such
amount (and, in case of late payment, together with default
interest
accrued from the date
of payment by that Finance Party until the
reimbursement payment by the Applicant) shall be immediately
repayable
or reimbursable by the Applicant.
6.2 Claims
under a Performance Guarantee
6.2.1 The Applicant
acknowledges that the Issuing Bank:
(a) may pay any claim
made or purported to be made under a
Performance Guarantee and which appears on its face to be in
order (a "claim");
(b) is not obliged to
carry out any investigation or seek any
confirmation from any other person before paying a claim; and
(c) will not be
concerned with the legality of a claim or any
underlying transaction or any available set-off, counterclaim
or
other defence of any person.
6.2.2 The obligations of the
Applicant under this Clause 6 will not be
affected by:
(a) the sufficiency,
accuracy or genuineness of any claim;
(b) any incapacity of,
or limitation on the powers of, any person
signing a claim or other document;
(c) the enforcement or
non-enforcement of the guarantee provided by
the Guarantor under this Agreement or the subordination of the
obligations of
the Guarantor under the Inter-Company Note; or
(d) any agreements or
arrangements between the Issuing Bank and any
other Finance Parties for the sharing, reimbursement or
indemnification of liabilities relating to any Performance
Guarantee or the Obligors.
6.3 Notice of
claims
The Issuing Bank shall, forthwith upon a claim being made, notify
the
Applicant and the Facility Agent of the claim and the amount of
the
claim, and the Facility Agent shall notify the Banks of the claim
and
their potential liabilities and required contributions to a
reimbursement of such payable amount under Clause 6.5 (Bank
reimbursement and indemnity) should the Applicant not pay such
claim
pursuant to Clause 6.4 (Payment by Applicant).
16
<PAGE>
6.4 Payment by
Applicant
Without prejudice to Clause 6.1 (Immediate payment), the
Applicant
shall,
immediately upon being notified of a claim:
(a) pay to the
Facility Agent for the Issuing Bank an amount equal to
the amount of such claim (and, in case of late payment,
together
with interest at the rate specified in Clause 10 (Default
interest) accrued from the date of payment by the Issuing Bank
until the reimbursement payment by the Applicant); or
(b) procure the
cancellation of such claim such that the Issuing Bank
and the Banks are reasonably satisfied that they have no
further
liability for such claim.
6.5 Bank
reimbursement and indemnity
6.5.1 If the Applicant shall
fail to pay the full amount to the Facility
Agent for the Issuing Bank when due pursuant to Clause 6.4 (Payment
by
Applicant), then the Issuing Bank shall notify the Facility Agent
and
each Bank of the amount of the claim and each Bank's Relevant
Proportion of such claim and each Bank shall immediately on
demand
(through the Facility Agent) reimburse the Issuing Bank for its
Relevant Proportion of such claim (and, in case of late payment by
such
Bank, together with interest at the rate specified in Clause 10
(Default interest) accrued from the date of demand by the Issuing
Bank
on such Bank until the reimbursement payment by that Bank).
6.5.2 If any Bank is not
permitted (by its constitutional documents or any
applicable law) to comply with Clause 6.5.1 above, then that Bank
will
not be obliged to comply with Clause 6.5.1 and shall instead be
deemed
to have taken, on the date the Performance Guarantee is issued (or
if
later, on the date the Bank's participation in the Performance
Guarantee is transferred or assigned to the Bank in accordance with
the
terms of this Agreement), an undivided interest and participation
in
the Performance Guarantee in an amount equal to its Relevant
Proportion
of that Performance Guarantee. On receipt of demand from the
Facility
Agent, that Bank shall pay to the Facility Agent (for the account
of
the Issuing Bank) an amount equal to its Relevant Proportion of
the
amount demanded
under Clause 6.5.1 above.
6.5.3 Without prejudice to
Clause 6.1 (Immediate payment), the Applicant
shall immediately on demand reimburse any Bank (through the
Facility
Agent) for any payment (and, in case of late payment, together
with
interest at the rate specified in Clause 10 (Default interest)
accrued
from the date of demand by the Bank until the reimbursement payment
by
the Applicant) it makes to the Issuing Bank under this Clause 6.5
in
respect of any Performance Guarantee.
6.6 Bank
obligations
6.6.1 The obligations of
each Bank under Clause 6 are continuing obligations
and will extend to the ultimate balance of sums payable by that
Bank in
respect of any Performance Guarantee, regardless of any
intermediate
payment or discharge in whole or in part.
6.6.2 The obligations of any
Bank under Clause 6 will not be affected by any
act, omission, matter or thing which, but for this Clause 6.6,
would
reduce, release or prejudice any of its obligations under Clause
6
(without limitation and whether or not known to it or any other
person)
including:
(a) any time, waiver
or consent granted to, or composition with, any
Obligor, McDermott Mauritius or other person;
(b) the release of any
other Obligor, McDermott Mauritius or any
other person under the terms of any composition or arrangement;
(c) the taking,
variation, compromise, exchange, renewal or release
of, or refusal or neglect to perfect, take up or enforce, any
rights against, or Security over assets of, any Obligor,
McDermott Mauritius or other person or any non-presentation or
non-observance of any formality or other requirement in respect
of any instrument or any failure to realise the full value of
any
Security;
17
<PAGE>
(d) any incapacity or
lack of power, authority or legal personality
of or dissolution or change in the members or status of an
Obligor, McDermott Mauritius or any other person;
(e) any amendment
(however fundamental) or replacement of a Finance
Document, any Performance Guarantee, any Contract or any other
document or Security;
(f) any
unenforceability, illegality or invalidity of any obligation
of any person under any Finance Document, any Performance
Guarantee, any Contract, the Inter-Company Note or any other
document or Security; or
(g) any insolvency or
similar proceedings.
