Document:

Exhibit 10.17

 

EXECUTION VERSION

 

DATED 28 March 2011

 

KOSMOS ENERGY FINANCE INTERNATIONAL
 as Original Borrower

 

- and -

 

KOSMOS ENERGY OPERATING, KOSMOS ENERGY INTERNATIONAL, KOSMOS ENERGY
 DEVELOPMENT and KOSMOS ENERGY GHANA HC
 as Guarantors

 

- and -

 

ABSA CAPITAL (A DIVISION OF ABSA BANK LIMITED), BNP PARIBAS, CRÉDIT
 AGRICOLE CORPORATE AND INVESTMENT BANK, HSBC BANK PLC, SOCIÉTÉ
 GÉNÉRALE, LONDON BRANCH AND STANDARD CHARTERED BANK 
 as Mandated Lead Arrangers and Underwriters

 

- and -

 

THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 2
 as Original Lenders

 

 

FACILITY AGREEMENT

 

 

Slaughter and May
 One Bunhill Row
 London
 EC1Y 8YY
 (SRG/JRR)

 

507147220

 

 

Contents

 

	
 
    	
 
    	
 
    	
Page
    
	
PART 1 INTERPRETATION
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
Definitions   and Interpretation
    	
 
    	
8
    
	
 
    	
 
    	
 
    	
 
    
	
PART 2 CONDITIONS PRECEDENT
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Conditions   Precedent
    	
 
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
The   Facility
    	
 
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
Finance   Parties’ Rights and Obligations
    	
 
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
Purpose
    	
 
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
Utilisation
    	
 
    	
52
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
Letters   of Credit — Utilisation
    	
 
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
Letters   of Credit — General Provisions
    	
 
    	
58
    
	
 
    	
 
    	
 
    	
 
    
	
PART 4 PAYMENTS, CANCELLATION, INTEREST   AND FEES
    	
 
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
Repayment
    	
 
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
Prepayment   and Cancellation
    	
 
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
Interest
    	
 
    	
71
    
	
 
    	
 
    	
 
    	
 
    
	
12.
    	
Interest   Periods
    	
 
    	
73
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
Changes   to the Calculation of Interest
    	
 
    	
74
    
	
 
    	
 
    	
 
    	
 
    
	
14.
    	
Fees
    	
 
    	
75
    
	
 
    	
 
    	
 
    	
 
    
	
PART 5 TAXES, INCREASED COSTS AND   INDEMNITIES
    	
 
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
15.
    	
Tax   Gross Up and Indemnities
    	
 
    	
77
    
	
 
    	
 
    	
 
    	
 
    
	
16.
    	
Increased   Costs
    	
 
    	
79
    
	
 
    	
 
    	
 
    	
 
    
	
17.
    	
Other   Indemnities
    	
 
    	
81
    
	
 
    	
 
    	
 
    	
 
    
	
18.
    	
Mitigation   by the Lenders
    	
 
    	
82
    
	
 
    	
 
    	
 
    	
 
    
	
PART 6 FORECASTS AND CALCULATIONS AND   BORROWING BASE AMOUNT
    	
 
    	
83
    

 

2

 

	
19.
    	
Forecasts   and Calculations
    	
 
    	
83
    
	
 
    	
 
    	
 
    	
 
    
	
PART 7 BANKS ACCOUNTS, CASH MANAGEMENT AND   RESERVE EQUITY
    	
 
    	
87
    
	
 
    	
 
    	
 
    	
 
    
	
20.
    	
Bank   Accounts and Cash Management
    	
 
    	
87
    
	
 
    	
 
    	
 
    	
 
    
	
21.
    	
Operation   of the Offshore Proceeds Accounts
    	
 
    	
90
    
	
 
    	
 
    	
 
    	
 
    
	
22.
    	
Debt   Service Reserve Account
    	
 
    	
92
    
	
 
    	
 
    	
 
    	
 
    
	
23.
    	
Authorised   Investments
    	
 
    	
93
    
	
 
    	
 
    	
 
    	
 
    
	
PART 8 FINANCIAL AND PROJECT INFORMATION
    	
 
    	
95
    
	
 
    	
 
    	
 
    	
 
    
	
24.
    	
Information   Undertakings
    	
 
    	
95
    
	
 
    	
 
    	
 
    	
 
    
	
PART 9 GUARANTEE
    	
 
    	
103
    
	
 
    	
 
    	
 
    	
 
    
	
25.
    	
Guarantee   and Indemnity
    	
 
    	
103
    
	
 
    	
 
    	
 
    	
 
    
	
PART 10 REPRESENTATIONS, COVENANTS, EVENTS OF   DEFAULT
    	
 
    	
106
    
	
 
    	
 
    	
 
    	
 
    
	
26.
    	
Representations
    	
 
    	
106
    
	
 
    	
 
    	
 
    	
 
    
	
27.
    	
Financial   Covenants
    	
 
    	
110
    
	
 
    	
 
    	
 
    	
 
    
	
28.
    	
General   Undertakings
    	
 
    	
110
    
	
 
    	
 
    	
 
    	
 
    
	
29.
    	
Events   of Default
    	
 
    	
118
    
	
 
    	
 
    	
 
    	
 
    
	
PART 11 CHANGES TO LENDERS AND OBLIGORS AND   ROLES
    	
 
    	
124
    
	
 
    	
 
    	
 
    	
 
    
	
30.
    	
Changes   to the Lenders
    	
 
    	
124
    
	
 
    	
 
    	
 
    	
 
    
	
31.
    	
Changes   to the Obligors
    	
 
    	
128
    
	
 
    	
 
    	
 
    	
 
    
	
32.
    	
Role   of the Agents and the Arranger
    	
 
    	
130
    
	
 
    	
 
    	
 
    	
 
    
	
33.
    	
Consultants
    	
 
    	
136
    
	
 
    	
 
    	
 
    	
 
    
	
PART 12 ADMINISTRATION, COSTS AND EXPENSES
    	
 
    	
138
    
	
 
    	
 
    	
 
    	
 
    
	
34.
    	
Payment   Mechanics
    	
 
    	
138
    
	
 
    	
 
    	
 
    	
 
    
	
35.
    	
Set-Off
    	
 
    	
140
    
	
 
    	
 
    	
 
    	
 
    
	
36.
    	
Costs   and Expenses
    	
 
    	
141
    
	
 
    	
 
    	
 
    	
 
    
	
37.
    	
Notices
    	
 
    	
142
    

 

3

 

	
38.
    	
Calculations   and Certificates
    	
 
    	
144
    
	
 
    	
 
    	
 
    	
 
    
	
39.
    	
Partial   Invalidity
    	
 
    	
145
    
	
 
    	
 
    	
 
    	
 
    
	
40.
    	
Remedies   and Waivers
    	
 
    	
145
    
	
 
    	
 
    	
 
    	
 
    
	
41.
    	
Amendments   and Waivers
    	
 
    	
145
    
	
 
    	
 
    	
 
    	
 
    
	
42.
    	
Counterparts
    	
 
    	
147
    
	
 
    	
 
    	
 
    	
 
    
	
PART 13 GOVERNING LAW AND ENFORCEMENT
    	
 
    	
148
    
	
 
    	
 
    	
 
    	
 
    
	
43.
    	
Governing   Law
    	
 
    	
148
    
	
 
    	
 
    	
 
    	
 
    
	
44.
    	
Jurisdiction
    	
 
    	
148
    
	
 
    	
 
    	
 
    	
 
    
	
45.
    	
Service   of Process
    	
 
    	
148
    
	
 
    	
 
    	
 
    	
 
    
	
Schedule 1 The Initial Obligors
    	
 
    	
150
    
	
 
    	
 
    	
 
    
	
Schedule 2 The Original Lenders
    	
 
    	
151
    
	
 
    	
 
    	
 
    
	
Schedule 3 Conditions Precedent
    	
 
    	
152
    
	
 
    	
 
    	
 
    
	
Schedule 4 Utilisation Requests
    	
 
    	
156
    
	
 
    	
 
    	
 
    
	
Schedule 5 Amortisation Schedule
    	
 
    	
159
    
	
 
    	
 
    	
 
    
	
Schedule 6 Mandatory Cost Formulae
    	
 
    	
160
    
	
 
    	
 
    	
 
    
	
Schedule 7 Form of Transfer Certificate
    	
 
    	
163
    
	
 
    	
 
    	
 
    
	
Schedule 8 Form of Lender Accession Notice
    	
 
    	
165
    
	
 
    	
 
    	
 
    
	
Schedule 9 Form of Accession Letter
    	
 
    	
167
    
	
 
    	
 
    	
 
    
	
Schedule 10 Form of Resignation Letter
    	
 
    	
168
    
	
 
    	
 
    	
 
    
	
Schedule 11 Form of Compliance Certificate
    	
 
    	
169
    
	
 
    	
 
    	
 
    
	
Schedule 12 Form of Letter of Credit
    	
 
    	
171
    
	
 
    	
 
    	
 
    
	
Schedule 13 Form of Confidentiality   Undertaking
    	
 
    	
175
    
	
 
    	
 
    	
 
    
	
Schedule 14 Form of Deed of Subordination
    	
 
    	
180
    
	
 
    	
 
    	
 
    
	
Schedule 15 Form of Sources and Uses   Statement
    	
 
    	
196
    
	
 
    	
 
    	
 
    
	
Schedule 16 (Copy of ORGL LC)
    	
 
    	
198
    

 

4

 

THIS AGREEMENT is dated 28 March 2011 and made between:

 

(1)                    KOSMOS ENERGY FINANCE INTERNATIONAL a company incorporated under the laws of the Cayman Islands with registered number 253656 and having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1-1209, Cayman Islands (the “Original Borrower”);

 

(2)                    KOSMOS ENERGY OPERATING a company incorporated under the laws of the Cayman Islands with registered number 231417 and having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1-1209, Cayman Islands (“KEO”);

 

(3)                    KOSMOS ENERGY INTERNATIONAL a company incorporated under the laws of the Cayman Islands with registered number 218274 and having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1-1209, Cayman Islands (“KEI”);

 

(4)                    KOSMOS ENERGY DEVELOPMENT a company incorporated under the laws of the Cayman Islands with registered number 225879 and having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1-1209, Cayman Islands (“KED”);

 

(5)                    KOSMOS ENERGY GHANA HC a company incorporated under the laws of the Cayman Islands with registered number 135710 and having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1-1209, Cayman Islands (“KEG”);

 

(6)                    ABSA CAPITAL (A DIVISION OF ABSA BANK LIMITED), BNP PARIBAS, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, HSBC BANK PLC, SOCIÉTÉ GÉNÉRALE LONDON BRANCH AND STANDARD CHARTERED BANK as mandated lead arrangers of the Facility (each a “Mandated Lead Arranger” and together, the “Mandated Lead Arrangers”);

 

(7)                    ABSA CAPITAL (A DIVISION OF ABSA BANK LIMITED), BNP PARIBAS, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, HSBC BANK PLC, SOCIÉTÉ GÉNÉRALE LONDON BRANCH AND STANDARD CHARTERED BANK as underwriters of the Facility (each an “Underwriter” and together, the “Underwriters”);

 

(8)                    THE FINANCIAL INSTITUTIONS listed in Schedule 2 as lenders (the “Original Lenders”);

 

(9)                    SOCIÉTÉ GÉNÉRALE, LONDON BRANCH as the lead technical bank, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK as co-technical bank and HSBC BANK PLC as co-technical bank (together referred to as the “Technical Bank”);

 

(10)             SOCIÉTÉ GÉNÉRALE, LONDON BRANCH as the lead modelling bank and CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK as co-modelling bank (together referred to as the “Modelling Bank”);

 

5

 

(11)             HSBC BANK PLC as the documentation bank (the “Documentation Bank”);

 

(12)             STANDARD CHARTERED BANK as onshore account bank on the terms and conditions set out in the KEG Onshore Project Accounts Agreement (the “Onshore Account Bank”);

 

(13)             HSBC BANK PLC as offshore account bank on the terms and conditions set out in the KEG Offshore Project Accounts Agreement and the Borrower Offshore Project Accounts Agreement (the “Offshore Account Bank”);

 

(14)             BNP PARIBAS as agent of the Finance Parties under this Agreement (the “Facility Agent”);

 

(15)             BNP PARIBAS in its capacity as Security Agent for the Secured Parties on the terms and conditions set out in the Intercreditor Agreement (the “Security Agent” which expression includes its successors in title and assigns or any person appointed as an additional trustee for the purpose of and in accordance with the Intercreditor Agreement); and

 

(16)             BNP PARIBAS as the intercreditor agent (the “Intercreditor Agent”).

 

6

 

INTRODUCTION

 

(1)                     The Original Lenders have agreed to provide a secured, revolving and amortising loan and letter of credit facility for loans of up to USD 2 billion.

 

(2)                     The parties have agreed to enter into this Agreement for the purpose of setting out the provisions on which such facility will be provided.

 

7

 

PART 1

 

INTERPRETATION

 

1.                         DEFINITIONS AND INTERPRETATION

 

1.1                  Definitions

 

Each of the defined terms and interpretative provisions set out below and in the above list of parties to this Agreement shall apply to this Agreement and each Finance Document, unless an express contrary intention appears in that Finance Document.

 

“1992 ISDA Master Agreement” means the Master Agreement (Multicurrency Cross Border) as published by the International Swaps and Derivatives Association, Inc.

 

“2002 ISDA Master Agreement” means the 2002 Master Agreement as published by the International Swaps and Derivatives Association, Inc.

 

“Accession Letter” means a document substantially in the form set out in Schedule 8 (Form of Lender Accession Notice) of this Agreement.

 

“Account Bank” means, as the context so requires, either the Onshore Account Bank, the Offshore Account Bank, or both of them.

 

“Accounting Reference Date” means 31 December of each year.

 

“Additional Borrower” means a company which accedes to the terms of this Agreement as an additional borrower in accordance with clause 31 (Changes to the Obligors) of this Agreement.

 

“Additional Commitment” has the meaning given to it in clause 3.3 (Additional Commitment).

 

“Additional Commitment Date” has the meaning given to that term in clause 3.3 (Additional Commitment) of this Agreement.

 

“Additional Cost Rate” has the meaning given to that term in Schedule 6 (Mandatory Cost Formulae) of this Agreement.

 

“Additional Debt” means, in relation to any debt, any money, debt or liability due, owing or incurred under or in connection with:

 

(A)                any refinancing, deferral, novation or extension of that debt;

 

(B)                  any further advance which may be made under any document, agreement or instrument supplemental to any relevant Finance Document together with any related interest, fees and costs;

 

(C)                  any claim for damages or restitution in the event of rescission of that debt or otherwise in connection with any relevant Finance Document;

 

8

 

(D)                 any claim against Kosmos flowing from any recovery by Kosmos or any liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer of a payment or discharge in respect of that debt on the grounds of preference or otherwise; and

 

(E)                   any amount (such as post-insolvency interest) which would be included in any of the above but for any discharge, non-provability, unenforceability or non-allowability of the same in any insolvency or other proceedings.

 

“Additional Guarantor” means a company which accedes to the terms of this Agreement as an additional guarantor in accordance with clause 31 (Changes to the Obligors) of this Agreement.

 

“Additional Lender” has the meaning given to it in clause 3.3 (Additional Commitment).

 

“Additional Obligor” means an Additional Borrower or an Additional Guarantor.

 

“Additional Oil Entitlement” shall have the meaning given to that term in the relevant Petroleum Agreement.

 

“Affected Administrative Party” has the meaning given to that term in clause 32.12(Replacement of Administrative Parties) of 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.

 

“Agent” means each of the Facility Agent, the Security Agent, the Intercreditor Agent, the Technical Bank and the Modelling Bank and “Agents” shall be construed accordingly.

 

“Agreed Form” means in a form agreed between the Borrower (and/or KEG) and the Facility Agent.

 

“Agreed Insurances” means the insurances to be implemented and maintained by the Obligors in accordance with the Schedule of Insurances, to be formulated in consultation with the Insurance Consultant, but excluding any insurances to the extent that the cover to be maintained is not available on reasonable commercial terms or no longer reflects insurance which would be implemented and maintained in accordance with good oil industry practice or ceases to be generally available in the market and provided that a maximum aggregate of up to 30 per cent. of reinsurance may be effected through a self-insurance programmes of the Obligors (such self-insurance being captive insurance and excluding non-insurance).

 

“Amortisation Schedule” means the amortisation schedule set out in Schedule 5 (Amortisation Schedule) of this Agreement, as amended, supplemented or replaced from time to time.

 

“Approved Accounting Principles” means US generally accepted accounting principles to the extent applicable to the relevant financial statements.

 

9

 

“Approved Auditor” means any one of Deloitte LLP, Ernst & Young, PriceWaterhouse Coopers LLP or such other internationally recognised auditor as the Majority Lenders may approve from time to time (acting reasonably).

 

“Approved Development” means any Petroleum Asset in which an Obligor has an interest and which the Majority Lenders have agreed (acting reasonably) shall be a Borrowing Base Asset.

 

“Assignments” means the KEG Offshore Security Assignment, the KEG Onshore Security Assignment and the Assignment of Reinsurance Rights, together with any other Security Document entered into after the Signing Date which may give rise to a liability to pay stamp duty, documentary taxes or any other similar tax, charge or impost.

 

“Assignment of Reinsurance Rights” means the deed of insurance and reinsurance assignment to be entered into in accordance with the terms of this Agreement, between the insurers, the Security Agent and KEG.

 

“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

 

“Authorised Investment” means, at any time (subject to such being available), any of the following:

 

(A)                a US Dollar denominated institutional money market fund with at least USD 1 billion of funds and an average rate of maturity not exceeding one year;

 

(B)                  a US Dollar denominated freely negotiable and marketable bond, treasury bill or debt security of a remaining maturity not exceeding one year issued by the United States of America or any agency or instrumentality thereof, or by any other sovereign government with a long-term credit rating of at least A2 by Moody’s or A by Standard & Poor’s at such time;

 

(C)                  a US Dollar denominated time deposit (of an original maturity not exceeding six months) made in London or New York or any other place agreed between the Borrower and the Facility Agent with a bank authorised to carry on business there whose long-term debt securities are, at such time, rated at least A2 by Moody’s or A by Standard & Poor’s;

 

(D)                 a US Dollar denominated instrument with a maturity of less than one year which has a short-term rating at such time of at least P1 by Moody’s or A1 by Standard & Poor’s or instruments with a maturity of less than one year issued by, or guaranteed by, entities whose short-term securities are rated at such time at least P1 by Moody’s or A1 by Standard & Poor’s; or

 

(E)                   any other investment agreed between the Facility Agent and the Borrower.

 

“Authorised Signatory” means, in relation to a company or other legal person:

 

(A)                one or more directors who are duly authorised whether singly or jointly, to act to bind that company or other legal person; or

 

10

 

 

(B)                  a person or persons duly authorised by that company or other legal person to act to bind that company or other legal person.

 

“Authority” means any governmental, provincial or local government, department, authority, court, tribunal or other judicial or regulatory body, instrumentality or agency in any of the countries where the Borrower operates its business.

 

“Availability Period” means the availability period in respect of the Facility as specified in clause 6.1 (Availability Period) of this Agreement.

 

“Available Commitment” means, at any time, a Lender’s Commitment minus:

 

(A)                the amount of its participation in any outstanding Loans; and

 

(B)                  in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date,

 

other than that Lender’s participation in any Loans that are due to be repaid or prepaid on or before expiry of the Availability Period or all or a part of any Letters of Credit that have been cash collateralised by the Borrower depositing funds into the LC Cash Collateral Account.

 

“Base Currency” has the meaning given to it in clause 34.7 (Currency of account).

 

“Basel II” has the meaning given to it in clause 16.3 (Exceptions).

 

“Basel III” means the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision on 16 December 2010.

 

“BBA Cure Period” has the meaning given to it in paragraph (A)(i) of clause 10.3 (Aggregate outstandings exceed the Borrowing Base Amount) of this Agreement.

 

“Borrower” means the Original Borrower or any Additional Borrower unless it has ceased to be a Borrower in accordance with clause 31 (Changes to the Obligors).

 

“Borrower Insurance Proceeds Account” means an account designated “Borrower — Insurance Proceeds Account” established by the Original Borrower with the Offshore Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“Borrower Offshore Proceeds Account” means an account designated “Borrower — Offshore” established by the Original Borrower with the Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

11

 

“Borrower Offshore Project Accounts Agreement” means the offshore project accounts agreement, dated on or about the date of this Agreement, between the Original Borrower, the Offshore Account Bank, the Facility Agent and the Security Agent.

 

“Borrower Offshore Security Assignment” means the English law security assignment and debenture, dated on or about the date of this Agreement, between the Original Borrower and the Security Agent.

 

“Borrowing Base Amount” means the amount determined on a Forecast Date in accordance with clause 19.6 (Calculation of Borrowing Base Amount) of this Agreement.

 

“Borrowing Base Assets” means KEG’s interest in, and all rights in respect of, Jubilee Field Phase 1, Phase 1a and Phase 1b and any other Ghana Block Asset when a plan of development applicable to that asset has been approved in accordance with the relevant Petroleum Agreement, including the Entitlement to all Unit Substances, and the assets in any Permitted Acquisition or Approved Development (which can be either Developed Assets or Developing Assets). In determining the reserves attributable to the Jubilee Field Phase 1, Phase 1a and Phase 1b and any Developed Assets, such determination shall take account of the proved and probable (2P) reserves, and in respect of Developing Assets, shall take account of proved (1P) reserves only.

 

“Break Costs” means the amount (if any) by which:

 

(A)                the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

 

exceeds:

 

(B)                  the amount which that Lender would be able to obtain by placing an amount equal to the total sum received by it on deposit with a leading bank in the London interbank market for a period starting on the date of receipt or recovery and ending on the last day of the current Interest Period.

 

The calculation of interest for the purposes of paragraph (A) shall exclude an amount equal to the Margin for the period referred to in that paragraph where Kosmos prepays a Loan in any of the following circumstances:

 

(1)                    under clause 10.1 (General) of this Agreement or if clause 10.10 (Right of repayment and cancellation in relation to a single Lender) of this Agreement applies; or

 

(2)                    a Market Disruption Event has occurred in relation to that Loan and no substitute basis for determining the rate of interest has been agreed.

 

“Brent Forward Curve” means a Brent Crude Oil five-year forward curve as quoted Ft, T by Intercontinental Exchange.

 

12

 

“Business Day” means a day (other than a Saturday or Sunday) when banks are open for business in London, Paris and New York.

 

“Cameroon Block Assets” means all activities, assets and developments in the Kombe-Nsepe Permit area and the Ndian River Block (including exploration), as such areas are described in the relevant Project Agreements set out below.

 

“Cameroon Blocks” means all of the blocks in the Kombe-Nsepe Permit area and the Ndian River Block, as such areas are described in the relevant Project Agreements set out below.

 

“Cash Waterfall” means the order of priority for application of amounts withdrawn from the Offshore Proceeds Accounts and the Onshore Working Capital Accounts as set out in clause 21.2 (Withdrawals — No Default Outstanding) of this Agreement.

 

“Change of Control” has the meaning given to that term in clause 10.6 (Change of Control) of this Agreement.

 

“Charge over Shares in KED” means the charge over shares in KED dated on or about the date of this Agreement between KEI and the Security Agent.

 

“Charge over Shares in KEG” means the charge over shares in KEG dated on or about the date of this Agreement between KED and the Security Agent.

 

“Charge over Shares in KEI” means the charge over shares in KEI dated on or about the date of this Agreement between KEO and the Security Agent.

 

“Charge over Shares in KEO” means the limited recourse charge over shares in KEO dated on or about the date of this Agreement between KEH as chargor, KEO and the Security Agent.

 

“Charge over Shares in the Original Borrower” means the limited recourse charge over shares in the Original Borrower dated on or about the date of this Agreement between KEI as chargor, the Original Borrower and the Security Agent.

 

“Charges over Shares” means the Charge over Shares in KED, the Charge over Shares in KEG, the Charge over Shares in KEI, the Charge over Shares in KEO and the Charge over Shares in the Original Borrower.

 

“Commitment” means:

 

(A)                in relation to an Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 2 (The Original Lenders) of this Agreement and the amount of any other Commitment transferred to it;

 

(B)                  in relation to an Additional Lender, its Additional Commitment; and

 

(C)                  in relation to any other Lender, the amount of any Commitment transferred to it,

 

to the extent not cancelled, reduced or transferred by it.

 

13

 

“Completion” means, in respect of a Developing Asset, the date on which the applicable Completion Test has been satisfied (as determined by the Technical Bank acting reasonably).

 

“Completion Test” means, in respect of a Developing Asset, the tests as agreed between the Original Borrower and the Technical Bank (acting reasonably) and approved by the Majority Lenders (acting reasonably) which must be completed to show that such asset should reasonably be considered to be a commercially producing asset (being substantially equivalent to the date of commencement of commercial production under applicable Project Agreements) in order for a Developing Asset to be included in the Borrowing Base Assets as a Developed Asset.

 

“Compliance Certificate” means a certificate, substantially in the form set out in Schedule 11 (Form of Compliance Certificate) of this Agreement.

 

“Conditions Precedent” means the conditions precedent to initial utilisation of the Facility as set out in Part I of Schedule 3 (Conditions Precedent) of this Agreement.

 

“Confidentiality Undertaking” means a confidentiality undertaking substantially in the form of Schedule 13 (Form of Confidentiality Undertaking) of this Agreement or in any other form agreed between Kosmos and the Mandated Lead Arrangers.

 

“Consultants” means the Technical Consultant, Environmental Consultant, the Reserves Consultant and the Insurance Consultant.

 

“Contract Area” shall have the meaning given to that term in the WCTP PA or the DWT PA, as appropriate, or in any new petroleum agreements in Ghana applying to any part of such areas.

 

“Contractor” means the contractor under the WCTP PA and the DWT PA respectively from time to time.

 

“Crude Oil” shall have the meaning given to that term in the UUOA.

 

“Debt Service Reserve Account” or “DSRA” means an account designated “Kosmos -DSRA” established by the Original Borrower in respect of the Facility with the Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“Deed of Acknowledgment and Release” means the Deed of Acknowledgment and Release between KEH, KEI, KED, KEFI, KEG and KEO.

 

“Deed of Subordination” means each deed of subordination in respect of Financial Indebtedness of either (i) the Obligors owed to each other, or (ii) Obligors owed to KEH, in each case substantially in the form of Schedule 14 (Form of Deed of Subordination).

 

“Default” means an Event of Default or event which, with the giving of notice, lapse of time, or fulfilment of any condition, would constitute an Event of Default.

 

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“Definitions Agreement” means the definitions agreement dated 13 July 2009 (as amended on 29 October, 2009, 24 December, 2009 and 23 August, 2010) between, inter alios, Kosmos Energy Finance (as original borrower), certain other Obligors and the Finance Parties named therein setting out the definitions and the rules of construction and interpretation used in the Finance Documents relating to the financing for the Jubilee Field Phase 1.

 

“Derivative Agreement” means an ISDA Master Agreement or similar agreement pursuant to which Derivative Transactions are entered into by the Borrower with a counterparty.

 

“Derivative Transaction” means any transaction entered into under a Derivative Agreement, including (but not limited to) any transaction which is a forward rate agreement, option, future, swap, cap, floor and any combination of the foregoing.

 

“Developed Assets” means each of Jubilee Field Phase 1, Phase 1a and Phase 1b, and any Developing Assets which have achieved Completion and, as applicable, Approved Developments and Permitted Acquisitions which have been approved as Developed Assets in accordance with clause 19.8.

 

“Developing Assets” means the Ghana Block Assets and, as applicable, Approved Developments and Permitted Acquisitions which are to be counted as Developing Assets.

 

“Development Work Program and Budget” shall have the meaning given to that term in the UUOA.

 

“Discharge Date” means the first date on which all liabilities (whether actual or contingent) owed to the Finance Parties (other than the Hedging Counterparties) have finally been discharged and such Finance Parties are under no further obligation to provide financial accommodation under the Finance Documents.

 

“Discharged Rights and Obligations” has the meaning given to it in clause 30.5 (Procedure for transfer).

 

“Dispute” has the meaning given to it in clause 44.1 (Submission).

 

“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 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 (including, without limitation, disruption of a technical or systems-related nature) to the treasury or payments operations of a Party preventing or severely inhibiting that or any other Party:

 

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(i)                        from performing its payment obligations under the Finance Documents; or

 

(ii)                     from communicating with other Parties in accordance with the terms of the Finance Documents,

 

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

 

“Distributions Reserve Account” means each account designated “Kosmos - DRA” which is established and maintained by an Obligor pursuant to clause 20.6 (Distributions Reserve Account) of this Agreement, with any bank and in any jurisdiction (and to the extent such account is held by HSBC Bank plc, it is not held in its capacity as Account Bank).

 

“Dividend Release Test” means the conditions to be satisfied under clause 28.23 (Distributions) of this Agreement for the payment of a Shareholder Distribution.

 

“DWT Block” means the Deep Water Tano area offshore Ghana, being the area described in Annex 1 of the DWT PA, but excluding any portions of such area in respect of which the Contractor’s rights thereunder are from time to time relinquished or surrendered pursuant to the DWT PA.

 

“DWT JOA” means the joint operating agreement dated 15 August 2006 between Tullow Ghana Limited, Sabre Oil and Gas Limited and KEG in respect of the DWT Block (and all amendments and supplements thereto).

 

“DWT PA” means the petroleum agreement dated 10 March 2006 between the Government, represented by the Minister, the GNPC, Tullow Ghana Limited, Sabre Oil and Gas Limited and KEG in respect of the DWT Block (and all amendments and supplements thereto).

 

“Economic Assumptions” means the economic assumptions agreed or determined in accordance with clause 19.1 (Forecast Procedures) of this Agreement.

 

“Enforcement Action” shall have the meaning given to that term in the Intercreditor Agreement.

 

“Entitlement” means Kosmos’s entitlement to and lifting by tankers of its share of crude oil delivered from a Field.

 

“Environmental Consultant” means Shaw Consultants International, Inc., (or any other reputable environmental consultant agreed to by the Technical and Modelling Bank (acting reasonably)) appointed in accordance with a scope of work and budget for fees and expenses agreed with the Borrower, the Facility Agent and the Technical and Modelling Bank.

 

“EO” means the EO Group Limited, a Cayman Islands company with registered company number 219175 whose registered office is at PMB CT 123, Cantonments,

 

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112A Adole Crescent Way, Airport, Accra, Ghana (formerly known as the KG Group Limited).

 

“EO Participation Agreement” means the participation agreement dated 1 June 2004 between KEG and EO (including, for the avoidance of doubt, any amendment, restatement or supplemental agreements or arrangements in relation thereto).

 

“Equator Principles” means those principles so titled and set out in a paper entitled “The ‘Equator Principles’: A financial industry benchmark for determining, assessing and managing social & environmental risk in project financing” dated July 2006 and developed and adopted by the International Finance Corporation and various other financial institutions, as amended from time to time.

 

“Event of Default” means any event or circumstance specified as such in clause 29 (Events of Default) of this Agreement.

 

“Existing Finance Documents” means the Finance Documents as defined in the Definitions Agreement.

 

“Existing Lender” has the meaning given to it in clause 30.1 (Assignments and transfers and changes in Facility Office by the Lenders).

 

“Facility” means the facility made available under this Agreement as described in clause 3 (The Facility) of this Agreement.

 

“Facility Office” means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice where notice is required under clause 32.14 (Facility Agent relationship with the Lenders) of this Agreement) as the office or offices through which it will perform its obligations under this Agreement.

 

“Fee Letter” means any letter or letters dated on or about the date of this Agreement between any Finance Party and Kosmos setting out any of the fees referred to in clause 14 (Fees) of this Agreement and any other fees payable by Kosmos to a Finance Party pursuant to a Finance Document or payable under this Facility.

 

“Field” means the Jubilee Field, the Ghana Block Assets, the Cameroon Block Assets, the Morocco Block Assets and any other onshore or offshore block or oil and gas field or reserves in which an Obligor has from time to time, directly or indirectly, acquired an interest pursuant to a Permitted Acquisition.

 

“Field Depletion Date” means the projected date on which it is determined (in accordance with the Forecast Assumptions) that Net Cash Flow is negative on each remaining Forecast Date following that projected date.

 

“Field Life Cover Ratio” or “FLCR” means the ratio of (i) the net present value of Net Cash Flow (calculated on the basis of the Forecast Assumptions) from the relevant Forecast Date until the Field Depletion Date plus the net present value of Relevant Capital Expenditure to (ii) the aggregate of all Loans outstanding under the Facility on that Forecast Date.

 

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“Final Information Memorandum” means the information memorandum agreed between the Original Borrower and the Mandated Lead Arrangers and used by the Mandated Lead Arrangers during primary syndication of the Facility.

 

“Final Maturity Date” means the earlier of 7 years from the date of Financial Close and the Reserve Tail Date.

 

“Final Repayment Date” means the final repayment date for the Facility determined in accordance with clause 9 (Repayment) and/or the Amortisation Schedule, and references to the Final Repayment Date shall be construed as a reference to any Revised Final Repayment Date which may be determined in accordance with clause 9.2 (Amendment to Amortisation Schedule) of this Agreement.

 

“Final Reports” means the reports prepared by the Insurance Consultant, the Reserves Consultant, the Technical Consultant and the Environmental Consultant in relation to the Borrowing Base Assets.

 

“Finance Document” means this Agreement, the Intercreditor Agreement, each Hedging Agreement, each Intercompany Loan Agreement, each Security Document, each Deed of Acknowledgment and Release, each Deed of Subordination and each Fee Letter with an Agent and any other document designated as such by the Original Borrower and the Facility Agent.

 

“Finance Party” means each of the Mandated Lead Arrangers, the Lenders, the Hedging Counterparties, the LC Issuing Banks, the LC Lenders, the Account Bank, the Facility Agent, the Security Agent, the Intercreditor Agent, the Modelling Bank and the Technical Bank, and “Finance Parties” shall be construed accordingly.

 

“Financial Close” means the date on which the Facility Agent notifies the Original Borrower and the Lenders that it has received all of the Conditions Precedent in form and substance satisfactory to it (acting reasonably) and/or waived receipt of those Conditions Precedent in accordance with clause 2.1 (Conditions Precedent to first Utilisation).

 

“Financial Covenants” means the financial covenants listed under clause 27 (Financial Covenants) of this Agreement.

 

“Financial Indebtedness” means any indebtedness for or in respect of:

 

(A)                moneys borrowed;

 

(B)                  any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

 

(C)                  any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

 

(D)                 the amount of any liability in respect of any lease or hire purchase contract which would be treated in the accounts of the relevant entity as a finance or capital lease;

 

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(E)                   receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

 

(F)                   any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the market to market value shall be taken into account);

 

(G)                  any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition but which is classified as a borrowing in the accounts of the relevant entity;

 

(H)                 any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability of an entity which is not a member of the Group and which underlying liability would fall within one of the other paragraphs of this definition if it were a liability of a member of the Group; and

 

(I)                      the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (A) to (H) above (but only to the extent that the Financial Indebtedness supported thereby is or is at any time in the future capable of being outstanding).

 

“Financing Costs” means all amounts of interest, fees, commitment fees, or other costs and scheduled principal instalments payable by the Obligors under the Finance Documents.

 

“First Currency” has the meaning given to it in clause 17.1 (Currency indemnity).

 

“Forecast” means each Forecast prepared in accordance with clause 19 (Forecasts and Calculations) of this Agreement.

 

“Forecast Assumptions” means the assumptions used in the production of a Forecast.

 

“Forecast Date” means:

 

(A)                the date of Financial Close;

 

(B)                  the date on which an asset becomes a Borrowing Base Asset;

 

(C)                  15 June and 15 December in each year commencing on and from a date to be agreed between the Technical and Modelling Bank and Kosmos which will fall between 15 June 2011 and 15 August 2011;

 

(D)                 any other date which falls no more than 90 days after the date on which the Reserves Consultant has, at the request of the Original Borrower, produced a new or updated reserves report;

 

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(E)                   the date of disposal of a Borrowing Base Asset (other than a Permitted Disposal which falls under any of paragraphs (B) and (E) to (K) of the definition of “Permitted Disposal” set out below); and

 

(F)                   on request by the Majority Lenders on any date after the Signing Date and before the date falling 12 months after the Signing Date upon which the Majority Lenders (acting reasonably) determine that an event (or series of events) or circumstance or any effect or consequence thereof has occurred (other than any fluctuation or change in crude oil prices) that could reasonably be expected to have a Material Adverse Effect, provided that, before making such determination, the Majority Lenders must first consult with Kosmos in good faith for not less than 5 Business Days.

 

“Forecast Period” means, in the case of the first Forecast Period, the period commencing on the date of Financial Close and ending at close of business on the first Forecast Date and, in the case of any subsequent Forecast Period, the period commencing on the expiry of the immediately preceding Forecast Period and ending at close of business on the next Forecast Date.

 

“Forecasting Procedures” means the procedures set out under clause 19 (Forecasts and Calculations) of this Agreement for preparing a Forecast.

 

“FPSO” means a floating production, storage and offloading vessel.

 

“FPSO Agreement” means an agreement entered into by Tullow Ghana Limited (and its successors under the UUOA) in relation to the Jubilee Field Phase 1 for the construction, installation, lease, operations and maintenance of an FPSO dated 7 May 2010 (as amended from time to time).

 

“FPSO Construction Financing” means any financing arrangements in relation to the construction of the FPSO to which an Obligor or member of the Group is a party.

 

“Ghanaian Cedi” means the lawful currency of Ghana.

 

“Ghana” means the Republic of Ghana, West Africa.

 

“Ghana Block Assets” means, other than Jubilee Field Phase 1, Phase 1a and Phase 1b, all other activities, assets and developments in the Contract Areas (including exploration).

 

“Ghana Blocks” means the WCTP Block and the DWT Block.