6.7 Applicant
reimbursement and indemnity
Further and without prejudice to Clauses 6.1(Immediate payment)
and
6.5.3 (Bank reimbursement and indemnity), but without duplication
of
any amounts paid by any Obligor pursuant to Clauses 6.1
(Immediate
payment) and 6.5.3 (Bank reimbursement and indemnity), the
Applicant
shall immediately on demand reimburse any Bank (through the
Facility
Agent) for any payment that Bank makes to the Issuing Bank under
Clause
6.5 (Bank reimbursement and indemnity) in respect of any
Performance
Guarantee and shall otherwise indemnify each Finance Party against
any
cost, loss or liability incurred by it (otherwise than by reason of
the
its gross negligence or wilful misconduct) in acting under or
in
relation to any Performance Guarantee.
6.8 Rights of
contribution
No Obligor will be entitled to any right of contribution or
indemnity
from any Finance Party in respect of any payment it may make under
this
Clause 6 (except to the extent that such payment would not have
become
payable but for the gross negligence or wilful misconduct of
that
Finance Party.
18
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Section 3 - Cash cover, reduction and
cancellation
7
Cash cover, reduction and cancellation
7.1
Illegality
7.1.1 If it becomes unlawful
in any jurisdiction for a Bank to perform any of
its obligations as contemplated by this Agreement or maintain
its
participation in any Performance Guarantee:
(a) that Bank shall
promptly notify the Facility Agent upon becoming
aware of that event;
(b) upon the Facility
Agent notifying the Applicant, the Commitment
of that Bank will be immediately cancelled and the Bank shall
not
be obliged to participate in the liability of any Performance
Guarantee; and
(c) the Applicant
shall on the date specified by the Bank in the
notice delivered to the Facility Agent (being no earlier than
the
last day of any applicable grace period permitted by law)
provide
full Cash Cover for that Bank's participation in all issued
Performance Guarantees or procure the cancellation of that
Bank's
participation in all issued Performance Guarantees.
7.1.2 If it becomes unlawful
in any jurisdiction for the Issuing Bank to
perform any of its obligations as contemplated by this Agreement or
to
issue a Performance Guarantee:
(a) the Issuing Bank
shall promptly notify the Facility Agent upon
becoming aware of that event;
(b) upon the Facility
Agent notifying the Applicant, the Facility
shall cease to be available for the issue of the Performance
Guarantees; and
(c) the Applicant
shall on the date specified by the Issuing Bank in
the notice delivered to the Facility Agent (being no earlier
than
the last day of any applicable grace period permitted by law)
provide full Cash Cover for all issued Performance Guarantees
or
procure the cancellation of all issued Performance Guarantees.
7.2 Voluntary cancellation
The Applicant may, if it gives the Facility Agent not less than
10
Business Days' (or such shorter period as the Majority Banks may
agree)
prior notice, cancel the whole or any part of the Available
Facility.
Any cancellation under this Clause 7.2 shall reduce the
Performance
Guarantee Limits and the Commitments of the Banks rateably.
7.3 Voluntary
cancellation or reduction of Performance Guarantees
The Applicant may, if it gives the Facility Agent and the Issuing
Bank
not less than 10 Business Days' (or such shorter period as the
Majority
Banks may agree) prior notice procure the cancellation or reduction
of
the whole or any part of a Performance Guarantee.
7.4 Right of
cancellation or request for transfer in relation to a single
Bank
7.4.1 If:
(a) any sum payable to
any Bank by an Obligor is required to be
increased under Clause 11.2 (Tax gross-up); or
(b) any Bank claims
indemnification from the Applicant under Clause
11.3 (Tax indemnity) or Clause 12 (Increased Costs),
19
<PAGE>
the Applicant may, whilst the circumstance giving rise to the
requirement or indemnification continues, give the Facility Agent
not
less than seven Business Days' (or such shorter period as the
Majority
Banks may agree) prior notice of its intention to either:
(a) cancel the
Commitment of that Bank and:
(i) provide full Cash
Cover for that Bank's participation in all
issued Performance Guarantees; or
(ii) procure the cancellation of such parts of all of the
issued
Performance Guarantees equating to that Bank's participation
in all issued Performance Guarantees; or
(b) request the
Facility Agent to enquire of the Banks whether any of
them is prepared to accept a transfer of that Bank's Commitment
in accordance with Clause 26 (Changes to the Banks).
7.4.2 On receipt of a notice
referred to in Clause 7.4.1 (and, if applicable,
subject to another Bank accepting a transfer of the Commitment),
the
Commitment of that Bank shall immediately be reduced to zero.
7.4.3 The Applicant shall 10
Business Days after the Applicant has given
notice under Clause 7.4.1 (or, if earlier, the date specified by
the
Applicant in that notice), procure the cancellation or transfer of
that
Bank's participation in all issued Performance Guarantees.
7.5
Restrictions
7.5.1 Any notice of
cancellation, reduction or Cash Cover payment given by
any Party under this Clause 7.5 shall be irrevocable and, unless
a
contrary indication appears in this Agreement, shall specify the
date
or dates upon which the relevant cancellation, reduction or Cash
Cover
payment is to be made and the amount of that cancellation,
reduction or
Cash Cover payment.
7.5.2 Any part of the
Facility which is cancelled, reduced or covered by Cash
Cover may not be re-utilised by way of Performance Guarantee.
7.5.3 The Applicant shall
not cash cover, repay, prepay, reduce or cancel all
or any part of the Performance Guarantees or cancel or reduce all
or
any part of the Commitments except at the times and in the
manner
expressly provided for in this Agreement.
7.5.4 No amount of the Total
Commitments cancelled under this Agreement may
be subsequently reinstated.
7.5.5 If the Facility Agent
receives a notice under this Clause 7 it shall
promptly forward a copy of that notice to the Applicant, the
Issuing
Bank or the affected Bank, as appropriate.
20
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Section 4 - Costs of issue and
participation
8
Commission
8.1 Payment of
commission
8.1.1 The Applicant shall
pay in advance, on the first day of each Commission
Period, to the Facility Agent for the account of the Banks the
aggregate commission accruable during each Commission Period on
the
Banks' aggregate liabilities under each issued Performance
Guarantee
(as determined in accordance with Clause 8.2 (Calculation of
commission)). This commission shall be distributed according to
the
respective amounts due to each Bank in accordance with Clause
8.4
(Distribution of commission) and shall be non-refundable in all
cases.
8.1.2 If the Applicant has
provided Cash Cover to the Facility Agent for a
Performance Guarantee or part thereof:
(a) the fronting fee
payable to the Facility Agent (for the account
of the Issuing Bank) in accordance with Clause 9.2 (Fee Letter)
shall continue to be payable until the Expiry Date of such
Performance Guarantee;
(b) the commission
payable to the Facility Agent (for the account of
the Banks) shall continue to be payable until no Bank has any
commitment or known liability in relation to such Performance
Guarantee; and
(b) the Applicant will
be entitled to withdraw the interest accrued
on the Cash Cover to pay such fronting fee or commission.
8.2
Calculation of commission
8.2.1 The rate of commission
to be applied to the Banks' liabilities under or
in respect of each issued Performance Guarantee for each
Commission
Period is:
(a) in the case of
Mashreqbank psc and any other Bank or other person
that takes a transfer of all or any part of Mashreqbank psc's
Commitment (whether directly acquired from Mashreqbank psc or
from any other Bank or person), 4.5 per cent per annum (or such
rate determined in accordance with Clause 8.2.2), provided that
such rate shall only apply in respect of Mashreqbank psc's
Commitment (whether directly acquired from Mashreqbank psc or
from any other Bank or person) and not to any other Commitment
held or acquired by such Bank or other person; and
(b) in the case of
each other Bank (but subject as provided in (a)
above), 4.0 per cent per annum (or such rate determined in
accordance with Clause 8.2.2).
8.2.2 The rates of
commission set out in Clause 8.2.1 may be increased upon
notification to the Applicant by the Facility Agent (acting on
the
instructions of the Banks), provided that such notification is
given at
least 30 days before the end of the existing Commission Period, and
the
increased rates of commission shall apply to each subsequent
Commission
Period.
8.3 Commission
Period
8.3.1 In relation to each
issued Performance Guarantee, subject to this
Clause 8.3:
(a) the duration of
the first Commission Period shall be six Months
and the duration of each subsequent Commission Period shall be
three Months;
(b) each Commission
Period shall start on the relevant Issue Date or
(if already made) on the last day of the preceding Commission
Period for that Performance Guarantee.
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8.3.2 A Commission Period
for an issued Performance Guarantee shall not
extend beyond its Expiry Date.
8.3.3 If a Commission Period
would otherwise end on a day which is not a
Business Day, that Commission Period will instead end on the
next
Business Day in that calendar month (if there is one) or the
preceding
Business Day (if there is not).
8.4
Distribution of commission
Upon receipt by the Facility Agent of a payment of commission from
the
Applicant, the Facility Agent shall distribute the respective share
of
such commission due to each Bank for its liability in respect of
each
relevant Performance Guarantee.
9
Other fees
9.1 Mandate
Letter
The Applicant shall pay to the Arranger the fees set out in the
Mandate
Letter or a Fee Letter, in the amounts and at the times agreed
therein.
9.2 Fee
Letter
The Applicant shall pay to the Facility Agent (for the account of
the
Issuing Bank) a fronting fee in respect of each Performance
Guarantee
requested by it in the amounts and at the times agreed in a Fee
Letter.
10
Default interest
10.1 Payment of
default interest
10.1.1 If an Obligor or Bank fails
to pay any amount payable by it under a
Finance Document on its due date, interest shall accrue on the
overdue
amount from the due date up to the date of actual payment (both
before
and after judgment) at a rate which is two per cent plus LIBOR
for
successive interest periods, each of a duration selected by the
Facility Agent (acting reasonably).