 

“Ghana Working Capital Cedi Account” means a Ghanaian Cedi account designated “Kosmos — Onshore Working Capital Account” established by Kosmos with the Onshore Account Bank in Ghana pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“Ghana Working Capital USD Account” means a USD account designated “Kosmos — Onshore Working Capital Account” established by Kosmos with the Onshore Account

 

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Bank in Ghana pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“GNPC” means the Ghana National Petroleum Corporation, a public corporation established by Provisional National Defence Council Law 64 of 1983.

 

“Government” means the government of Ghana or, as appropriate, the government of any other country in which a Borrowing Base Asset is situated.

 

“Gross Revenues” means, for the relevant period of determination and without double counting, the USD equivalent of each of the following amounts to the extent received (or projected to be received or which are credits to an interest or account of an Obligor) by or on behalf of an Obligor (including the USD equivalent of any payment in kind) during that period from or in respect of the Borrowing Base Assets (other than any amount received or held on behalf of an Interested Third Party which is not related to a Borrowing Base Asset whether in cash or in kind):

 

(A)                amounts received or to be received from the sale of crude oil, condensate, natural gas liquids and all output and product from the Borrowing Base Assets or otherwise received or to be received pursuant to any Project Agreement;

 

(B)                  amounts representing interest on the Project Accounts and interest or distributions or income of any kind in respect of Authorised Investments;

 

(C)                  all refunds of tax of any kind;

 

(D)                 all Insurance Proceeds;

 

(E)                   all damages or other payments for termination or non-performance or failure to perform or variation under any contract;

 

(F)                   all net amounts received under any Derivative Agreement;

 

(G)                  all amounts received in respect of any Permitted Disposal; and

 

(H)                 all other amounts which fall to be credited to the profit and loss account of an Obligor for the financial year in which the relevant period falls.

 

“Group” means KEO and the Original Borrower and each of their subsidiaries.

 

“Guarantor” means the Original Guarantor or an Additional Guarantor.

 

“Hedging Agreement” means an ISDA Master Agreement or similar agreement pursuant to which Hedging Transactions are entered into by the Borrower with a Hedging Counterparty and where the liability of the Obligors thereunder are secured by the Security Documents.

 

“Hedging Counterparty” means:

 

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(a)                    any person which is named on the signing pages of the Intercreditor Agreement as a Hedging Counterparty and;

 

(b)                   any person which becomes a Party as a Hedging Counterparty pursuant to Clause 13.5 (Creditor/Agent Accession Undertaking) of the Intercreditor Agreement.

 

“Hedging Transaction” means any transaction entered into under a Hedging Agreement, including (but not limited to) any transaction which is a forward rate agreement, option, future, swap, cap, floor and any combination of the foregoing.

 

“IFC Commitment” has the meaning given to it in paragraph (A) of clause 3.4 (IFC as Additional Lender) of this Agreement.

 

“IFC Facility” has the meaning given to it in paragraph (A) of clause 3.4 (IFC as Additional Lender) of this Agreement.

 

“IFC Rebalancing” has the meaning given to it in paragraph (C) of clause 3.4 (IFC as Additional Lender) of this Agreement.

 

“Illegality Lender” has the meaning given to that term in clause 10.2 (Illegality) of this Agreement.

 

“Increased Costs” has the meaning given to that term in clause 16.1 (Increased costs) of this Agreement.

 

“Insolvency Event” means, in relation to any Obligor, any circumstances described in clause 29.6 (Insolvency) of this Agreement.

 

“Insolvency Proceedings” means, in relation to any Obligor, any circumstances described in clause 29.7 (Insolvency proceedings) of this Agreement.

 

“Insurance” or “Insurances” means any or all of the contracts of insurance which Kosmos is required from time to time to purchase or procure and maintain pursuant to the Schedule of Insurances.

 

“Insurance Consultant” means the appointed insurance consultant, currently Moore-McNeil, LLC, appointed in accordance with a scope of work and budget for fees and expenses agreed with the Borrower, the Facility Agent and the Technical and Modelling Bank.

 

“Insurance Consultant Appointment Letter” means the letter between Kosmos, the Facility Agent and the Insurance Consultant setting out the terms of appointment of the Insurance Consultant, in the Agreed Form.

 

“Insurance Proceeds” means all moneys which may at any time be or become payable to or received by an Obligor (other than proceeds in respect of third party liability insurances) under or pursuant to the Agreed Insurances and any reinsurance contract in which the relevant Obligor has an interest.

 

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“Insurance Proceeds Accounts” means any of the KED Insurance Proceeds Account, the KEG Insurance Proceeds Account, the KEI Insurance Proceeds Account, the KEO Insurance Proceeds Account, the Borrower Insurance Proceeds Account and any account deemed to be an “Insurance Proceeds Account” in accordance with clause 20 (Bank Accounts and Cash Management) and which is secured in favour of the Secured Parties, each an “Insurance Proceeds Account”.

 

“Intercompany Borrower” means a borrower under an Intercompany Loan Agreement.

 

“Intercompany Loan Agreement” means each loan agreement in Agreed Form pursuant to which a Borrower makes advances to an Obligor from the proceeds of a Utilisation under the Facility.

 

“Intercreditor Agreement” means the intercreditor agreement, entered into on or about the date of this Agreement, between, amongst others, the Facility Agent, the Lenders, the Hedging Counterparties, the Original Borrower and the Security Agent.

 

“Interest Period” means, in relation to a Loan, each period determined in accordance with clause 12 (Interest Periods) of this Agreement and, in relation to an Unpaid Sum, each period determined in accordance with clause 11.4 (Default interest) of this Agreement.

 

“Interested Third Party” has the meaning given to the term in clause 20.2(A)(iii) (Other bank accounts) of this Agreement.

 

“IPO” means in relation to a company, a transaction in which shares in that company are sold or issued to investors and in connection with such sale or issue are admitted to trading on a regulated market or other stock exchange.

 

“IPO Reorganisation” means any Reorganisation implemented by KEH, or any of its Subsidiaries from time to time (or any group of them), which is undertaken for the purpose of facilitating an IPO.

 

“ISDA Master Agreement” means the 1992 ISDA Master Agreement or the 2002 ISDA Master Agreement, as the case may be.

 

“Joint Operating Agreements” means:

 

(A)                the DWT JOA;

 

(B)                  the WCTP JOA; and

 

(C)                  the joint operating agreement between Societe Nationale des Hydrocarbures, Perenco Oil and Gas (Cameroon) Ltd and Kosmos Energy Cameroon HC dated 3 July 2008 pursuant to which the parties, to ensure good management of the petroleum operations, agreed to further define their respective rights in relation to the Kombe-Nsepe Permit, Cameroon (and all amendments and supplementals thereto).

 

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“Jubilee Field” means the hydrocarbon accumulation so named that is located approximately 63km offshore Ghana and which extends across the Ghana Blocks.

 

“Jubilee Field Phase 1” means the Phase 1 development of the Jubilee Field, as described in the Phase 1 Plan of Development for the Jubilee Field, including the Project Infrastructure and all appraisal, exploration, construction, operations, maintenance and exploitation works and activities, and the treatment, processing, storage, delivery, lifting and sale of Unit Substances therefrom.

 

“KED Insurance Proceeds Account” means an account designated “KED — Insurance Proceeds Account” established by KED with the Offshore Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“KED Offshore Proceeds Account” means an account designated “Kosmos Energy Development — Offshore” established by KED with the Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“KED Offshore Security Assignment” means the English law security assignment and debenture, dated on or about the date of this Agreement, between KED and the Security Agent.

 

“KEG Insurance Proceeds Account” means an account designated “KEG — Insurance Proceeds Account” established by KEG with the Offshore Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“KEG Offshore Proceeds Account” means an account or accounts where the designated name includes the words “Kosmos Energy Ghana HC — Offshore” established by KEG with the Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“KEG Offshore Project Accounts Agreement” means the offshore project accounts agreement, dated on or about the date of this Agreement, between KEG, the Offshore Account Bank, the Facility Agent and the Security Agent.

 

“KEG Offshore Security Assignment” means the English law security assignment and debenture, dated on or about the date of this Agreement, between KEG and the Security Agent.

 

“KEG Onshore Project Accounts Agreement” means the onshore project accounts agreement, dated on or about the date of this Agreement, between KEG, the Onshore Account Bank, the Facility Agent and the Security Agent.

 

“KEG Onshore Security Assignment” means the Ghanaian law debenture, dated on or about the date of this Agreement, between KEG and the Security Agent.

 

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“KEH” means Kosmos Energy Holdings, a company incorporated under the laws of the Cayman Islands with registered number 133483 and having its registered office at PO Box 32332, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1-1209, Cayman Islands.

 

“KEI and KEO Offshore Security Assignment” means the English law security assignment dated on or about the date of this Agreement between KEI, KEO and the Security Agent.

 

“KEI Insurance Proceeds Account” means an account designated “KEI — Insurance Proceeds Account” established by KEI with the Offshore Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“KEI Offshore Proceeds Account” means an account designated “Kosmos Energy International — Offshore” established by KEI with the Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“KEI Offshore Security Assignment” means the English law security assignment and debenture, dated on or about the date of this Agreement, between KEI and the Security Agent.

 

“KEL” means Kosmos Energy Ltd., a company incorporated under the laws of Bermuda with registered number 45011 and having its registered office at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

 

“KEO Insurance Proceeds Account” means an account designated “KEO — Insurance Proceeds Account” established by KEO with the Offshore Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“KEO Offshore Proceeds Account” means an account designated “Kosmos Energy Operating — Offshore” established by KEO with the Account Bank in London pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement which is secured in favour of the Secured Parties.

 

“KEO Offshore Security Assignment” means the English law security assignment and debenture, dated on or about the date of this Agreement, between KEO and the Security Agent.

 

“Kosmos” means KEG or the Borrower, as the context so requires.

 

“LC Cash Collateral Account” means an account designated “Kosmos — LC Cash Collateral Account” which is established and maintained by the Original Borrower pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement, with the relevant LC Issuing Bank or Lender (as applicable, in accordance with the terms of clause 7.1(B)(viii)(a)), which is secured in favour of the relevant LC Issuing Bank or Lender, as applicable.

 

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“LC Issuing Bank” means the Mandated Lead Arrangers and Underwriters and such other Lenders (each an LC Issuing Bank) appointed to such role from time to time and who issue, pursuant to clause 7.6 (Issue of Letters of Credit) of this Agreement, a Letter of Credit.

 

“LC Lender” means each Lender, unless otherwise agreed.

 

“Lender” means:

 

(A)                any Original Lender;

 

(B)                  any bank or financial institution which has become a Party as a lender in accordance with clause 30 (Changes to the Lenders) of this Agreement; and

 

(C)                  any entity which has become a Party as a lender in accordance with clause 3.3 (Additional Commitment) of this Agreement,

 

which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

 

“Lender Accession Notice” means a notice substantially in the form set out under Schedule 8 (Form of Lender Accession Notice) to be delivered by an Additional Lender pursuant to and in accordance with clause 3.3 (Additional Commitment) of this Agreement.

 

“Letter of Credit” means a letter of credit:

 

(A)                substantially in the form set out in Schedule 12 (Form of Letter of Credit) of this Agreement subject to such amendments as any beneficiary may reasonably require;

 

(B)                  in such form as already issued by Kosmos on the date of this Agreement (together with such amendments as may reasonably be required by the beneficiary thereunder); or

 

(C)                  in any other form requested by Kosmos and agreed by the Facility Agent (pursuant to instructions from the Majority Lenders (acting reasonably)) and each LC Lender.

 

“LIBOR” means the British Bankers’ Association Interest Settlement Rate for the relevant Interest Period, as displayed on the appropriate page of the Reuters screen or, if that page is replaced or service ceases to be available, such reasonable alternative page or service which the Facility Agent reasonably specifies, or if no such rate or screen is available, the arithmetic mean of the rates (rounded to four decimal places) provided by three Reference Banks.

 

“Loan” means each loan or Letter of Credit made or to be made under this Agreement or the principal amount outstanding for the time being of that loan or Letter of Credit.

 

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“Loan Life Cover Ratio” or “LLCR” means the ratio of (i) the net present value of Net Cash Flow (calculated on the basis of the Forecast Assumptions) from the relevant Forecast Date until the Final Maturity Date plus the net present value of Relevant Capital Expenditure to (ii) the aggregate of all Loans outstanding under the Facility on that Forecast Date.

 

“Majority Lenders” means, as applicable, those Lenders whose participation in advances under the Facility are equal to 66 2/3 per cent. of the aggregate advances then outstanding, or if there are no advances outstanding, whose Commitments then aggregate at least 66 2/3 per cent. of the Total Commitments under the Facility.

 

“Mandatory Cost” means the percentage rate per annum calculated by the Facility Agent in accordance with Schedule 6 (Mandatory Cost Formulae) of this Agreement.

 

“Margin” means the percentage rate per annum determined in accordance with clause 11.2 (Margin) of this Agreement.

 

“Market Disruption Event” has the meaning given to that term in clause 13.2 (Market disruption) of this Agreement.

 

“Material Adverse Effect” means, in relation to any event (or series of events) or circumstance which occurs or arises (other than fluctuations in Crude Oil prices), that event (or events) or circumstance (or any effect or consequence thereof), in the opinion of the Majority Lenders, would reasonably be expected materially and adversely to affect the financial condition, operations, or business of any Obligor or the Borrowing Base Assets, or the ability of any Obligor to perform its obligations under the Finance Documents in full and on the basis contemplated therein in a way which is materially prejudicial to the interests of the Lenders or results in the Obligors being unable to pay any amounts when due and payable under the Finance Documents.

 

“Material Contracts” means the following contracts and agreements in Agreed Form at the Signing Date:

 

(A)                The Drilling Contract for the provision of a semi-submersible drilling unit ‘Eirik Raude’ and associated drilling services between Tullow Oil plc and Ocean Rig 2 AS (as contractor) dated 15 February 2008.

 

(B)                  The Atwood Hunter Offshore Drilling Contract made between Kosmos Energy Ghana HC, Noble Energy EG Ltd and Alpha Offshore Drilling Services Company dated 23 June 2008

 

(C)                  The Atwood Hunter Rig Sharing Agreement between Kosmos Energy Ghana HC, Noble Energy EG Ltd and Alpha Offshore Drilling Services Company dated June 24, 2008.

 

(D)                 The agreement for the construction, installation, lease, operations and maintenance of a floating, production, storage and offloading facility to be signed between Tullow Ghana Limited and Jubilee Ghana MV21 B.V. as the contractor entered into as of 7 May 2010.

 

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(E)                   Daywork Drilling Contract — Offshore (Deepwater Millennium), is made between Anadarko Petroleum Corporation, and Transocean Offshore Deepwater Holdings Limited, effective date April 17, 2008.

 

(F)                   Master Crude Sales Agreement, Trafigura Beheer B.V., Amsterdam, Branch Office Lucerne, and Kosmos Energy Ghana HC; effective date September 24, 2010 and as per first and second amendments dated January 17, 2011 and February 2, 2011.

 

(G)                  Jubilee Field Unit Crude Oil Lifting Agreement between, Ghana National Petroleum Corporation, Tullow Ghana Limited, Kosmos Energy Ghana HC, Anadarko WCTP Company, Sabre Oil & Gas Holdings Limited and EO Group Limited, dated December 8, 2010.

 

“Minister” means the Government’s Minister for Energy.

 

“Model” means the computer model in the Agreed Form at the Signing Date, as such model may be updated from time to time pursuant to clause 19 (Forecasts and Calculations) of this Agreement.

 

“Model Auditor” means Operis Group plc appointed in accordance with a scope of work and budget for fees and expenses agreed with the Borrower, the Facility Agent and the Technical and Modelling Bank.

 

“Model Auditor Appointment Letter” means the letter between Kosmos, the Facility Agent, the Technical and Modelling Bank and the Model Auditor setting out the terms of appointment of the Model Auditor in the Agreed Form.

 

“Moody’s” means Moody’s Investors Service, Inc., a Delaware corporation and any successor thereto and if such corporation shall for any reason no longer perform the functions of a securities rating agency, Moody’s shall be deemed to refer to any other internationally recognised rating agency agreed by the Facility Agent and Kosmos (both acting reasonably).

 

“Morocco Block Assets” means all activities, assets and developments in the Boujdour Offshore area of interest in Morocco (including exploration), as such area of interest is further described in the relevant Project Agreements defined below.

 

“Morocco Blocks” means all of the blocks in the Boujdour Offshore area of interest as such area of interest is further described in the relevant Project Agreements defined below.

 

“Net Cash Flow” means, for any relevant period (but without any double counting):

 

(A)                Net Revenues; minus

 

(B)                  Project Costs,

 

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projected to be paid or received during that period converted if necessary into USD at the rate of exchange used in the Forecast Assumptions on the date of projected receipt or payment.

 

“Net Revenues” means Gross Revenues minus Royalty Payments and Additional Oil Entitlement payments.

 

“New Commitment Rebalancing” has the meaning given to it in clause 3.3 (Additional Commitment) of this Agreement.

 

“New Lender” has the meaning given to it in clause 30.1 (Assignments and transfers and changes in Facility Office by the Lenders).

 

“New Project Agreement” means any project agreement relating to any Approved Development or Permitted Acquisition over which the Lenders have, or are to receive, a Security Interest.

 

“Non-Funding Lender” means:

 

(A)                any Lender who fails to participate in any Utilisation in the amount and at the time required;

 

(B)                  any Lender who has indicated publicly or to the Facility Agent or an Obligor that it does not intend to participate in all or part of any Utilisation;

 

(C)                  any Lender which has repudiated its obligations under the Facility; or

 

(D)                 any Lender in respect of which or in respect of whose holding company any of the events specified in clause 29.6 (Insolvency) or clause 29.7 (Insolvency proceedings) of this Agreement (disregarding paragraph (B) of clause 29.7) (Insolvency proceedings) applies or has occurred.

 

“Obligors” means the Borrowers and the Guarantors.

 

“Offshore Proceeds Accounts” means any of the KED Offshore Proceeds Account, the Borrower Offshore Proceeds Account, the KEG Offshore Proceeds Account, the KEI Offshore Proceeds Account, the KEO Offshore Proceeds Account, the Borrower Offshore Proceeds Account and any account deemed to be an “Offshore Proceeds Account” in accordance with clause 20.1 (Project Accounts), and which is secured in favour of the Secured Parties, each an “Offshore Proceeds Account”.

 

“Onshore Working Capital Accounts” means the Ghana Working Capital Cedi Account and the Ghana Working Capital USD Account.

 

“Operator” means, in relation to each Borrowing Base Asset or each Developing Asset, the relevant operator of that Borrowing Base Asset or Developing Asset.

 

“Operator Report” means the semi-annual report prepared by the Operator in relation to each Borrowing Base Asset and each Developing Asset.

 

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“ORGL LC” means the Letter of Credit dated 24 December 2010 issued by BNP Paribas to Ocean Rig Ghana Limited as beneficiary originally at the request of KEF in respect of the obligations of Tullow Ghana Limited to the beneficiary thereof, a copy of which is appended in Schedule 16 (Copy of ORGL LC), under which the amount of USD 23,000,000 is outstanding as at the date of this Agreement.

 

“Original Guarantor” means KEO, KEI and KED, KEG and any subsidiary of a Borrower which owns Borrowing Base Assets.

 

“Participating Interest” has the meaning given to it in the relevant Petroleum Agreement and details of each such participating interest as at the date of this Agreement are as set out in clause 26.14 (Assets) of this Agreement.

 

“Participating Member State” means any member state of the European Union that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

 

“Party” means a party to a Finance Document.

 

“Permitted Acquisition” means any acquisitions or investments:

 

(A)                which are made in the ordinary course of the day to day business of the acquiring company;

 

(B)                  which are funded by equity or debt subordinated on terms acceptable to the Majority Lenders (acting reasonably);

 

(C)                  which are in respect of the implementation and development of the Borrowing Base Assets;

 

(D)                 which are included within a Forecast;

 

(E)                   in respect of which the aggregate consideration paid (which shall exclude the amount of any debt assumed) does not in any calendar year exceed USD 50 million, or such higher figure as the Majority Lenders may agree (acting reasonably);

 

(F)                   by an Obligor which are to be Borrowing Base Assets as approved by the Majority Lenders (acting reasonably); or

 

(G)                  which are approved by the Majority Lenders (acting reasonably),

 

provided in each case that such acquisition or investment may not take place in Iran, Myanmar, North Korea, Sudan, Syria, Cuba, any country which is subject to a Sanctions Regime or any country designated by the Majority Lenders (acting reasonably).

 

“Permitted Disposals” means any:

 

(A)                                           disposal permitted in accordance with clause 28.8 (Disposals) of this Agreement;

 

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(B)                  disposals made in the ordinary course of the day to day business of operating the Borrowing Base Assets;

 

(C)                  disposals expressly permitted under any Project Agreement;

 

(D)                 disposals of cash for purposes not prohibited by the Finance Documents;

 

(E)                   disposals expressly required in order to comply with its obligations under the Project Agreements;

 

(F)                   disposals of assets in exchange for other assets of comparable, or superior as to, type, value and quality;

 

(G)                  disposals of obsolete assets;

 

(H)                 disposals from one Obligor to another or from a subsidiary to an Obligor;

 

(I)                      disposals on arms length terms for market value of its Entitlements from a Field or petroleum products to which an Obligor is entitled by virtue of its ownership or investment in a Petroleum Asset;

 

(J)                     disposals on arms length terms with a net market value not exceeding USD 50 million in any calendar year or, from the date of this Agreement, USD 100 million in aggregate; and

 

(K)                 disposals not falling within (A) to (J) above which are consented to by the Majority Lenders.

 

“Permitted Financial Indebtedness” means:

 

(A)                any Financial Indebtedness arising under or contemplated by the Finance Documents;

 

(B)                  any Financial Indebtedness the proceeds of which are applied, promptly on receipt by Kosmos, in making or procuring the making of a prepayment of all amounts outstanding under the Finance Documents in full;

 

(C)                  any Financial Indebtedness subordinated to the Lenders on terms approved by the Majority Lenders (each acting reasonably) provided that there shall be no subordination in respect of amounts held in any Distributions Reserve Account;

 

(D)                 any Financial Indebtedness owed to an Obligor;

 

(E)                   any Financial Indebtedness arising under finance or capital leases of vehicles, plant, equipment or computers, provided that the aggregate capital value of all such items so leased under outstanding leases by members of the Group does not exceed USD 100 million (or its equivalent in other currencies) at any time;

 

(F)                   any Financial Indebtedness arising under any Derivative Agreement that Kosmos may enter further to the provisions of clause 28.17(A) (Hedging); or

 

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(G)                  any Financial Indebtedness otherwise approved by the Majority Lenders (such approval not to be unreasonably withheld or delayed).

 

“Permitted Party” has the meaning given to it in clause 30.7 (Disclosure of information).

 

“Permitted Security” means:

 

(A)                any netting or set-off arrangement entered into in the ordinary course of financing arrangements for the purpose of netting or setting off debit and credit balances;

 

(B)                  any lien securing obligations no more than 90 days overdue arising by operation of law;

 

(C)                  any Security Interest arising under or contemplated by the Finance Documents or pursuant to the express terms of any Project Agreement;

 

(D)                 any title retention provisions in a supplier’s standard conditions of supply of goods;

 

(E)                   any Security Interest created over or in respect of any Distributions Reserve Accounts; and

 

(F)                   any Security Interest not falling within (A) to (E) above which is consented to by the Majority Lenders.

 

“Permitted Transferee” shall have the meaning given to that term in clause 10.6 (Change of Control) of this Agreement.

 

“Petroleum Agreements” means:

 

(i)                       the DWT PA and the WCTP PA (and all amendments and supplements thereto);

 

(ii)                    the petroleum agreement between Office National des Hydrocarbures et des Mines and Kosmos Energy Offshore Morocco HC dated 3 May 2006 in relation to the Boujdour Offshore area of interest in Morocco (and all amendments and supplementals thereto);

 

(iii)                 the memorandum of understanding between Office National des Hydrocarbures et des Mines, acting on behalf of the Kingdom of Morocco and Kosmos Energy Offshore Morocco HC, dated 27 September 2010;

 

(iv)                the production sharing agreement between The Republic of Cameroon and Kosmos Energy Cameroon HC in respect of the Ndian River Block in Cameroon (and all amendments and supplementals thereto);

 

(v)                   the convention of establishment (the “CoE”) between The Republic of Cameroon, CMS Nomeco Cameroon Ltd and Globex Cameroon, LLC dated 11 December 1997 pursuant to which The Republic of Cameroon granted certain mining titles to CMS Nomeco Cameroon Ltd and Globex Cameroon, LLC in relation to the

 

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Douala/Kribi-Campo Basin, the Rio Del Rey Basin, certain Deep Water Zones and certain Other Interior Basins (both aforementioned terms as defined in the CoE), which rights, together with the rights conferred under the Contract of Association referred to below, are referred to as the governing rights of the Kombe-Nsepe Permit, Cameroon (and all amendments and supplementals thereto);

 

(vi)                the exploration agreement between Perenco Oil and Gas (Cameroon) Ltd and Kosmos Energy Cameroon HC dated 5 October 2005 pursuant to which Perenco Oil and Gas (Cameroon) Ltd transferred by way of farm-out to Kosmos Energy Cameroon HC a portion of its interest in the Kombe-Nsepe Permit, Cameroon (and all amendments and supplementals thereto),

 

as such documents may be updated, amended or replaced from time to time.

 

“Petroleum Asset” means any assets related to the exploration for or exploitation, production, treatment, processing, transportation, storage, marketing and sale of petroleum products including, but without limitation, any contractual rights under any agreement entered into in relation to or incidental or ancillary thereto, any equity or participating interest in any entity which has such an interest or which conducts such activities and any right which would allow a person to obtain title to or an interest in any petroleum products.

 

“Phase 1 Plan of Development for the Jubilee Field” means the relevant plan for the development of the Jubilee Field (Phase 1) approved by the Government.

 

“Process Agent” has the meaning given to it in clause 45 (Service of Process).

 

“Project Accounts” means any or all of each Debt Service Reserve Account, the LC Cash Collateral Account, the Offshore Proceeds Accounts, the Onshore Working Capital Accounts and the Insurance Proceeds Accounts, in each case, as established pursuant to clause 20 (Bank Accounts and Cash Management) of this Agreement and any account established further to clause 10.3 (Aggregate outstandings exceed the Borrowing Base Amount) of this Agreement, with such accounts being secured in favour of the Secured Parties.

 

“Project Accounts Agreements” means the KEG Offshore Project Accounts Agreement, the KEG Onshore Project Accounts Agreement and the Borrower Offshore Project Accounts Agreement.

 

“Project Agreements” means (when entered into by the relevant Obligor):

 

(A)                each Petroleum Agreement;

 

(B)                  the Joint Operating Agreements;

 

(C)                  the UUOA;

 

(D)                 the contract of association (the “Contract of Association”) between The Republic of Cameroon, CMS Nomeco Cameroon Ltd, Globex Cameroon LLC

 

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and Societe Nationale des Hydrocarbures dated 11 December 1997 pursuant to which the parties have agreed the terms upon which they will carry out petroleum operations in relation to the M’VIA field, which rights, together with the rights conferred under the CoE referred to above, are referred to as the governing rights of the Kombe-Nsepe Permit, Cameroon (and all amendments and supplementals thereto);

 

(E)                   the association contract between Office National des Hydrocarbures et des Mines and Kosmos Energy Offshore Morocco dated 3 May 2006 in relation to the Boujdour Offshore area of interest in Morocco (and all amendments and supplementals thereto); and

 

(F)                   each New Project Agreement and any other agreement which the Facility Agent and the Original Borrower agree shall be a Project Agreement,

 

as such documents may be updated, amended or replaced from time to time.

 

“Project Costs” means all costs and expenses (including without limitation exploration costs and any costs incurred under any Derivative Agreement pursuant to any Derivative Transaction) in relation to:

 

(A)                Borrowing Base Assets;

 

(B)                  the Ghana Block Assets in the following 12 months;

 

(C)                  the Cameroon Blocks in the following 12 months;

 

(D)                 the Morocco Blocks in the following 12 months; and

 

(E)                   any other project, venture, Field or Petroleum Asset which can be funded by headroom under the Borrowing Base Amount, such headroom in any Forecast Period being the amount by which the Borrowing Base Amount exceeds the projected aggregate costs and expenses shown in the then current Forecast for that period for (A) to (D) above.

 

“Project Infrastructure” means:

 

(A)                the FPSO for the Jubilee Field Phase 1;

 

(B)                  a taut-leg mooring system for that vessel;

 

(C)                  seven production wells;

 

(D)                 five production drill centers;

 

(E)                   five production manifolds;

 

(F)                   four water injection wells;

 

(G)                  two water-injection drill centers;

 

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(H)                 two water injection manifolds;

 

(I)                      three gas-injection wells;

 

(J)                     one gas-injection drill center;

 

(K)                 one gas-injection manifold;

 

(L)                   two riser bases;

 

(M)              six subsea distribution units; and

 

(N)                 associated flowlines, risers, umbilicals and jumpers.

 

“Qualifying Bank” means an internationally recognised bank which:

 

(A)                is not on a sanctions list or subject to a sanctions regime issued, imposed or administered by the United States or any member country of the European Union, or the European Union itself or the United Nations (or any agency of any of them) (a “Sanctions Regime”); or

 

(B)                  does not have its principal place of business in a country which is subject to a Sanctions Regime; or

 

(C)                  is not a bank whose principal place of business is in a country notified by Kosmos to the Facility Agent prior to signing of this Agreement.

 

“Quotation Day” means, in relation to any period for which an interest rate is to be determined two Business Days before the first day of that period.

 

“Reference Banks” means the principal London offices of Société Générale, London Branch and BNP PARIBAS, or such other Reference Banks appointed under clause 32.16 (Reference Banks) of this Agreement.

 

“Relevant Capital Expenditure” means capital expenditure incurred or to be incurred in relation to the Borrowing Base Assets and Ghana Block Assets in the next twelve months or, in respect of exploration and appraisal costs for Ghana Block Assets, in the next six months as determined pursuant to a Forecast and which is or will be funded by the Facility or by contributions to the capital of an Obligor (including loans subordinated on terms acceptable to the Facility Agent (acting reasonably)).

 

“Reorganisation” means (without limitation) any transaction, deemed transaction, step, procedure or agreement, including (but without limitation) the transfer, distribution, contribution or settlement of assets and/or liabilities.

 

“Repayment Date” means the date specified as such in the Amortisation Schedule, as may be adjusted in accordance with clause 34.6 (Business Days) of this Agreement.

 

“Repayment Instalment” means each repayment instalment required pursuant to the Amortisation Schedule (as adjusted from time to time).

 

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“Repeating Representations” means the representations set out under:

 

(A)                clauses 26.1 (Status), 26.2 (Legal validity), 26.3 (Non-conflict), 26.4 (Powers and authority) of this Agreement, each as at the time the power or authority was exercised only; and

 

(B)                  clauses 26.5 (Authorisations), 26.9 (Financial Statements and other factual information), 26.10 (Proceedings pending or threatened), 26.11 (Breach of laws), 26.12 (Ranking of security), 26.13 (Pari passu ranking), 26.14 (Assets), 26.15 (Project Agreements), 26.16 (No Immunity) and 26.17 (Ownership of Obligors) of this Agreement.

 

“Replacement Lender” has the meaning given to that term in clause 10.10 (Right of repayment and cancellation in relation to a single Lender) of this Agreement.

 

“Required Approvals” means all material approvals, licenses, consents and authorisations necessary in connection with the execution, delivery, performance or enforcement of any Finance Document or the development, construction and ownership of the relevant Obligor’s interest in a Borrowing Base Asset.

 

“Required Balance” means a balance which is sufficient to meet the payment of interest and fees only due and payable in the next six months on the Facility.

 

“Reserve Tail Date” means, at any time, the semi-annual Repayment Date immediately preceding the date on which a Forecast projects that the aggregate economically recoverable reserves remaining to be produced from the Borrowing Base Assets (as reflected in the current Forecast) is projected to be equal to or less than 25 per cent. of the aggregate of the economically recoverable reserves from the Borrowing Base Assets reflected in the Forecast agreed as a condition to first Utilisation. The Reserve Tail Date will be re-determined by each Forecast by reference to the aggregate of reserves for the Borrowing Base Assets adjusted for any reserves upgrades or downgrades, for additional reserves acquired pursuant to any Approved Development or Permitted Acquisition and for any disposal of reserves.

 

“Reserves Consultant” means Netherland Sewell & Associates, Inc., (or any other reputable consultant agreed to by the Technical and Modelling Bank (acting reasonably)) appointed in accordance with a scope of work and budget for fees and expenses agreed with the Borrower, the Facility Agent and the Technical and Modelling Bank.

 

“Reserves Consultant Appointment Letter” means the letter between Kosmos, the Facility Agent, the Technical and Modelling Bank and the Reserves Consultant setting out the terms of appointment of the Reserves Consultant, in the Agreed Form.

 

“Resignation Letter” means a letter substantially in the form set out in Schedule 10 (Form of Resignation Letter).

 

“Retiring Guarantor” has the meaning given to it in clause 25.8 (Release of Guarantors’ right of contribution).

 

36

 

“Revised Final Repayment Date” has the meaning given to that term in clause 9.2 (Amendment to Amortisation Schedule) of this Agreement.

 

“Rollover Loan” means one or more Loans:

 

(A)                made or to be made on the same day that a maturing Loan is due to be repaid;

 

(B)                  the aggregate amount of which is equal to or less than the amount of the maturing Loan;

 

(C)                  made or to be made to the same Borrower for the purpose of refinancing a maturing Loan.

 

“Royalty Payments” means royalties payable to the Government by a contractor out of, or calculated by reference to, petroleum to which such contractor is entitled under the terms and conditions of the relevant Petroleum Agreement.

 

“Sanctions Regime” has the meaning given to it in paragraph (A) of the definition of “Qualifying Bank”.

 

“Schedule of Insurances” means the schedule of insurances in the Agreed Form (and initialled by the Borrower and/or KEG and the Facility Agent) setting out the insurances to be maintained by the Obligors.

 

“Second Currency” has the meaning given to it in clause 17.1 (Currency indemnity).

 

“Secured Liabilities” means at any time and without double counting, all present and future obligations and liabilities (actual or contingent) of each Obligor (whether or not for the payment of money and including any obligation to pay damages for breach of contract) which are, or are expressed to be, or may become due, owing or payable to any or all of the Secured Parties under or in connection with any of the Finance Documents, together with all costs, charges and expenses incurred by the Security Agent or any Secured Party which any Obligor is obliged to pay under any Finance Document.

 

“Secured Party” means each party to a Finance Document (other than an Obligor or Intercompany Borrower).

 

“Security Documents” means each of the following documents:

 

(A)                the KEG Offshore Security Assignment;

 

(B)                  the KEG Onshore Security Assignment;

 

(C)                  the KED Offshore Security Assignment;

 

(D)                 the KEI Offshore Security Assignment;

 

(E)                   the KEO Offshore Security Assignment;

 

37

 

(F)                   the Borrower Offshore Security Assignment;

 

(G)                  the KEI and KEO Offshore Security Assignment;

 

(H)                 the Charge over Shares in KED;

 

(I)                      the Charge over Shares in KEG;

 

(J)                     the Charge over Shares in KEO;

 

(K)                 the Charge over Shares in KEI;

 

(L)                   the Charge over Shares in the Original Borrower;

 

(M)              the Assignment of Reinsurance Rights;

 

(N)                 the KEG Offshore Project Accounts Agreement;

 

(O)                 the KEG Onshore Project Accounts Agreement;

 

(P)                   the Borrower Offshore Project Accounts Agreement; and

 

(Q)                 subject to the provisions of the Intercreditor Agreement, each other document evidencing or creating any Security Interest held or obtained from an Obligor for or in respect of any Secured Liabilities.

 

“Security Interest” means a mortgage, charge, pledge, lien or other security interest or any other agreement or arrangement having a similar effect.

 

“Service Document” has the meaning given to it in clause 45 (Service of Process).

 

“Shareholder” means any funds affiliated with Warburg Pincus and Blackstone Capital Partners or the Blackstone Group.

 

“Shareholder Affiliate” means any Affiliate of a Shareholder, any trust of which a Shareholder or any of its Affiliates is a trustee, any partnership of which a Shareholder or any of its Affiliates is a partner and any trust, fund or other entity which is managed by, or is under the control of, a Shareholder or any of its Affiliates, provided that any such trust, fund or other entity which has been established for at least 6 months solely for the purpose of making, purchasing or investing in loans or debt securities and which is managed or controlled independently from all other trusts, funds or other entities managed or controlled by a Shareholder or any of its Affiliates which have been established for the primary or main purpose of investing in the share capital of companies shall constitute a Shareholder Affiliate.

 

“Shareholder Distribution” means a shareholder distribution as calculated and defined in clause 28.23 (Distributions) of this Agreement.

 

“Signing Date” means the date on which each of the Finance Documents have been signed.

 

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“Sources and Uses Statement” has the meaning given to it in clause 24.8 (Sources and Uses).

 

“Specified Time” means 11:00 a.m. London time on the relevant Quotation Day.

 

“Standard and Poor’s” means Standard & Poor’s Ratings Service, a division of the McGraw-Hill Companies, Inc., and any successor thereto and if such corporation shall for any reason no longer perform the functions of a securities rating agency, Standard & Poor’s shall be deemed to refer to any other internationally recognised rating agency agreed by the Facility Agent and Kosmos (both acting reasonably).

 

“Subordinated Creditor” means any Obligor whose rights are subordinated to those of the Creditors pursuant to a Deed of Subordination.

 

“Subordinated Debt” means all present and future moneys, debts, obligations and liabilities which are, or are expressed to be, or may become due, owing or payable by any Obligor to any Affiliate (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise) together with any related Additional Debt.

 

“Successful Syndication” means the Underwriters each reduce their participation in the Facility to a final hold of not more than USD 200 million.

 

“Sum” has the meaning given to it in clause 17.1 (Currency indemnity).

 

“Tax” means any tax, levy, impost, duty or other 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).