10.1.2 Any default interest
accruing under this Clause 10 shall be immediately
payable by the Obligor or Bank (as applicable and without
double
counting) on demand by the Facility Agent.
10.1.3 Default interest (if unpaid)
arising on an overdue amount will be
calculated on a daily basis and compounded with the overdue amount
at
the end of each interest period applicable to that overdue amount
but
will remain immediately due and payable.
10.2 Notification of
rates of interest
The Facility Agent shall promptly notify the Issuing Bank, the
Banks,
the relevant Obligors (as appropriate) of the determination of a
rate
of default interest under this Agreement.
10.3 Definitions
For the purposes of this Clause 10, the following definitions
shall
have the following meanings:
LIBOR means, in relation to any amount:
(a) the applicable
Screen Rate; or
(b) (if no Screen Rate
is available for Dollars for the relevant
interest period) the rate which the Facility Agent would be
able
to obtain by placing an amount equal to that amount on deposit
with a leading bank in the London interbank market for the
relevant period,
22
<PAGE>
as of 11 a.m. two Business Days before the first day of the
relevant
interest period for that amount.
Screen Rate means the British Bankers' Association Interest
Settlement
Rate for Dollars for the relevant period, displayed on the
appropriate
page of the Reuters screen. If the agreed page is replaced or
service
ceases to be available, the Facility Agent may specify another page
or
service displaying the appropriate rate after consultation with
the
Applicant and the Banks.
23
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Section 5 - Additional payment
obligations
11 Tax
gross-up and indemnities
11.1 Definitions
In this Agreement:
Tax Credit means a credit against, relief from, or remission or
repayment of any Tax.
Tax Deduction means a deduction or withholding for or on account of
Tax
from a
payment under a Finance Document.
Tax Payment means either an increase in a payment made by an
Obligor to
a Finance Party under Clause 11.2 (Tax gross-up) or a payment
under
Clause 11.3 (Tax indemnity).
11.2 Tax gross-up
11.2.1 Each Obligor shall make all
payments to be made by it under the Finance
Documents without any Tax Deduction, unless a Tax Deduction is
required
by law.
11.2.2 The Applicant shall promptly
upon becoming aware that an Obligor has
had or will have to make a Tax Deduction (or that there has been
or
will be any change in the rate at which or the basis on which any
Tax
Deduction has to be made) notify the Facility Agent
accordingly.
Similarly, a Bank or the Issuing Bank shall notify the Facility
Agent
on becoming so aware in respect of a payment payable to that Bank
or
the Issuing Bank. If the Facility Agent receives such a
notification
from a Bank or the Issuing Bank it shall notify the Applicant and
the
Obligor in question.
11.2.3 If a Tax Deduction is
required by law to be made by an Obligor, the
amount of the payment in respect of which the Tax Deduction is
required
to be made shall be increased to the amount which (after the
Tax
Deduction) will leave an amount equal to the payment which would
have
been due if no Tax Deduction had been required.
11.2.4 If an Obligor is required to
make a Tax Deduction, it shall make the
Tax Deduction, and any payment required in connection with the
Tax
Deduction within the time allowed and in the minimum amount
required by
law.
11.2.5 As soon as reasonably
practicable after making a Tax Deduction or a
payment required in connection with a Tax Deduction, the Obligor
making
the Tax Deduction or payment shall deliver to the Facility Agent
for
the Finance Party in question a copy of a tax receipt or other
evidence
reasonably satisfactory to that Finance Party that the Tax
Deduction or
payment has been made.
11.3 Tax
indemnity
11.3.1 If any Finance Party is
subject to any liability for or required to
make any payment for or on account of Tax on any sum received
or
receivable (or any sum deemed for Tax purposes to be received
or
receivable) under any Finance Document, the Applicant shall (within
10
Business Days of written demand by the Facility Agent, together
with a
description in reasonable detail of the relevant Tax) pay to
that
Finance Party the amount of such Tax.
11.3.2 Clauses 11.2.3 and
11.3.1 shall not
apply:
(a) in relation to any
Tax assessed or imposed on a Finance Party:
(i) under the law of
the jurisdiction in which that Finance
Party is incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party is treated as
resident for tax purposes, or otherwise by reason of a
present or former connection between the taxing jurisdiction
and the Finance Party (or a shareholder or Affiliate
thereof) other than a connection arising solely as a result
of having entered into this Agreement or receiving a payment
hereunder; or
24
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(ii) under the law of the jurisdiction in which that Finance
Party's Facility Office is located, in respect of amounts
received or receivable in that jurisdiction;
(b) in relation to any
Tax assessed or imposed on a Finance Party if
that Tax is assessed or imposed on or calculated by reference
to
the net income received or receivable (but not any sum deemed
to
be received or receivable), or (if it is standard market
practice
to do so in a particular jurisdiction) which is assessed or is
calculated based on a method to be in lieu of a net income or
similar type Tax, by that Finance Party;
(c) in relation to any
Tax assessed by reason of a failure of the
Finance
Party to comply with any applicable mandatory
certification, documentation, reporting or similar requirement;
or
(d) in the case of
Clause 11.3.1, to the extent that the liability or
requirement is compensated for by an increased payment under
Clause 11.2 (Tax gross-up).
11.3.3 A Finance Party making, or
intending to make, a claim under Clause
11.3.1 above shall promptly notify the Facility Agent of the
event
which will give,
or has given, rise to the claim, following which the
Facility Agent shall notify the Applicant accordingly.
11.3.4 A Finance Party shall, on
receiving a payment from an Obligor under
this Clause 11.3, notify the Facility Agent.
11.4 Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance
Party
determines in its absolute discretion (but acting in good faith)
that
it has obtained, utilised and retained (or will obtain, utilise
and
retain) a Tax Credit which is attributable to either:
(a) an increased
payment of which that Tax Payment forms part;
(b) that Tax Payment;
or
(c) the Tax with
respect to which the Tax Payment was made,
such Finance Party shall promptly pay to the Obligor the amount
reasonably determined in good faith by such Finance Party to be
the
amount which will leave such Finance Party (after the payment) in
the
same after-Tax position as it would have been in had the Tax
Payment
not been required to be made by such Obligor.
11.5 Stamp taxes
The Applicant shall within three Business Days of demand,
indemnify
each Finance Party against any cost, loss or liability which
that
Finance Party incurs in relation to any stamp duty, registration
tax or
other similar Tax which is payable in respect of any of the
Finance
Documents.
11.6 Value added
tax
11.6.1 All amounts which are
expressed to be payable under any of the Finance
Documents by any Party to a Finance Party which (in whole or in
part)
constitute the consideration for VAT purposes for any supply of
goods
or services shall be deemed to be exclusive of any VAT which is
chargeable on that supply. Subject to Clause 11.6.3, if VAT is
chargeable on any supply made by any Finance Party to any Party
under
any of the Finance Documents, that Party shall pay (in addition to
and
at the same time as paying the consideration for the supply) an
amount
equal to the amount of the VAT (and the Finance Party shall
promptly
provide an appropriate VAT invoice to that Party).
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11.6.2 If VAT is chargeable on any
supply made by any Finance Party (the
Supplier) to any other Finance Party (the Recipient) under any of
the
Finance Documents, and any Party (the Relevant Party) is required
by
the terms of any of the Finance Documents to pay to the Supplier
an
amount equal to the consideration for that supply (rather than
being
required to reimburse the Recipient in respect of that
consideration),
the Relevant Party shall also pay to the Supplier (in addition to
and
at the same time as paying that amount) an amount equal to the
amount
of the VAT. The Recipient shall promptly pay to the Relevant Party
an
amount equal to any VAT credit or repayment which, as
reasonably
determined by the Recipient, relates to that supply.
11.6.3 Where any Party is required
by any of the Finance Documents to
reimburse a Finance Party in respect of any cost or expense, that
Party
shall at the same time indemnify the Finance Party against any
VAT
incurred by the Finance Party in respect of the cost or expense to
the
extent that the Finance Party reasonably determines that neither it
nor
any other member of any group of which it is a member for VAT
purposes
is entitled to any credit or repayment from the relevant tax
authority
in respect of that VAT.
12
Increased Costs
12.1 Increased
Costs
12.1.1 Subject to Clause 12.3
(Exceptions) the Applicant shall, within three
Business Days of a demand by the Facility Agent, pay for the
account of
a Finance Party the amount of any Increased Costs incurred by
that
Finance Party or any of its Affiliates as a result of (i) the
introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation, (ii)
compliance with any law or regulation made after the date of
this
Agreement or (iii) compliance with any law or regulation relating
to
capital adequacy, whether made before or after the date of this
Agreement.
12.1.2 In this Agreement Increased
Costs means:
(a) a reduction in the
rate of return from the Facility or on a
Finance Party's (or its Affiliate's) overall capital;
(b) an additional or
increased cost; or
(c) a reduction of any
amount due and payable under any Finance
Document,
which is incurred or suffered by a Finance Party or any of its
Affiliates to the extent that it is attributable to that Finance
Party
having entered into its Commitment or funding or performing its
obligations under any Finance Document.
12.2 Increased Cost
claims
12.2.1 A Finance Party intending to
make a claim pursuant to Clause 12.1
(Increased Costs) shall notify the Facility Agent of the event
giving
rise to the claim, following which the Facility Agent shall
promptly
notify the Applicant.
12.2.2 Each Finance Party shall, as
soon as practicable after a demand by the
Facility Agent, provide a certificate confirming the amount of
its
Increased Costs.
12.3 Exceptions
12.3.1 Clause 12.1 (Increased
Costs) does not apply to the extent any
Increased Cost is:
(a) attributable to a
Tax; or
26
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(b) attributable to
the wilful breach by the relevant Finance Party
or
its Affiliates of any law or regulation.
13
Other indemnities
13.1 Currency
indemnity
13.1.1 If any sum due from an
Obligor under the Finance Documents (a Sum), or
any order, judgment or award given or made in relation to a Sum,
has to
be converted from the currency (the First Currency) in which that
Sum
is payable into another currency (the Second Currency) for the
purpose
of:
(a) making or filing a
claim or proof against that Obligor; or
(b) obtaining or
enforcing an order, judgment or award in relation to
any litigation proceedings,
that Obligor shall, as an independent obligation, within three
Business
Days of demand, indemnify each Finance Party to whom that Sum is
due
against any cost, loss or liability arising out of or as a result
of
the conversion including any discrepancy between (i) the rate
of
exchange used to convert that Sum from the First Currency into
the
Second Currency and (ii) the rate or rates of exchange available
to
that person at the time of its receipt of that Sum.