 

“Technical and Environmental Consultant Appointment Letter” means the letter between Kosmos, the Facility Agent and the Technical Consultant, the Technical and Modelling Bank and Environmental Consultant setting out the terms of appointment of the Technical Consultant and Environmental Consultant, in the Agreed Form.

 

“Technical and Modelling Bank” means the Technical Bank and the Modelling Bank, provided that if the Technical Bank and the Modelling Bank cannot reach agreement on a certain issue, then the opinion of the Technical Consultant will be requested (to the extent a Technical Consultant is not already appointed and the parties do not agree on a replacement within 5 Business Days of notification of the failure to reach agreement, the Technical Bank and the Modelling Bank shall request the President of the Energy Institute of London to appoint an independent consultant within 5 Business Days). If no agreement can be reached after consulting the relevant Consultant, the three parties forming the Technical Bank (or in case of a modelling issue the two parties forming the Modelling Bank and the Consultant) will vote and the final decision shall be determined by a two-thirds majority vote.

 

“Technical Assumptions” means the technical assumptions agreed or determined in accordance with clause 19.1 (Forecast Procedures) of this Agreement.

 

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“Technical Consultant” means Shaw Consultants International, Inc. (or any other reputable technical consultant agreed to by the Technical and Modelling Bank (acting reasonably)), appointed in accordance with a scope of work and budget for fees and expenses agreed with the Borrower, the Facility Agent and the Technical and Modelling Bank.

 

“Third Parties Act” has the meaning given to it in clause 1.4 (Third Party Rights).

 

“Total Available Facility Amount” means at any time the amount calculated as such pursuant to clause 3.2 (Total Available Facility Amount) of this Agreement.

 

“Total Commitments” means the aggregate of the Commitments of the Lenders.

 

“Total Facility Amount” means at any time, the total facility made available under the Facility but as reduced by the amount of any cancellation of the Facility.

 

“Transaction Document” means each Finance Document and each Project Agreement.

 

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 7 (Form of Transfer Certificate) of this Agreement or any other form agreed between the Facility Agent and Kosmos.

 

“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.

 

“Unit Substances” shall have the meaning given to that term in the UUOA.

 

“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.

 

“USD” or “US Dollar” means the lawful currency of the United States of America.

 

“Utilisation” means a utilisation of the Facility by way of a Loan.

 

“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Loan is to be made.

 

“Utilisation Request” means a notice substantially in the form set out in Schedule 4 (Utilisation Requests) of this Agreement or in the Agreed Form.

 

“UUOA” means the unitization and unit operating agreement entered into between GNPC, Tullow Ghana Limited, KEG, Anadarko WCTP Company, Sabre Oil and Gas Holdings Limited and EO dated 13 July 2009.

 

“VAT” means value added tax as provided for in the Value Added Tax Act 1994 or any regulations promulgated thereunder and any other tax of a similar nature.

 

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“WCTP Block” means West Cape Three Points area offshore Ghana, being the area described in Annex 1 of the WCTP PA, but excluding any portions of such area in respect of which Contractor’s rights thereunder are from time to time relinquished or surrendered pursuant to the WCTP PA.

 

“WCTP JOA” means the joint operating agreement dated 27 July 2004 between KEG and EO in respect of the West Cape Three Points Block Off-shore Ghana (and all amendments and supplements thereto).

 

“WCTP PA” means the petroleum agreement dated 22 July 2004 between the Government, represented by the Minister, the GNPC, KEG and EO in respect of the West Cape Three Points Block Off-shore Ghana (and all amendments and supplements thereto).

 

1.2                  Construction of particular terms

 

Unless a contrary indication appears, any reference in this Agreement to:

 

(A)                “this Agreement” shall be construed as a reference to the agreement or document in which such reference appears together with all recitals and Schedules thereto;

 

(B)                  a reference to “assets” includes properties, revenues and rights of every description;

 

(C)                  an “authorisation” or “consent” shall be construed as including any authorisation, consent, approval, resolution, licence, exemption, permission, recording, notarisation, filing or registration;

 

(D)                 an “authorised officer” shall be construed, in relation to any Party, as a reference to a Director or other person duly authorised by such Party as notified by such Party to the Facility Agent as being authorised to sign any agreement, certificate or other document or to take any decision or action, as applicable. The provision of any certificate or the making of any certification by any authorised officer of Kosmos shall not create for that authorised officer any personal liability to the Finance Parties;

 

(E)                   a “calendar year” is a reference to a period starting on (and including) 1 January and ending on (and including) the immediately following 31 December;

 

(F)                   a “certified copy” shall be construed as a reference to a copy of that document, certified by an authorised officer of the relevant Party delivering it to be a complete, accurate and up-to-date copy of the original document;

 

(G)                  a “clause” shall, subject to any contrary indication, be construed as a reference to a clause of the agreement or document in which such reference appears;

 

(H)                 “continuing” shall, in relation to any Default or Event of Default, be construed as meaning that such Default or Event of Default has not been remedied or waived;

 

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(I)                      the “equivalent” on any given date in any currency (the “first currency”) of an amount denominated in another currency (the “second currency”) is a reference to the amount of the first currency which could be purchased with the amount of the second currency at the spot rate of exchange quoted by the Facility Agent in the normal course of business at or about 11.00 a.m. on such date for the purchase of the first currency with the second currency in the London foreign exchange markets for delivery on the second Business Day thereafter;

 

(J)                     the “group” of any person, shall be construed as a reference to that person, its subsidiaries and any holding company of that person and all other subsidiaries of any such holding company, from time to time;

 

(K)                 a “holding company” of a company or corporation shall be construed as a reference to any company or corporation of which the first-mentioned company or corporation is a subsidiary;

 

(L)                   “include” or “including” shall be deemed to be followed by “without limitation” or “but not limited to” whether or not they are followed by such phrase or words of like import;

 

(M)              a “month” or “Month” is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next succeeding calendar month save that, where any such period would otherwise end on a day which is not a Business Day, it shall end on the next succeeding Business Day, unless that day falls in the calendar month succeeding that in which it would otherwise have ended, in which case it shall end on the immediately preceding Business Day provided that, if a period starts on the last Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that later month (and references to “months” and “Months” shall be construed accordingly);

 

(N)                 a “person” shall be construed as a reference to any person, trust, firm, company, corporation, government, state or agency of a state or any association or partnership (whether or not having separate legal personality) of two or more of the foregoing;

 

(O)                 a reference to a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of Law but, if not having the force of Law, being a regulation, rule, official directive, request or guideline with which a prudent person carrying on the same or a similar business to Kosmos would comply) of any governmental body, Agency, department or regulatory, self-regulatory or other authority or organisation;

 

(P)                   a “right” shall be construed as including any right, title, interest, claim, remedy, discretion, power or privilege, in each case whether actual, contingent, present or future;

 

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(Q)                 a “Schedule” shall, subject to any contrary indication, be construed as a reference to a schedule of the agreement or document in which such reference appears;

 

(R)                  a “subsidiary” of a company or corporation means a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006 which shall be construed as a reference to any company or corporation:

 

(i)                        which is controlled, directly or indirectly, by the first-mentioned company or corporation;

 

(ii)                     more than half the issued share capital of which is beneficially owned, directly or indirectly, by the first-mentioned company or corporation; or

 

(iii)                  which is a subsidiary of another subsidiary of the first-mentioned company or corporation,

 

and, for these purposes, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;

 

(S)                   the “winding-up”, “dissolution” or “administration” of a company or corporation shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such company or corporation is incorporated or any jurisdiction in which such company or corporation carries on business including the seeking of liquidation, bankruptcy, winding-up, reorganisation, dissolution, administration, receivership, judicial custodianship, administrative receivership, arrangement, adjustment, protection or relief of debtors; and

 

(T)                  a “year” is a reference to a period starting on one day in a month in a calendar year and ending on the numerically corresponding day in the same month in the next succeeding calendar year, save that, where any such period would otherwise end on a day which is not a Business Day, it shall end on the next succeeding Business Day, unless that day falls in the month succeeding that in which it would otherwise have ended, in which case it shall end on the immediately preceding Business Day Provided that, if a period starts on the last Business Day in a month, that period shall end on the last Business Day in that later month (and references to “years” shall be construed accordingly).

 

1.3                  Interpretation

 

(A)                Words importing the singular shall include the plural and vice versa.

 

(B)                  Words indicating any gender shall include each other gender.

 

(C)                  Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document to:

 

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(i)                        any party or person shall be construed so as to include its and any subsequent successors, permitted transferees and permitted assigns in accordance with their respective interests;

 

(ii)                     such agreement or document or any other agreement or document shall be construed as a reference to each such agreement or document or, as the case may be, such other agreement or document as the same may have been, or may from time to time be, amended, varied, novated or supplemented, in each case to the extent permitted under the Finance Documents;

 

(iii)                  a time of day shall, save as otherwise provided in any agreement or document, be construed as a reference to London time.

 

(D)                 Section, Part, Clause and Schedule headings contained in, and any index or table of contents to, any agreement or document are for ease of reference only.

 

1.4                  Third Party Rights

 

(A)                Any Hedging Counterparty may enforce the terms of clause 21.2 (Withdrawals — No Default Outstanding), clause 25 (Guarantee and Indemnity) and clause 41.2(C) (Exceptions) of this Agreement by virtue of the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”). This clause 1.4(A) confers a benefit on each such Hedging Counterparty, and, subject to the remaining provisions of this clause 1.4, is intended to be enforceable by each Hedging Counterparty by virtue of the Third Parties Act.

 

(B)                  Subject to paragraph (A) above, a person who is not a party to this Agreement has no right under the Third Parties Act to enforce or enjoy the benefit of any term of this Agreement.

 

(C)                  Notwithstanding any term of any Finance Document, this Agreement may be rescinded or varied without the consent of any person who is not a Party hereto.

 

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PART 2

CONDITIONS PRECEDENT

 

2.                         CONDITIONS PRECEDENT

 

2.1                  Conditions Precedent to first Utilisation

 

Kosmos may not deliver a Utilisation Request unless the Facility Agent has received all of the documents and other evidence listed in Part I of Schedule 3 (Conditions Precedent) in form and substance satisfactory to the Facility Agent (acting reasonably), or their delivery has otherwise been waived in accordance with clause 2.3 (Waivers of Conditions Precedent). The Facility Agent (acting reasonably) shall notify Kosmos and the Lenders promptly upon being so satisfied.

 

2.2                  Conditions Precedent to each Utilisation

 

The Lenders will only be obliged to comply with clause 6.5 (Lenders’ participation) if, on the proposed Utilisation Date:

 

(A)                no Default or Event of Default is continuing or will result from the proposed Loan;

 

(B)                  an Authorised Signatory of Kosmos certifies that

 

(i)                        the funds from that Utilisation are expected to be applied in payment of amounts subject to and in accordance with the Cash Waterfall within 90 days of the relevant drawdown date (other than making a distribution in accordance with paragraph (vii) of the Cash Waterfall) or are otherwise required to maintain a reasonable and prudent level of working capital in the Project Accounts;

 

(ii)                     the aggregate principal amount outstanding under the Facility does not exceed the Borrowing Base Amount, and the making of the Utilisation would not result in the aggregate principal amount outstanding under the Facility exceeding the Borrowing Base Amount; and

 

(iii)                  the Repeating Representations to be made by each Obligor are, in the light of the facts and circumstances then existing, true and correct in all material respects (or, in the case of a Repeating Representation that contains a materiality concept, true and correct in all respects).

 

2.3                  Waivers of Conditions Precedent

 

(A)                The Facility Agent as applicable, acting in accordance with the instructions of the Lenders, may waive the requirement under clause 2.1 (Conditions Precedent to first Utilisation) to deliver any one or more of the documents and other evidence listed in Schedule 3 (Conditions Precedent to each Utilisation), as applicable.

 

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(B)                  Satisfaction of any of the conditions set out in clause 2.2 (Conditions Precedent) may be waived by the Facility Agent acting in accordance with the instructions of the Majority Lenders.

 

(C)                  Any waiver effected by the Facility Agent in accordance with this clause shall be binding on all Parties.

 

(D)                 For avoidance of doubt, no Utilisation may be made under the Facility, until the Facility Agent has confirmed all relevant Conditions Precedent have been satisfied (acting reasonably) or waived in accordance with this clause 2 (Conditions Precedent).

 

(E)                   Prior to the first Utilisation of the Facility (and not thereafter), any Default or Event of Default which arises by virtue of the fact that the Security Interests granted pursuant to the Security Documents are second-ranking (due to the subsistence during such period of Security Interests (as defined in the Existing Finance Documents) which were granted pursuant to the Existing Finance Documents), shall be deemed not to have arisen.

 

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PART 3

OPERATION OF THE FACILITY

 

3.                         THE FACILITY

 

3.1                  Facility Commitment amounts

 

(A)                Subject to the terms of this Agreement, the Lenders have agreed to make available to the Borrower a secured US Dollar revolving loan facility and a letter of credit facility in an aggregate amount equal to the Total Commitments.

 

(B)                  The Facility may be utilised by way of Loans (which, during the Availability Period only, shall include Rollover Loans) and Letters of Credit up to an aggregate amount not exceeding USD 200 million.

 

3.2                  Total Available Facility Amount

 

(A)                The Total Available Facility Amount shall be computed in accordance with this clause 3.2.

 

(B)                  If at any time the aggregate amount of all Loans exceeds the Borrowing Base Amount, the Total Available Facility Amount shall be zero.

 

(C)                  Notwithstanding any increase to the Total Available Facility Amount by the addition of (a) Additional Commitment pursuant to clause 3.3 below; or (b) the IFC Commitment pursuant to clause 3.4 below and subject to paragraph (B) above, the Total Available Facility Amount shall be an amount equal to the lesser of:

 

(i)                        the Total Facility Amount less (1) the amount of all Loans which have not been either prepaid or repaid and (2) the aggregate amount of any Letters of Credit issued, or to be issued, under the Facility (only to the extent not cash collateralised by amounts standing to the credit of the LC Cash Collateral Account); and

 

(ii)                     the Borrowing Base Amount less (1) the amount of all Loans and (2) the aggregate amount of any Letters of Credit issued, or to be issued, under the Facility (only to the extent not cash collateralised by amounts standing to the credit of the LC Cash Collateral Account),

 

where the Borrowing Base Amount is determined by reference to the most recent Forecast prepared in accordance with the Forecasting Procedures.

 

(D)                 For the avoidance of doubt, if at any time a Letter of Credit is cash collateralised in whole in or part in accordance with clause 7.1(B) of this Agreement, the Total Available Facility Amount shall, subject always to paragraphs (B) and (C) above, automatically increase by the amount of such deposit. Conversely, in the event that the whole or any part of the cash collateral is withdrawn in accordance with clause 7.1(B) of this Agreement, then the Total Available Facility Amount will reduce by the amount of such withdrawal.

 

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3.3                  Additional Commitment

 

(A)                Kosmos may notify the Facility Agent (such notice being an “Additional Commitment Notice”) that it has agreed with any Lender or any other bank or financial institution (in each case, an “Additional Lender”) to increase the Total Facility Amount by the provision of additional commitments under the Facility (each such increase in commitments being an “Additional Commitment”), provided that:

 

(i)                        the Additional Commitment Notice is delivered at any time after the earlier of (1) the date of Successful Syndication; and (2) the date falling six months after Financial Close, and prior to the expiry of the Availability Period;

 

(ii)                     all existing Lenders have been given a right of first refusal over a period of 30 days to provide the Additional Commitment following delivery of a copy of the Additional Commitment Notice to the Facility Agent;

 

(iii)                  the increase is to take effect before the expiry of the Availability Period and the maximum aggregate amount of Additional Commitment (including all previous increases) does not exceed USD 1 billion less any amount of IFC Commitment which has then been provided;

 

(iv)                 no Event of Default is continuing or would arise as a result of the provision of the Additional Commitment; and

 

(v)                    the terms of the Additional Commitment shall, for all purposes of this Agreement, be treated pursuant to the terms of this Agreement in the same manner as the existing Commitments.

 

(B)                  Each Additional Commitment Notice shall:

 

(i)                        confirm that the requirements of clause 3.3(A) above are fulfilled;

 

(ii)                     specify the date upon which the Additional Commitment is anticipated to be made available to the Borrower (the “Additional Commitment Date”); and

 

(iii)                  where the Additional Lender is IFC, include any further details that may be required by the Facility Agent (acting reasonably) pursuant to clause 3.4 (IFC as Additional Lender).

 

(C)                  In the event that the Additional Lender is not a Party to this Agreement, Kosmos shall procure that each Additional Lender:

 

(i)                        delivers a Lender Accession Notice in the form set out in Schedule 8 (Form of Lender Accession Notice) duly completed and signed on behalf of the Additional Lender and specifying its Additional Commitment to the Facility Agent; and

 

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(ii)                     accedes to the Intercreditor Agreement in accordance with the terms of the Intercreditor Agreement,

 

in each case, on or prior to the Additional Commitment Date.

 

(D)                 Subject to the conditions in paragraph (B) and (C) above being met, from the relevant Additional Commitment Date:

 

(i)                        the Additional Lender shall make available the relevant Additional Commitment for Utilisation under the Facility in accordance with the terms of this Agreement (as amended);

 

(ii)                     the Additional Commitment shall rank pari passu with respect to existing Commitments; and

 

(iii)                  any necessary rebalancing of the Commitments and outstandings under the Facility and the Additional Commitment provided by the Additional Lender to ensure that they are pro rata (the “New Commitment Rebalancing”) will be made, at the Borrower’s election, by the Borrower making utilisations from the Additional Commitment:

 

(a)                    in priority to utilisations from Commitments under the Facility; or

 

(b)                   to effect a prepayment under the Facility to the existing Lenders (which amount may be redrawn by the Borrower),

 

in each case to procure, as far as practicable, any New Commitment Rebalancing, following which all utilisations shall be made pro rata.

 

(E)                   Each Additional Lender shall become a party to this Agreement (and be entitled to share in the Security created under the Security Documents in accordance with the terms of the Finance Documents) if such Additional Lender accedes to the Intercreditor Agreement in accordance with the Intercreditor Agreement.

 

(F)                   Each party (other than the relevant Additional Lender) irrevocably authorises and instructs the Facility Agent to execute on its behalf any Lender Accession Notice which has been duly completed and signed on behalf of that proposed Additional Lender and each Party agrees to be bound by such accession. The Facility Agent must promptly sign any such Lender Accession Notice (and in any event within three Business Days of receipt).

 

(G)                  The Facility Agent shall only be obliged to execute a Lender Accession Notice delivered to it by an Additional Lender once the Facility Agent (acting reasonably) has, to the extent that the necessary information is not already available to it, received all required information to comply with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the accession of such Additional Lender.

 

(H)                 On the date that the Facility Agent executes a Lender Accession Notice:

 

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(i)                        the Additional Lender party to that Lender Accession Notice, each other Finance Party and the Obligors shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had that Additional Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of that accession and with the Commitment specified by it as its Additional Commitment; and

 

(ii)                     that Additional Lender shall become a Party to this Agreement as a “Lender”.

 

3.4                  IFC as Additional Lender

 

(A)                In the event that the Additional Commitment is to be provided by IFC, subject to compliance with the provisions of clause 3.3 (Additional Commitment), IFC may provide its Additional Commitment (the “IFC Commitment”) through a separate tranche, facility or facilities ranking pari passu with the Facility (the “IFC Facility”) details of which, together with any amendments to the Finance Documents as Kosmos and IFC (each acting reasonably) consider necessary, shall be provided with the Additional Commitment Notice.

 

(B)                  Any IFC Commitment shall be provided on substantially the same terms and conditions as the Facility, save that the IFC Facility shall include such additional or alternative terms and conditions as required by IFC’s policies and practices (the rights in relation to which shall not be available to the Finance Parties).

 

(C)                  In order to rebalance the Commitments and outstandings under the Facility and the IFC Facility to ensure that they are pro rata (the “IFC Rebalancing”), at the Borrower’s election, the Borrower will make utilisations under the IFC Facility:

 

(i)                        in priority to the Facility; or

 

(ii)                     to effect a prepayment under the Facility (which amount may be redrawn by the Borrower),

 

in each case to procure, as far as practicable, the IFC Rebalancing, following which all drawings under the IFC Facility and the Facility shall be pro rata.

 

3.5                  Amendments to Finance Documents

 

(A)                The Parties shall, acting reasonably, make such amendments to the Finance Documents as may be necessary to increase the Total Facility Amount pursuant to clause 3.3 (Additional Commitment) above (including such amendments as required to implement any alternative terms and conditions as required by IFC’s policies and practices) and to enable each Additional Lender to accede to the Finance Documents and provide its Additional Commitment hereunder. The Facility Agent may effect, on behalf of the Finance Parties, any such amendment. Any Lender Accession Notice or accession in respect of the Intercreditor Agreement entered into, or any amendment to the Finance Documents effected pursuant to clause 3.3 (Additional Commitment) above, by

 

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the Facility Agent, the Additional Lender or the Original Borrower, shall be binding on all Parties.

 

(B)                  Notwithstanding paragraph (A) above, any amendments to the Finance Documents or additional or alternative terms and conditions, in each case as may be reasonably required as a consequence of any IFC Commitment being provided to the Borrower shall not require the consent of the Finance Parties.

 

4.                         FINANCE PARTIES’ RIGHTS AND OBLIGATIONS

 

(A)                The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under any Finance Documents to which it is a Party does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

 

(B)                  The rights of each Finance Party under or in connection with the Finance Documents to which it is a Party 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.

 

(C)                  A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

 

5.                         PURPOSE

 

5.1                  Purpose

 

The proceeds of any Loan or Letter of Credit may only be used by the Borrower for the following purposes:

 

(A)                in the case of a first Utilisation of the Facility, to repay all amounts outstanding under the Existing Finance Documents in full;

 

(B)                  to pay Project Costs (including Relevant Capital Expenditure);

 

(C)                  to pay Financing Costs (other than principal and interest);

 

(D)                 to make advances to an Obligor under an Intercompany Loan Agreement to enable such Obligor to pay Project Costs;

 

(E)                   to fund the DSRA and the LC Cash Collateral Account;

 

(F)                   to meet all costs and expenses incurred in respect of making any Permitted Acquisition; and

 

(G)                  to issue Letters of Credit under the Facility.

 

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5.2                  Monitoring

 

No Finance Party is bound to monitor or verify the application of any Loan made pursuant to the Finance Documents.

 

6.                         UTILISATION

 

6.1                  Availability Period

 

Subject to satisfaction of the relevant Conditions Precedent, the Facility shall be available for drawing during the period from and including the Signing Date to and including 15 May 2014.

 

6.2                  Delivery of a Utilisation Request

 

A Borrower may borrow a loan under the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than 10:00 am on the third Business Day (or in the case of the first Utilisation only, the second Business Day) prior to the proposed Utilisation Date and the Facility Agent shall deliver such Utilisation Request to the Lenders within one Business Day of receipt of the same by it. For this purpose, if the Facility Agent receives the Utilisation Request on a day which is not a Business Day or after 10:00 am on a Business Day, it will be treated as having received the Utilisation Request on the following Business Day.

 

6.3                  Completion of a Utilisation Request

 

(A)                Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

(i)                        the proposed Utilisation Date is a Business Day within the Availability Period;

 

(ii)                     the amount of the Utilisation complies with clause 6.4 (Amount); and

 

(iii)                  the proposed Interest Period complies with clause 12 (Interest Periods).

 

(B)                  Only one Loan may be requested in each Utilisation Request and a maximum of 3 Utilisation Requests may be requested in any one month.

 

(C)                  A Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation 10 or more Loans would be outstanding.

 

6.4                  Amount

 

Kosmos must notify the Facility Agent and the Technical and Modelling Bank (giving notice of not less than three Business Days’ prior to the Utilisation Date) of the amount of any proposed Loan under the Facility that must be:

 

(A)                a minimum of USD 10 million (or, in any event, such lesser amount as the Facility Agent may agree); and

 

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(B)                  an integral multiples of USD 10 million (or, in any event, such lesser amount as the Facility Agent may agree),

 

or, if less, the balance of the Facility.

 

6.5                  Lenders’ participation

 

(A)                If the conditions set out in this Agreement have been met, each Lender under the Facility shall make its participation in the relevant Loan available by the Utilisation Date through its Facility Office in accordance with the terms of this Agreement.

 

(B)                  The amount of a Lender’s participation in that Loan will be equal to the proportion borne by its Available Commitment to the Available Commitments under the Facility immediately prior to the making of the relevant Loan.

 

(C)                  The Facility Agent shall notify each Lender of the amount of each Loan under the Facility and the amount of its participation in each such Loan not less than 3 Business Days before the Utilisation Date.

 

(D)                 A Business Day for the purposes of clause 6 (Utilisation) shall mean a day (other than a Saturday or Sunday) when banks are open for business in London, New York and Paris.

 

7.                         LETTERS OF CREDIT — UTILISATION

 

7.1                  General

 

(A)                In this clause 7 and clause 8 (Letters of Credit):

 

(i)                        “Expiry Date” means, for a Letter of Credit, the last day of its Term;

 

(ii)                     “LC Proportion” means, in relation to a Lender in respect of any Letter of Credit, the proportion (expressed as a percentage) borne by the Available Commitment of such Lender under the Facility to the aggregate Available Commitments of all the Lenders under the Facility immediately prior to the issue of that Letter of Credit, adjusted to reflect any assignment or transfer under this Agreement to or by that Lender;

 

(iii)                  “Renewal or Extension Request” means a written notice delivered to the Facility Agent in accordance with clause 7.7 (Renewal or extension of a Letter of Credit);

 

(iv)                 “Start Date” means, for a Letter of Credit, the first day of its Term; and

 

(v)                    “Term” means each period determined under this Agreement for which an LC Issuing Bank is under a liability under a Letter of Credit.

 

(B)                  Any reference in this Agreement to:

 

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(i)                        a “Finance Party” includes each of the LC Lenders and each of the LC Issuing Banks;

 

(ii)                     an amount borrowed under the Facility includes any amount utilised by way of Letter of Credit;

 

(iii)                  a Utilisation under the Facility made or to be made to the Borrower includes a Letter of Credit issued on its behalf;

 

(iv)                 a Lender funding its participation in a Utilisation under the Facility includes a Lender participating in a Letter of Credit;

 

(v)                    amounts outstanding under the Facility include amounts outstanding under or in respect of any Letter of Credit;

 

(vi)                 an outstanding amount of a Letter of Credit at any time is the maximum amount that is or may be payable in respect of that Letter of Credit at that time;

 

(vii)              the Borrower “repaying” or “prepaying” a Letter of Credit means:

 

(a)                    the Borrower providing cash collateral for that Letter of Credit by depositing funds into the LC Cash Collateral Account;

 

(b)                   the maximum amount payable under the Letter of Credit being reduced in accordance with its terms; or

 

(c)                    an LC Issuing Bank being satisfied (acting reasonably) that it has no further liability under that Letter of Credit,

 

and the amount, subject to the Cash Waterfall, by which a Letter of Credit is repaid or prepaid under sub-paragraphs (viii)(a) and (viii)(b) below is the amount of the relevant cash collateral or reduction; and

 

(viii)           the Borrower providing “cash collateral” for a Letter of Credit means the Borrower paying an amount in the currency of the Letter of Credit in to the LC Cash Collateral Account and the following conditions are met:

 

(a)                    the account is with the LC Issuing Bank (if the cash collateral is to be provided for all the Lenders) or with a Lender (if the cash collateral is to be provided for that Lender);

 

(b)                   withdrawals from the LC Cash Collateral Account may only be made at any time provided that:

 

(1)                     there is no Default or Event of Default outstanding at the time;

 

(2)                     the withdrawal does not occur during a BBA Cure Period;

 

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(3)                     the latest Sources and Uses Statement does not show that there is a shortfall in funding projected to be available to meet Project Costs; and

 

(4)                     the Available Commitment at that time is equal to or exceeds the amount of the withdrawal; and

 

(c)                    any amount withdrawn from the LC Cash Collateral Account is deposited into the account from which the original payment was made into the LC Cash Collateral Account.

 

(C)                  clause 6 (Utilisation) does not apply to a Utilisation by way of Letter of Credit.

 

(D)                 For the avoidance of doubt, in determining the amount of the Available Commitment and a Lender’s LC Proportion of a proposed Letter of Credit for the purposes of this Agreement the Available Commitment of a Lender will be calculated taking account of any cash collateral provided for outstanding Letters of Credit, subject to the Total Available Facility Amount not exceeding the lesser of (i) the Total Facility Amount and (ii) the Borrowing Base Amount.

 

(E)                   A “Business Day” for the purposes of clause 7 (Letters of Credit — Utilisation) shall mean a day (other than a Saturday or Sunday) when banks are open for business in London, New York and Paris.

 

(F)                   The ORGL LC shall be deemed to have been issued by BNP Paribas as LC Issuing Bank (such appointment as LC Issuing Bank being solely in respect of the ORGL LC) pursuant to a Utilisation Request submitted by the Borrower in accordance with the terms of this Agreement and such utilisation shall be deemed to have occurred immediately after the first Utilisation under the Facility (the “ORGL LC Utilisation”). For the avoidance of doubt:

 

(i)                        BNP Paribas shall pay the cash collateral already posted with it pursuant to the ORGL LC to the Distribution Reserve Account; and

 

(ii)                     no conditions other than those which are required in order to facilitate the first Utilisation will be required to be satisfied in order for the ORGL LC Utilisation to be effective.

 

7.2                  Letter of Credit Option

 

(A)                The Facility may also be utilised by way of Letters of Credit at any time prior to the Final Maturity Date.

 

(B)                  Letters of Credit may be issued under the Facility by any LC Issuing Bank or LC Issuing Banks as may be selected by the Borrower.

 

(C)                  The Borrower may at any time request any or all Lenders to agree to become a LC Issuing Bank. If any such Lender or Lenders so agree, the Borrower may in its absolute discretion decide which of those Lenders (if any) it wishes to appoint as a LC Issuing Bank.

 

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(D)                 The Borrower may appoint any Lender as an LC Issuing Bank at any time by notice in writing to the Facility Agent (accompanied by a deed of accession in the form agreed between the Agent and the Borrower, signed by the relevant Lender confirming its appointment as an LC Issuing Bank), following receipt of which the Facility Agent shall promptly countersign any such deed of accession on behalf of the Finance Parties (and in any event within 3 Business Days of receipt of the notice) and notify the Finance Parties (with a copy to the Borrower) that the relevant Lender has become an LC Issuing Bank.

 

7.3                  Delivery of a Utilisation Request for Letters of Credit

 

Subject to a LC Issuing Bank having been appointed, the Borrower may request a Letter of Credit to be issued by delivery to the Facility Agent and one or more LC Issuing Banks (as may be selected by the Borrower) of a duly completed Utilisation Request substantially in the form of Part II of Schedule 4 (Utilisation Requests) not later than the third Business Day prior to the proposed Utilisation Date and a maximum of 3 such Utilisation Requests may be delivered in any one month, provided that there shall not, at any time, be more than 10 Letters of Credit outstanding.

 

7.4                  Completion of a Utilisation Request for Letters of Credit

 

Each Utilisation Request for a Letter of Credit is irrevocable and will not be regarded as having been duly completed unless:

 

(A)                it specifies that it is for a Letter of Credit;

 

(B)                  it specifies the amount that is to be utilised under the Facility;

 

(C)                  the proposed Utilisation Date is a Business Day within the Availability Period;

 

(D)                 the currency and amount of the Letter of Credit comply with clause 7.5 (Amount);

 

(E)                   the form of Letter of Credit is attached;

 

(F)                   the Expiry Date of the Letter of Credit falls on or before the Final Repayment Date for the Facility; and

 

(G)                  the delivery instructions for the Letter of Credit are specified.

 

7.5                  Amount

 

The amount of the proposed Letter of Credit must be an amount which is not more than the Total Available Facility Amount and which is a minimum of USD 5 million or, if less, the Total Available Facility Amount and which otherwise complies with clause 7.6(B)(ii).

 

7.6                  Issue of Letters of Credit

 

(A)                If the conditions set out in this Agreement have been met, the relevant LC Issuing Bank shall issue the Letter of Credit on the Utilisation Date.

 

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(B)                  The relevant LC Issuing Bank will only be obliged to comply with paragraph (A) above if on the date of the Utilisation Request or Renewal or Extension Request and on the proposed Utilisation Date:

 

(i)                        in the case of a Letter of Credit renewed in accordance with clause 7.7 (Renewal or extension of a Letter of Credit), no Event of Default is continuing or would result from the proposed Utilisation and, in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation;

 

(ii)                     the making of the proposed Utilisation would not result in (i) the aggregate principal amount outstanding under the Facility exceeding the lesser of the Total Facility Amount and the Borrowing Base Amount or (ii) the aggregate of all outstanding Letters of Credit issued by the LC Issuing Banks exceeding USD 200 million;

 

(iii)                  the Repeating Representations to be made by each Obligor are true in all material respects (or, in the case of a Repeating Representation that contains a materiality concept, true and correct in all respects); and

 

(iv)                 the LC Issuing Bank and the Lenders have completed all applicable know-your-customer and compliance requirements which are required by law in relation to the beneficiary of the Letter of Credit.

 

(C)                  The amount of each Lender’s participation in each Letter of Credit will be equal to the proportion borne by the Available Commitment of such Lender under the Facility to the aggregate Available Commitments of all the Lenders under the Facility immediately prior to the issue of the Letter of Credit.

 

(D)                 The Facility Agent shall notify the LC Issuing Bank and each Lender of the details of the requested Letter of Credit and its participation in that Letter of Credit by the Specified Time.

 

7.7                  Renewal or extension of a Letter of Credit

 

(A)                The Borrower may request any Letter of Credit issued on its behalf be renewed or extended by delivery to the Facility Agent and the relevant LC Issuing Bank of a Renewal or Extension Request by the sixth Business Day before the date of the proposed renewal.

 

(B)                  The Lenders shall treat any Renewal or Extension Request in the same way as a Utilisation Request for a Letter of Credit except that the conditions set out in paragraph (E) of clause 7.4 (Completion of a Utilisation Request for Letters of Credit) shall not apply.

 

(C)                  The terms of each renewed or extended Letter of Credit shall be the same as those of the relevant Letter of Credit immediately prior to its renewal, except that:

 

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(i)                        its amount may be less than the amount of the Letter of Credit immediately prior to its renewal or extension;

 

(ii)                     (in relation to a renewal only) its Term shall start on the date which was the Expiry Date of the Letter of Credit immediately prior to its renewal, and shall end on the proposed Expiry Date specified in the Renewal or Extension Request subject to clause 7.4(F); and

 

(iii)                  (in relation to an extension only) its Term shall start on the date which was the Start Date of the Letter of Credit immediately prior to its extension, and shall end on the proposed Expiry Date specified in the Renewal or Extension Request subject to clause 7.4(F)

 

(D)                 If the conditions set out in this Agreement have been met, the relevant LC Issuing Bank shall re-issue and/or amend any Letter of Credit pursuant to a Renewal or Extension Request.

 

8.                         LETTERS OF CREDIT — GENERAL PROVISIONS

 

8.1                  When immediately repayable or prepayable

 

If a Letter of Credit or any amount outstanding under a Letter of Credit becomes payable, the Borrower shall repay or prepay that amount within five Business Days of demand by the relevant LC Issuing Bank.

 

8.2                  Fee payable in respect of Letters of Credit

 

(A)                The Borrower shall pay to each of the LC Issuing Banks a fronting fee in respect of each Letter of Credit issued by it, in the amount and at the times agreed in the letter between each relevant LC Issuing Bank and the Borrower. A reference in this Agreement to a Fee Letter shall include the letter referred to in this paragraph.

 

(B)

 

(i)                        Subject to (ii) below, the Borrower shall pay to the Facility Agent (for the account of each LC Lender) a letter of credit fee computed at the same rate as the Margin on the outstanding amount of each Letter of Credit for the period from the issue of that Letter of Credit until its Expiry Date. This fee shall be distributed according to each LC Lender’s LC Proportion of that Letter of Credit.

 

(ii)                     The Borrower shall be entitled to deduct, from the letter of credit fee calculated as described in (i) above and paid to the Facility Agent, in respect of each Relevant Lender, an amount which is the product of the Margin and any Borrower Replacement Collateral (as defined in clause 8.10 below) held in respect of such Relevant Lender (the “RL Reduction”). The net fee distributed by the Facility Agent to each Relevant Lender shall be the fee calculated according to such Relevant

 

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Lender’s LC Proportion then reduced by the amount of the RL Reduction.

 

(C)                  The accrued letter of credit fee on a Letter of Credit shall be payable quarterly (on each of 31 March, 30 June, 30 September and 31 December and as from the first of such dates falling after the date of issue of that Letter of Credit) and on the Expiry Date for that Letter of Credit.

 

(D)                 If the Borrower uses cash collateral to cover any part of a Letter of Credit then the fronting fee payable to the relevant LC Issuing Bank and the letter of credit fee payable for the account of each LC Lender shall not (in respect of the part of the Letter of Credit covered by the cash collateral) be payable.

 

8.3                  Claims under a Letter of Credit

 

(A)                The Borrower irrevocably and unconditionally authorises each LC Issuing Bank to pay any claim made or purported to be made under a Letter of Credit and which appears on its face to be in order (a “claim”).

 

(B)                  The Borrower shall immediately on demand pay to the Facility Agent for the account of the relevant LC Issuing Bank an amount equal to the amount of any claim under that Letter of Credit.

 

(C)                  The Borrower acknowledges that the LC Issuing Bank:

 

(i)                        is not obliged to carry out any investigation or seek any confirmation from any other person before paying a claim; and

 

(ii)                     deals in documents only and 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.

 

(D)                 The obligations of the Borrower under this clause will not be affected by:

 

(i)                        the sufficiency, accuracy or genuineness of any claim or any other document; or

 

(ii)                     any incapacity of, or limitation on the powers of, any person signing a claim or other document.

 

8.4                  Indemnities

 

(A)                The Borrower shall immediately on demand indemnify each LC Issuing Bank against any cost, loss or liability incurred by such LC Issuing Bank (otherwise than by reason of such LC Issuing Bank’s gross negligence or wilful misconduct and otherwise in respect of the obligation of any Lender to provide cash collateral pursuant to Clause 8.10) in acting as an LC Issuing Bank under any Letter of Credit.

 

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(B)                  Each Lender shall (according to its LC Proportion) immediately on demand by the Facility Agent (acting on the instructions of the relevant LC Issuing Bank), indemnify each LC Issuing Bank against any cost, loss or liability incurred by the LC Issuing Bank (otherwise than by reason of such LC Issuing Bank’s gross negligence or wilful misconduct) in acting as such LC Issuing Bank under any Letter of Credit (unless that LC Issuing Bank has been reimbursed by the Borrower pursuant to a Finance Document).

 

(C)                  The Borrower shall immediately on demand reimburse any Lender for any payment it makes to an LC Issuing Bank under this clause 8.4 (Indemnities) (other than any Cash Deposit made pursuant to Clause 8.10 but including in respect of any amount withdrawn from the Cash Deposit and payment to any LC Issuing Bank under Clause 8.10(C) or 8.10(D)). In the absence of reimbursement of the LC Issuing Bank or Lenders by the Borrower pursuant to this clause 8.4 within 5 Business Days of demand (the “LC Payment Date”), the Borrower shall be deemed to have requested a Loan of an amount (in Dollars) equal to the outstanding amount payable on the LC Payment Date and the Borrower shall be treated as having agreed to borrow that Loan on the LC Payment Date. The proceeds of each Loan made available by the Lenders in accordance with this clause 8.4(C) and deemed to be made to the Borrower shall be paid to the LC Issuing Bank (or, as the case may be, the Facility Agent on behalf of the Lenders) in satisfaction of the obligations of the Borrower in accordance with this clause 8.4 to reimburse the LC Issuing Bank or Lenders for the amount of the outstanding payment.

 

(D)                 The obligations of each Lender and the Borrower under this clause are continuing obligations and will extend to the ultimate balance of sums payable by that Lender or, as the case may be, the Borrower in respect of any Letter of Credit, regardless of any intermediate payment or discharge in whole or in part.

 

(E)                   The obligations of a Lender or a Borrower under this clause will not be affected by any act, omission, matter or thing which, but for this clause, would reduce, release or prejudice any of its obligations under this clause (without limitation and whether or not known to it or any other person) including:

 

(i)                        any time, waiver or consent granted to, or composition with, any Obligor, any beneficiary under a Letter of Credit or any other person;

 

(ii)                     the release of any other Obligor or any other person under the terms of any composition or arrangement;

 

(iii)                  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, any beneficiary under a Letter of Credit 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;

 

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(iv)                 any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor, any beneficiary under a Letter of Credit or any other person;

 

(v)                    any amendment (however fundamental) or replacement of a Finance Document, any Letter of Credit or any other document or security;

 

(vi)                 any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, any Letter of Credit or any other document or security; or

 

(vii)              any insolvency or similar proceedings.

 

8.5                  Rights of contribution

 

The Borrower will not be entitled to any right of contribution or indemnity from any Finance Party in respect of any payment it may make under this clause 8.

 

8.6                  Role of a LC Issuing Bank

 

(A)                Nothing in this Agreement constitutes a LC Issuing Bank as a trustee or fiduciary of any other person.

 

(B)                  An LC Issuing Bank shall not be bound to account to any Lender for any sum, or the profit element of any sum received by it for its own account.

 

(C)                  An LC Issuing Bank may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.

 

(D)                 An LC Issuing Bank may rely on:

 

(i)                        any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

 

(ii)                     any statement made by a director, Authorised Signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

 

(E)                   An LC Issuing Bank may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

 

(F)                   An LC Issuing Bank may act in relation to the Finance Documents through its personnel and agents.

 

(G)                  An LC Issuing Bank is not responsible for:

 

(i)                        the adequacy, accuracy and/or completeness of any information (whether oral or written) provided by any Party (including itself), or any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other

 

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agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or

 

(ii)                     the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

 

8.7                  Exclusion of liability

 

(A)                Without limiting paragraph (B) below, the LC Issuing Bank will not be liable for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.

 

(B)                  No Party (other than the LC Issuing Bank) may take any proceedings against any officer, employee or agent of the LC Issuing Bank in respect of any claim it might have against the LC Issuing Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the LC Issuing Bank may rely on this clause subject to clause 1.4 (Third Party Rights) and the provisions of the Third Parties Act.

 

8.8                  Credit appraisal by the Lenders

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each LC Lender confirms to the LC Issuing Bank that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including, but not limited to, those listed in paragraphs (A) to (D) of clause 32.15 (Credit appraisal by the Lenders).

 

8.9                  Amendments and Waivers

 

Notwithstanding any other provision of any Finance Document, an amendment or waiver which relates to the rights or obligations of an LC Issuing Bank may not be effected without the consent of the LC Issuing Bank.

 

8.10           Cash collateralisation

 

(A)                If and for so long as:

 

(i)                        the long-term senior unsecured credit rating of a Lender is, or is reduced to, below A-(Standard & Poor’s) or A3 (Moody’s); or

 

(ii)                     it becomes unlawful in any applicable jurisdiction for a Lender to perform its obligations under Clause 8.4 (Indemnities) of this Agreement,

 

(any such Lender being a “Relevant Lender”) then, within two (2) Business Days of the date of publication by S&P or Moody’s of such rating downgrade or the date upon which the obligations become unlawful, the Relevant Lender shall,

 

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unless otherwise agreed by the LC Issuing Bank, as security for (but without prejudice to) its obligations under Clause 8.4 (Indemnities), pay to the LC Issuing Bank an amount equal to its LC Proportion of the aggregate outstandings under all issued Letters of Credit at such date (the “Cash Deposit”). The Relevant Lender shall, within ten (10) Business Days of any increase in such aggregate outstandings, pay to the LC Issuing Bank an amount equal to its LC Proportion of any such increase (unless otherwise agreed by the Issuing Bank) (and any additional amount so paid shall form part of the Cash Deposit). If requested by the LC Issuing Bank, the Relevant Lender shall enter into security documentation over the Cash Deposit in form and substance satisfactory to the LC Issuing Bank (acting reasonably).

 

(B)                  Any Cash Deposit made pursuant to this Clause 8.10 shall be placed by the LC Issuing Bank in a separately designated bank account and shall bear interest (at the rate of interest customarily given by the LC Issuing Bank for short-term cash deposits in amounts equal to such Cash Deposit) from (and including) the date of deposit of any amounts in, until (but excluding) the date of withdrawal of any amounts from, such account (such amount held being the “Borrower Replacement Collateral”).

 

(C)                  The LC Issuing Bank shall only withdraw amounts standing to the credit of such account:

 

(i)                        for payment to the LC Issuing Bank up to (and including) the amount of the Cash Deposit in accordance with Clause (D) below; and

 

(ii)                     in excess of the Cash Deposit, for payment to the Relevant Lender, if so instructed by the Relevant Lender.

 

(D)                 Without prejudice to the provisions of Clause 8.4(B), each Relevant Lender hereby irrevocably authorises the LC Issuing Bank to withdraw from any account established pursuant to this Clause 8.10 in relation to such Relevant Lender such Relevant Lender’s LC Proportion of the amount specified in any claim made under a Letter of Credit, up to the amount of the Relevant Lender’s Cash Deposit in discharge of such Relevant Lender’s obligations to it under Clause 8.4(B).

 

(E)                   If and to the extent the Relevant Lender at any time fails to comply with its payment obligations under Clause 8.10(A), then (without prejudice to Clause 8.4(B)):

 

(i)                        the Relevant Lender hereby irrevocably authorises the Agent to apply its entitlement to sums received by the Agent from any source in respect of payment under, and/or any other sum received by the Agent under or in respect of, the Finance Documents, towards such payment obligations;

 

(ii)                     the Borrower and the LC Issuing Bank may (in their sole discretion) agree that the Borrower shall pay an amount to the LC Issuing Bank:

 

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(a)                    which may or may not be equal to the Relevant Lender’s Cash Deposit or such part thereof as is unpaid by the Relevant Lender; and

 

(b)                   which shall be placed by the LC Issuing Bank in a separately designated bank account and shall bear interest (at the rate of interest customarily given by the LC Issuing Bank for short-term cash deposits in amounts equal to such amounts) from (and including) the date of deposit of any amounts in, until (but excluding) the date of withdrawal of any amounts from, such account,

 

and

 

(iii)                  the LC Issuing Bank may withdraw amounts standing to the credit of such account:

 

(a)                    to pay the LC Issuing Bank such Relevant Lender’s LC Proportion of any claim made under a Letter of Credit; and

 

(b)                   as otherwise agreed between the Borrower and the LC Issuing Bank.

 

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PART 4

PAYMENTS, CANCELLATION, INTEREST AND FEES

 

9.                         REPAYMENT

 

9.1                  Repayment of the Facility

 

(A)                Subject to paragraph (B) below, all Loans outstanding under the Facility will be repaid semi-annually on each successive 15 June and 15 December commencing on 15 June 2014. Repayment Instalments will be sufficient to ensure that the Amortisation Schedule is met.

 

(B)                  Any repayment made during the Availability Period may be redrawn, but any repayment may not be redrawn after the expiry of the Availability Period.

 

9.2                  Amendment to Amortisation Schedule

 

(A)                In the event that the Reserve Tail Date is earlier than the Final Maturity Date, the Amortisation Schedule will be amended so that:

 

(i)                        the final Repayment Instalment for the Facility is to be paid on the Reserve Tail Date (the “Revised Final Repayment Date”); and

 

(ii)                     the Repayment Instalment payable on each Repayment Date shall be adjusted on a pro rata basis so as to ensure that all Loans under the Facility are fully repaid on the Reserve Tail Date.

 

(B)                  In the event that the Total Facility Amount is increased pursuant to clause 3 (The Facility), the Amortisation Schedule will be amended accordingly to reflect such increase.

 

10.                  PREPAYMENT AND CANCELLATION

 

10.1           General

 

(A)                Subject to there being no Event of Default outstanding and other than an obligation to make a prepayment where the aggregate outstandings under the Facility exceed the Borrowing Base Amount at the end of the BBA Cure Period or upon a Change of Control, prepayments in respect of the Facility shall be paid at the end of the next Interest Period falling not less than 15 days after the date on which the event giving rise to the obligation to make the prepayment occurs, and shall be applied pro rata to each Repayment Instalment under the Facility.

 

(B)                  Any amount prepaid may only be redrawn if such prepayment and Utilisation occurs prior to expiry of the Availability Period.

 

(C)                  Any prepayment shall be made with accrued interest on the amount prepaid and, subject to Break Costs (excluding any Margin), without premium or penalty.

 

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10.2           Illegality

 

(A)                If it becomes unlawful in any applicable jurisdiction for a Lender (an “Illegality Lender”) to perform any of its obligations as contemplated by the Finance Documents, or to fund or maintain its participation in any Utilisation:

 

(i)                        that Lender shall promptly notify the Facility Agent upon becoming aware of that event;

 

(ii)                     upon the Facility Agent notifying Kosmos, the Commitment of that Lender will be immediately cancelled; and

 

(iii)                  the Borrower shall either:

 

(a)                    if the Lender so requires, repay that Lender’s participation in the Utilisations made to the Borrower on the last day of the Interest Period for each Utilisation occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law); or

 

(b)                   replace that Lender in accordance with paragraph (B) of clause 10.10 (Right of repayment and cancellation in relation to a single Lender) on or before the first date applicable under paragraph (a) above in respect of which a payment is due and payable.

 

(B)                  If it becomes unlawful in any applicable jurisdiction for the Borrower to perform any of its obligations as contemplated by the Finance Documents:

 

(i)                        the Borrower shall promptly notify the Facility Agent upon becoming aware of that event;

 

(ii)                     the Facility Agent shall notify the Lenders; and

 

(iii)                  the Borrower shall repay each Utilisation made to it on the last day of the Interest Period for that Utilisation occurring after the Facility Agent have notified the Lenders or, if earlier, the last day of any applicable grace period permitted by law.

 

(C)                  If it becomes unlawful for an LC Issuing Bank to issue or leave outstanding any Letter of Credit, the relevant LC Issuing Bank shall promptly notify the Facility Agent upon becoming aware of that event, and upon the Facility Agent notifying the Borrower, (i) the Facility shall cease to be available for the issue of Letters of Credit unless and until the relevant LC Issuing Bank is replaced by another Lender in accordance with paragraph (B) of clause 10.10 (Right of repayment and cancellation in relation to a single Lender) and (ii) the Borrower shall prepay all Letters of Credit issued by such LC Issuing Bank and use its reasonable

 

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endeavours to procure the release of such LC Issuing Bank from all outstanding Letters of Credit.

 

10.3           Aggregate outstandings exceed the Borrowing Base Amount

 

(A)                In the event that a Forecast shows that the aggregate of the outstandings under the Facility on the relevant Forecast Date exceeds the Borrowing Base Amount as determined in such Forecast, the Borrower shall, within 90 days of the date of the relevant Forecast (in addition to Repayment Instalments under the Amortisation Schedule), make an additional mandatory repayment of the Facility as necessary to ensure that the aggregate of the outstandings under the Facility does not exceed the Borrowing Base Amount provided always that:

 

(i)                        subject to (ii) below, an Event of Default shall arise in respect of such mandatory prepayment only if such prepayment has not been made in full after a period of 90 days from the relevant Forecast Date (the “BBA Cure Period”); and

 

(ii)                     such mandatory repayment will be required at the expiry of the BBA Cure Period only if, at such time, a Forecast prepared immediately prior to the expiry of the BBA Cure Period confirms that the aggregate of the outstandings under the Facility exceeds the Borrowing Base Amount.

 

(B)                  The Obligors shall be entitled to make any such mandatory prepayment by (i) depositing cash into an account with the Account Bank secured in favour of the Lenders (which shall be a Project Account) which has been established solely for this purpose or (ii) procuring a letter of credit on terms approved by the Facility Agent (acting reasonably), in favour of the Facility Agent, in each case, in an amount equal to the mandatory prepayment required. Any excess standing to the credit of such account on any Forecast Date shall be released and may be withdrawn by the Borrower and applied for any purpose as it sees fit (without reference to the Cash Waterfall) provided that prior to being paid into such account none of the Secured Parties had any rights to such amounts (if any Secured Parties had any rights to such amount, such amount shall be paid into an Offshore Proceeds Account).

 

10.4           Permitted disposals

 

If, as a result of a Permitted Disposal, the amount outstanding under the Facility exceeds the Borrowing Base Amount, then the required amount of proceeds from such Permitted Disposal to ensure that there is no such excess, after having taken into account the impact of the Permitted Disposal on the Borrowing Base Amount will be used to make a prepayment of the Facility.

 

10.5           Insurance Receipts

 

(A)                All Insurance Proceeds received by an Obligor in excess of 10 million shall be paid into and retained in the Insurance Proceeds Account until applied in accordance with the terms of this clause.

 

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(B)                  All net proceeds of any insurance claim received by an Obligor in respect of a Borrowing Base Asset shall, unless the Majority Lenders otherwise agree, first be applied in prepayment of the Facility:

 

(i)                        where the aggregate amount of the insurance proceeds received is in excess of USD 100 million (less expenses); or

 

(ii)                     if less than USD 100 million but more than USD 10 million, to the extent not applied or committed to be applied to meet a third party claim or to cover operating losses of, or in the reinstatement of, a Borrowing Base Asset or purchase of a replacement Borrowing Base Asset or otherwise in amelioration of the loss to a Borrowing Base Asset or reinvestment in the Borrowing Base Asset within, in each case, one year of receipt.

 

10.6           Change of Control

 

(A)                Upon a Change of Control:

 

(i)                        the Obligor shall promptly notify the Facility Agent upon becoming aware of the occurrence of that event; and

 

(ii)                     if the Majority Lenders so require, the Facility Agent shall, on not less than 30 days written notice to Kosmos, cancel the Commitments and the Borrower shall repay each Lender’s participation in any Utilisations on the last day of the then current period under the Facility, together with accrued interest and all other amounts accrued under the Finance Documents.

 

(B)                  For the purposes of paragraph (A) above, a “Change of Control” means any person (or persons with whom they act in concert) other than a Permitted Transferee acquiring, directly or indirectly, more than 50 per cent. of the ordinary share capital in any Obligor carrying a right to vote in general meetings of that company. For the avoidance of doubt, a Change of Control shall not occur on an IPO of any Shareholder (directly or indirectly) in KEO or the Borrower, or an IPO of any Obligor.

 

(C)                  For the purposes of paragraph (B) above, any persons includes more than one person acting in concert and a “Permitted Transferee” means:

 

(i)                        an Affiliate of a Shareholder or KEH, so long as they remain an Affiliate (including any funds associated with Warburg Pincus and Blackstone Capital Partners or the Blackstone Group); or

 

(ii)                     a person who is otherwise approved by the Majority Lenders (acting reasonably) provided that any Lender which does not grant its approval may, on not less than 30 days written notice to the Facility Agent and Kosmos, demand that its participation in the Facility be prepaid in full and that its Commitment be immediately cancelled, provided that Kosmos may, in accordance with paragraph (B) of clause 10.10 (Right of repayment and cancellation in relation to a single Lender), procure

 

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the replacement of that Lender or the transfer of its participation and Commitment to another Lender (with that Lender’s consent) rather than such prepayment and cancellation provided that such replacement or transfer is completed within the relevant notice period given by the relevant Lender. If such replacement or transfer does not occur within the relevant period, that Lender’s participation in the Facility shall be immediately due and payable in full by the Borrower and its Commitment immediately cancelled.

 

10.7           Automatic Cancellation

 

At the close of business in London on the last Business Day of the Availability Period for the Facility, the undrawn Commitment of each Lender under the Facility at that time shall be automatically cancelled.

 

10.8           Voluntary Cancellation

 

(A)                Kosmos may, by giving not less than ten Business Days’ (or such shorter period as the Majority Lenders may agree) prior written notice to the Facility Agent, without penalty, cancel the undrawn Commitments under any Facility in whole or in part (but if in part, in a minimum amount of USD 1 million or, if less, the balance of the undrawn Commitments). The relevant Commitments in respect of the Facility will be cancelled on a date specified in such notice, being a date not earlier than ten Business Days after the relevant notice is received by that Facility Agent.

 

(B)                  Any valid notice of cancellation will be irrevocable and will specify the date on which the cancellation shall take effect. No part of any Commitment which has been cancelled or which is the subject of a notice of cancellation may subsequently be utilised.

 

(C)                  When any cancellation of Commitments under the Facility takes effect, each Lender’s Available Commitment under the Facility will be reduced by an amount which bears the same proportion to the total amount being cancelled as its Available Commitment under the Facility bears to the Available Commitment (at that time) under the Facility.

 

10.9           Voluntary Prepayment of Loans

 

(A)                Subject to clause 10.1 (General), a Utilisation may be prepaid whether in whole or in part by the Borrower without penalty upon ten Business Days’ prior written notice to the Facility Agent.

 

(B)                  Any valid notice of prepayment will be irrevocable and, unless a contrary indication appears in this Agreement, will specify the date on which the cancellation shall take effect. Any amount prepaid or repaid may not be redrawn if such prepayment or repayment and Utilisation occurs after the expiry of the Availability Period.

 

(C)                  Prepayment shall take effect:

 

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(i)                        on the last day of the then current Interest Period; or

 

(ii)                     on any other date subject to payment by the Borrower, on demand of Break Costs (if any), in accordance with clause 13.4 (Break Costs).

 

(D)                 Unless a contrary indication appears in this Agreement, when any prepayment of the whole or part of a Loan takes place, each Lender’s participation in the relevant Loan shall be reduced rateably.

 

10.10    Right of repayment and cancellation in relation to a single Lender

 

(A)                If:

 

(i)                        Kosmos reasonably believes that the sum payable to any Lender by an Obligor is required to be increased under clause 15.2 (Tax gross-up);

 

(ii)                     Kosmos receives a notice from the Facility Agent under clause 15.3 (Tax Indemnity) or clause 16 (Increased Costs);

 

(iii)                  any Lender is or becomes a Non-Funding Lender; or

 

(iv)                 any Lender is or becomes entitled to increase its rate of interest further to clause 13.2 (Market disruption),

 

Kosmos may, while (in the case of paragraph (i) and (ii) above) the circumstance giving rise to the belief or notice continues or (in the case of (iii) or (iv) above) the relevant circumstance continues:

 

(a)                    give the Facility Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender’s participation in the Utilisations;

 

(b)                   in the case of a Non-Funding Lender or Illegality Lender, give the Facility Agent notice of cancellation of the Available Commitment of that Lender in relation to the Facility and reinstate all or part of such Available Commitment in accordance with paragraph (B) below;

 

(c)                    or replace that Lender in accordance with paragraph (B) below.

 

(B)                  Kosmos may:

 

(i)                        in the circumstances set out in paragraph (A) above or pursuant to clause 10.1 (General) or clause 10.2 (Illegality) or clause 10.6(A)(ii) (Change of Control), replace an Existing Lender (as defined in clause 30 (Changes to the Lenders)), with one or more other Lenders (which need not be Existing Lenders) (each a “Replacement Lender”), which have agreed to purchase all or part of the Commitment and participations of that Existing Lender in Utilisations made to Kosmos

 

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pursuant to an assignment or transfer in accordance with the provisions of clause 30 (Changes to the Lenders); or

 

(ii)                     in the circumstances set out in paragraph (A)(iv)(a) of this clause 10.10, cancel the Available Commitments of the Non-Funding Lender or Illegality Lender in respect of the Facility and procure that one or more Replacement Lenders assume Commitments under the Facility in an aggregate amount not exceeding the Available Commitment of the relevant Non-Funding Lender or Illegality Lender in relation to the Facility,

 

in each case on condition that:

 

(a)                     each assignment or transfer under this paragraph (B) shall be arranged by Kosmos (with such reasonable assistance from the Existing Lender as Kosmos may reasonably request); and

 

(b)                    no Existing Lender shall be obliged to make any assignment or transfer pursuant to this paragraph (B) unless and until it has received payment from the Replacement Lender or Replacement Lenders in an aggregate amount equal to the outstanding principal amount of the participations in the Utilisations owing to the Existing Lender, together with accrued and unpaid interest and fees (including, without limitation, any Break Costs to the date of payment) and all other amounts payable to the Existing Lender under this Agreement.

 

(C)                  On receipt of a notice from Kosmos referred to in paragraph (A) above, the Commitment of that Lender shall immediately be reduced to zero.

 

(D)                 On the last day of each Interest Period which ends after Kosmos has given notice under paragraph (A) above (or, if earlier, the date specified by Kosmos in that notice), Kosmos shall repay that Lender’s participation in the relevant Utilisation.

 

(E)                   Paragraphs (A) and (B) do not in any way limit the obligations of any Finance Party under clause 18.1 (Mitigation).

 

11.                  INTEREST

 

11.1           Calculation of interest

 

The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

 

(A)                Margin;

 

(B)                  LIBOR; and

 

(C)                  Mandatory Cost (if any).

 

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11.2           Margin

 

The Margin applicable to a Loan shall be a percentage per annum, based on utilisation of the Facility, as follows:

 

	
Years (counting
    	
 
    	
Utilisation of Facility
    	
 
    	
 
    	
 
    
	
from and including
    	
 
    	
is less than or equal
    	
 
    	
Utilisation of Facility is
    	
 
    
	
the year of the
    	
 
    	
to 75% of the Total
    	
 
    	
more than 75% of the Total
    	
 
    
	
Signing Date)
    	
 
    	
Facility Amount
    	
 
    	
Facility Amount
    	
 
    
	
1 to 3 (inclusive)
    	
 
    	
3.25
    	
%
    	
3.50
    	
%
    
	
4 to 5 (inclusive)
    	
 
    	
3.75
    	
%
    	
4.00
    	
%
    
	
6 to 7 (inclusive)
    	
 
    	
4.50
    	
%
    	
4.75
    	
%
    

 

11.3           Payment of interest

 

The Borrower shall pay accrued interest on each Loan on the last day of each Interest Period (and, if the Interest Period is longer than six months, on the dates falling at six-monthly intervals after the first day of the Interest Period).

 

11.4           Default interest

 

(A)                If an Obligor 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, subject to paragraph (B) below, is 1.0 per cent. higher than the rate which would have been payable if the overdue amount had, during the period of non payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any interest accruing under this clause shall be immediately payable by the Obligor on demand by that Facility Agent.

 

(B)                  If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:

 

(i)                        the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

 

(ii)                     the rate of interest applying to the overdue amount during that first Interest Period shall be 1.0 per cent. higher than the rate which would have applied if the overdue amount had not become due.

 

(C)                  Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

 

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11.5           Notification of rates of interest

 

The Facility Agent shall promptly notify the relevant Lenders and Kosmos of the determination of a rate of interest under this Agreement.

 

12.                  INTEREST PERIODS

 

12.1           Selection of Interest Periods

 

(A)                The Borrower shall select an Interest Period for a Loan in the Utilisation Request for that Loan.

 

(B)                  Subject to this clause, the Borrower may select an Interest Period of 1, 3 or 6 months or such other period as may be agreed between Kosmos and the Facility Agent.

 

(C)                  No Interest Period for a Loan under the Facility shall extend beyond the Final Maturity Date.

 

(D)                 The first Interest Period of each Loan shall commence on the Utilisation Date and end on the same day as the end of the selected Interest Period. In the case of each Loan (other than the first Loan under the Facility), each subsequent Interest Period shall end on the same day as the current Interest Period of any outstanding Loan made under the Facility.

 

12.2           Non-Business Days

 

If an Interest Period ends on a day which is not a Business Day, that Interest Period will instead end on the next Business Day, unless the next Business Day is in another month, in which case the Interest Period will end on the preceding Business Day.

 

12.3           Consolidation and division of Loans

 

(A)                Subject to paragraph (B) below, if two or more Interest Periods for Loans under the Facility end on the same date, those Loans will, unless Kosmos specifies to the contrary in the Utilisation Request or in a notice to the Facility Agent, be consolidated into, and treated as, a single Loan under the Facility on the last day of the Interest Period.

 

(B)                  If Kosmos requests (in either a Utilisation Request or otherwise in a notice to the Facility Agent) that a Loan be divided into two or more Loans, that Loan will, on the last day of its Interest Period, be so divided into the amounts specified in such request, being an aggregate amount equal to the amount of the Loan immediately before its division.

 

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13.                  CHANGES TO THE CALCULATION OF INTEREST

 

13.1           Absence of quotations

 

Subject to clause 13.2 (Market disruption), if LIBOR is to be determined by reference to the Reference Banks but up to four Reference Banks do not supply a quotation by the Specified Time, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

 

13.2           Market disruption

 

(A)                If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender’s share of that Loan for the Interest Period shall be the percentage rate per annum which is the sum of:

 

(i)                        the Margin;

 

(ii)                     the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and

 

(iii)                  the Mandatory Cost, if any, applicable to that Lender’s participation in the Loan.

 

(B)                  In this Agreement “Market Disruption Event” means if, on or about noon in London on the Quotation Day for the relevant Interest Period none or only one of the Reference Banks supplies a rate to the Facility Agent to determine LIBOR for the Interest Period, or the Facility Agent receives notifications from a Lender or Lenders (whose participations exceed 35 per cent. in aggregate of all participations) that the cost to it of obtaining matching deposits in the London interbank market would be materially in excess of LIBOR.

 

(C)                  The Facility Agent shall notify Kosmos immediately upon receiving notice from the Lender(s).

 

13.3           Alternative basis of interest or funding

 

(A)                If a Market Disruption Event occurs and the Facility Agent or the Borrower so requires, the Facility Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

 

(B)                  Any alternative basis agreed pursuant to paragraph (A) above shall, with the prior consent of all the Lenders and Kosmos, be binding on all Parties.

 

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13.4                        Break Costs

 

(A)                 Kosmos shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by it on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

 

(B)                   Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

 

(C)                   If, following a payment by Kosmos of all or part of a Loan or Unpaid Sum on a day other than the last day of an Interest Period for that Loan or Unpaid Sum, a Lender realises a profit, and no Event of Default is continuing, that Lender must pay an amount equal to that profit to Kosmos as soon as practicable.

 

14.                               FEES

 

14.1                        Commitment fee

 

(A)                 The Borrower shall pay to the Facility Agent, a fee computed as follows:

 

(i)                      when Commitment is available for utilisation, at a rate equal to 40 per cent. per annum of the then applicable Margin; and

 

(ii)                   when Commitment is not then available for utilisation, at a rate equal to 20 per cent. per annum of the then applicable Margin.

 

(B)                  The accrued commitment fee is payable quarterly (on each of 31 March, 30 June, 30 September and 31 December) in arrears on any undrawn and uncancelled portion of the Commitments for the period from the date of this Agreement until and including the last day of the Availability Period.

 

(C)                  Notwithstanding paragraphs (A) and (B) above, the Borrower shall not be required to pay any such commitment fees to the Facility Agent for the account of any Lender during the period in which such Lender is a Non-Funding Lender.

 

14.2                        Front end and underwriting fees

 

The Borrower shall pay to each Original Lender, front end and underwriting fees in the amount and at the times agreed in a Fee Letter.

 

14.3                        Facility Agent fee

 

The Borrower shall pay to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.

 

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14.4                        Security Agent fee

 

The Borrower shall pay to the Security Agent (for its own account) a trustee fee in the amount and at the times agreed in a Fee Letter.

 

14.5                        The Technical Bank fee

 

The Borrower shall pay to the lead technical bank and to each co-technical bank (for its own account in each case) a technical bank fee in the amount and at the times agreed in a Fee Letter.

 

14.6                        The Modelling Bank fee

 

The Borrower shall pay to the lead modelling bank and the co-modelling bank (for its own account in each case) a modelling bank fee in the amount and at the times agreed in a Fee Letter.

 

14.7                        The Documentation Bank fee

 

The Borrower shall pay to the Documentation Bank (for its own account) a documentation bank fee in the amount and at the times agreed in a Fee Letter.

 

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PART 5

TAXES, INCREASED COSTS AND INDEMNITIES

 

15.                               TAX GROSS UP AND INDEMNITIES

 

15.1                        Definitions

 

In this Agreement:

 

“Tax Credit” means a credit against, relief or remission for, 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 the increase in a payment made by an Obligor to a Finance Party under clause 15.2 (Tax gross-up) or a payment under clause 15.3 (Tax Indemnity).

 

15.2                        Tax gross-up

 

(A)                Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

 

(B)                  Kosmos shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly.

 

(C)                  If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

 

(D)                 If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

 

(E)                   Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party (acting reasonably) that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing Authority.

 

(F)                   If an Obligor makes any payment to a Finance Party in respect of or relating to a Tax Deduction, but such Obligor was not obliged to make such payment, the relevant Finance Party shall within five Business Days of demand refund such payment to such Obligor.

 

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15.3                        Tax Indemnity

 

(A)                 Except as provided below, the Borrower shall (within five Business Days of demand by the Facility Agent) indemnify a Finance Party against any loss, liability or cost which that Finance Party determines will be or has been (directly or indirectly) suffered by that Finance Party for or on account of Tax, by that Finance Party in respect of a Finance Document.

 

(B)                   Paragraph (A) above shall not apply:

 

(i)                       with respect to any Tax assessed on a Finance Party under the law of the jurisdiction in which:

 

(a)                    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

 

(b)                   that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,

 

if in either such case that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party or that Finance Party’s Facility Office; or

 

(ii)                   to the extent a loss, liability or cost is compensated for by an increased payment under clause 15.2 (Tax gross-up); or

 

(iii)                with respect to any Tax assessed prior to the date which is 180 days prior to the date on which the relevant Finance Party requests such a payment from the Borrower, unless a determination of the amount claimed could only be made on or after the first of those dates.

 

(C)                   A Finance Party making, or intending to make a claim under paragraph (A) 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 provide to Kosmos a copy of the notification by such Finance Party.

 

(D)                  A Finance Party shall, on receiving a payment from an Obligor under this clause, notify the Facility Agent. The Finance Parties will undertake to use reasonable endeavours to obtain reliefs and remissions for taxes and deductions and to reimburse Kosmos for reliefs, remissions or credits obtained (but without any obligation to arrange its tax affairs other than as it sees fit nor to disclose any information about its tax affairs).

 

15.4                        Tax Credit

 

(A)                 If:-

 

(i)                       an Obligor makes a Tax Payment, and

 

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(ii)                    a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part, or to that Tax Payment, and

 

(iii)                 that Finance Party has obtained, utilised and retained that Tax Credit,

 

the Finance Party shall pay an amount to the Obligor which that Finance Party reasonably determines will leave it (after that payment) in the same after-Tax position as it would have been in but for its utilisation of the Tax Credit.

 

(B)                   Nothing in this clause will:

 

(i)                       interfere with the rights of any Finance Party to arrange its affairs in whatever manner it thinks fit; or

 

(ii)                    oblige any Finance Party to disclose any information relating to its Tax affairs or computations.

 

15.5                        Stamp Taxes

 

Kosmos shall, within five Business Days of demand, pay and indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document other than in respect of an assignment or transfer by a Lender or any breach by any Finance Party of the terms of clauses 28.27 (Due execution of security Assignments) and 28.29 (Lenders’ custody of documents).

 

15.6                        Value added tax

 

(A)                All consideration expressed to be payable under a Finance Document by any Party to a Finance Party shall be deemed to be exclusive of any VAT. If VAT is chargeable on any supply made by any Finance Party to any Party in connection with a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT against delivery of an appropriate VAT invoice.

 

(B)                  Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that obligation shall be deemed to extend to all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that neither the Finance Party nor any other member of any VAT group of which it is a member is entitled to credit or repayment of the VAT.

 

16.                               INCREASED COSTS

 

16.1                        Increased costs

 

(A)                Subject to clause 16.3 (Exceptions) the Borrower shall, within five 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 the introduction of or any change in (or in the

 

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interpretation, administration or application by any governmental body or regulatory Authority of) any law or regulation (whether or not having the force of law, but if not, being of a type with which that Finance Party or Affiliate is expected or required to comply), or as a result of the implementation or application of, or compliance with, Basel III or any law or regulation that implements or applies Basel III.

 

(B)                  In this Agreement “Increased Costs” means:

 

(i)                       a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;

 

(ii)                    an additional or increased cost; or

 

(iii)                 a reduction of any amount due and payable under any Finance Document,

 

which is (a) material and (b) incurred or suffered by a Finance Party or any of its Affiliates but only 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.

 

16.2                        Increased cost claims

 

(A)                A Finance Party intending to make a claim pursuant to clause 16.1 (Increased costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the company.

 

(B)                  Each Finance Party shall provide a certificate confirming the amount of its Increased Costs.

 

16.3                        Exceptions

 

(A)                clause 16.1 (Increased costs) does not apply to the extent any Increased Cost is:

 

(i)                      attributable to a Tax Deduction required by law to be made by an Obligor provided that this clause is without prejudice to any rights which the affected Lender may have under clause 15.2 (Tax gross-up) to receive a grossed up payment;

 

(ii)                  the subject of a claim under clause 15.3 (Tax Indemnity) (or might be or have been the subject of a claim under clause 15.3 (Tax Indemnity) but for any of the exclusions in paragraph (B) of clause 15.3 (Tax Indemnity));

 

(iii)               incurred prior to the date which is 180 days prior to the date on which the Finance Party makes a claim in accordance with clause 16.2 (Increased cost claims), unless a determination of the amount incurred could only be made on or after the first of those dates;

 

80

 

(iv)              any of the types of cost dealt with by Schedule 6 (Mandatory Cost Formulae);

 

(v)                 attributable to the wilful breach by the relevant Finance Party or any of its Affiliates of any law or regulation; or

 

(vi)              attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment contained in Basel III) (“Basel II”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

 

(B)                   In this clause 16.3 (Exceptions), a reference to a “Tax Deduction” has the same meaning given to the term in clause 15.1 (Definitions).

 

17.                               OTHER INDEMNITIES

 

17.1                        Currency indemnity

 

(A)                 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:

 

(i)                       making or filing a claim or proof against that Obligor; or

 

(ii)                    obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

 

that Obligor shall as an independent obligation, within five 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 (a) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (b) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

 

(B)                  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.

 

17.2                        Other indemnities

 

Each Obligor shall, within five 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;

 

81

 

(B)                   a failure by an Obligor to pay any amount due under a Finance Document on its due date;

 

(C)                  funding, or making arrangements to fund, its participation in a Utilisation requested by the Borrower in a Utilisation Request but not made by reason of a Default or an act or omission on the part of an Obligor; and

 

(D)                  a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by Kosmos.

 

17.3                        Indemnity to the Facility Agent

 

Each Obligor shall promptly on demand, indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a direct result of:

 

(A)                 investigating any event which it reasonably believes is a Default; and

 

(B)                  acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised by an Obligor.

 

18.                               MITIGATION BY THE LENDERS

 

18.1                        Mitigation

 

(A)                Each Finance Party shall, in consultation with Kosmos, use all reasonable endeavours to mitigate or remove any circumstances which arise and which would result in any facility ceasing to be available or any amount becoming payable under or pursuant to, or cancelled pursuant to, any of clause 10.2 (Illegality), clause 15.2 (Tax gross-up), clause 16.1 (Increased costs) or clause 13.2 (Market disruption) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

 

(B)                  Paragraph (A) above does not in any way limit the obligations of any Obligor under the Finance Documents.

 

(C)                  Each Finance Party shall notify the Facility Agent as soon as it becomes aware that any circumstances of the kind described in paragraph (A) above have arisen or may arise. The Facility Agent shall notify Kosmos promptly of any such notification from a Finance Party.

 

18.2                        Limitation of liability

 

(A)                Each Obligor shall promptly 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 18.1 (Mitigation).