13.1.2 Each Obligor waives any
right it may have in any jurisdiction to pay
any amount under the Finance Documents in a currency or currency
unit
other than that in which it is expressed to be payable.
13.2 Other
indemnities
The Applicant shall, within three Business Days of demand,
indemnify
each Finance Party against any cost, loss or liability incurred by
that
Finance Party as a result of:
(a) the occurrence of
any Event of Default;
(b) a failure by an
Obligor to pay any amount due under a Finance
Document on its due date, including any cost, loss or liability
arising as a result of Clause 31 (Sharing among the Finance
Parties);
(c) issuing or
funding, or making arrangements to issue or fund, its
participation in a Performance Guarantee requested but not made
by reason of the operation of any one or more of the provisions
of this Agreement (other than by reason of default or
negligence
by that Finance Party alone); or
(d) a Performance
Guarantee (or part of a Performance Guarantee) not
being cancelled, reduced or cash covered in accordance with a
notice given by the Applicant.
13.3 Indemnity to the
Facility Agent and the Issuing Bank
The Applicant shall promptly indemnify the Facility Agent and
the
Issuing Bank against any cost, loss or liability incurred by either
of
them (acting reasonably) as a result of:
(a) investigating any
event which it reasonably believes is a
Default;
(b) entering into or
performing any foreign exchange contract for the
purposes of Clause 32.9 (Change of currency); or
(c) acting or relying
on any notice, request or instruction which it
reasonably believes to be genuine, correct and appropriately
authorised.
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14
Mitigation by the Banks
14.1 Mitigation
14.1.1 Each Finance Party shall, in
consultation with the Applicant, take all
reasonable steps to mitigate any circumstances which arise and
which
would result in any amount becoming payable under or pursuant to,
or
cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 11
(Tax
gross-up and indemnities) or Clause 12 (Increased Costs)
including
transferring its rights and obligations under the Finance Documents
to
another Affiliate or Facility Office.
14.1.2 Clause 14.1.1 does not in
any way limit the obligations of any Obligor
under the Finance Documents.
14.2 Limitation of
liability
14.2.1 The Applicant shall
indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of
steps
taken by it under Clause 14.1 (Mitigation).
14.2.2 A Finance Party is not
obliged to take any steps under Clause 14.1
(Mitigation) if, in the opinion of that Finance Party (acting
reasonably), to do so might be prejudicial to it.
15
Costs and expenses
15.1 Transaction
expenses
The Applicant shall promptly on demand pay the Arranger and the
Facility Agent the amount of all out-of-pocket costs and
expenses
(including legal fees) reasonably incurred by any of them in
connection
with the negotiation, preparation, printing, execution and
syndication
of the Finance Documents provided that the Applicant shall not
be
responsible for any legal fees incurred by the Arranger and the
Facility Agent in connection with the negotiation, preparation,
printing, execution and syndication of the Finance Documents in
excess
of $30,000 (excluding VAT, disbursements and any costs relating
to
non-English law advisers).
15.2 Amendment
costs
If (a) an Obligor requests an amendment, waiver or release of,
or
consent in relation to, any Finance Document or (b) an amendment
is
required to any Finance Document pursuant to Clause 32.9 (Change
of
currency), the Applicant shall, within three Business Days of
demand,
reimburse the Finance Parties for the amount of all costs and
expenses
(including legal fees) reasonably incurred by them in responding
to,
evaluating, negotiating or complying with that request or
requirement.
15.3 Enforcement
costs
The Applicant shall, within three Business Days of demand, pay to
each
Finance Party the amount of all costs and expenses (including
legal
fees) incurred by that Finance Party in connection with the
enforcement
of, or the preservation of any rights under, any Finance Document
or
the investigation of any possible Default.
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Section 6 - Guarantee
16
Guarantee and indemnity
16.1 Guarantee and
indemnity
The Guarantor irrevocably and unconditionally:
(a) guarantees to each
Finance Party punctual performance by the
Applicant of all the Applicant's obligations under the Finance
Documents;
(b) undertakes with
each Finance Party that whenever the Applicant
does not pay any amount when due under or in connection with
any
Finance Document, the Guarantor shall immediately on demand pay
that amount as if it were the principal obligor; and
(c) indemnifies each
Finance Party immediately on demand against any
cost, loss or liability suffered by that Finance Party if any
obligation guaranteed by it is or becomes unenforceable,
invalid
or illegal. The amount of the cost, loss or liability shall be
equal to the amount which that Finance Party would otherwise
have
been entitled to recover.
16.2 Continuing
guarantee
This guarantee is a continuing guarantee and will extend to the
ultimate balance of sums payable by any Obligor under the
Finance
Documents, regardless of any intermediate payment or discharge in
whole
or in part.
16.3
Reinstatement
If any payment by an Obligor or discharge given by a Finance
Party
(whether in respect of the obligations of any Obligor or any
Security
for those obligations or otherwise) is avoided or reduced as a
result
of insolvency, liquidation, administration or any similar
event:
(a) the liability of
each Obligor shall continue as if the payment,
discharge, avoidance or reduction had not occurred; and
(b) the Finance
Parties shall be entitled to recover the value or
amount of that Security or payment from each Obligor, as if the
payment, discharge, avoidance or reduction had not occurred.
16.4 Waiver of
defences
The obligations of the Guarantor under this Clause 16 will not
be
affected by an act, omission, matter or thing which, but for
this
Clause, would reduce, release or prejudice any of its obligations
under
this Clause 16 (whether or not known to it or any Finance
Party)
including:
(a) any time, waiver
or consent granted to, or composition with, any
Obligor or other person;
(b) the release of any
other Obligor or any other person under the
terms of any composition or arrangement with any creditor of
any
person;
(c) the taking,
variation, compromise, exchange, renewal, enforcement
or release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or Security over assets of, any
Obligor or other person or any non-presentation or
non-observance
of any formality or other requirement in respect of any
instrument or any failure to realise the full value of any
Security;
(d) any incapacity or
lack of power, authority or legal personality
of or dissolution or change in the members or status of an
Obligor or any other person;
29
<PAGE>
(e) any amendment
(however fundamental), replacement, variation,
novation, assignment or the avoidance or termination of a
Finance
Document or any other document or Security;
(f) any
unenforceability, illegality or invalidity of any obligation
of, or any Security created by, any person under any Finance
Document
or any other document; or
(g) any insolvency,
liquidation, administration or similar procedure.
16.5 Immediate
recourse
The Guarantor waives any right it may have of first requiring
any
Finance Party (or any trustee or agent on its behalf) to
proceed
against or enforce any other rights or Security or claim payment
from
any person before claiming from the Guarantor under this Clause
16.
This waiver applies irrespective of any law or any provision of
a
Finance Document to the contrary.
16.6
Appropriations
During the Facility Period, each Finance Party may:
(a) refrain from
applying or enforcing any other moneys, Security or
rights held or received by it (or any trustee or agent on its
behalf) in respect of amounts which may be or become payable by
the Obligors under or in connection with the Finance Documents,
or apply and enforce the same in such manner and order as it
sees
fit (whether against those amounts or otherwise) and the
Guarantor shall not be entitled to the benefit of the same; and
(b) hold in an
interest-bearing suspense account any moneys received
from the Guarantor on account of the Guarantor's liability
under
this Clause 16.
16.7 Deferral of
Guarantor's rights
During the Facility Period, and unless the Facility Agent
otherwise
directs, the Guarantor will not exercise any rights which it may
have
by reason of performance by it of its obligations under the
Finance
Documents:
(a) to receive or
claim payment from or be indemnified by the
Applicant;
(b) to claim any
contribution from any other guarantor of, or
provider of Security in respect of, any Obligor's obligations
under the Finance Documents;
(c) to take the
benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of any Finance Party
under any Finance Document or of any guarantee or Security
taken
pursuant to, or in connection with, the Finance Documents by
any
Finance Party;
(d) to exercise any
right of set-off against the Applicant; and/or
(e) to claim or prove
as a creditor of the Applicant in competition
with any Finance Party.
16.8 Additional
Security
This guarantee is in addition to, is not in any way prejudiced by,
and
shall not merge with, any other guarantee or Security now or in
the
future held by any Finance Party.
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Section 7 - Subordination of Inter-Company
Note
17
Subordination
17.1 Scope
17.1.1 The indebtedness of the
Guarantor owed to the Subordinated Creditor and
evidenced by the Inter-Company Note shall be subordinated to the
Senior
Liabilities in the manner set forth in such Inter-Company Note as
in
effect of the date hereof.
17.1.2 The Guarantor acknowledges
and agrees to the subordination arrangements
between or relating to the Finance Parties and the Subordinated
Creditor and none of the undertakings in this Clause 17 on the part
of
any Finance Party or by the Subordinated Creditor under the
subordination provisions of the Inter-Company Note is given to
any
Obligor or any Subsidiaries of any Obligor or shall be enforceable
by
any of them.
17.1.3 For the purposes of this
Clause 17, the following terms have the
following meanings:
Conditional Release Date means the earlier of:
(a) the date on which
the Senior Secured Notes are fully repaid
following an equity infusion into the Guarantor; and
(b) the date on which
the Guarantor has discharged all of its
obligations and liabilities in relation to the Calyon Facility
Agreement (other than any contingent indemnification
obligations
that expressly survive the termination of such agreement).
Senior Liabilities means all liabilities and obligations
(whether
actual or contingent, primary or secondary) of the Guarantor to
the
Finance Parties under or in respect of the Finance Documents.
Subordinated Liabilities means all liabilities and obligations
(whether
actual or contingent, primary or secondary) of the Guarantor to
the
Subordinated Creditor under the Inter-Company Note.
17.2 Term of
subordination
17.2.1 Subject to Clause 17.2.2,
the Guarantor undertakes to ensure that the
subordination provisions in favour of the Finance Parties set forth
in
the Inter-Company Note shall apply until the Conditional Release
Date,
or, if earlier, until the Senior Liabilities (other than any
contingent
indemnification obligations that expressly survive the termination
of
this Facility) cease to exist. Upon the Conditional Release Date,
the
subordination provisions in favour of the Finance Parties set forth
in
the Inter-Company Note shall automatically terminate, without the
need
for further action by any of the parties hereto or the
Subordinated
Creditor.