 

(B)                  A Finance Party is not obliged to take any steps under clause 18.1 (Mitigation) if, in the bona fide opinion of that Finance Party (acting reasonably), to do so might in any way be prejudicial to it.

 

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PART 6

FORECASTS AND CALCULATIONS AND BORROWING BASE AMOUNT

 

19.                               FORECASTS AND CALCULATIONS

 

19.1                        Forecast Procedures

 

(A)                 Not less than 30 Business Days before any proposed or required Forecast Date, the Borrower and the Technical and Modelling Bank shall consult together with a view to preparing and agreeing the relevant Forecast including the Forecast Assumptions and all associated calculations and information. Kosmos shall ensure that a new or updated reserves report is prepared by the Reserves Consultant for the Forecast prepared for 15 June 2011 and for each Forecast prepared on subsequent Forecast Dates falling at twelve monthly intervals (or such earlier dates as Kosmos may elect). Each party shall consult in good faith and act reasonably, and shall make available sufficiently experienced personnel, with a view to reaching agreement as soon as reasonably practicable. Each Forecast (and all Forecast Assumptions used) shall have due and proper regard to any reasonable view expressed by any of the Consultants in a report delivered for the purpose of preparing the Forecast, any plan of development, work program and budget and the provisions and requirements of the Project Agreements (and any updates thereto). Any product pricing proposal by the Technical and Modelling Bank shall be reasonable in the circumstances and shall be made in accordance with current business practices, applied on a consistent, reasonable and non-discriminatory basis and reflecting market practice at the time.

 

(B)                  The Borrower shall provide its proposed Forecast to each Lender 15 Business Days before the relevant Forecast Date and the Technical and Modelling Bank shall provide its commentary on such Forecast, including whether it agrees or disagrees with such Forecast (including, if applicable, details of the grounds for its determination not to agree with the Forecast). Each Lender shall have 10 Business Days to approve the Forecast and, once approved by the Majority Lenders, that Forecast will apply for the relevant Forecast Period. If any such Lender has not objected in writing to the Forecast within such 10 Business Day period, then such Lender shall be deemed to have approved the Forecast. A Forecast shall only be deemed to have been accepted by such Lenders if it has been approved (or deemed approved) by the Majority Lenders. In making any objection, such Lenders must act reasonably and no objection may be made other than on the grounds that a Forecast Assumption which has been used in the Forecast is not reasonable in the circumstances, or on the grounds of proven or manifest error.

 

(C)                  In making any determination in the Forecasting Procedures the Majority Lenders shall give due and proper regard to any information provided (including any report delivered by the Consultants for the purposes of the Forecast) or representations made by the Borrower and the Technical and Modelling Bank. Any determination shall take due and proper regard of any plan of development, work program and budget (and any updates thereto) and the provisions and requirements of the Project Agreements. Any determination in relation to

 

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product prices shall be reasonable in the circumstances and shall be made in accordance with current business practices, applied on a consistent, reasonable and non-discriminatory basis and reflecting market practice at the time.

 

(D)                 If the Majority Lenders do not approve the Forecast, the Borrower and the Technical and Modelling Bank shall prepare a revised Forecast which satisfies, in all reasonable respects, the objections of the Majority Lenders.

 

(E)                   If, for any reason, a Forecast is not agreed prior to the applicable Forecast Date, the then applicable Forecast shall continue to apply until the new Forecast is prepared and agreed in accordance with the Forecast Procedures.

 

19.2                        Contents of Forecast

 

(A)                 Each Forecast will set out or include:

 

(i)                       the Technical Assumptions and Economic Assumptions upon which the Forecast is based (including, without limitation, on product prices);

 

(ii)                    an updated Model;

 

(iii)                 the calculation of the Borrowing Base Amount;

 

(iv)                the calculation of any mandatory prepayment required because the aggregate of outstandings under the Facility exceeds the Borrowing Base Amount;

 

(v)                   calculations of the Field Life Cover Ratio and the Loan Life Cover Ratio;

 

(vi)                the calculation of the Reserve Tail Date;

 

(vii)            the aggregate economically recoverable proved (1P) reserves and the proved and probable (2P) reserves remaining to be produced from the Borrowing Base Assets (reflecting any updated reserves report produced by the Reserves Consultant in respect of that Forecast, or if no such updated reserves report has been produced, reflecting the immediately preceding reserves report as may be updated by Kosmos with the agreement of the Technical Consultant and the Technical and Modelling Bank (acting reasonably);

 

(viii)         the revised Amortisation Schedule (if required) or confirmation that no revision to the Amortisation Schedule is required pursuant to clause 9.2 (Amendment to Amortisation Schedule); and

 

(ix)                 such other reasonable information as the Technical and Modelling Bank or the Facility Agent may reasonably require.

 

(B)                  All projections and calculations to be made under this clause shall be expressed and made in US Dollars (at the Facility Agent’s spot rate of exchange at the time if so required (which the Facility Agent will provide promptly on request)).

 

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19.3           New Borrowing Base Assets

 

Whenever a new asset becomes, or is to become, a Borrowing Base Asset, a new Forecast must first be prepared and provided to each Lender, in accordance with this clause 19 (Forecasts and Calculations), together with a Sources and Uses Statement, including that asset.

 

19.4           Manner of Calculations

 

(A)                All the calculations required for each Forecast will be calculated using the Model on the basis of the Technical Assumptions and Economic Assumptions determined for the purposes of that Forecast.

 

(B)                  Where the manner of determining any of the calculations required for a Forecast differs between the programme on which the Model operates and the provisions of the Finance Documents, the Finance Documents will prevail.

 

19.5           Borrowing Base Amount

 

The Borrowing Base Amount shall be determined on each Forecast Date pursuant to a Forecast prepared in accordance with the Forecasting Procedures. The Borrowing Base Amount so determined shall apply for the duration of the next succeeding Forecast Period or until a new Forecast is prepared.

 

19.6           Calculation of Borrowing Base Amount

 

(A)                The Borrowing Base Amount for the purposes of the Facility shall be the lesser of:

 

(i)                        the sum of: (a) the net present value of Net Cash Flow until the Field Depletion Date plus (b) the net present value of Relevant Capital Expenditure, divided by 1.5;

 

(ii)                     the sum of: (a) the net present value of Net Cash Flow until the Final Maturity Date plus (b) the net present value of Relevant Capital Expenditure, divided by 1.3.

 

(B)                  The discount rate utilised to determine the net present values referred to in paragraph (A) above shall be eight per cent. and shall be applied in calculating the net present value of cash flows.

 

19.7           Model

 

(A)                The Facility Agent, the Technical and Modelling Bank and Kosmos may each make proposals with regard to amendments to the Model which it believes:

 

(i)                        in good faith are required for the purpose of correcting any manifest error in the form or structure of the Model; or

 

(ii)                     to incorporate additional assumptions.

 

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(B)                  If the Facility Agent, Technical and Modelling Bank and Kosmos are unable to agree on the required changes to the Model within 15 Business Days from the date on which such changes were proposed, then the matter shall, on the request of Kosmos or the Technical and Modelling Bank, or on the initiation of the Facility Agent, be referred for resolution to an appropriate expert appointed by the Facility Agent (being a person having appropriate independent expertise with respect to, but no interest in, the outcome of the matter referred to it).

 

(C)                  The costs of any references to an expert and the costs, if any, incurred in giving effect to any agreed revision to the Model will be borne by Kosmos except, in the case of the costs of any reference to an expert only, if the expert determines that any proposal by the Technical and Modelling Bank or the Facility Agent in respect of the changes to the Model which are in dispute could not be regarded as reasonable and are rejected by such expert, in which case such costs shall be borne by the Lenders.

 

(D)                 Any amendments to the Model will not be made until such time as such amendment has been agreed or determined (as appropriate) pursuant to paragraphs (A) and (B) above. Prior to such amendment being incorporated into the Model, the Model will continue to be utilised without such amendment.

 

(E)                   Where the manner of determining any of the calculations required for a Forecast is amended as a consequence of any amendments made to the Model, the Finance Documents shall be deemed to be amended to reflect any such amendment.

 

19.8           Approved Developments and Permitted Acquisitions

 

Prior to requesting the consent of the Majority Lenders to the carrying out of any Approved Development (or the inclusion of any Field or Petroleum Asset (or any part thereof) in the Borrowing Base Assets as an Approved Development) or to the making of any Permitted Acquisition, the Technical and Modelling Bank and the Borrower shall consult in good faith, and acting reasonably, they shall prepare a proposal for the consideration of each Lender which includes all relevant information for the Lenders to make an informed decision on whether to grant the requisite consent (including appropriate reports from the Technical Consultant, the Environmental Consultant, the Reserves Consultant and the Insurance Consultant). Any Approved Development or Permitted Acquisition must be compliant with the Equator Principles (as confirmed by the Environmental Consultant). The Technical and Modelling Bank shall include its recommendation with the proposal on whether consent should be given. In considering whether to grant any such consent, the Lenders shall act reasonably and shall take due and proper regard of any recommendation of the Technical and Modelling Bank (but without any liability on the part of the Technical and Modelling Bank and each Lender being deemed to make its own independent assessment) and the information provided with the proposal. If the Majority Lenders refuse their consent, they shall provide the Borrower with reasonable details of the reasons why they have refused their consent. A Permitted Acquisition may not take place in Iran, Libya, Myanmar, North Korea, Sudan, Syria, Cuba, any country which is on a sanctions list issued by the United States, the European Union (or any member state) or the United Nations or any country designated by the Majority Lenders (acting reasonably).

 

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PART 7

BANKS ACCOUNTS, CASH MANAGEMENT AND RESERVE EQUITY

 

20.                  BANK ACCOUNTS AND CASH MANAGEMENT

 

20.1           Project Accounts

 

(A)                Each Obligor shall establish and maintain each of the Project Accounts, as required under the terms of this Agreement, with the Account Bank in London or such other jurisdiction approved by the Facility Agent (acting reasonably).

 

(B)                  The Project Accounts (other than the Ghana Working Capital Cedi Account which shall be denominated in Ghanaian Cedi) shall be denominated in US Dollars. Any sum constituting interest paid in respect of the credit balance on any Project Account shall be treated in the same manner as any other sum credited to a Project Account.

 

(C)                  Each Project Account will be a separate account at the Account Bank. The Project Accounts will be maintained until the Discharge Date.

 

(D)                 Amounts may be deposited into the Onshore Working Capital Accounts, to the extent necessary, to meet local onshore payments only, provided that the aggregate balance in such accounts may not exceed USD 10 million (or equivalent) or such higher amount agreed by the Facility Agent (acting reasonably).

 

(E)                   Subject to paragraph (D) above and to the order of payments provided for in the Cash Waterfall, Kosmos shall maintain the balance of the Offshore Proceeds Accounts and the Onshore Working Capital Accounts, which, when aggregated and taken together with amounts paid in advance for its liabilities under the Project Agreements, is prudent and reasonable.

 

20.2           Other bank accounts

 

(A)                Each Obligor shall not open or maintain any bank accounts other than:

 

(i)                        the Project Accounts (including such other accounts established by KEG with the Account Bank which would be Project Accounts but for the execution of the Onshore Security Assignment and the Offshore Security Assignment by all the parties thereto in accordance with this Agreement), which shall not be overdrawn at any time and any withdrawals from such Project Accounts shall only be made out of cleared funds;

 

(ii)                     the Distributions Reserve Accounts, which shall not be overdrawn at any time; and

 

(iii)                  such accounts as may be necessary or appropriate for it to perform its obligations as an operator in relation to the Ghana Blocks and, except into which moneys received from, or for the account of, any other party

 

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may be paid as required (but any money being related to any carried interest (including in respect of the carried interest of EO) in relation to any Borrowing Base Asset shall be paid into an Offshore Proceeds Account) (an “Interested Third Party”),

 

provided that in no event shall such accounts referred to in (ii) and (iii) above, or any moneys standing to the credit of such accounts referred to in (ii) and (iii) above, be available to the Lenders (except on an unsecured basis following the occurrence of any of the events described in clause 29.6 (Insolvency) and/or clause 29.7 (Insolvency proceedings)) or subject to any restrictions under the Finance Documents and shall not be subject to any Security Interest in favour of any Finance Party (but may be secured in favour of any other person other than the Finance Parties).

 

(B)                  The Lenders will account to KEH and/or the relevant Obligor if and to the extent they receive any proceeds from any account referred to in clause 20.2(A)(ii) or (A)(iii) above, and shall hold any such moneys to the account of, and on trust for, KEH.

 

(C)                  Any Lender that is in receipt of proceeds as described in paragraph (B) above shall:

 

(i)                        within five Business Days notify details of the receipt or recovery to Kosmos, KEH and the Facility Agent; and

 

(ii)                     within five Business Days of demand by KEH, pay an amount equal to such receipt or recovery to KEH.

 

20.3           Appointment of Account Bank

 

(A)                Any appointment of or change to the Account Bank will become effective only upon the Account Bank executing, or new Account Bank acceding to the terms of, the Project Accounts Agreements or such other terms as may be approved by Kosmos and the Facility Agent (acting reasonably).

 

(B)                  Kosmos may, with the consent of the Facility Agent (not to be unreasonably withheld or delayed), change the Account Bank to another bank which meets the requirements of paragraph (C) below, but subject to paragraph (A) above and clause 20.1 (Project Accounts). If the Account Bank resigns, then Kosmos will appoint a replacement Account Bank which meets the requirements of paragraph (C), but subject to paragraph (A) and clause 20.1 (Project Accounts).

 

(C)                  Each Account Bank shall be a bank whose long-term unguaranteed, unsecured securities or debt has a rating of A- or higher from Standard and Poor’s or A3 or higher from Moody’s (or equivalent) or such lower rating as the Facility Agent and Kosmos shall agree in writing.

 

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20.4           Security Documents and Project Accounts Agreements

 

(A)                The Project Accounts shall be subject to a first ranking Security Interest in favour of the Secured Parties. Kosmos shall forthwith upon any change to the Account Bank, or upon opening any Project Account which is not subject to the security constituted by the relevant Security Documents, execute and deliver to the Security Agent such supplemental Security Documents as the Security Agent and the Facility Agent may reasonably require in order to create a first priority Security Interest over that Project Account in favour of the Finance Parties. Such supplemental Security Documents must be in a form and in substance satisfactory to the Facility Agent and the Security Agent.

 

(B)                  Kosmos shall, before any Project Account is opened, procure that the Obligor and the Account Bank have entered into the Project Accounts Agreements.

 

(C)                  In the case of execution of any of the Security Documents and Project Accounts Agreements referred to in paragraphs (A) and (B) above, Kosmos shall deliver to the Facility Agent documents which are the equivalent of those referred to in paragraph 1 of Schedule 3 (Conditions Precedent) in respect of such Security Documents and Project Accounts Agreements, together with any legal opinions which the Facility Agent may reasonably require, such legal opinions to be provided at the reasonable expense of Kosmos. All such documents must be in a form and in substance satisfactory to the Facility Agent.

 

(D)                 The detailed operating procedures for the Project Accounts will be agreed between Kosmos and the Account Bank, but in the event of any inconsistency between those procedures and the Project Accounts Agreements or this Agreement, the provisions of this Agreement shall prevail.

 

20.5           Control on withdrawals following Default

 

If a Default has occurred and is continuing and has not been waived, no Obligor may withdraw any moneys from the Project Accounts except:

 

(A)                with the prior consent of the Facility Agent;

 

(B)                  to meet an Obligor’s payment obligations under the Finance Documents or the Project Agreements on the relevant due date; or

 

(C)                  to pay for Project Costs not included in paragraph (B) above where:

 

(i)                        the payment in question has been budgeted for and the Facility Agent have given their written consent to the relevant expenditure or cost being incurred; or

 

(ii)                     the failure to make the payment in question would materially and adversely affect the business or financial condition of Kosmos or any other Obligor.

 

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20.6           Distributions Reserve Account

 

(A)                Each Obligor may maintain a Distributions Reserve Account into which the amount of any permitted distribution under clause 28.23 (Distributions), permitted indebtedness (other than drawdowns under the Facility) and contributions to the capital of an Obligor may be credited subject to compliance with the Cash Waterfall and such amounts shall not be subordinated to the rights of the Lenders. Amounts standing to the credit of the Distributions Reserve Accounts shall not be available to the Finance Parties whether as secured or unsecured creditors of Kosmos and irrespective of whether an Event of Default has occurred. The Obligors may grant security over their Distributions Reserve Account in favour of any person and shall not be required to grant any Security Interest over the Distributions Reserve Account in favour of the Finance Parties. Sums standing to the credit of the Distributions Reserve Accounts may be withdrawn and applied as the Obligor sees fit.

 

(B)                  The Lenders will account to KEH and/or the relevant Obligor if and to the extent they receive any proceeds from a Distributions Reserve Account, and shall hold any such moneys to the account of, and on trust for, KEH. If any other person has a Security Interest or claim against amounts standing to the credit of a Distributions Reserve Account, any such interest or claim shall be limited to these amounts and they shall not have recourse to the assets of any Obligor generally, nor shall they be entitled to make any claim or enforce against, or initiate any Insolvency Proceedings of any kind, against any Obligor.

 

(C)                  Any Lender that is in receipt of proceeds as described in paragraph (B) above, shall turnover such proceeds to KEH in accordance with paragraph (C) of clause 20.2 (Other bank accounts) above.

 

21.                  OPERATION OF THE OFFSHORE PROCEEDS ACCOUNTS

 

21.1           Payments in

 

Unless a Finance Document expressly requires an amount to be paid into any other Project Account, each Obligor must ensure that:

 

(A)                all Gross Revenues received;

 

(B)                  the proceeds of any Loan;

 

(C)                  the proceeds of repayment of any loan made pursuant to any FPSO Construction Financing;

 

(D)                 the proceeds of any Permitted Disposals; and

 

(E)                   any other amount payable to, or received by an Obligor (including payments received under any offtake contract (and the Obligors shall direct any person making such payments that any such payment shall be paid into that account only)), but excluding any amount which may be credited to the Distribution Reserve Account of Kosmos,

 

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are paid directly into an Offshore Proceeds Account.

 

21.2           Withdrawals — No Default Outstanding

 

(A)                Unless otherwise provided and unless there is a Default outstanding, amounts may only be withdrawn from the Offshore Proceeds Accounts and the Onshore Working Capital Accounts (including by way of transfer to any other account) if they are applied for the following purposes and subject to the following priority:

 

(i)                        first, payment of Project Costs provided that, if the latest Sources And Uses Statement shows that there is a shortfall in funding projected to be available, then such available funding must, unless the Majority Lenders otherwise agree, be allocated to meet costs in the following order of priority:

 

(a)                    Borrowing Base Assets;

 

(b)                   Ghana Block Assets;

 

(c)                    the Cameroon Block Assets and the Morocco Block Assets; and

 

(d)                   any other Project Costs.

 

In the event that there is any projected shortfall in funding, then the Facility may not be used for a purpose set out above unless each of the other purposes higher in the order of priority is fully funded by committed and available funding for the then applicable Forecast Period (including amounts under the Facility and assuming that there is no Default or Event of Default under the Finance Documents).

 

(ii)                     secondly, pari passu, payment of (or the funding of an Obligor, including by way of payment under any Intercompany Loan Agreement, to enable it to pay) any Financing Costs (excluding any payments of principal) under the Facility due but unpaid (applied to overdue amounts first, unpaid fees second, and unpaid interest third) or scheduled payments due but unpaid under a Hedging Agreement;

 

(iii)                  thirdly, pari passu, payments of (or the funding of an Obligor, including by way of payment under any Intercompany Loan Agreement to enable it to pay) principal under the Facility due but unpaid (applied to overdue amounts first and then to unpaid principal payments) and payment of (or the funding of the Borrower, including by way of payment under any Intercompany Loan Agreement to enable it to pay) any liabilities, including any early termination payment, due but unpaid under a Hedging Agreement;

 

(iv)                 fourthly, payment of any mandatory prepayments required because the outstandings under the Facility exceed the Borrowing Base Amount as determined by the most recent Forecast;

 

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(v)                    fifthly, payments required to be made into the DSRA up to the Required Balance;

 

(vi)                 sixthly, prepayments under the Finance Documents and/or providing cash collateral under any Letter of Credit; and

 

(vii)              lastly, so long as the Dividend Release Test is met, to make distributions to its shareholders at the Borrower’s discretion, which shall include making payments to the Distribution Reserve Account and payments under any Intercompany Loan Agreement provided that the amount distributed shall be based on the aggregate amount standing to the credit of the Offshore Proceeds Accounts on the relevant payment date after the amounts in (i) to (vi) above have been deducted.

 

22.                  DEBT SERVICE RESERVE ACCOUNT

 

22.1           Funding of Debt Service Reserve Account

 

(A)                Kosmos shall ensure on an ongoing basis that deposits are made into the Debt Service Reserve Account in accordance with the Cash Waterfall until the balance of such account is not less than the Required Balance. The funding of the Debt Service Reserve Account shall continue in accordance with the Cash Waterfall until the Discharge Date.

 

(B)                  Failure to maintain the Required Balance standing to the credit of the Debt Service Reserve Account shall not constitute an Event of Default for the purposes of clause 29 (Events of Default), but failure to apply amounts from the Project Accounts during the relevant Forecast Period in accordance with the Cash Waterfall shall constitute an Event of Default for the purposes of clause 29 (Events of Default).

 

(C)                  Notwithstanding the provisions of paragraphs (A) and (B) above, Kosmos may (without being restricted by the Cash Waterfall) make a Utilisation under the Facility to fund the Debt Service Reserve Account.

 

22.2           Withdrawals from Debt Service Reserve Account

 

(A)                Subject to paragraph (B) below, amounts standing to the credit of the DSRA may be withdrawn only to pay any Financing Costs under the Facility in accordance with the Cash Waterfall.

 

(B)                  In addition, withdrawals may be made from the Debt Service Reserve Account to the extent the amount withdrawn is equal to or less than the amount (if any) by which the amount standing to the credit of the Debt Service Reserve Account exceeds the applicable Required Balance at that time. Any such withdrawal may be applied in accordance with, and for the purposes set out in, the Cash Waterfall.

 

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23.                  AUTHORISED INVESTMENTS

 

23.1           Power of investment

 

Subject always to clause 20.1 (Project Accounts), Kosmos may require that such part of the amounts standing to the credit of any of the Project Accounts as it may consider prudent (having reasonable grounds for so considering) shall be invested from time to time in Authorised Investments in accordance with this clause and in a manner consistent with the provisions of clause 28.17(A) (Hedging).

 

23.2           Type of investment

 

(A)                Kosmos shall use its reasonable endeavours to procure that there are maintained from time to time a prudent spread of Authorised Investments and that the maturity of Authorised Investments is such that they can be liquidated to enable all payment obligations under the Finance Documents to be met on the due date.

 

(B)                  If any Authorised Investment ceases to be an Authorised Investment, Kosmos will, as soon as reasonably practicable upon becoming aware of this, procure that the relevant investment is replaced by an Authorised Investment or cash, provided that if it does not propose liquidating the relevant investment earlier than its maturity, it shall notify the Facility Agent that such investment is no longer an Authorised Investment promptly upon becoming aware of this and, subject to it having provided such notice, it will not be obliged to liquidate such investment before its maturity date unless either of the Facility Agent, acting reasonably, requests it to do so.

 

23.3           Realisations

 

(A)                Upon the realisation (whether by way of disposal, maturity or otherwise) of any Authorised Investment, the net proceeds of realisation shall either immediately be credited directly to the Project Account from which the Authorised Investment or such investment was made, or (unless a Default has occurred and is continuing) immediately be invested in another Authorised Investment, whichever Kosmos directs.

 

(B)                  Upon the receipt of any interest, dividends or other income from or in respect of any Authorised Investment, such interest, dividends or other income shall be credited to the Project Account concerned with the Authorised Investment or such other investment from which such interest, dividend or other income derives, or (if such interest, dividend or other income is derived from an Authorised Investment and such Authorised Investment is to be retained after such interest, dividend or other income is received and Kosmos so requests) the relevant interest, dividend or other income shall be reinvested in that Authorised Investment.

 

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23.4           Project Accounts include Authorised Investments

 

(A)                Any reference in this Agreement to the balance standing to the credit of one of the Project Accounts shall be deemed to include a reference to the Authorised Investments in which all or part of such balance is for the time being invested. (other than for the purposes of determining the balance required to comply with clause 20.1 (Project Accounts)). In the event of any dispute as to the value of any Authorised Investment for the purpose of determining the amount deemed to be standing to the credit of a Project Account, that value shall be determined by the Facility Agent acting reasonably and in good faith and following consultation with Kosmos and having given due consideration to any representations given by Kosmos within the period required by the Facility Agent (which period shall not, in any event, be of shorter duration than five Business Days). If Kosmos so requests, the Facility Agent will give Kosmos details of the basis or method of its determination.

 

(B)                  Kosmos may, by notice in writing to the Facility Agent and the Account Bank, deem an Authorised Investment to be concerned with a different Project Account so as to transfer Authorised Investments between Project Accounts, if:

 

(i)                        the aggregate amount standing to the credit of each Project Account remains the same; or

 

(ii)                     the transfer of an equivalent amount between those Project Accounts would be permitted.

 

23.5           Security over Authorised Investments

 

Prior to the Borrower making any Authorised Investment in England, the Borrower shall ensure that it has entered into the Offshore Security Assignment. To the extent that any Authorised Investment is made in a jurisdiction other than England, the Borrower shall execute and deliver, such other security as the Facility Agent may reasonably require from time to time in order to ensure that such Authorised Investment is secured to the Finance Parties by way of first priority security, in a form and substance satisfactory to the Facility Agent and the Security Agent, acting reasonably.

 

23.6           Interest on balances in Project Accounts

 

Each sum credited to a Project Account from time to time shall, from the time it is so credited until the time it is withdrawn therefrom (whether for the purpose of making an Authorised Investment or otherwise for application in accordance with the terms of this Agreement), bear interest at such rate as Kosmos may from time to time agree with the relevant Account Bank.

 

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PART 8

FINANCIAL AND PROJECT INFORMATION

 

24.                  INFORMATION UNDERTAKINGS

 

The undertakings in this clause remain in force from the date of this Agreement until the Discharge Date.

 

24.1           Books of account and auditors

 

Each Obligor shall:

 

(A)                keep proper books of account relating to its business; and

 

(B)                  appoint and maintain as its auditors any Approved Auditor.

 

24.2           Financial statements

 

(A)                Before (but for the avoidance of doubt not after) KEL or any of its Subsidiaries from time to time undertakes an IPO, the Borrower shall procure that KEH shall supply to the Facility Agent (in sufficient copies as most recently notified by the Facility Agent as being sufficient to allow one copy for each Lender):

 

(i)                        as soon as they become available, but in any event within 180 days of the end of each financial year, its audited consolidated financial statements for that financial year;

 

(ii)                     within 90 days of the end of each semi-annual period, its unaudited semi-annual consolidated financial statements for that period; and

 

(iii)                  within 90 days of the end of each quarter, its quarterly management reports for that period.

 

(B)                  After (but for the avoidance of doubt not before) KEL or any of its Subsidiaries from time to time undertakes an IPO, the Borrower shall procure that KEL shall supply to the Facility Agent (in sufficient copies as most recently notified by the Facility Agent as being sufficient to allow one copy for each Lender):

 

(i)                        as soon as they become available, but in any event within 180 days of the end of each financial year, its audited consolidated financial statements for that financial year;

 

(ii)                     within 90 days of the end of each semi-annual period, its unaudited semi-annual consolidated financial statements for that period; and

 

(iii)                  within 90 days of the end of each quarter, its quarterly management reports for that period.

 

(C)                  KEO shall supply to the Facility Agent (in sufficient copies as most recently notified by the Facility Agent as being sufficient to allow one copy for each

 

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Lender) within 90 days of the end of each quarter, its quarterly management reports for that period.

 

(D)                 If any audited consolidated financial statements which have been provided to the Facility Agent pursuant to either Clause (A)(i) or (B)(i) above contain an auditors’ qualification then, in each case if instructed to do so by the Facility Agent (acting only on the instructions of the Majority Lenders):

 

(i)                        KEO shall supply to the Facility Agent (in sufficient copies as most recently notified by the Facility Agent as being sufficient to allow one copy for each Lender), as soon as practicable, but in any event within 120 days of being so requested, its audited financial statements for its last financial year; and

 

(ii)                     the Borrower shall supply to the Facility Agent (in sufficient copies as most recently notified by the Facility Agent as being sufficient to allow one copy for each Lender), as soon as practicable, but in any event within 120 days of being so requested, its audited financial statements for its last financial year.

 

(E)                   If during any financial year of the Borrower there is a material change in the nature and extent of the accounting transactions which the Borrower enters into, it shall promptly inform the Facility Agent thereof and the Borrower shall, if instructed to do so by the Facility Agent (acting on the instructions of the Majority Lenders (acting reasonably)), supply to the Facility Agent (in sufficient copies for each Lender), as soon as they become available, but in any event within 180 days of request, its audited consolidated financial statements for its last financial year.

 

24.3           Year-end

 

Neither KEO nor the Borrower shall change its Accounting Reference Date without the consent of the Majority Lenders.

 

24.4           Form of financial statements

 

(A)                KEO and the Borrower must ensure that each set of financial statements supplied under the Facility Agreement:

 

(i)                        is certified by an Authorised Signatory of the relevant company as a true and correct copy; and

 

(ii)                     gives (if audited) a true and fair view of, or (if unaudited) fairly represents, the financial condition of the relevant company for the period to the date on which those financial statements were drawn up.

 

(B)                  Unless otherwise agreed with the Facility Agent, all accounts of KEH, KEL, KEO and the Borrower delivered under the Facility Agreement shall be prepared in accordance with the Approved Accounting Principles.

 

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(C)                  KEO and the Borrower must notify the Facility Agent of any material change to the manner in which any audited financial statements delivered under the Facility Agreement are prepared.

 

(D)                 If requested by the Facility Agent, each of KEH, KEL, KEO and the Borrower must supply to the Facility Agent:

 

(i)                        a full description of any change notified under paragraph (B) above and the adjustments which would be required to be made to those financial statements in order to cause them to use the accounting policies, practices, procedures and reference period upon which such financial statements were prepared prior to such change; and

 

(ii)                     sufficient information, in such detail and format as may be required by the Facility Agent (acting reasonably), to enable the Lenders to make a proper comparison between the financial position shown by the set of financial statements prepared on the changed basis and its most recent audited financial statements delivered to the Facility Agent under the Facility Agreement prior to such change.

 

24.5           Compliance Certificate

 

(A)                KEO and the Borrower must supply (and, in the case of the Borrower, procure that KEH and KEL supply) to the Facility Agent a compliance certificate with each set of financial statements sent to the Facility Agent under Clauses 24.4(A), 24.4(B), 24.4(C), 24.4(D) above certifying the matters specified in clause 24.4(A)(ii) above.

 

(B)                  A compliance certificate supplied in accordance with (A) above must be signed by two Authorised Signatories of KEH, KEL, KEO or the Borrower, as applicable.

 

24.6           Project Information

 

(A)                Each Obligor must (as soon as reasonably practicable) supply to the Facility Agent, in sufficient copies for all the Lenders if the Facility Agent so requests:

 

(i)                        any new updates to each and amendments to each agreed budget, or development and/or work programme in relation to each Borrowing Base Asset owned by it as soon as reasonably practicable following receipt from the relevant Operator (and, in any event, within 21 days of receipt) and, at least semi-annually, the latest Operator Report for each Borrowing Base Asset and each Developing Asset owned by it (as soon as reasonably practicable and, in any event, within 21 days of the end of the semi-annual period when it must be provided);

 

(ii)                     copies of all reports provided to any Government Authority by the Operator which have been copied to Kosmos (and in any event within 21 days of receipt);

 

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(iii)      such technical and commercial information which Kosmos has in its possession relating to a Field or Petroleum Assets or its or their condition and which is relevant to the interests of the Lenders under the Finance Documents as the Facility Agent may reasonably request from time to time (following prior consultation with Kosmos); and

 

(iv)      promptly, details of any material updates or amendments to any Project Agreement.

 

(B)                  The terms of appointment of the Technical Consultant shall require it (in consultation with the Technical and Modelling Bank) to prepare and deliver the following reports and information to the Technical and Modelling Bank and Kosmos for distribution to the Lenders:

 

(i)       a quarterly report on the Project Costs which have been incurred, reconciled against draw-downs made, equity contributed and cash held in the Project Accounts;

 

(ii)      a semi-annual report on the progress of each Developing Asset, including confirmation of the projected date for Completion and the aggregate of Project Costs required to achieve Completion (reconciled against the most recent Forecast) and whether there are, in its opinion, any other material issues or concerns of which it is aware in relation to the Developing Asset which should be brought to the attention of the Lenders;

 

(iii)      a semi-annual report on the operation of each Developed Asset, including the amount and timing of all Entitlement lifted by the Obligors and details of the disposal of that Entitlement (including price); and

 

(iv)     in any of the foregoing reports, such additional information or commentary as the Technical and Modelling Bank may reasonably require (following prior consultation with Kosmos) in order for the Lenders (in the context of their interests under the Finance Documents) to be properly informed about the progress, implementation, development and operation of the Borrowing Base Assets,

 

and the Borrower shall provide the Technical Consultant and the Technical and Modelling Bank with reasonable assistance and provide each of them with such information and other documents as the Technical Consultant and/or the Technical and Modelling Bank may reasonably request in order for the Technical Consultant to prepare and deliver the reports and information referred to in (i) to (iv) above and/or the Technical and Modelling Bank to consider and review such reports and information. Such assistance shall include facilitating visits by the Technical Consultant and the Technical and Modelling Bank to the Borrowing Base Assets and the construction/fabrication facilities of any Obligor’s contractors.

 

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24.7           Information: Miscellaneous

 

Each Obligor shall supply to the Facility Agent, in sufficient copies for all the Lenders, if the Facility Agent so requests:

 

(A)                all documents dispatched by each Obligor to its Shareholders (or any class of them) or its creditors generally, at the same time as they are dispatched;

 

(B)                  promptly after becoming aware of them, the details of any material litigation, arbitration or administrative proceedings which are currently threatened or pending against the Guarantor or any member of the Group or in respect of or relevant to an interest in a Borrowing Base Asset or any Ghana Block Assets;

 

(C)                  promptly after they have been issued, copies of any insurance policies in respect of all Agreed Insurances and any renewals in respect of such insurance policies;

 

(D)                 promptly after becoming aware of them, details of any claims made under any Insurance where the claim is for a sum in excess of USD 5 million; and

 

(E)                   promptly, such further information regarding the financial condition, assets, business and operations of the Guarantor or any member of the Group as the Facility Agent may reasonably request.

 

24.8           Sources and Uses

 

(A)                Kosmos must supply to the Facility Agent on each Forecast Date (in sufficient copies for all the Lenders if the Facility Agent so requests), a sources and uses statement (“Sources and Uses Statement”) showing, for the following twelve month period:

 

(i)                        the Project Costs projected to be incurred; and

 

(ii)                     the sources of funds to be used to cover such Project Costs.

 

(B)                  In the event that the Project Costs specified under any Sources and Uses Statement delivered to the Facility Agent under paragraph (A)(i) above exceed the funding which is projected to be available to meet those Project Costs, then the Borrower shall consult with the Facility Agent and the Technical and Modelling Bank in good faith with a view to agreeing a plan pursuant to which the Borrower will be able to meet any projected shortfall in funding.

 

(C)                  Notwithstanding paragraph (B) above, within 30 days of the relevant Forecast Date, the Borrower shall deliver to the Facility Agent the Borrower’s remedial plan for the funding of any projected shortfall in funding and the Borrower shall use all reasonable endeavours to comply with such plan (or any update thereto which it delivers to the Facility Agent), and shall consult on a regular basis with the Facility Agent and the Technical and Modelling Bank on the remedial steps being taken to fund any projected shortfall in funding.

 

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(D)                 A Default or an Event of Default will not occur under any circumstances if a Sources and Uses Statement shows a shortfall in funding.

 

24.9           Approved Development

 

Kosmos must supply to the Facility Agent (in sufficient copies for all the Lenders if the Facility Agent so requests) quarterly (and monthly, but only to the extent available) project reports in respect of an Approved Development.

 

24.10    Compliance with Remedial Plan

 

The Borrower shall use all reasonable endeavours to implement the remedial plan (or amended plan provided to the Facility Agent) and shall continue to consult on a regular basis with (and when requested by) the Facility Agent and the Technical Bank on implementation of the plan.

 

24.11    Notification of Default

 

Each Obligor must notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) and any material default under or material breach of any Project Agreement promptly upon becoming aware of its occurrence.

 

24.12    “Know your customer” and “customer due diligence” requirements

 

(A)                If:

 

(i)        the introduction of or any change in (or in the interpretation, administration or application by any government or regulatory Authority of) any law or regulation (having the force of law) made after the date of the Facility Agreement;

 

(ii)     any change in the ownership of an Obligor after the date of the Facility Agreement; or

 

(iii)      a proposed assignment or transfer by a Lender of any of its rights and obligations under the Facility Agreement to a party that is not a Lender prior to such assignment or transfer,

 

obliges the Facility Agent or any Lender (or, in the case of paragraph (C) below, any prospective new Lender) to comply with “know your customer”, “customer due diligence” or similar identification procedures in circumstances where the necessary information is not already available to it (or, in the case of paragraph (C) below, cannot be provided by the transferring Lender from information already provided to it), Kosmos shall, as soon as reasonably practicable upon the request of the Facility Agent or the relevant Lender, supply, or procure the supply of, such reasonable documentation and other evidence as is within an Obligor’s possession and control to enable the Facility Agent or such Lender to comply with all necessary “know your customer”, “customer due diligence” or other similar checks required under the relevant laws and regulations.

 

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(B)                  Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent, as the case may be, to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

(C)                  The Borrower shall, by not less than 10 Business Days’ prior written notice to the Facility Agent, notify the Facility Agent (which shall promptly notify the Lenders) of its intention to request that one of the subsidiaries (other than a subsidiary of a Borrower which owns Borrowing Base Assets) becomes an Additional Guarantor pursuant to the Facility Agreement.

 

(D)                 Following the giving of any notice pursuant to paragraph (C) above, if the accession of such Additional Guarantor obliges the Facility Agent or any Lender to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Facility Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the accession of such subsidiary to the Facility Agreement as an Additional Guarantor.

 

24.13    Use of websites

 

(A)                Except as provided below, each Obligor may deliver any information under the Facility Agreement to the Facility Agent by posting it on to an electronic website if:

 

(i)                        it maintains or has access to an electronic website for this purpose and provides the Facility Agent with the details and password to access the website and the information; and

 

(ii)                     the information posted is in a format required by the Facility Agreement or is otherwise agreed between each Obligor and the Facility Agent (whose approval shall not be unreasonably withheld or delayed).

 

The Facility Agent must supply each relevant Lender with the address of and password for the website.

 

(B)                  Notwithstanding the above, Kosmos must supply to the Facility Agent in paper form a copy of any information posted on the website together with sufficient copies for:

 

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(i)        any Lender who notifies the Facility Agent in writing (copied to each Obligor) that it does not wish to receive information via the website; and

 

(ii)     within ten Business Days of request, any other Lender, if that Lender so requests.

 

(C)                  Each Obligor must promptly upon becoming aware of its occurrence, notify the Facility Agent if:

 

(i)      the website cannot be accessed;

 

(ii)     the website or any information on the website is infected by any electronic virus or similar software;

 

(iii)      the password for the website is changed; or

 

(iv)      any information to be supplied under the Facility Agreement is posted on the website or amended after being posted.

 

(D)                 If the circumstances in sub-paragraph (C)(i) or (ii) above occur, an Obligor must supply any information required under the Facility Agreement in paper form until the circumstances giving rise to the notification are no longer continuing and the information can be provided in accordance with paragraph (A) above.

 

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PART 9

GUARANTEE

 

25.                  GUARANTEE AND INDEMNITY

 

25.1           Guarantee and indemnity

 

Each Guarantor irrevocably and unconditionally jointly and severally:

 

(A)                guarantees to each Finance Party punctual performance by each Borrower of all that Borrower’s obligations under the Finance Documents;

 

(B)                  undertakes with each Finance Party that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was 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.

 

25.2           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.

 

25.3           Reinstatement

 

If any payment by an Obligor or any 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 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)                  each Finance Party 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.

 

25.4           Waiver of defences

 

The obligations of each Guarantor under this clause 25 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 25 (without limitation and whether or not known to it or any Finance Party) including:

 

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(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 member of the Group;

 

(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 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 or dissolution or change in the members or status of an Obligor or any other person;

 

(E)                   any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

 

(F)                   any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

 

(G)                  any insolvency or similar proceedings.

 

25.5           Immediate recourse

 

Each 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 that Guarantor under this clause 25. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

 

25.6           Appropriations

 

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

 

(A)                refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

 

(B)                  hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this clause 25.

 

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25.7    Deferral of Guarantors’ rights

 

(A)     Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents:

 

(i)        to be indemnified by an Obligor;

 

(ii)       to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents; and/or

 

(iii)      to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party.

 

(B)      If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with clause 34 (Payment Mechanics) of this Agreement.

 

25.8    Release of Guarantors’ right of contribution

 

If any Guarantor ceases to be a Guarantor (a “Retiring Guarantor”) in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:

 

(A)     that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and

 

(B)      each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.

 

25.9    Additional security

 

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

 

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PART 10

REPRESENTATIONS, COVENANTS, EVENTS OF DEFAULT

 

26.      REPRESENTATIONS

 

Each Obligor makes the representations and warranties set out in this clause to each Finance Party and acknowledges that each Finance Party has entered into the Finance Documents in full reliance on those representations and warranties.

 

26.1    Status

 

(A)     It is a limited liability company, duly incorporated and validly existing under the laws of its jurisdiction of incorporation.

 

(B)      It has the power to own its assets and carry on its business as it is being conducted.

 

26.2    Legal validity

 

Each Transaction Document to which it is a party constitutes, or will constitute when executed, its valid, legally binding and enforceable obligations in accordance with its terms (subject to any limitation on enforcement under law or general principles of equity or qualifications which are specifically set out in any legal opinion delivered as a Condition Precedent) and that, so far as it is aware having made all due and careful enquiries, each Transaction Document is in full force and effect.

 

26.3    Non-conflict

 

The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents to which it is a party do not conflict with:

 

(A)     any applicable law or regulation;

 

(B)      its constitutional documents; or

 

(C)      any agreement binding upon it,

 

to the extent which has, or could reasonably be expected to have, a Material Adverse Effect.

 

26.4    Powers and authority

 

It has (or had at the relevant time) the power and authority to execute and deliver the Transaction Documents to which it is a party and it has the power and authority to perform its obligations under the Transaction Documents to which it is a party and the transactions contemplated thereby.

 

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26.5    Authorisations

 

Except for the registration of any Security Document, all Required Approvals (except to the extent already provided as a Condition Precedent, or where required by any Authority in respect of any Security Interest granted (or to be granted) under the Security Documents) have been obtained or effected and are in full force and effect (where a failure to do so has or could reasonably be expected to have a Material Adverse Effect).

 

26.6    Stamp and registration duties

 

Except for registration fees, if any, payable in relation to the Security Documents, there is no stamp or registration duty or similar Tax or charge in respect of any Transaction Document, which has not been made or paid within applicable time periods (where a failure to do so has, or could reasonably be expected to have, a Material Adverse Effect).

 

26.7    No Default

 

No Default has occurred and is outstanding.

 

26.8    Final Information Memorandum

 

(A)     The factual information in the Final Information Memorandum (other than that referred to in paragraph (B) below) was true in all material respects on the date of the Final Information Memorandum and did not omit anything material which was known to Kosmos at the time or contain anything that was materially misleading and, except to the extent advised in writing to the Facility Agent by Kosmos on or prior to Financial Close, so far as Kosmos is aware having made due and careful enquiry, no information has been disclosed to it nor have circumstances arisen nor has any event occurred since the date of the Final Information Memorandum which renders the information contained in the Final Information Memorandum materially misleading or materially incorrect.

 

(B)      The statements of opinion, projections and forecasts in the Final Information Memorandum attributable to Kosmos were made in good faith, with due care and on what Kosmos believed to be reasonable assumptions at the relevant time and representing the views of Kosmos at the time.

 

26.9    Financial Statements and other factual information

 

(A)     The most recent audited financial statements and interim financial statements delivered to the Facility Agent in accordance with clause 24.2 (Financial statements) (which, at the Signing Date, is the unaudited opening balance sheet of the Borrower as at 18 March 2011):

 

(i)        have been prepared in accordance with the Approved Accounting Principles (if relevant); and

 

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(ii)      (if audited) give a true and fair view of, or (if unaudited) fairly represent, its financial condition for the relevant period.

 

(B)      All factual information provided by or under the express direction of KEO and the Borrower to the Finance Parties in connection with the Facility was believed by KEO and the Borrower at the time it was so provided to be true in all material respects.

 

26.10 Proceedings pending or threatened

 

Except as disclosed to the Facility Agent in writing prior to the Signing Date, no litigation, arbitration or administrative proceeding is pending or threatened which could reasonably be expected to be adversely determined against it and which, if so determined, has, or could reasonably be expected to have, a Material Adverse Effect.

 

26.11 Breach of laws

 

(A)     It has not breached any law or regulation which has, or could reasonably be expected to have, a Material Adverse Effect.

 

(B)      It is in compliance with all environmental laws, a breach of which could reasonably be expected to give rise to a liability on it which has, or could reasonably be expected to have, a Material Adverse Effect and, so far as it is aware having made due and careful enquiry, there is no environmental claim outstanding against it which, if adversely determined, would give rise to a liability on it which has, or could reasonably be expected to have, a Material Adverse Effect.

 

26.12 Ranking of security

 

Subject to any limitations on enforcement under law or general principles of equity or qualifications set out in any legal opinion delivered as a Condition Precedent, each Security Document when executed confers the Security Interests it purports to confer over the assets referred to in that Security Document and those assets are not subject to any other Security Interest that is not permitted pursuant to clause 28.6 (Negative pledge).

 

26.13 Pari passu ranking

 

Its payment obligations under the Finance Documents rank at least pari passu with all its other present unsecured obligations, except for obligations mandatorily preferred by law applying to companies generally.

 

26.14 Assets

 

KEG holds the legal and beneficial interest in a 30.875 per cent Participating Interest in the WCTP Block; and the legal and beneficial interest in an 18 per cent Participating Interest in the DWT Block. Kosmos Energy Cameroon HC holds the legal and beneficial interest in a 35 per cent Participating Interest in the Kombe-N’sepe Permit, Cameroon; and, the legal and beneficial interest in a 100 per cent Participating Interest

 

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in the Ndian River, Cameroon. Kosmos Energy Offshore Morocco HC holds the legal and beneficial interest in a 75 per cent Participating Interest in Boujdour Offshore Permits.

 

26.15 Project Agreements

 

As at the Signing Date or, if later, the date a Project Agreement is delivered to the Facility Agent, so far as it is aware having made all due and careful enquiries:

 

(A)     each copy of a Project Agreement delivered to the Facility Agent under the Facility Agreement is true and complete;

 

(B)      there is no other agreement in connection with, or arrangements which amend, supplement or affect any Project Agreement in any material respect; and

 

(C)      no Obligor has a material obligation (being an obligation or liability exceeding USD 50 million) under any agreement which is not a Project Agreement, a Finance Document, or a Material Contract.

 

26.16 No Immunity

 

In any proceedings taken in any relevant jurisdiction in relation to the Transaction Documents (or any of them), it shall not be entitled to claim for itself or any of its assets immunity from suit, execution or attachment or other legal process.

 

26.17 Ownership of Obligors

 

(A)     KEH beneficially owns, indirectly, all of the issued share capital of the Guarantors and the Borrower.

 

(B)      The issued share capital of the Guarantors and the Borrower is fully paid up and, to the extent beneficially owned by KEH, free of all encumbrances or other third party rights (other than pursuant to the Security Documents).

 

26.18 ORGL LC

 

The amount of USD 23,000,000 is outstanding under the ORGC LC as at the date of this Agreement.

 

26.19 Times for making representations

 

(A)     The representations set out in this clause 26.18 (other than the representations in clauses 26.8 (Final Information Memorandum), 26.4 (Powers and authority), 26.5 (Authorisations) and 26.15(B) (Project Agreements)) are made by each Obligor on the date of this Agreement. The representation in clause 26.8 (Final Information Memorandum) will be made on the date of the Final Information Memorandum and the representation in clause 26.4 (Powers and authority) will be made as at the time that the power or authority is exercised only. Each Repeating Representation is deemed to be repeated by each Obligor on the

 

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date of each Utilisation Request, each Utilisation Date and on the first day of each Interest Period.

 

(B)      When a representation is repeated, it is applied to the facts and circumstances existing at the time of repetition.

 

27.      FINANCIAL COVENANTS

 

27.1    Financial Covenants

 

(A)     On any Forecast Date, Kosmos shall ensure that:

 

(i)        the Field Life Cover Ratio shall not be less than 1.30; and

 

(ii)       the Loan Life Cover Ratio shall not be less than 1.10,

 

in each case, as calculated by the Technical and Modelling Bank (acting reasonably) on the basis of all information made available to it.

 

(B)      No later than three Business Days following each Forecast Date, Kosmos shall send to the Facility Agent, a certificate signed by two authorised representatives setting out its calculation of the financial ratios referred to in this clause 27 as at such date.

 

28.      GENERAL UNDERTAKINGS

 

The undertakings in this clause shall remain in force from the date of this Agreement until the Discharge Date.

 

28.1    Corporate existence

 

Each Obligor shall maintain its corporate existence.

 

28.2    Authorisations

 

Each Obligor shall promptly obtain and comply with Required Approvals where a failure to do so would have a Material Adverse Effect.

 

28.3    Compliance with laws

 

Each Obligor shall comply with all laws and regulations (including compliance with environmental laws, permits and licences and compliance with the Equator Principles) applicable to it where failure to do so would have a Material Adverse Effect.

 

28.4    Pari passu ranking

 

Each Obligor shall ensure that at all times its payment obligations to the Finance Parties under the Finance Documents rank at least pari passu as to priority of payment with all its other present and future unsecured and unsubordinated Financial Indebtedness, except for claims mandatorily preferred by operation of law applying generally.

 

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28.5    Security

 

Subject to clause 28.27 (Due execution of security assignments) and clause 28.30 (Security Documents: consents, ranking and perfection), each Obligor shall undertake all actions reasonably necessary (including the making or delivery of filings and payment of fees) to maintain the Security Interests under the Security Documents to which it is a party in full force and effect (including the priority thereof).

 

28.6    Negative pledge

 

Other than Permitted Security, an Obligor shall not create or permit to exist any Security Interest over any of its assets.

 

28.7    Conduct of other business

 

Kosmos shall not conduct any business other than activities in connection with, or related, ancillary or incidental to, its interest in the Borrowing Base Assets.

 

28.8    Disposals

 

(A)     Other than Permitted Disposals, an Obligor shall not, either in a single transaction or in a series of transactions and whether related or not, dispose of all or a material part of its assets.

 

(B)      If an Obligor wishes to make a Permitted Disposal of an asset which is subject to a Security Interest in favour of the Finance Parties, then the Finance Parties shall, promptly upon request from Kosmos, absolutely and unconditionally release and discharge the relevant asset from that Security Interest and shall do all things necessary at the cost and expense of Kosmos to effect such discharge.

 

(C)      The shares in the capital of KEO or the Borrower may at any time be transferred to another holding company in which event the existing security over such shares shall be released subject to such new holding company providing substitute security over all shares in the capital of KEO or the Borrower, as the case may be, on substantially the same terms and conditions.

 

28.9    Financial Indebtedness

 

Other than Permitted Financial Indebtedness, an Obligor shall not incur any Financial Indebtedness.

 

28.10 Material contracts

 

No Obligor will enter into any contract or agreement that imposes material obligations on it except:-

 

(A)     contracts or agreements entered into in the ordinary course of business and on arm’s length terms (including in relation to Approved Developments and Permitted Acquisitions);

 

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(B)      the Project Agreements and the EO Participation Agreement and contracts and agreements required or contemplated therein or in respect of the development and implementation of Kosmos’s interest in the Fields and the Ghana Blocks;

 

(C)      contracts or agreements otherwise permitted or contemplated by the Finance Documents;

 

(D)      where the obligations and liabilities of the Obligor thereunder are fully funded by Permitted Financial Indebtedness or equity contributions; or

 

(E)      with the approval of the Majority Lenders (acting reasonably).

 

28.11 Upstream guarantees

 

No Obligor may, without the approval of the Majority Lenders (acting reasonably), enter into upstream guarantees or indemnities in respect of obligations or liabilities of any other member of the Group (excluding Obligors).

 

28.12 Mergers

 

No Obligor may enter into any amalgamation, consolidation, demerger, merger or reconstruction or winding-up without the consent of the Majority Lenders, except on a solvent basis and in circumstances where the Obligor remains the legal entity following such amalgamation, consolidation, demerger, merger or reconstruction or winding-up.

 

28.13 Loans

 

(A)     Except as provided in (B) below, no Obligor may be a creditor in respect of any Financial Indebtedness.

 

(B)      Paragraph (A) does not apply to:

 

(i)        any loans made pursuant to an Intercompany Loan Agreement;

 

(ii)       any credit provided under a Project Agreement, the EO Participation Agreement or in relation to the FPSO located in the Jubilee Field;

 

(iii)      any trade credit in the ordinary course of day to day business;

 

(iv)      loans or other credit not exceeding USD 100 million in aggregate at any one time; or

 

(v)       any other credit approved by the Majority Lenders (acting reasonably).

 

28.14 Operation

 

As far as it is able to do so by exercising its rights under a Project Agreement to which it is a party, each Obligor will use its reasonable endeavours to procure that the Borrowing Base Assets are developed, operated and maintained in all material respects in

 

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accordance with the terms of that Project Agreement and applicable law and in accordance with good international oil industry practice.

 

28.15 Compliance with Project Agreements

 

(A)     Each Obligor must comply with its obligations under the Project Agreements to which it is a party where failure to do so would have a Material Adverse Effect.

 

(B)      In the event an Obligor fails to pay any sum due under any Project Agreement it shall take such steps as shall be reasonably available to it so as to permit such payment to be made on its behalf by any Finance Party or any person acting on behalf of any Finance Party.

 

28.16 Insurances

 

Each Obligor will maintain all Agreed Insurances which it maintains in its own name, promptly pay all premiums and other monies payable under all its Agreed Insurances and promptly on request produce to the Security Agent a copy of each policy and evidence (reasonably acceptable to the Security Agent) of payment of such sums (and allow the Lenders to implement such insurance at the cost of the Borrower and the event of any default in that regard) and exercise its rights under the Project Agreements to procure (as far as it is able) the maintenance of the Agreed Insurances.

 

28.17 Hedging

 

(A)     The Borrower will maintain in place at all times a prudent risk management policy relating to managing its exposure to interest rates and fluctuations in the price of Crude Oil. In relation to hedging which is implemented to manage exposure to fluctuations in the price of Crude Oil, the volume which may be hedged by instruments creating contingent liabilities will be capped at 75 per cent. of 2P Developed Assets which are producing. To the extent that this 75 per cent. cap is exceeded at any time, the Borrower and the Hedging Counterparties shall, for so long as such excess subsists, negotiate in good faith with a view to agreeing a way forward which rectifies such excess.

 

(B)      The Borrower will have the right to implement any hedging by either (i) entering into Hedging Agreements with one or more Hedging Counterparties; and/or (ii) entering into Derivative Agreements with counterparties who do not accede to the terms of the Intercreditor Agreement and where the relevant payments thereunder are a Project Cost.

 

(C)      Each Underwriter will have a right to bid for its pro rata share of any hedging proposed by an Obligor.

 

28.18 Borrowing Base Assets

 

Each Borrowing Base Asset will at all times be owned by a member of the Group.

 

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28.19 Project Agreements

 

(A)     No Obligor will agree to any amendment, waiver or termination of a Project Agreement which would have a Material Adverse Effect or approve or vote in favour of any work programme, budget or development plan which would commit an Obligor to expenditure which it would not be able to meet from funds available to it, after taking account of forecast Project Costs and Financing Costs.

 

(B)      No term or condition of any Finance Document shall prevent any Obligor from complying with its express obligations under any Project Agreement, or require an Obligor to act or omit to act in a manner which would or might reasonably be expected to result in a breach of any provision of a Project Agreement including, but without limitation, Kosmos’ obligations under the EO Participation Agreement.

 

(C)      In the event that an Obligor has an obligation under a Project Agreement to make a payment in respect of a Project Cost because of the default by another party in paying its share of the relevant Project Cost, then the Obligor shall promptly notify the Facility Agent of the additional payment obligation (including reasonable details of how it arose and any steps being taken by the parties in relation to the relevant default and such other additional information as the Facility Agent may reasonably request). In such an event, the Facility Agent will have the right (acting reasonably) to request a sources and uses test to be performed.

 

28.20 Eligible offtakers

 

Kosmos will enter into agreements for the sale of its Entitlement with offtakers whom Kosmos determines, acting reasonably and in accordance with a prudent marketing policy which it shall have in place from time to time, have the financial capability and technical capacity to perform their obligations in accordance with the relevant terms and taking account of the nature and size of the transaction. Financial capability may be measured by applying suitable ratings tests, through credit support structures (including specific payment terms, guarantees, security and letters of credit), the identity of the offtaker (such as their market experience and reputation and whether they are part of a larger corporate group), course of dealings, or such other reasonable criteria as Kosmos may apply from time to time. In assessing technical capacity, Kosmos shall have regard to the experience of the offtaker, whether the offtaker is sufficiently well equipped technically and managerially to perform its obligations, and the availability of third party services and support.

 

28.21 Tax affairs

 

Each Obligor must promptly file all tax returns required by law within the requisite time limits except to the extent contested in good faith and subject to adequate reserve or provision.

 

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28.22    Permitted Acquisitions

 

No Obligor may, without the prior written consent of the Facility Agent (acting on the instructions of the Majority Lenders (acting reasonably)), make any acquisition of, or investment in, any assets, rights or property (but excluding for the avoidance of doubt any payment of Financing Costs or Project Costs) which is not a Permitted Acquisition.

 

28.23    Distributions

 

(A)                Each Obligor may make, declare or pay a distribution (including any payment under any subordinated loan agreement falling within the terms of sub-paragraph (C) of the definition of Permitted Financial Indebtedness and including any funding pursuant to, or payment under, any Intercompany Loan Agreement) (a “Shareholder Distribution”), subject to:

 

(i)                        there is no Default or Event of Default outstanding and no Default or Event of Default would be caused by such Shareholder Distribution;

 

(ii)                     the latest Sources and Uses Statement not indicating a projected shortage in funding to meet projected Project Costs;

 

(iii)                  no Shareholder Distribution being permitted during a BBA Cure Period; and

 

(iv)                 such Shareholder Distribution being made, declared, or paid in compliance with the Cash Waterfall.

 

(B)                  Any distribution permitted to be paid hereunder may be paid directly to the recipient or deposited into the Distributions Reserve Account, in accordance with the terms of the Facility Agreement.

 

28.24    Constitutional documents

 

Each Obligor will not agree to any amendment to any of its constitutional documents in a manner that could adversely affect the interests of the Finance Parties.

 

28.25    Further assurance

 

Subject to clause 28.27 (Due execution of security assignments) and clause 28.30 (Security Documents: consents, ranking and perfection) each of the Obligors shall, at its own expense, promptly do all things, take all such action and execute all such other documents and instruments as may be requested by the Facility Agent from time to time and to the extent they are reasonably required or necessary for the purpose of giving effect to the provisions of the Finance Documents and the Project Agreements and for the purpose of perfecting and protecting the Lenders’ rights with respect to the Security Interests which are required to be created or perfected by the Finance Documents when required thereunder.

 

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28.26    Delivery of certain documents

 

The Borrower shall use its reasonable endeavours to procure the delivery of the final report from the Technical Consultant to the Facility Agent in form and substance satisfactory to it no later than 15 Business Days from the date of this Agreement.

 

28.27    Due execution of security Assignments

 

(A)                The Security Agent shall have safe custody and control of the Assignments (which term shall, for the avoidance of doubt for the purposes of this clause 28.27 (Due execution of security assignments), be deemed not to include the Assignment of Reinsurance Rights until its execution by KEG and the relevant insurers, it being agreed that Kosmos shall take all such steps as may be reasonable (taking into account all of the circumstances at the time and the steps taken previously by Kosmos) to procure its execution by KEG and the relevant insurers). The Security Agent shall execute and date such documents for and on behalf of the Finance Parties in any of the following circumstances:

 

(i)                        if a Default has occurred and is continuing and the Majority Senior Lenders have instructed the Security Agent to execute and date the Assignments for and on behalf of the Finance Parties; or

 

(ii)                     if instructed to do so at any time by the Borrower.

 

(B)                  Each party to this Agreement irrevocably authorises the Security Agent to execute the Assignments for and on behalf of the Finance Parties and to date the Assignments when it is required to do so under paragraph (A) above. The Assignments shall be of no force or effect until they are duly executed by the Security Agent and dated for and on behalf of the Finance Parties in accordance with this clause 28.27 (Due execution of security assignments).

 

(C)                  In the event that the Security Agent signs and dates the Assignments in accordance with this clause 28.27 (Due execution of security assignments), then the Borrower shall (and the Facility Agent may) without the requirement for any further authorisation from any Obligor make a Utilisation under the Facility to meet the payment of any stamp duty which is payable as a consequence of the Assignments being signed and dated. The Borrower shall (and the Facility Agent shall if it effects the Utilisation under the Facility) apply the relevant funds promptly in payment of the relevant stamp duty and shall ensure that the Assignments are stamped and registered as soon as practicable (and in any event within any time period required by law). The Borrower (or the Facility Agent, as the case may be) shall in each case notify the Security Agent and each Finance Party upon making the payment of any stamp duty and the stamping and registration of the Assignments.

 

28.28    Stamp duty and other impost waiver

 

The Borrower shall use its reasonable endeavours to seek a waiver or exemption from any stamp duty, documentary taxes or any other similar tax, charge or impost which may be payable upon the execution of any of the Assignments, or to obtain confirmation

 

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that no such duty, taxes, charges or impost would be payable upon execution. In the event that such waiver, exemption or confirmation is successfully obtained in relation to any Assignment, the Borrower shall promptly instruct the Security Trustee to execute and date such Assignment(s) for and on behalf of the Finance Parties in accordance with Clause 28.27(A)(ii) above.

 

28.29    Lenders’ custody of documents

 

(A)                Each Lender undertakes that it shall not deliver any Finance Document or any other document or agreement into a country that would result in such Finance Document, other document or agreement (or any party to it) becoming subject to (or liable for payment of) any stamp duty, documentary taxes or any other similar tax, charge or impost (or impose any obligation upon a member of the Group of KEH to reimburse any other person for such a payment).

 

(B)                  Paragraph (A) above shall not apply to a Lender at any time at which such Lender (i) has a right to take Enforcement Action; (ii) has the written consent of the Borrower; or (iii) is required to deliver such Finance Document or other document or agreement by any order or a court or regulatory authority or other legal or regulatory requirement.

 

28.30    Security Documents: consents, ranking and perfection

 

(A)                No Obligor shall be required to grant any assignment of rights under any contract, or Security Interest over any asset (including contracts and rights), where the consent of any Government or any governmental body, regulatory body or state-owned or controlled company or enterprise is required for the granting of such assignment or Security Interest.

 

(B)                  With the exception of those consents referred to in clause (A) above, Kosmos shall use reasonable endeavours to seek any other required third party consents required in relation to any Security Document, provided that the obtaining of such consent shall not be a condition precedent to any Utilisation of the Facility and provided that there shall be no fixed date by which such consent must be obtained.

 

(C)                  Kosmos shall use reasonable endeavours to obtain acknowledgments to any notices of assignment served in relation to any Security Document, provided that receipt of such acknowledgments shall not be a condition precedent to any Utilisation of the Facility.

 

(D)                 Where required by the terms of any agreement which is binding upon any Obligor, any Security Interest granted in favour of the Lenders shall be subordinated to the interests of the parties under such agreement.

 

(E)                   With the exception of the Charges over Shares, perfection of any Security Interest shall not be a condition precedent to first Utilisation.

 

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28.31    IPO Reorganisation

 

The Finance Parties agree that, notwithstanding the terms of any Finance Document which, but for this Clause, may have prevented an Obligor from participating in and/or implementing an IPO Reorganisation, each Obligor may participate in and implement such an IPO Reorganisation and no term or condition of any Finance Document which would, but for this Clause, prevent an IPO Reorganisation, shall prevent such an IPO Reorganisation or require KEH, or any Obligor or any of their respective Subsidiaries to act, or omit to act, in a manner which would or might reasonably be expected to prevent, impede, restrict or result in the obstruction of, or delay to, an IPO Reorganisation, provided that: (i) such IPO Reorganisation is for the purposes of an IPO substantially as described in the Form S-1 filed by Kosmos Energy Ltd. with the United States Securities and Exchange Commission on 14 January 2011 (including any updated filing in relation to such Form S-1); and (ii) the interests of the Finance Parties are not materially prejudiced. Without limitation (and without prejudice to Clause 28.8(C), the foregoing shall require the Finance Parties to release and discharge the Security Interests created pursuant to any Security Document, provided that immediately upon such release substantially equivalent security is granted in favour of the Finance Parties on substantially similar terms and such that the position of the Finance Parties is not materially prejudiced. Nothing in this Clause 28.31 shall prevent any Obligor from acting or omitting to act in any way (including implementing an IPO Reorganisation) which would otherwise be permitted by the terms of the Finance Documents.

 

28.32    Ghanaian security

 

(A)                The Borrower shall use reasonable endeavours to obtain a legal opinion from Ghanaian counsel confirming that the consent obtained on 18 December 2010 from the Ghana National Petroleum Corporation and the Ministry of Energy of Ghana, which was required in relation to the grant of certain Security Interests (the “Ghana Security Interests”) contemplated by the Security Documents (as defined in the Existing Finance Documents), would extend to the grant of such Security Interests in favour of the Finance Parties in the context of the Finance Documents.

 

(B)                  If such a legal opinion is obtained, the Borrower shall then promptly enter into security documents in the required form in order to grant to the Finance Parties equivalent Security Interests to the Ghana Security Interests in the context of the Finance Documents. Such security documents will be held by the Security Agent in accordance with Clause 28.27 (Due execution of security Assignments) above.

 

29.                  EVENTS OF DEFAULT

 

Each of the events or circumstances set out in this clause is an Event of Default (save for clause 29.17 (Acceleration — all Lenders), unless otherwise stated.

 

29.1           Non-payment

 

An Obligor does not pay any amount payable by it to any Finance Party (or to the Facility Agent for its own account) under the Finance Documents in the manner and on

 

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the date required under the Finance Documents within five Business Days of its due date.

 

29.2           Breach of financial covenant

 

Kosmos does not comply with the provisions of the Financial Covenants, provided that where the LLCR or FLCR has been breached, the Borrower shall have 45 days within which to remedy any breach of the relevant financial covenant by means of a prepayment and/or a cancellation of the Facility where any prepayment is funded by the provision of Additional Debt subordinated on terms acceptable to the Majority Lenders (acting reasonably), or by the contribution of equity to the capital of the Borrower or by taking such other remedial action as may be approved by the Majority Lenders provided always that the Borrower shall be entitled to remedy any such breach not more than twice in total and not more than once in any 12 month period.

 

29.3           Breach of other obligations

 

An Obligor does not comply with any other provision of the Finance Documents (other than in respect of non-payment or breach of a Financial Covenant), unless the non-compliance is:

 

(A)                capable of remedy; and

 

(B)                  remedied within 30 days of the earlier of the Facility Agent giving notice or the Obligor becoming aware of the non-compliance.

 

29.4           Misrepresentation

 

Any representation or statement made or deemed to be made by an Obligor in the Finance Documents is or proves to have been incorrect or misleading in any material respect when made or deemed to be made (or, in the case of a representation or statement that contains a materiality concept, is or proves to have been incorrect or misleading in any respect when made or deemed to be made), unless the misrepresentation is:

 

(A)                capable of remedy; and

 

(B)                  remedied within 30 days of the earlier of the Facility Agent giving notice or the relevant Obligor becoming aware of the misrepresentation.

 

29.5           Cross-default

 

(A)                Any Financial Indebtedness of any Obligor is not paid when due nor within any applicable grace period.

 

(B)                  Any Financial Indebtedness of any Obligor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described) and such amount is not paid when due.

 

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(C)                  Notwithstanding paragraphs (A) and (B) above, no Event of Default will occur under this clause if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness is less than USD 100 million (or its equivalent in any other currency or currencies) or if the relevant event or default has been waived, or if such event or default is caused by a Disruption Event, provided that, in the case of a Disruption Event the requisite payment is made within five Business Days.

 

29.6           Insolvency

 

Any of the following occurs in respect of an Obligor:

 

(A)                it is, or is deemed for the purposes of any law to be, unable to, or admits its inability to, pay its debts as they fall due or is or becomes insolvent or a moratorium is declared in relation to its indebtedness generally; or

 

(B)                  it stops or suspends or threatens to suspend, or announces an intention to stop or suspend making payment of all or any class of its debts as they fall due in default of the obligation to make the relevant payment.

 

29.7           Insolvency proceedings

 

(A)                Except as provided in paragraph (B) below, any of the following occurs in respect of an Obligor:

 

(i)                        a written resolution is passed or a resolution is passed at a meeting of its shareholders, directors or other officers to petition for or to file documents with a court or any registrar for its winding-up, administration or dissolution;

 

(ii)                     any person presents a petition, or files documents with a court or any registrar for its winding-up, administration or dissolution;

 

(iii)                  an order for its winding-up, administration or dissolution is made;

 

(iv)                 any liquidator, provisional liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any material part of its assets;

 

(v)                    a moratorium is declared in relation to the indebtedness of an Obligor;

 

(vi)                 its shareholders, directors or other officers request the appointment of, or give notice of their intention to appoint a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, provisional liquidator, receiver, administrative receiver, administrator or similar officer;

 

(vii)              any composition, compromise, assignment or arrangement is made with any of its creditors; or

 

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(viii)           any other analogous step or procedure is taken in any jurisdiction.

 

(B)                  Paragraph (A) does not apply to:

 

(i)                        any step or procedure which is part of a re-organisation of an Obligor on a solvent basis with the consent of the Majority Lenders (acting reasonably); or

 

(ii)                     an IPO Reorganisation; or

 

(iii)                  in the case of sub-paragraph (ii) or (iv) (or any step or procedure under sub-paragraph (vi) that is analogous to sub-paragraph (ii) or (iv)), if the relevant step, petition or filing is made by a person other than an Obligor, shareholder or their respective officers or directors and the relevant Obligor is taking steps in good faith and with due diligence for such proceedings or action to be stayed, discontinued, revoked or set aside and the same is stayed, discontinued, revoked or set aside within a period of 60 days; or

 

(iv)                 any enforcement action that applies to assets having an aggregate value of less than USD 100 million.

 

29.8           Creditors’ process

 

Any attachment, sequestration, distress, execution or analogous event affects any asset(s) of an Obligor, having an aggregate value of at least USD 15 million, and is not discharged within 45 days.

 

29.9           Unlawfulness and Invalidity of the Finance Documents and Project Agreements

 

If:

 

(A)                all or any part of a Finance Document is not, or ceases to be, a legal, valid, binding and enforceable obligation of an Obligor;

 

(B)                  following its execution, all or any part of a Project Agreement is not or ceases to be, a legal, valid, binding and enforceable obligation of an Obligor in circumstances which would have a Material Adverse Effect; or

 

(C)                  following its execution, all or any part of a Project Agreement is suspended, terminated or revoked in circumstances which would have a Material Adverse Effect,

 

and:

 

(i)                        Kosmos fails, within 60 days (or, in the case of a Finance Document, 30 days) of becoming aware of the matter, to procure the execution of a substitute agreement or agreements on substantially the same terms and with a commercially qualified party or parties acceptable to the Majority Lenders (acting reasonably); or

 

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(ii)                     the matter is not otherwise remedied within 60 days (or, in the case of a Finance Document, 30 days) of an Obligor becoming aware of the matter.

 

29.10    Cessation of Business

 

An Obligor ceases, or threatens to cease, all or a substantial part of its business (as carried on the date of the Facility Agreement).

 

29.11    Abandonment

 

(A)                A Borrowing Base Asset is abandoned (other than as a consequence of unsuccessful exploration activities) in whole or in part and where such abandonment has or could reasonably be expected to have a Material Adverse Effect.

 

(B)                  Without limiting the above paragraph, Kosmos will be deemed to have abandoned a Borrowing Base Asset if, after the relevant Completion, no petroleum is produced at a commercial level for a continuous period of 180 days and all necessary steps are not being diligently pursued with a view to recommencing production as soon as practically possible.

 

29.12    Expropriation

 

The Government (or any other official central or local government body with due authority) states officially that it will take any step with a view to the seizure, expropriation, nationalisation, requisition or compulsory acquisition of any member of the Group or all or a material part of the Borrowing Base Assets or all or a material part of the rights of any member of the Group in relation thereto and such act has, or could reasonably be expected to have, a Material Adverse Effect.

 

29.13    Repudiation of Finance Documents

 

Any Finance Document is repudiated or rescinded by an Obligor.

 

29.14    Material Litigation

 

Any material litigation, arbitration or administrative proceedings are commenced, threatened or pending against any Obligor which could reasonably be expected to be adversely determined against it and which, if so determined, has, or would have, a Material Adverse Effect.

 

29.15    Breach or Termination of Project Agreements

 

Any party to a Project Agreement, following its execution, defaults under that Project Agreement or terminates a Project Agreement in circumstances which has, or would have, a Material Adverse Effect.

 

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29.16    Material Adverse Effect

 

Any event which, in the opinion of the Majority Lenders (acting reasonably), has a Material Adverse Effect but only following consultation between the Facility Agent and Kosmos over a period of not less than 30 days with a view to agreeing steps of mitigation (each Party acting reasonably with a view to appropriate remedial action being taken).

 

29.17    Acceleration — all Lenders

 

Subject to the terms of the Intercreditor Agreement, on and at any time after the occurrence of an Event of Default which is continuing, the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower:

 

(A)                cancel the Total Commitments whereupon they shall immediately be cancelled;

 

(B)                  declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or

 

(C)                  declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Facility Agent on the instructions of the Majority Lenders; and/or

 

(D)                 exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under any of the Finance Documents.

 

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PART 11

CHANGES TO LENDERS AND OBLIGORS AND ROLES

 

30.                  CHANGES TO THE LENDERS

 

30.1           Assignments and transfers and changes in Facility Office by the Lenders

 

Subject to this clause, a Lender (the “Existing Lender”) may:

 

(A)                (i)                        assign any of its rights; or

 

(ii)                     transfer by novation any of its rights and obligations,

 

to an Affiliate, another Lender, an Affiliate of another Lender or, with the prior consent of the Borrower (other than where an Event of Default is continuing), to an internationally recognised Qualifying Bank (which will not be unreasonably withheld or delayed and which will be deemed to have been given five Business Days after the date upon which the Existing Lender has requested it unless consent is expressly refused by the Borrower within that time), or such other institution as the Borrower may agree (the “New Lender”), or

 

(B)                  change its Facility Office.

 

30.2           Conditions of assignment and transfer or change in Facility Office

 

(A)                The consent of Kosmos is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is (i) to, or in favour of, another Lender or an Affiliate of a Lender, or (ii) made at a time when an Event of Default is continuing.

 

(B)                  The consent of Kosmos is required for a change in Facility Office to a different jurisdiction. In the case of a change of Facility Office for which Kosmos’s consent is not required, the Lender must notify Kosmos of the new Facility Office promptly on the change taking effect.