17.2.2 The Guarantor undertakes to
ensure that any termination or release of
the obligations of the Subordinated Creditor under the
subordination
provisions in favour of the Finance Parties set forth in the
Inter-Company Note pursuant to the occurrence of the
Conditional
Release Date shall be conditional. If following such termination
or
release, the Subordinated Liabilities:
(a) are not fully discharged; and
(b) are subordinated
to any liabilities and obligations of the
Guarantor to any third party creditor of the Guarantor or any
of
its Subsidiaries,
the Guarantor shall ensure that the subordination provisions in
favour
of the Finance Parties set forth in the Inter-Company Note shall
be
automatically reinstated, to which terms the Subordinated
Creditor
shall be bound, and the Finance Parties shall be entitled to
enforce
such subordination provisions against the Subordinated Creditor as
if
such termination or release had not occurred and any such
Conditional
Release Date had not taken place, and the Conditional Release Date
will
cease to have effect for the purposes of this Agreement; provided
that
if the Inter-Company Note subsequently ceases to be subordinated to
the
liabilities and obligations of the Guarantor to all such third
party
creditors of the Guarantor or any of its Subsidiaries (other than
the
Finance Parties), the subordination provisions in favour of the
Finance
Parties set forth in the Inter-Company Note shall be
automatically
terminated.
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17.3 Ranking of
liabilities
17.3.1 The Guarantor undertakes to
ensure that the Senior Liabilities shall
rank in priority to the Subordinated Liabilities as provided in
the
Inter-Company Note as in effect on the date hereof.
17.3.2 Nothing in this Clause 17,
or any other provision of this Agreement,
shall operate to prohibit, prevent or require the consent of any
party
for any payment of any of the Senior Liabilities.
32
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Section 8 - Representations, warranties,
undertakings and Events of Default
18
Representations and warranties
Each Finance Party has entered into this Agreement in reliance on
the
representations of each Obligor set out in this Clause 18, and
each
Obligor warrants to each Finance Party on the date of this
Agreement as
set out in this Clause 18.
18.1 Status
18.1.1 Each of the Obligors and
McDermott Mauritius is a corporation, duly
incorporated and validly existing under the law of its jurisdiction
of
incorporation.
18.1.2 Each of the Obligors and
McDermott Mauritius has the power to sue and
be sued in its own name and to own its assets and carry on its
business
as that business is being and is intended to be conducted.
18.2 Binding
obligations
The obligations expressed to be assumed by each of the Obligors
and
McDermott Mauritius in each Finance Document and Contract to which
it
is a party are, subject to any general principles of law limiting
its
obligations which are specifically referred to in any legal
opinion
delivered pursuant to Clause 4 (Conditions of Issue), legal,
valid,
binding and enforceable obligations.
18.3 Non-conflict
with other obligations
The entry into and performance by each of the Obligors and
McDermott
Mauritius of, and the transactions contemplated by, the Finance
Documents
and the Contracts to which it is a party do not and will not
conflict with:
(a) any law or
regulation applicable to it or binding on its assets;
(b) its constitutional
documents; or
(c) any agreement or
instrument binding upon it or any of its assets,
except for any such conflict as would not reasonably be
expected
to have a Material Adverse Effect.
18.4 Power and
authority
Each of the Obligors and McDermott Mauritius has the power to
enter
into, perform and deliver, and has taken all necessary action
to
authorise its entry into, performance and delivery of, the
Finance
Documents and Contracts to which it is a party and the
transactions
contemplated by those Finance Documents or Contracts.
18.5 Validity and
admissibility in evidence
All Authorisations required:
(a) to enable each of
the Obligors and McDermott Mauritius lawfully
to enter into, exercise its rights and comply with its
obligations in the Finance Documents and Contracts to which it
is
a party;
(b) to make the
Finance Documents and Contracts to which it is a
party admissible in evidence in its jurisdiction of
incorporation; and
(c) to enable each of
the Obligors and McDermott Mauritius and each
Subsidiary of any Obligor or McDermott Mauritius to carry on
its
business, trade and ordinary activities,
33
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have been obtained or effected and are in full force and effect,
except
where the failure to obtain or effect any such authorisation would
not
reasonably be expected to have a Material Adverse Effect.
18.6 Certified
Copies
Any document provided to any Finance Party by or on behalf of each
of
the Obligors or McDermott Mauritius which purports to be a
Certified
Copy is a true, complete and accurate copy of the original
document
which has not been amended other than by a document a Certified
Copy of
which is attached to it.
18.7 Governing law
and enforcement
18.7.1 The choice of the governing
law of each Finance Document to which any
Obligor is a party and, if applicable, the governing law of the
Inter-Company Note will be recognised and enforced in that
Obligor's
jurisdiction of incorporation.
18.7.2 Any judgment obtained in the
jurisdiction of the governing law of each
Finance Document to which any Obligor is a party will be recognised
and
enforced in that Obligor's jurisdiction of incorporation.
18.8 Deduction of
Tax
It is not required to make any deduction for or on account of Tax
from
any payment it may make under any Finance Document.
18.9 No filing or
stamp taxes
Under the law of the jurisdiction of incorporation of each of
the
Obligo