 

(C)                  The consent of Kosmos to an assignment or transfer or change in Facility Office must not be unreasonably withheld or delayed (and will be deemed to have been given five Business Days after the relevant Lender has requested it unless consent is expressly refused by Kosmos within that time).

 

(D)                 In the event a Letter of Credit is outstanding, transfer or assignment of a Commitment shall require the prior consent of each LC Issuing Bank.

 

(E)                   An assignment will only be effective on:

 

(i)                       receipt by the Facility Agent of written confirmation from the New Lender (in form and substance satisfactory to the Facility Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and

 

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(ii)                    the New Lender entering into the documentation required for it to accede as a party to the relevant Finance Documents (including, but not limited to, the Intercreditor Agreement).

 

(F)                   A transfer will only be effective if the procedure set out in clause 30.5 (Procedure for transfer) is complied with.

 

(G)                  If:

 

(i)                       a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

 

(ii)                    as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under clause 15 (Tax Gross Up and Indemnities) or clause 16 (Increased Costs),

 

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.

 

(H)                 Each New Lender, by executing the relevant Transfer Certificate confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with the Finance Documents on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement.

 

(I)                      Any assignment or transfer of part of the Existing Lender’s rights and/or obligations must be a minimum of USD 5 million and must not result in the Existing Lender retaining less than USD 5 million.

 

30.3           Assignment or transfer fee

 

The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of USD 2,500.

 

30.4           Limitation of responsibility of Existing Lenders

 

(A)                Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

 

(i)                        the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

 

(ii)                     the financial condition of any Obligor;

 

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(iii)                 the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or

 

(iv)                the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

 

and any representations or warranties implied by law are excluded.

 

(B)                  Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

 

(i)                       has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in the Facility and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

 

(ii)                    will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

 

(C)                  Nothing in any Finance Document obliges an Existing Lender to:

 

(i)                       accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this clause; or

 

(ii)                    support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.

 

30.5           Procedure for transfer

 

(A)                Subject to the conditions set out in clause 30.2 (Conditions of assignment and transfer or change in Facility Office) a transfer is effected in accordance with paragraph (B) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate on behalf of the other Finance Parties and the Obligors as well as itself, and notify Kosmos of the date of the transfer and name of the New Lender. Each Finance Party and each Obligor irrevocably authorises the Facility Agent to sign such a Transfer Certificate on its behalf.

 

(B)                  On the Transfer Date:

 

(i)                       to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance

 

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Documents, each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the “Discharged Rights and Obligations”);

 

(ii)                    each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

 

(iii)                 the Facility Agent, each Mandated Lead Arranger, the New Lender and the other Finance Parties shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent such Finance Parties and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and

 

(iv)                the New Lender shall become a Party as a “Lender”.

 

30.6           Copy of Transfer Certificate to Borrower

 

The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, send to Kosmos a copy of that Transfer Certificate.

 

30.7           Disclosure of information

 

Any Lender, its officers and agents may disclose to any of its Affiliates (including its head office, representative and branch offices in any jurisdiction) (each a “Permitted Party”) and:

 

(A)                to any person (or through) whom that Lender assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under this Agreement (or any adviser on a need to know basis advising such person on any of the foregoing);

 

(B)                  to a professional adviser or a service provider of the Permitted Parties on a need to know basis advising such person on the rights and obligations under the Finance Documents or to an auditor of any Permitted Party on a need to know basis;

 

(C)                  with (or through) whom that Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or any Obligor (or any adviser of any of the foregoing on a need to know basis advising such person on the rights and obligations under the Finance Documents);

 

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(D)                 to any rating agency (provided only general terms are disclosed in relation to the rating of a portfolio of assets), insurer or insurance broker, a direct or indirect provider of credit protection in respect of the Lender’s participation in the Facility only on a need to know basis;

 

(E)                   to any court or tribunal or regulatory, supervisory, governmental or quasi-governmental authority with jurisdiction over the Permitted Parties who requires disclosure of that information (where the Permitted Party has a legal obligation to provide that information or, if not, is customarily obligated or required to comply with such requirement); or

 

(F)                   to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation,

 

any information about any Obligor, the Group and the Finance Documents as that Lender shall consider appropriate if, in relation to paragraphs (A) to (C) above, the person to whom the information is to be given has entered into a Confidentiality Undertaking (unless such person is already subject to professional confidentiality requirements which are no less stringent than those which are set out in a Confidentiality Undertaking) and provided that it shall itself ensure that all such information is kept confidential and is protected with security measures and a degree of care that would apply to its own confidential information.

 

31.                  CHANGES TO THE OBLIGORS

 

31.1           Assignments and transfers by Obligors

 

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

 

31.2           Additional Borrowers

 

(A)                Subject to compliance with the provisions of paragraphs (C) and (D) of clause 24.12 (“Know your customer” and “customer due diligence” requirements), Kosmos may request that any of its subsidiaries becomes an Additional Borrower. That subsidiary shall become an Additional Borrower if:

 

(i)                       the Majority Lenders (or, if that Additional Borrower is incorporated in a jurisdiction in which no other Borrower is incorporated, all the Lenders) approve the addition of that subsidiary;

 

(ii)                    the Additional Borrower is, or simultaneously becomes, a Guarantor;

 

(iii)                 Kosmos delivers to the Facility Agent a duly completed and executed Accession Letter;

 

(iv)                Kosmos confirms that no Default is continuing or would occur as a result of that subsidiary becoming an Additional Borrower; and

 

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(v)                   the Facility Agent has received all of the documents and other evidence listed in Part II of Schedule 3 (Conditions Precedent) in relation to that Additional Borrower, each in form and substance satisfactory to the Facility Agent.

 

(B)                  The Facility Agent shall notify Kosmos and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 3 (Conditions Precedent).

 

(C)                  In the event that an Additional Borrower becomes a party to this Agreement:

 

(i)                       Kosmos, on behalf of all Obligors; and

 

(ii)                    the Facility Agent on behalf of all Finance Parties,

 

are hereby authorised to effect all amendments required to be made to the Finance Documents to which they are party to reflect the fact that there may be multiple borrowers of the Facility.

 

31.3           Resignation of a Borrower

 

(A)                Kosmos may request that a Borrower (other than Kosmos) ceases to be a Borrower by delivering to the Facility Agent a Resignation Letter.

 

(B)                  The Facility Agent shall accept a Resignation Letter and notify Kosmos and the Lenders of its acceptance if:

 

(i)                       no Default is continuing or would result from the acceptance of the Resignation Letter (and Kosmos has confirmed this is the case); and

 

(ii)                    the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents,

 

whereupon that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents.

 

31.4           Additional Guarantor

 

(A)                Subject to compliance with the provisions of paragraphs (C) and (D) of clause 24.12 (“Know your customer” and “customer due diligence” requirements), the Borrower may request that any of its subsidiaries becomes an Additional Guarantor. That subsidiary shall become an Additional Guarantor if:

 

(i)                       Kosmos delivers to the Facility Agent an Accession Letter duly completed and executed by that Additional Guarantor and Kosmos; and

 

(ii)                    the Facility Agent have received all of the documents and other evidence listed in Part II of Schedule 3 (Conditions Precedent) in

 

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relation to that Additional Guarantor, each in form and substance satisfactory to the Facility Agent.

 

(B)                  The Facility Agent shall notify Kosmos and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 3 (Conditions Precedent).

 

31.5           Repetition of Representations

 

Delivery of an Accession Letter constitutes confirmation by the relevant subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.

 

32.                  ROLE OF THE AGENTS AND THE ARRANGER

 

32.1           Appointment of the Agents

 

(A)                Each other Finance Party (other than the relevant Agent) appoints each Agent to act in that capacity under and in connection with the Finance Documents.

 

(B)                  Each other Finance Party authorises each Agent to exercise the rights, powers, authorities and discretions specifically given to that Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

 

32.2           Duties of the Facility Agent

 

(A)                The Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.

 

(B)                  Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

 

(C)                  If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.

 

(D)                 If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than to an Agent or a Mandated Lead Arranger) under this Agreement it shall promptly notify the other Finance Parties.

 

(E)                   The Facility Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.

 

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32.3           Role of the Mandated Lead Arrangers

 

Except as specifically provided in the Finance Documents, no Mandated Lead Arranger has obligations of any kind to any other Party under or in connection with any Finance Document.

 

32.4           No fiduciary duties

 

(A)                Except as specifically provided in the Finance Documents, nothing in this Agreement constitutes an Agent or a Mandated Lead Arranger as a trustee or fiduciary of any other person.

 

(B)                  No Agent nor any Mandated Lead Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

 

32.5           Business with the Group

 

Each Agent and each Mandate Lead Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.

 

32.6           Rights and discretions of Agents

 

(A)                Each Agent may rely on:

 

(i)                       any representation, notice or document believed by it to be genuine, correct and appropriately authorised; and

 

(ii)                    any statement made by a director, Authorised Signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.

 

(B)                  Each Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

 

(i)                       no Default has occurred (unless it has actual knowledge of a Default arising under clause 29.1 (Non-payment));

 

(ii)                    any right, power, authority or discretion vested in any Party or the Lenders (or any consistent majority of Lenders) has not been exercised; and

 

(iii)                 any notice or request made by Kosmos (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.

 

(C)                  Each Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.

 

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(D)                 Each Agent may act in relation to the Finance Documents through its personnel and agents.

 

(E)                   Each Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

 

(F)                   Notwithstanding any other provision of any Finance Document to the contrary, no Agent nor any Mandated Lead Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

 

32.7           Lenders’ instructions

 

(A)                Unless a contrary indication appears in a Finance Document, each Agent shall (i) exercise any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by the Lenders in accordance with this Agreement and the Intercreditor Agreement (or, if so instructed, refrain from exercising any right, power, authority or discretion vested in it as Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with such instructions.

 

(B)                  Each Agent may refrain from acting in accordance with instructions given to it by the Lenders in accordance with this Agreement and the Intercreditor Agreement until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.

 

(C)                  In the absence of instructions in accordance with this Agreement and the Intercreditor Agreement each Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.

 

(D)                 Neither Agent is authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document.

 

32.8           Responsibility for documentation

 

No Agent nor any Mandated Lead Arranger:

 

(A)                is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by an Agent, a Mandated Lead Arranger, an Obligor or any other person given in or in connection with any Finance Document or the Final Information Memorandum; or

 

(B)                  is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document.

 

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32.9           Exclusion of liability

 

(A)                Without limiting paragraph (B) below (and without prejudice to the provisions of paragraph (E) of clause 34.9 (Disruption to Payment Systems etc.), no Agent shall be liable (including, without limitation, for negligence or any other category of liability whatsoever) for any action taken by it under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct.

 

(B)                  No Party (other than the relevant Agent) may take any proceedings against any officer, employee or agent of that Agent in respect of any claim it might have against it or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the relevant Agent may rely on this clause.

 

(C)                  An Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by it if that Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by it for that purpose.

 

32.10    Lenders’ indemnity to the Agents

 

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify each Agent and the Technical and Modelling Bank, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by it (otherwise than by reason of the relevant Agent’s or Technical and Modelling Bank’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to clause 34.9 (Disruption to Payment Systems etc.) notwithstanding the relevant Agent’s or Technical and Modelling Bank’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the relevant Agent) in acting as an Agent or the Technical and Modelling Bank under the Finance Documents (unless the relevant Agent or the Technical and Modelling Bank has been reimbursed by an Obligor pursuant to a Finance Document).

 

32.11    Resignation of the Agent

 

(A)                An Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the other Finance Parties and Kosmos.

 

(B)                  Alternatively, an Agent may resign by giving notice to the other Finance Parties and Kosmos, in which case the Majority Lenders may appoint a successor Agent.

 

(C)                  If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (B) above within 30 days after notice of resignation was given,

 

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the relevant Agent may (with the prior written consent of Kosmos) appoint a successor Agent (acting through an office in the United Kingdom).

 

(D)                 A retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. This obligation shall not apply in the event the Agent is required to resign pursuant to clause 32.11(G) below.

 

(E)                   An Agent’s resignation notice shall only take effect upon the appointment of a successor.

 

(F)                   Upon the appointment of a successor, a retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this clause 32.11. Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

 

(G)                  After consultation with Kosmos, the Majority Lenders may, by notice to an Agent, require it to resign in accordance with paragraph (B) above.

 

32.12 Replacement of Administrative Parties

 

(A)                If:

 

(i)                        in relation to the Facility Agent, the Security Agent or an LC Issuing Bank (or their respective holding companies), clause 29.6 (Insolvency) or clause 29.7 (Insolvency proceedings) (disregarding paragraph (B) of that clause) applies or has occurred; or

 

(ii)                     if the Facility Agent, the Security Agent or an LC Issuing Bank or any of their Affiliates repudiates its obligations under the Facility or (in its capacity as Lender) becomes a Non-Funding Lender,

 

Kosmos shall be entitled to request that Majority Lenders appoint within 10 Business Days either a co-Agent or additional LC Issuing Bank or a replacement Agent or LC Issuing Bank from one of their number or (subject to reasonable consultation with the Parent), from outside the Lender group.

 

(B)                  The Facility Agent, Security Agent or LC Issuing Bank to which either of the circumstances described in (A)(i) or (A)(ii) above applies (an “Affected Administrative Party”) shall cease to be entitled to fees in respect of its role upon becoming an Affected Administrative Party.

 

(C)                  Each Affected Administrative Party shall provide all assistance and documentation reasonably required to Kosmos and the other Lenders to enable the uninterrupted administration of the Facility. This shall include, where the Affected Administrative Party is the Facility Agent, the provision to Kosmos on request and in any event, within five Business Days, of an up to date list of participants in the Facility including names and contact details.

 

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32.13 Confidentiality

 

(A)                In acting as agent for the Finance Parties, an Agent shall be regarded as acting through its agency division or, in the case of the Technical and Modelling Bank, through the relevant division performing the role which shall be treated as a separate entity from any other of its divisions or departments.

 

(B)                  If information is received by another division or department of an Agent, it may be treated as confidential to that division or department and the relevant Agent shall not be deemed to have notice of it.

 

32.14 Facility Agent relationship with the Lenders

 

(A)                The Facility Agent may treat each Lender as a Lender, entitled to payments under this Agreement and acting through its Facility Office unless it has received not less than five Business Days’ prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

 

(B)                  Each Lender shall supply the Facility Agent with any information required by that Facility Agent in order to calculate the Mandatory Cost in accordance with Schedule 6 (Mandatory Cost Formulae).

 

32.15 Credit appraisal by the Lenders

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agents and each Mandated Lead Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

 

(A)                the financial condition, status and nature of the Guarantor and each member of the Group;

 

(B)                  the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

 

(C)                  whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

 

(D)                 the adequacy, accuracy and/or completeness of the Final Information Memorandum and any other information provided by the Agents, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement,

 

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arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

 

32.16 Reference Banks

 

If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Facility Agent shall (in consultation with Kosmos) appoint another Lender or an Affiliate of a Lender to replace that Reference Bank.

 

32.17 Deductions from amounts payable by Agents

 

If any Party owes an amount to an Agent under the Finance Documents, the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents, that Party shall be regarded as having received any amounts so deducted.

 

33.      CONSULTANTS

 

33.1    Insurance Consultant

 

Kosmos and the Finance Parties hereby confirm the appointment of Moore-McNeil, LLC as Insurance Consultant, upon the terms and subject to the conditions set out in the Insurance Consultant Appointment Letter.

 

33.2    Technical Consultant

 

Kosmos and the Finance Parties hereby confirm the appointment of Shaw Consultants, Inc. as Technical Consultant upon the terms and conditions set out in the Technical and Environmental Consultant Appointment Letter.

 

33.3    Environmental Consultant

 

Kosmos and the Finance Parties hereby confirm the appointment of Shaw Consultants, Inc. as Environmental Consultant upon the terms and conditions set out in the Technical and Environmental Consultant Appointment Letter.

 

33.4    Reserves Consultant

 

Kosmos and the Finance Parties hereby confirm the appointment of Netherland Sewell & Associates, Inc. as Reserves Consultant upon the terms and conditions set out in the Reserves Consultant Appointment Letter.

 

33.5    Terms of appointment of Consultants

 

Each Party acknowledges that each of the Consultants has been appointed to act as consultant and adviser to the Finance Parties in relation to technical matters relating to the Project within its own sphere of competence. Each Finance Party acknowledges that each of the Consultants (and each replacement Consultant appointed pursuant to

 

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clause 33.6 (Termination and replacement)) may also act as consultant and adviser to other Parties in relation to the Project. The fees and other terms of those appointments are set out in the appointment letters between the Consultants and Kosmos, copies of which have been given to, and consented to by, the Lenders. The Facility Agent may, acting reasonably and consistently with the agreed scope of work for the relevant Consultant, request it to provide advice or services in relation to the Project.

 

33.6    Termination and replacement

 

The Facility Agent may, if it has reasonable grounds to do so and (unless an Event of Default has occurred and is continuing) has first consulted with Kosmos, at any time terminate the appointment of a Consultant if it considers it necessary or appropriate to do so, and shall promptly give notice of any such termination to Kosmos. If the Facility Agent terminate the appointment of any Consultant it may appoint as a replacement Consultant any person approved (which approval shall include the identity of the replacement, the terms of appointment and approval of the fees and expenses to be payable to that person) for this purpose by Kosmos (which approval may not be unreasonably withheld or delayed or required while an Event of Default is continuing). The terms of any such appointment shall be set out in an appointment letter between such replacement Consultant (or additional consultant as appropriate) and Kosmos.

 

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PART 12

ADMINISTRATION, COSTS AND EXPENSES

 

34.      PAYMENT MECHANICS

 

34.1    Payments to the Facility Agent

 

(A)                On each date on which an Obligor or a Lender is required to make a payment under a Finance Document (other than any Hedging Agreement), that Obligor or Lender shall make the same available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

 

(B)                  Payment shall be made to such account in London (or, as the case may be, Paris or New York) as the Facility Agent specifies.

 

34.2    Distributions by the Facility Agent

 

Subject to the terms of the Intercreditor Agreement, each payment received by either of the Facility Agent under the Finance Documents for another Party shall be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days’ notice with a bank in London (or, as the case may be, Paris or New York).

 

34.3    Clawback

 

(A)                Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

 

(B)                  If the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.

 

34.4    Partial Payments

 

If the Facility Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Facility Agent shall apply that payment towards the obligations of that Obligor under those Finance Documents in accordance with the Cash Waterfall. This clause will override any appropriation made by an Obligor.

 

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34.5    No set-off by Obligors

 

All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

 

34.6    Business Days

 

(A)                Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

 

(B)                  During any extension of the due date for payment of any principal or Unpaid Sum under the Finance Documents, interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

 

34.7    Currency of account

 

(A)                Subject to paragraphs (B) to (E) below, the base currency is the currency of account and payment for any sum due from an Obligor under any Finance Document and is the US Dollar (“Base Currency”).

 

(B)                  A repayment of a Utilisation or Unpaid Sum or a part of a Utilisation or Unpaid Sum shall be made in the currency in which that Utilisation or Unpaid Sum is denominated on its due date.

 

(C)                  Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.

 

(D)                 Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

 

(E)                   Any amount expressed to be payable in a currency other than the Base Currency shall be paid in that other currency.

 

34.8    Change of currency

 

(A)                Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

 

(i)                        any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent acting reasonably (after consultation with Kosmos); and

 

(ii)                     any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the

 

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conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).

 

(B)                  If a change in any currency of a country occurs, the Parties will enter negotiations in good faith with a view to agreeing any amendments which may be necessary to this Agreement to comply with any generally accepted conventions and market practice in the London interbank market and otherwise to reflect the change in currency.

 

34.9    Disruption to Payment Systems etc.

 

If either of the Facility Agent determine (acting reasonably) that a Disruption Event has occurred or either of the Facility Agent is notified by Kosmos that a Disruption Event has occurred:

 

(A)                the Facility Agent may, and shall if requested to do so by Kosmos, consult with Kosmos with a view to agreeing with Kosmos such changes to the operation or administration of the Facility (including, without limitation, changes to the timing and mechanics of payments due under the Finance Documents) as the Facility Agent may deem necessary in the circumstances;

 

(B)                  the Facility Agent shall not be obliged to consult with Kosmos in relation to any changes mentioned in paragraph (A) above if, in its reasonable opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

 

(C)                  the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (A) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;

 

(D)                 any such changes agreed upon by the Facility Agent and Kosmos shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of clause 41 (Amendments and Waivers);

 

(E)                   the Facility Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this clause; and

 

(F)                   the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (D) above.

 

35.      SET-OFF

 

Subject to the terms of the Intercreditor Agreement and without prejudice to the rights of the Finance Parties at law, at any time after an Event of Default has occurred which is continuing, a Finance Party (other than a Non-Funding Lender) may, on giving notice to

 

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the Obligor, set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

 

36.      COSTS AND EXPENSES

 

36.1    Transaction expenses

 

Kosmos shall within fifteen Business Days of demand, pay the Facility Agent and each Mandated Lead Arranger the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with:

 

(A)                the negotiation, preparation, printing, and execution of:

 

(i)                        this Agreement and any other documents referred to in this Agreement; and

 

(ii)                     any other Finance Documents executed after the date of this Agreement;

 

(B)                  the appointments of the Consultants.

 

36.2    Amendment costs

 

If:

 

(A)                an Obligor requests an amendment, waiver or consent; or

 

(B)                  an amendment is required pursuant to clause 34.8 (Change of currency),

 

Kosmos shall, within fifteen Business Days of demand, reimburse the Facility Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Facility Agent in responding to, evaluating, negotiating or complying with that request or requirement.

 

36.3    Enforcement costs

 

Kosmos shall, within five 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 or attempted enforcement of, or the preservation of any rights under, any Finance Document.

 

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37.      NOTICES

 

37.1    Communications in writing

 

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

 

37.2    Addresses

 

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

 

(A)                in the case of the Obligors, that identified with its name below;

 

(B)                  in the case of each Lender or any other Initial Obligor, that notified in writing to the Facility Agent on or prior to the date on which it becomes a Party; and

 

(C)                  in the case of an Agent, that identified with its name below,

 

or any substitute address or fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days’ notice.

 

Contact details of the Obligors:

 

	
To:
    	
Copy:
    
	
 
    	
 
    
	
P.O. Box   32322
    	
 
    
	
4th   Floor Century Yard
    	
c/o   Kosmos Energy LLC
    
	
Cricket   Square
    	
8176   Park Lane
    
	
Elgin   Avenue
    	
Suite 500
    
	
Georgetown
    	
Dallas
    
	
Grand   Cayman
    	
Texas   75231
    
	
KY1   – 1209
    	
USA
    
	
Cayman   Islands
    	
 
    
	
 
    	
 
    
	
Fax:   
    	
+1   345 946 4090
    	
Fax:   +1 214 445 9709
    
	
 
    	
 
    	
 
    
	
Attention:   
    	
W.   Greg Dunlevy
    	
Attention:   
    	
William   S. Hayes
    

 

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Contact details of the Facility Agent:

 

Name: Phoi-Van Phuong

 

Email: phoi-van.phuong@bnpparibas.com

 

Address: BNP Paribas S.A., Paris

 

16, rue de Hanovre

 

75002 Paris (France)

 

Tel: + 33 1 42 98 10 95

 

Fax: + 33 1 42 98 49 25

 

37.3    Delivery

 

(A)                Subject to clause 37.5 (Electronic communication), any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:

 

(i)                        if by way of fax, when received in legible form; or

 

(ii)                     if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post with postage prepaid in an envelope addressed to it at that address;

 

and, if a particular department or officer is specified as part of its address details provided under clause 37.2 (Addresses), if addressed to that department or officer.

 

(B)                  Any communication or document to be made or delivered to either of the Facility Agent will be effective only when actually received by the Facility Agent and then only if it is expressly marked for the attention of the department or officer identified with the Facility Agent’s signature below (or any substitute department or officer as the Facility Agent shall specify for this purpose).

 

(C)                  All notices from or to an Obligor shall be sent through the Facility Agent.

 

(D)                 Any communication or document made or delivered to Kosmos in accordance with this clause will be deemed to have been made or delivered to each of the Obligors.

 

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37.4    Notification of address and fax number

 

Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to clause 37.2 (Addresses) or changing its own address or fax number, the Facility Agent shall notify the other Parties.

 

37.5    Electronic communication

 

(A)                Any communication to be made between the Facility Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Facility Agent and the relevant Lender:

 

(i)                        agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

 

(ii)                     notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

 

(iii)                  notify each other of any change to their address or any other such information supplied by them.

 

(B)                  Any electronic communication made between the Facility Agent and a Lender will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.

 

37.6    English language

 

(A)                Any notice given under or in connection with any Finance Document must be in English.

 

(B)                  All other documents provided under or in connection with any Finance Document must be:

 

(i)                        in English; or

 

(ii)                     if not in English, and if so required by either of the Facility Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

38.      CALCULATIONS AND CERTIFICATES

 

38.1    Accounts

 

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

 

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38.2    Certificates and determinations

 

Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest or proven error, prima facie evidence of the matters to which it relates.

 

38.3    Day count convention

 

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days.

 

39.      PARTIAL INVALIDITY

 

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

40.      REMEDIES AND WAIVERS

 

No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

 

41.      AMENDMENTS AND WAIVERS

 

41.1    Required consents

 

(A)                Subject to clause 41.2 (Exceptions) and to paragraph (C) below, any term of the Finance Documents (other than a waiver of a Condition Precedent or a Condition Subsequent, which shall be made pursuant to clause 2.3 (Waivers of Conditions Precedent) may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.

 

(B)                  The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this clause.

 

(C)                  Notwithstanding the terms of this clause 41, in relation to an amendment, variation or waiver of the terms of the Intercreditor Agreement or the Security Documents, the terms of the Intercreditor Agreement shall prevail.

 

41.2    Exceptions

 

(A)                The following may not be effected without the consent of all the Lenders.

 

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(i)                        amending the definition of “Majority Lenders””;

 

(ii)                     amending, varying or waiving clause 4 (Finance Parties’ Rights and Obligations) of this Agreement and/or any other term of any Finance Document which relates to the rights and/or obligations of each Finance Party being several;

 

(iii)                  varying the date for, or altering the amount or currency of, any payment to Lenders under the Finance Documents;

 

(iv)                 increasing or extending the Commitment of a Lender;

 

(v)                    amending varying or waiving a term of any Finance Document which expressly requires the consent of all the Lenders; ;

 

(vi)                 amending, varying or waiving this clause; or

 

(vii)              any release of Security Interests granted pursuant to any Security Document or amendment, waiver or variation of the obligations of any Obligor pursuant to Clause 25.1 (Guarantee and Indemnity). Nothing in this Clause (vii) shall require any consent to be obtained for any release of Security Interests, Security Documents (including but not limited to under releases made pursuant to Clause 28.8(C)) or obligations of any Obligor pursuant to Clause 25.1 (Guarantee and Indemnity), which are permitted by Clause 28.31 (IPO Reorganisation).

 

(B)                  An amendment of clause 19.6 (Calculation of Borrowing Base Amount) to reduce the figure of 1.5 or the figure of 1.3 may not be effected without the consent of the Majority Lenders.

 

(C)                  An amendment or waiver which relates to the rights or obligations of an Agent, an LC Issuing Bank or an Account Bank may not be effected without the consent of that Agent, LC Issuing Bank or an Account Bank.

 

(D)                 An amendment or waiver which relates to clause 21.2 (Withdrawals — No Default Outstanding) or clause 25 (Guarantee and Indemnity) and the rights or obligations of a Hedging Counterparty may not be effected without the consent of each Hedging Counterparty.

 

(E)                   If a Lender (i) becomes a Non-Funding Lender or (ii) does not accept or reject a request for an amendment, waiver, consent or approval within fifteen Business Days (or such longer period as Kosmos may specify) of such request being made, that Lender’s Commitment shall not be included for the purposes of calculating Total Commitments under the Facility when ascertaining whether a certain percentage of Total Commitments has been obtained to approve the amendment, waiver, consent or approval, provided that (other than in the case of (i) above) no more than 25 per cent. of Lender votes (by Commitment) may be disregarded in such a way.

 

146

 

41.3    Exclusions

 

Subject to clause 41.2 (Exceptions), if a Lender does not accept or reject a request for an amendment or waiver within ten Business Days of receipt of such request (or such longer period as Kosmos and the Facility Agent may agree), or abstains from accepting or rejecting a request for an amendment or waiver, or if the Lender is a Non Funding Lender, its Commitments shall not be included for the purpose of calculating the Total Commitments when ascertaining whether the consent of a Lender or Lenders whose Commitments aggregate more than the required percentage of the Total Commitments has been obtained in respect of such request.

 

41.4    Disenfranchisement of Shareholder Affiliates

 

Notwithstanding any other provisions of this Agreement, for so long as a Shareholder Affiliate is a Lender and/or to the extent that a Shareholder Affiliate beneficially owns a Commitment or has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement having a substantially similar economic effect and such agreement or arrangement has not been terminated, such Shareholder Affiliate shall not be entitled to exercise any rights to vote as Lender in respect of any matters requiring decision by the Lenders under the terms of this Agreement or any of the Finance Documents. Each such Shareholder Affiliate acknowledges and agrees that:

 

(A)                in the event that a matter requires decision by one or more Lenders under this Agreement or any of the Finance Documents,

 

(i)                        the Commitment of such Shareholder Affiliate and any associated participation of such Shareholder Affiliate in a Loan shall be deemed to be zero; and

 

(ii)                     such Shareholder Affiliate shall be deemed not to be a Lender;

 

(B)                  in relation to any meeting or conference call to which all or any number of Lenders are invited to attend or participate, it shall not attend or participate in the same if so requested by the Facility Agent or, unless the Facility Agent otherwise agree, be entitled to receive the agenda or any minutes of the same; and

 

(C)                  it shall not, unless the Facility Agent otherwise agree, be entitled to receive any report or other document prepared at the behest of, or on the instructions of, the Facility Agent or one or more of the Lenders.

 

42.      COUNTERPARTS

 

(A)                This Agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each Party has executed at least one counterpart.

 

(B)                  Each counterpart shall constitute an original of this Agreement, but all the counterparts shall together constitute one and the same instrument.

 

147

 

PART 13

GOVERNING LAW AND ENFORCEMENT

 

43.      GOVERNING LAW

 

This Agreement shall be governed by and construed in accordance with English law.

 

44.      JURISDICTION

 

44.1    Submission

 

The parties hereby irrevocably agree for the exclusive benefit of the Secured Parties that the courts of England shall have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a “Dispute”).

 

44.2    Forum convenience

 

The parties hereby irrevocably agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly irrevocably agree not to argue to the contrary.

 

44.3    Concurrent jurisdiction

 

This clause 44 is for the benefit of the Secured Parties only. As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.

 

45.      SERVICE OF PROCESS

 

(A)                Without prejudice to any other mode of service allowed under any relevant law, each of the Obligors:

 

(i)                        irrevocably appoints Trusec Limited of 2 Lambs Passage, London EC1Y 8BB (the “Process Agent”) as its agent for service of process in relation to any Dispute before the English courts in connection with any Finance Document;

 

(ii)                     irrevocably agrees that any Service Document may be sufficiently and effectively served on it in connection with any Dispute in England and Wales by service on the Process Agent (or any replacement agent appointed pursuant to paragraph (B) of this clause 45 (Service of Process); and

 

(iii)                  irrevocably agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.

 

(B)                  If the agent referred to in paragraph (A) of this clause 45 (or any replacement agent appointed pursuant to this paragraph (B)) at any time ceases for any

 

148

 

reason to act as such, as the case may be, each Obligor shall as soon as reasonably practicable appoint a replacement agent to accept service having an address for service in England or Wales and shall notify the Facility Agent of the name and address of the replacement agent; failing such appointment and notification, the agent referred to in paragraph (A) of this clause 45 (or any replacement agent appointed pursuant to this paragraph (B)) shall continue to be authorised to act as agent for service of process in relation to any proceedings before the English courts on behalf of the relevant party and shall constitute good service.

 

(C)                  Any document addressed in accordance with clause 45 paragraph (A) shall be deemed to have been duly served if:

 

(i)                        left at the specified address, when it is left; or

 

(ii)                     sent by first class post, two clear Business Days after posting.

 

(D)                 For the purposes of this clause 45, “Service Document” means a writ, summons, order, judgment or other document relating to or in connection with any Dispute. Nothing contained herein shall affect the right to serve process in any other manner permitted by law.

 

This Agreement has been entered into on the date stated at the beginning of this Agreement.

 

149

 

Schedule 1

The Initial Obligors

 

The Original Borrowers

 

	
Name
    	
 
    	
Jurisdiction of Incorporation
    	
 
    	
Registered Number
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Kosmos   Energy Finance International
    	
 
    	
Cayman Islands
    	
 
    	
253656
    

 

The Original Guarantors

 

	
Name
    	
 
    	
Jurisdiction of Incorporation
    	
 
    	
Registered Number
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Kosmos   Energy Operating
    	
 
    	
Cayman Islands
    	
 
    	
231417
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Kosmos   Energy International
    	
 
    	
Cayman Islands
    	
 
    	
218274
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Kosmos   Energy Development
    	
 
    	
Cayman Islands
    	
 
    	
225879
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Kosmos   Energy Ghana HC
    	
 
    	
Cayman Islands
    	
 
    	
135710
    

 

 

Schedule 2

The Original Lenders

 

	
Original Lender
    	
 
    	
Commitment (USD)
    
	
ABSA   CAPITAL (A DIVISION OF ABSA BANK LIMITED)
    	
 
    	
307,333,333.33
    
	
BARCLAYS   BANK PLC
    	
 
    	
26,000,000
    
	
BNP   PARIBAS
    	
 
    	
333,333,333.33
    
	
CRÉDIT   AGRICOLE CORPORATE AND INVESTMENT BANK
    	
 
    	
333,333,333.33
    
	
HSBC   BANK PLC
    	
 
    	
333,333,333.33
    
	
SOCIÉTÉ   GÉNÉRALE LONDON BRANCH
    	
 
    	
333,333,333.35
    
	
STANDARD   CHARTERED BANK
    	
 
    	
333,333,333.33
    

 

 

Schedule 3

Conditions Precedent

 

Part I

 

Conditions Precedent To first Utilisation

 

1.                          Provision of each of the following Finance Documents, duly executed by each of the parties to them (subject, in the case of the relevant Security Document, to the Lenders having agreed to the requirements of subordination in relation to any Security created in respect of a Project Agreement):

 

(i)                       this Agreement;

 

(ii)                    any Intercompany Loan Agreement;

 

(iii)                 the KEG Offshore Project Accounts Agreement;

 

(iv)                the Borrower Offshore Project Accounts Agreement;

 

(v)                   the KEG Onshore Project Accounts Agreement;

 

(vi)                the Intercreditor Agreement;

 

(vii)             the Charge over Shares in the Original Borrower;

 

(viii)          the Charge over Shares in KEO;

 

(ix)                  the Charge over Shares in KEG;

 

(x)                     the Charge over Shares in KED;

 

(xi)                  the Charge over Shares in KEI;

 

(xii)               the Borrower Offshore Security Assignment;

 

(xiii)            the KEO Offshore Security Assignment;

 

(xiv)           the KEI Offshore Security Assignment;

 

(xv)              the KED Offshore Security Assignment;

 

(xvi)           the KEG Offshore Security Assignment;

 

(xii)               the KEG Onshore Security Assignment;

 

(xiii)            the KEI and KEO Offshore Security Assignment;

 

(xix)             the Facility Agent Fee Letter;

 

 

(xx)                the front end and underwriting Fee Letter;

 

(xxi)             the Technical Bank Fee Letters;

 

(xxii)          the Modelling Bank Fee Letters;

 

(xxiii)       the Security Agent Fee Letter;

 

(xxiv)      the Documentation Bank Fee Letter; and

 

(xxv)         the BNP Paribas LC Issuing Fee Letter.

 

2.                          Provision of certified copies of each Obligor’s constitutional documents and corporate resolutions authorising entry into and performance of the Finance Documents to which they are a party and certification as to solvency.

 

3.                          Receipt by the Facility Agent of appropriate legal opinions from Clifford Chance LLP, Walkers, Fugar & Company, Maples & Calder, Thompson & Knight and Bentsi-Enchill, Letsa & Ankomah.

 

4.                          Final Reports and/or letters issued by the Consultants (provided that there is only an obligation to provide an executive summary of the Final Report from the Technical Consultant as a condition precedent to first Utilisation).

 

5.                          Provision of a certificate from the Borrower that all Required Approvals on the date of the proposed utilisation have been obtained (including a schedule of all such Required Approvals).

 

6.                          Provision of a certificate in the agreed form certifying that complete copies of the following Project Agreements, including all amendments in relation thereto, have been delivered to the Agents under the Existing Finance Documents pursuant to the terms of the CTA (as defined in the Definitions Agreement):

 

(i) the DWT PA;

 

(ii)                the DWT JOA;

 

(iii)               the WCTP PA; and

 

(iv)              the WCTP JOA,

 

together with certified copies of all other Project Agreements not referred to in paragraphs (i) to (iv) (inclusive) above (including, for the avoidance of doubt and without limitation, those documents listed under paragraphs (C), (D) and (E) of the definition of Project Agreements).

 

7.                          An audit of the Model prepared by the Model Auditor.

 

8.                          All share charges are entered into pursuant to condition precedent 1 above are perfected and fully valid and, where applicable (by adopting a consistent approach as

 

153

 

was adopted for the Existing Finance Documents): (a) share certificates and blank stock transfer forms are delivered to the Security Agent; (b) certified copy registers of members are delivered to the Security Agent in relation to companies whose shares have been pledged; and (c) letter of undertaking from the Company whose shares are being charged.

 

9.         Each Obligor (save for the Original Borrower and KEO) shall provide a certified copy of its most recent audited accounts, if any, and KEO shall provide a copy of the Form S-1 filed by Kosmos Energy Ltd. with the United States Securities and Exchange Commission on 23 March 2011, which includes the most recent audited consolidated accounts of the Group.

 

10.       The Schedule of Insurances.

 

11.       The following documents for release of the Security Interests (as defined in the Existing Finance Documents ) created by under the Existing Finance Documents, in the form agreed by the Security Trustee (as defined in the Existing Finance Documents):

 

·         deed of release between KEH, KEO, KEI, KED and BNP PARIBAS, as security trustee, releasing the security created by the existing charges over shares;

 

·         deed of release between KED, Kosmos Energy Finance, KEG and KEO and BNP Paribas, as security trustee, releasing the security created by the existing debentures;

 

·         deed of release between KEI, KEO and BNP Paribas, as security trustee, releasing the secured property under the existing security assignment;

 

154

 

·         Part II

 

Conditions Precedent Required to be Delivered by an Additional Obligor

 

1.         Provision of an Accession Letter, duly executed by the Additional Obligor and the Borrower.

 

2.         Provision of a Deed of Subordination in respect of any Financial Indebtedness of such Additional Obligor and a deed, duly signed on behalf of the Additional Obligor and each other Obligor and KEH, substantially in the form of the Deed of Acknowledgment and Release.

 

3.         Provision of certified copies of the Additional Obligor’s constitutional documents and certificates of incorporation (or equivalent).

 

4.         A copy of a resolution of the board of directors of the Additional Obligor approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that one or more specified persons execute the Accession Letter and any other documents and notices in connection with the Finance Documents.

 

5.         A specimen signature of each person authorised to execute the Accession Letter and any other documents and notices in connection with the Finance Documents.

 

6.         A certificate of the Additional Obligor (signed by a director) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guarantee, security or similar limit binding on it to be exceeded.

 

7.         A certificate of an Authorised Signatory of the Additional Obligor certifying that each copy document listed in this Part II of Schedule 3 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.

 

8.         A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.

 

9.         If available, the latest audited financial statements of the Additional Obligor.

 

10.       Receipt by the Facility Agent of any appropriate legal opinions.

 

11.       If the proposed Additional Obligor is incorporated in a jurisdiction other than England and Wales, evidence that the process agent specified in clause 45 (Service of Process), if not an Obligor, has accepted its appointment in relation to the proposed Additional Obligor.

 

155

 

Schedule 4

Utilisation Requests

 

Part I

Loans

 

	
From:
    	
Kosmos   Energy Finance International (the “Borrower”)
    
	
 
    	
 
    
	
To:
    	
BNP PARIBAS (the “Facility Agent”)
    

 

Dated:

 

Dear Sirs

 

Kosmos Energy Finance International — Facility Agreement
 dated [              ] (the “Agreement”)

 

1.         We refer to the Agreement. This is a Utilisation Request in respect of a Utilisation under the Facility. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

 

2.         We wish to borrow a Loan under the Facility on the following terms:

 

	
Proposed   Utilisation Date:
    	
 
    	
[             ]   (or, if that is not a Business Day, the next Business Day)
    
	
 
    	
 
    	
 
    
	
Amount:
    	
 
    	
[             ]   under or, if less, the Total Available Commitment
    
	
 
    	
 
    	
 
    
	
Amount   attributable to Interest payments
    	
 
    	
[             ]
    
	
 
    	
 
    	
 
    
	
Interest   Period:
    	
 
    	
[             ]
    

 

3.         We hereby certify that:

 

	
(a)
    	
 
    	
no   Default or Event of Default is continuing or will result from the proposed   Loan;
    
	
 
    	
 
    	
 
    
	
(b)
    	
 
    	
the   Loan is expected to be applied in payment of amounts subject to and in   accordance with the Cash Waterfall within 90 days of the Utilisation Date or   are otherwise required for Kosmos to comply with clause 20.1 (Project Accounts) of this Agreement;
    
	
 
    	
 
    	
 
    
	
(d)
    	
 
    	
the   making of the Utilisation would not result in the aggregate principal amount   outstanding under the Facility exceeding the Borrowing Base Amount; and
    
	
 
    	
 
    	
 
    
	
(e)
    	
 
    	
the   Repeating Representations are, in the light of the facts and circumstances   then existing, true and correct in all material respects (or, in the case of   a
    

 

 

Repeating Representation that contains a materiality concept, true and correct in all respects).

 

4.         The proceeds of this Loan should be credited to the [Borrower/other] Offshore Proceeds Account and to the extent an amount has been attributed to Interest payments above, such amount shall be applied towards the payment of Interest on the Facility.

 

5.         This Utilisation Request is irrevocable and is a Finance Document.

 

	
 
    	
Yours faithfully
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Authorised Signatory for
   Kosmos Energy Finance International
    	
 
    

 

157

 

Part II

Letters of Credit

 

	
From:
    	
[·] (the “Borrower”)
    
	
 
    	
 
    
	
To:
    	
BNP PARIBAS (the “Facility Agent”)
    
	
 
    	
 
    
	
 
    	
[·] (the “LC Issuing Bank”)
    

 

Dated:

 

Dear Sirs

 

Kosmos Energy Finance International — Facility Agreement

dated [                   ]

(the “Agreement”)

 

1.         We wish to arrange for a Letter of Credit to be issued by the LC Issuing Bank on the following terms:

 

	
Proposed   Utilisation Date:
    	
 
    	
[             ]   (or, if that is not a Business Day, the next Business Day)
    
	
 
    	
 
    	
 
    
	
Total   Amount:
    	
 
    	
[             ]   or, if less, the Total Commitments
    
	
 
    	
 
    	
 
    
	
Beneficiary:
    	
 
    	
[             ]
    
	
 
    	
 
    	
 
    
	
Term   or Expiry Date:
    	
 
    	
[             ]
    

 

2.         We hereby certify that each condition specified in clause 7.6 (Issue of Letters of Credit) is satisfied on the date of this Utilisation Request.

 

3.         We attach a copy of the proposed Letter of Credit.

 

4.         This Utilisation Request is irrevocable and is a Finance Document.

 

Delivery Instructions:

 

[specify delivery instructions]

 

	
 
    	
Yours faithfully
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Authorised Signatory for
   Kosmos Energy Finance International
    	
 
    

 

158

 

Schedule 5

Amortisation Schedule

 

	
 
    	
 
    	
Amortisation Amount
    	
 
    	
Revised Total Facility Amount
    
	
Repayment Date
    	
 
    	
(USD)
    	
 
    	
(USD)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/06/11
    	
 
    	
0
    	
 
    	
2,000,000,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/12/11
    	
 
    	
0
    	
 
    	
2,000,000,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/06/12
    	
 
    	
0
    	
 
    	
2,000,000,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/12/12
    	
 
    	
0
    	
 
    	
2,000,000,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/06/13
    	
 
    	
0
    	
 
    	
2,000,000,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/12/13
    	
 
    	
0
    	
 
    	
2,000,000,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/06/14
    	
 
    	
333,333,333
    	
 
    	
1,666,666,667
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/12/14
    	
 
    	
222,222,222
    	
 
    	
1,444,444,445
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/06/15
    	
 
    	
222,222,222
    	
 
    	
1,222,222,223
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/12/15
    	
 
    	
222,222,222
    	
 
    	
1,000,000,001
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/06/16
    	
 
    	
222,222,222
    	
 
    	
777,777,779
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/12/16
    	
 
    	
222,222,222
    	
 
    	
555,555,557
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/06/17
    	
 
    	
222,222,222
    	
 
    	
333,333,335
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/12/17
    	
 
    	
222,222,222
    	
 
    	
111,111,113
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
15/03/18
    	
 
    	
111,111,113
    	
 
    	
—
    

 

159

 

Schedule 6

Mandatory Cost Formulae

 

1.         The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England (and/or the Financial Services Authority (or, in either case, any other Authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.

 

2.         On the first day of each Interest Period (or as soon as possible thereafter) the Facility Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Facility Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum.

 

3.         The Additional Cost Rate for any Lender lending from a Facility Office in a Participating Member State will be the percentage notified by that Lender to the Facility Agent. This percentage will be certified by that Lender in its notice to that Facility Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that Facility Office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that Facility Office.

 

4.         The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Facility Agent as follows:

 

(a)       in relation to a sterling Loan:

 

	
AB + C(B–D)[+E]x0.01
    	
  per   cent. per annum
    	
 
    
	
100–(A+C)
    	
 
    

 

(b)      in relation to a Loan in any currency other than sterling:

 

	
Ex0.01
    	
  per   cent. per annum
    	
 
    
	
300
    	
 
    

 

Where:

 

A        is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest-free cash ratio deposit with the Bank of England to comply with cash ratio requirements.

 

B         is the percentage rate of interest (excluding the Margin and the Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of interest specified in paragraph (A) of clause 11.4 (Default interest)) payable for the relevant Interest Period on the Loan.

 

 

C         is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest-bearing Special Deposits with the Bank of England.

 

D        is the percentage rate per annum payable by the Bank of England to the Facility Agent on interest-bearing Special Deposits.

 

E         is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Facility Agent as being the average of the most recent rates of charge supplied by the Reference Banks to that Facility Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.

 

5.         For the purposes of this Schedule:

 

(A)     “Eligible Liabilities” and “Special Deposits” have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England.

 

(B)      “Fees Rules” means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits.

 

(C)      “Fee Tariffs” means the fee tariffs specified in the Fees Rules under activity group A.1 Deposit acceptors (ignoring any minimum fee or zero-rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate); and

 

(D)      “Tariff Base” has the meaning given to it in, and will be calculated in accordance with, the Fees Rules.

 

6.         In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.

 

7.         If requested by the Facility Agent, each Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to that Facility Agent, the rate of charge payable by that Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs applicable to that Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Reference Bank.

 

8.         Each Lender shall supply any information required by the Facility Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information on or prior to the date on which it becomes a Lender:

 

161

 

(A)     the jurisdiction of its Facility Office; and

 

(B)      any other information that the Facility Agent may reasonably require for such purpose.

 

Each Lender shall promptly notify the Facility Agent of any change to the information provided by it pursuant to this paragraph.

 

9.         The percentages of each Lender for the purpose of A and C above and the rates of charge of each Reference Bank for the purpose of E above shall be determined by the Facility Agent based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies the Facility Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a Facility Office in the same jurisdiction as its Facility Office.

 

10.       The Facility Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects.

 

11.       The Facility Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8 above.

 

12.       Any determination by the Facility Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest or proven error, be conclusive and binding on all Parties.

 

13.       The Facility Agent may from time to time, after consultation with Kosmos and the Lenders, determine and notify to all Parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England or the Financial Services Authority or the European Central Bank (or, in any case, any other Authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest or proven error, be conclusive and binding on all Parties.

 

162

 

Schedule 7

Form of Transfer Certificate

 

	
To:
    	
BNP PARIBAS as (the “ Facility Agent”)
    
	
 
    	
 
    
	
From:
    	
[The   Existing Lender] (the “Existing Lender”)   and [The New Lender] (the “New Lender”)
    

 

Dated:

 

Dear Sirs

 

Kosmos Energy Finance International — Facility Agreement

dated [                ] (the “Agreement”)

 

1.         We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

 

2.         We refer to clause 30.5 (Procedure for transfer):

 

(A)     The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all or part of the Existing Lender’s Commitment, rights and obligations referred to in the Schedule in accordance with clause 30.5 (Procedure for transfer).

 

(B)      The proposed Transfer Date is [                                ].

 

(C)      The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of clause 37.2 (Addresses) are set out in the Schedule.

 

3.         The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (C) of clause 30.4 (Limitation of responsibility of Existing Lenders).

 

4.         The New Lender confirms that it is a Qualifying Lender.

 

5.         This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

 

6.         This Transfer Certificate is governed by English law.

 

163

 

THE SCHEDULE

 

Commitments/rights and obligations to be transferred

 

[Insert relevant details]

 

[Facility Office address, fax number and attention details for notices and account details for payments]

 

	
[Existing   Lender]
    	
 
    	
[New   Lender]
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
By:
    	
 
    
					

 

This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [            ].

 

	
BNP PARIBAS
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: 
    	
 
    	
 
    	
 
    
				

 

164

 

Schedule 8

Form of Lender Accession Notice

 

	
 
    	
 
    
	
To:
    	
BNP PARIBAS as Facility Agent
    
	
 
    	
 
    
	
From: 
    	
[Additional Lender]
    

 

Dated:

 

 

Dear Sirs,

 

Kosmos Energy Finance International - Facility Agreement

dated                  (the “Agreement”)

 

1.                          We refer to the Agreement and the Facility Agreement. This is a Lender Accession Notice. Terms defined in the Facility Agreement relating to the Agreement have the same meaning in this Lender Accession Notice unless given a different meaning in this Lender Accession Notice.

 

2.                          [Additional Lender] agrees:

 

(a)                    to be bound by the terms of the Agreement as a Lender pursuant to clause [3.3] (Additional Commitment) of the Agreement; and

 

(b)                   to be bound by the terms of the Intercreditor Agreement as a [Lender/ Creditor].

 

3.                          [Additional Lender]’s Additional Commitment is USD [                  ].

 

4.                          [Additional Lender’s] administrative details are as follows:

 

	
Account   details:
    	
 
    	
[                                   ]
    
	
 
    	
 
    	
 
    
	
Facility   Office Address:
    	
 
    	
[                                   ]
    
	
 
    	
 
    	
 
    
	
Telephone   No.:
    	
 
    	
[                                   ]
    
	
 
    	
 
    	
 
    
	
Fax   No.:
    	
 
    	
[                                   ]
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
[                                   ]
    

 

5.                          This Lender Accession Notice is governed by English law.

 

6.                          This Lender Accession Notice has been delivered as a deed on the date stated at the beginning of this Lender Accession Notice.

 

165

 

[Additional Lender]

 

By:

 

 

This Lender Accession Notice is accepted by the Facility Agent and the Commitment Commencement Date is confirmed as [                       ].

 

	
BNP PARIBAS
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    
			

 

166

 

Schedule 9

Form of Accession Letter

 

	
From:
    	
[name of subsidiary] (the “Company”) and Kosmos Energy Finance   International (the “Borrower”)
    
	
 
    	
 
    
	
To:
    	
BNP PARIBAS (the “Facility Agent”)
    

 

Dated:

 

Dear Sirs

 

Kosmos Energy Finance International — Facility Agreement

dated [               ] (the “Agreement”)

 

1.                          We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.

 

2.                          The Company agrees to become an Additional [Borrower]/[Guarantor] and to be bound by the terms of the Agreement as an Additional [Borrower]/[Guarantor] pursuant to clause [31.2 (Additional Borrowers)]/[31.4 (Additional Guarantor)] of the Agreement. The Company is a company duly incorporated under the laws of [name of relevant jurisdiction].

 

3.                          The Company’s administrative details are as follows:

 

	
Address:
    
	
 
    
	
Fax   No:
    
	
 
    
	
Attention:
    

 

4.                          This Accession Letter is governed by English law.

 

This Accession Letter is entered into by deed.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[Borrower]
    	
 
    	
Kosmos   Energy Finance International
    

 

 

Schedule 10

Form of Resignation Letter

 

	
From: 
    	
[resigning Obligor] and Kosmos Energy   Finance International
    
	
 
    	
 
    
	
To:
    	
BNP PARIBAS (the “Facility Agent”)
    

 

Dated:

 

Dear Sirs

 

Kosmos Energy Finance International — Facility Agreement

dated [               ] (the “Agreement”)

 

1.                          We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.

 

2.                          Pursuant to clause [31.3 (Resignation of a Borrower)] of the Agreement, we request that [resigning Obligor] be released from its obligations as a Borrower under the Agreement.

 

3.                          We confirm that:

 

(a)                    no Default is continuing or would result from the acceptance of this request; and

 

(b)                   [                     ].

 

4.                          This Resignation Letter is governed by English law.

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[resigning Obligor]
    	
 
    	
Kosmos   Energy Finance International
    

 

168

 

Schedule 11

Form of Compliance Certificate

 

	
To:
    	
BNP PARIBAS as (the “Facility Agent”)
    
	
 
    	
 
    
	
From: 
    	
Kosmos   Energy Finance International (the “Borrower”)
    

 

Date:

 

Dear Sirs

 

Kosmos Energy Finance International — Facility Agreement

dated [               ] (the “Agreement”)

 

1.                          We refer to the Agreement. This is Compliance Certificate. Terms defined in the Agreement have the same meaning in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

 

2.                          We confirm that as at [               ], being the last occurring Forecast Date:

 

(A)                the Field Life Cover Ratio was [                ]; and

 

(B)                  the Loan Life Cover Ratio was [                ],

 

 in each case, as demonstrated by the current Forecast Assumptions.

 

3.                          We set out below the calculations establishing the figures in paragraph 2 above:

 

                                   [                       ]

 

4.                          We confirm that as at [               ], so far as we are aware having made diligent enquiries, no Default has occurred or is continuing.(1)

 

5.                          The balance of each Debt Service Reserve Account is as follows:

 

                                   [                       ]

 

 

(1)                    Note — If this statement cannot be made, the certificate should identify any Default that has occurred or is continuing and the action taken, or proposed to be taken, to remedy it.

 

169

 

	
 
    	
 
    	
Yours faithfully
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Authorised Signatory for
    	
 
    	
 
    	
 
    	
Authorised Signatory for
    
	
Kosmos Energy Finance International
    	
 
    	
 
    	
 
    	
Kosmos Energy Finance International
    

 

170

 

Schedule 12

Form of Letter of Credit

 

	
To:
    	
[Beneficiary]   (the “Beneficiary”)
    

 

Date:

 

Irrevocable Standby Letter of Credit no.[            ]

 

At the request and for the account of [                                ], [LC Issuing Bank] (the “LC Issuing Bank”) hereby establishes in your favour this irrevocable standby letter of credit (“Letter of Credit”) not exceeding the Total L/C Amount on the following terms and conditions:

 

1.                         Definitions

 

In this Letter of Credit:

 

“Business Day” means a day (other than a Saturday or a Sunday) on which banks are open for general business in London.

 

“Demand” means a demand for a payment under this Letter of Credit in the form of the schedule to this Letter of Credit.

 

“Expiry Date” means [                                   ].

 

“Total L/C Amount” means an aggregate amount not to exceed $[·] (USD [insert amount in words] only).

 

2.                         LC Issuing Bank’s agreement

 

(A)                The Beneficiary may request a drawing or drawings under this Letter of Credit by giving to the LC Issuing Bank a duly completed Demand. A Demand must be received by the LC Issuing Bank by [        ] p.m. (London time) on the Expiry Date. Multiple drawings are permitted.

 

(B)                  Subject to the terms of this Letter of Credit, the LC Issuing Bank unconditionally and irrevocably undertakes to the Beneficiary that, within [ten] Business Days of receipt by it of a Demand, it shall pay to the Beneficiary the amount demanded in that Demand.

 

(C)                  The LC Issuing Bank will not be obliged to make a payment under this Letter of Credit if as a result the aggregate of all payments made by it under this Letter of Credit would exceed the Total L/C Amount.

 

3.                         Expiry

 

(A)                The LC Issuing Bank will be released from its obligations under this Letter of Credit on the date (if any) notified by the Beneficiary to the LC Issuing Bank as

 

171

 

the date upon which the obligations of the LC Issuing Bank under this Letter of Credit are released.

 

(B)                  Unless previously released under paragraph (a) above, on [                     ] p.m. ([London] time) on the Expiry Date the obligations of the LC Issuing Bank under this Letter of Credit will cease with no further liability on the part of the LC Issuing Bank except for any Demand validly presented under the Letter of Credit that remains unpaid.

 

(C)                  When the LC Issuing Bank is no longer under any further obligations under this Letter of Credit, the Beneficiary must return the original of this Letter of Credit to the LC Issuing Bank.

 

4.                         Payments

 

All payments under this Letter of Credit shall be made in [                  ] and for value on the due date to the account of the Beneficiary specified in the Demand.

 

5.                         Delivery of Demand

 

Each Demand shall be in writing, and, unless otherwise stated, may be made by letter, by registered mail or by courier on your letterhead, with the blanks appropriately completed, purportedly signed by your authorised officers bearing original handwritten signatures and must be received in legible form by the LC Issuing Bank at its address and by the particular department or officer (if any) as follows:

 

[ ]

 

6.                         Assignment

 

The Beneficiary’s rights under this Letter of Credit may not be assigned or transferred.

 

7.                         Amendment

 

The Letter of Credit may be amended only by written instrument signed by the LC Issuing Bank and the Beneficiary.

 

8.                         ISP 98

 

Except to the extent it is inconsistent with the express terms of this Letter of Credit, this Letter of Credit is subject to the International Standby Practices (ISP 98), International Chamber of Commerce Publication No. 590.

 

9.                         Governing Law

 

This Letter of Credit is governed by English law.

 

172

 

10.                  Jurisdiction

 

The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter of Credit.

 

	
 
    	
Yours faithfully,
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
[LC Issuing Bank]
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
					

 

SCHEDULE

 

FORM OF DEMAND

 

	
To:
    	
[LC Issuing Bank]
    

 

Date:

 

Dear Sirs

 

Standby Letter of Credit no. [             ] issued in favour of [BENEFICIARY] (the “Letter of Credit”)

 

We refer to the Letter of Credit. Terms defined in the Letter of Credit have the same meaning when used in this Demand.

 

1.                          We certify that the sum of [             ] is due [and has remained unpaid for at least [             ] Business Days] [under [set out underlying contract or agreement]]. We therefore demand payment of the sum of [             ].

 

2.                          The amount specified in paragraph 1 is not in excess of the Total L/C Amount.

 

3.                          Payment should be made to the following account:

 

Name:

 

Account Number:

 

Bank:

 

173

 

4.         The date of this Demand is not later than the Expiry Date.

 

	
 
    	
 
    	
 
    
	
Yours   faithfully
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Authorised   Signatory)
    	
 
    	
(Authorised   Signatory)
    
	
 
    	
 
    	
 
    
	
For
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[BENEFICIARY]
    	
 
    	
 
    

 

174

 

Schedule 13

Form of Confidentiality Undertaking

 

To:          [insert details of lender]

 

 

Re:

 

Kosmos Energy Finance International (the “Company”) and its USD 2 billion reserves based loan facility dated [                 ] 2011 (the “Facility”)

 

[insert date]

 

Dear Sirs

 

We understand that you are considering participating in the Facility. In consideration of us agreeing to make available to you certain information, by your signature of a copy of this letter you agree as follows:

 

1.         Confidentiality Undertaking: You undertake:

 

(A)     to keep the Confidential Information confidential and not to disclose it to anyone except as provided for by paragraph 2 below and to ensure that the Confidential Information is protected with security measures with a degree of care not less than that which you would apply to your own confidential information;

 

(B)      to keep confidential and not disclose to anyone except as provided for by paragraph 2 below the fact that the Confidential Information has been made available or that discussions or negotiations are taking place or have taken place between us;

 

(C)      to use the Confidential Information only for the Permitted Purpose;

 

(D)      to ensure that any person to whom you pass any Confidential Information in accordance with paragraph 2 (unless disclosed under paragraph 2(B) below) acknowledges and complies with the provisions of this letter as if that person were also a party to it; and

 

(E)      not to make enquiries in relation to the Confidential Information of any other person, whether a third party or any member of the Group or any of their officers, directors, employees or professional advisers, save for such officers, directors, employees or professional advisers as may be expressly nominated by us for this purpose, provided that this paragraph shall not prevent or restrict you from conducting and completing all necessary and appropriate due diligence in accordance with your normal credit and underwriting approval processes and as required to be performed in order to obtain any requisite credit or underwriting approvals in relation to your possible participation in the Facility.

 

175

 

2.         Permitted Disclosure: We agree that you may disclose Confidential Information:

 

(A)     to members of the Participant Group and their officers, directors, employees, consultants and professional advisers but only to the extent necessary for the proper fulfilment of the Permitted Purpose, provided that:

 

(i)        such information is disclosed strictly on a need to know basis and provided that the Confidential Information may not be disclosed to any person in the Participant Group who is not working directly on matters concerning your participation in the Facility; and

 

(ii)       appropriate information barriers or other procedures as may be necessary are in place to ensure there can be no unauthorised disclosure of, or access to, the Confidential Information to any such person referred to in subparagraph (i) above;

 

(B)      (i) where required by any court of competent jurisdiction or any competent judicial, governmental, supervisory or regulatory body, (ii) where required by the rules of any stock exchange on which the shares or other securities of any member of the Participant Group are listed or (iii) where required by the laws or regulations of any country with jurisdiction over the affairs of any member of the Participant Group; or

 

(C)      with our prior written consent.

 

3.         Notification of Required or Unauthorised Disclosure: You agree (to the extent permitted by law) to inform us of the full circumstances of any disclosure under paragraph 2(b) (in advance where reasonable and practicable) or immediately upon becoming aware that Confidential Information has been disclosed in breach of this letter.

 

4.         Return of Copies: If we so request in writing, you shall return all Confidential Information supplied to you by us or any member of the Group and destroy or permanently erase all copies of Confidential Information made by you and use all reasonable endeavours to ensure that anyone to whom you have supplied any Confidential Information destroys or permanently erases such Confidential Information and any copies made by them, in each case save to the extent that you or the recipients are required to retain any such Confidential Information by any applicable law, rule or regulation or by any competent judicial, governmental, supervisory or regulatory body, or where the Confidential Information has been disclosed in accordance with paragraph 2(B) above.

 

5.         Continuing Obligations: The obligations in the preceding paragraphs of this letter are continuing and, in particular, shall survive the termination of any discussions or negotiations between you and us, irrespective of their outcome. Notwithstanding the previous sentence, the obligations in this letter shall cease twelve months after you have returned all Confidential Information and destroyed or permanently erased all copies of Confidential Information made by you to the extent required pursuant to paragraph 4 above.

 

176

 

6.         No Representation; Consequences of Breach, etc: You acknowledge and agree that:

 

(A)     neither we nor any of our officers, employees or advisers, and no other member of the Group and none of the officers, employees or advisers of any member of the Group (each a “Relevant Person”), (i) make any representation or warranty, express or implied, as to, or assume any responsibility for, the accuracy, reliability or completeness of any of the Confidential Information or any other information supplied by us or any member of the Group or the assumptions on which it is based or (ii) shall be under any obligation to update or correct any inaccuracy in the Confidential Information or any other information supplied by us or any other member of the Group or be otherwise liable to you or any other person in respect of the Confidential Information or any such information; and

 

(B)      we and other members of the Group may be irreparably harmed by the breach of the terms of this letter and damages may not be an adequate remedy; each Relevant Person may be granted an injunction or specific performance for any threatened or actual breach of the provisions of this letter by you or any other person.

 

7.         Inside Information: You acknowledge that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation relating to insider dealing and you undertake not to use any Confidential Information for any unlawful purpose. As a result of being given the Confidential Information you may well become insiders and, therefore, be unable to take certain actions which you would otherwise be able to take.

 

8.         No Waiver; Amendments, etc: This letter shall not affect any other obligation owed by you to any member of the Group. No failure or delay in exercising any right, power or privilege under this letter will operate as a waiver thereof nor will any single or partial exercise of any right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privileges under this letter. The terms of this letter and your obligations under this letter may only be amended or modified by written agreement between us and you.

 

9.         Nature of Undertakings: The undertakings and acknowledgements given by you under this letter are given to us and (without implying any fiduciary obligations on our part) are also given for the benefit of each other member of the Group.

 

10.       Third party rights:

 

(A)     Each other member of the Group and each Relevant Person (each a “Third Party”) may enforce the terms of this letter by virtue of the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”). This paragraph 10(A) confers a benefit on each Third Party, and, subject to the remaining provisions of this paragraph 10, is intended to be enforceable by each Third Party by virtue of the Third Parties Act.

 

177

 

(B)      Subject to paragraph 10(a), a person who is not a party to this letter has no right under the Third Parties Act to enforce or enjoy the benefit of any term of this letter.

 

(C)      Notwithstanding any provisions of this letter, the parties to this letter do not require the consent of any person to rescind or vary this letter at any time.

 

11.       Counterparts: This letter may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart. Each counterpart shall constitute an original of this letter, but all the counterparts shall together constitute one and the same instrument.

 

12.       Governing Law and Jurisdiction: Any matter, claim or dispute, whether contractual or non-contractual, arising out of or in connection with this letter (including the agreement constituted by your acknowledgement of its terms), is to be governed by and determined in accordance with English law, and the parties submit to the non-exclusive jurisdiction of the English courts.

 

13.       Definitions and Construction: In this letter (including the acknowledgement set out below):

 

“Confidential Information” means any and all information relating to the Company, the Group and the Facility, provided to you by us or any member of the Group or any of our affiliates or advisers, in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information and information regarding all discussions and negotiations between us (including information regarding the outcome of such discussions or negotiations), but excludes information that (a) is or becomes public knowledge other than as a direct or indirect result of any breach of this letter or (b) is known by you before the date the information is disclosed to you by us or any member of the Group or any of our affiliates or advisers or is lawfully obtained by you after that date, other than from a source which is connected with the Group and which, in either case, as far as you are aware, has not been obtained in violation of, and is not otherwise subject to, any obligation of confidentiality;

 

“Group” means, in respect of a person, that person and that person’s Holding Companies and each of their respective Subsidiaries;

 

“Holding Company” means, in relation to a company, any other company in respect of which it is a Subsidiary;

 

“Participant Group” means you, and each of your Holding Companies and Subsidiaries;

 

“Permitted Purpose” means considering and evaluating whether to enter into contracts with us in relation to your participation in the Facility; and

 

“Subsidiary” means a subsidiary within the meaning of section 1159 of the Companies Act 2006.

 

178

 

Please acknowledge your agreement to the above by signing and returning the enclosed copy.

 

	
Yours   faithfully
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
For and on behalf of Kosmos Energy Finance   International
    	
 
    

 

	
 
    	
 
    
	
To:   
    	
Kosmos   Energy Finance International and each other member of the Group
    
	
 
    	
 
    
	
 
    	
 
    
	
We acknowledge and agree to the above:
    
	
 
    
	
 
    	
 
    
	
For and on behalf of [insert details of lender]
    
			

 

179

 

Schedule 14

Form of Deed of Subordination

 

THIS DEED is dated [                                              ] and made between:

 

(1)       [·] (the “Obligor”);

 

(2)       BNP PARIBAS in its capacity as Security Agent for the Secured Parties on the terms and conditions set out in the Intercreditor Agreement (the “Security  Agent”) which expression includes its successors in title and assigns or any person appointed as an additional trustee for the purpose of and in accordance with the Intercreditor Agreement; and

 

(3)       [·] (the “Subordinated Party”).

 

BACKGROUND:

 

(1)       Under the Facility, the Lenders have agreed to make available $[·] billion loan facility to the Borrower.

 

(2)       The Subordinated Party has agreed to make, or may in the future make, loans available to the Obligor.

 

(3)       The Obligor and the Subordinated Party have agreed that the Subordinated Debt (as defined below) shall be subordinated to the claims of the Secured Parties on the terms of this Deed.

 

IT IS AGREED as follows:

 

1.        DEFINITIONS AND INTERPRETATION

 

1.1      Definitions

 

In this Deed:

 

“Permitted Payment” means any payment or receipt expressly permitted by clause 4 (Permitted Payments) so long as it is so permitted.

 

“Subordinated Debt” means all present and future moneys, debts, obligations and liabilities which are, or are expressed to be, or may become due, owing or payable by the Obligor to the Subordinated Party (in each case, whether alone or jointly, or jointly and severally, with any other person, whether actually or contingently, and whether as principal, surety or otherwise) together with any related Additional Debt.

 

“Subordinated Documents” means any document evidencing or recording the terms of any Subordinated Debt.

 

180

 

“Subordination Period” means the period beginning on the date of this Deed and ending on the date on which all the Secured Liabilities have been unconditionally and irrevocably paid or discharged or satisfied in full and all commitments of the Secured Parties have expired or been cancelled.

 

1.2      Incorporation of defined terms

 

Terms defined in clause 1 (Definitions) of the facility agreement made on or about the date of this Deed (the “Agreement”) by, inter alios, the parties to this Deed shall have the same meaning and construction when used herein.

 

1.3      Construction of particular terms

 

The rules of construction and interpretation set out in clause 2 (Interpretation and Construction) of the Agreement shall apply to this Deed as if expressly set out herein.

 

1.4      Third Party Rights

 

(a)       Subject to clause 1.4(b), the parties to this Deed do not intend that any term of this Deed should be enforceable by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this Deed.

 

(b)      Each of the Secured Parties shall have the right to enforce the terms of this Deed.

 

2.        RANKING

 

(a)       The Secured Liabilities shall rank senior in priority to the Subordinated Debt.

 

(b)      Except as provided in this Deed, any payment in respect of the Subordinated Debt is conditional upon the expiry of the Subordination Period.

 

(c)       As between the Secured Parties, nothing in this Deed shall prejudice the ranking of the Secured Liabilities as set forth in the Intercreditor Agreement.

 

3.        UNDERTAKINGS

 

3.1      Undertakings of the Obligor

 

(a)       During the Subordination Period the Obligor shall not, and the Subordinated Party shall not require the Obligor to:

 

(i)        pay, repay or prepay any principal, interest or other amount on or in respect of, or make any distribution in respect of, or redeem, purchase, acquire or defease, any of the Subordinated Debt whether in cash or in kind;

 

(ii)       exercise any set-off against any Subordinated Debt;

 

181

 

(iii)      create or permit to subsist any Security over any of its assets, or give any guarantee, for, or in respect of, any Subordinated Debt;

 

(iv)      amend, terminate or give any waiver or consent under the Subordinated Documents, other than any amendment, termination, waiver or consent purely of a technical or administrative nature; or

 

(v)       take or omit to take any action whereby the ranking and/or subordination contemplated by this Deed might be impaired or terminated.

 

(b)      Notwithstanding paragraph (a) above, the Obligor may:

 

(i)        do anything prohibited by paragraph (a) above with the prior written consent of the Security Agent; and

 

(ii)       make any Permitted Payment.

 

3.2      Undertakings of the Subordinated Party

 

(a)       During the Subordination Period, the Subordinated Party shall not:

 

(i)        demand or receive payment, repayment or prepayment of any principal, interest or other amount on or in respect of, or any distribution in respect of, the Subordinated Debt in cash or in kind or apply any money or property in or towards discharge of the Subordinated Debt;

 

(ii)       exercise any set-off against the Subordinated Debt;

 

(iii)      permit to subsist or receive any Security, or any guarantee, for, or in respect of, the Subordinated Debt;

 

(iv)      amend, terminate or give any waiver or consent under any Subordinated Document, other than any amendment, termination, waiver or consent purely of a technical or administrative nature; or

 

(v)       take or omit to take any action whereby the ranking and/or subordination contemplated by this Deed might be impaired;

 

(vi)      take any Enforcement Action in relation to the Subordinated Debt; or

 

(vii)     assign, transfer or otherwise dispose of any of its rights, benefit, title or interest in or to the Subordinated Debt.

 

(b)      Notwithstanding paragraph (a) above, the Subordinated Party may:

 

(i)        do anything prohibited by paragraph (a) above with the prior written consent of the Security Agent; and

 

182

 

(ii)       receive and retain a Permitted Payment.

 

4.        PERMITTED PAYMENTS

 

Subject to clause 6 (Turnover) and clause 7 (Subordination on Insolvency), unless:

 

(a)       a Default is continuing; or

 

(b)      an Insolvency Event or Insolvency Proceedings have occurred in which case clause 7 (Subordination on Insolvency) applies; or

 

(c)       the aggregate of the outstandings under the Facility on the most recent Forecast Date exceeds the Borrowing Base Amount pursuant to clause 10.3 (Aggregate outstandings exceed the Borrowing Base Amount) of the Agreement and the earlier of the date of the mandatory prepayment to cure the deficiency or the date which is 90 days following that Forecast Date has not occurred, (in which case the provisions of clause 7 (Subordination on Insolvency) shall apply),

 

the Obligor may pay and the Subordinated Party may receive and retain payments of [of interest and principal] on the Subordinated Debt in accordance with clause 21.2 (Withdrawals — No Default Outstanding) of the Agreement, such payment or receipt to include payment or receipt by way of set-off.

 

5.        REPRESENTATIONS

 

5.1      Representations of the Subordinated Party

 

The Subordinated Party makes the representations and warranties set out in this clause 5.1 on the date of this Deed:

 

(a)       It is duly incorporated (if a corporate person) or duly established (in any other case except for a natural person) and validly existing under the law of its jurisdiction of incorporation or formation.

 

(b)      It has the power to own its assets and carry on its business as it is being and is proposed to be, conducted, and it has the power to enter into and perform all its obligations under this Deed and the transactions contemplated by this Deed.

 

(c)       The obligations expressed to be assumed by it under this Deed are legal, valid, binding and enforceable obligations.

 

(d)      The entry into and performance by it of, and the transactions contemplated by, this Deed does not and will not conflict with:

 

(i)     any law applicable to it;

 

(ii)    its constitutional documents; or

 

183

 

(iii)   any agreement or instrument binding upon it or any of its assets.

 

(e)                    It has (or had at the relevant time) the power and authority to execute and deliver this Deed and it has the power and authority to perform its obligations under this Deed and the transactions contemplated thereby.

 

(f)                      All Required Approvals have been obtained or effected and are in full force and effect where a failure to do so has or could reasonably be expected to have a Material Adverse Effect.

 

(g)                   It is the sole beneficial owner of the Subordinated Debt owed to it.

 

5.2      Repetition

 

Each of the representations and warranties in clause 5.1 (representations of the subordinated party) will be repeated on the date of each utilisation date and on the first day of each interest period. Where a representation is repeated, it is applied to the facts and circumstances existing at the time of repetition.

 

6.        TURNOVER

 

During the Subordination Period, if the Subordination Party received or recovers:

 

(a)                    a payment (other than a Permitted Payment) in cash or in kind or distribution in respect of any of the Subordinated Debt from the Obligor or any other source; or

 

(b)                   the proceeds of any enforcement of any Security or any guarantee or other assurance against financial loss for any Subordinated Debt, in each case, in contravention of clause 2 (Ranking) or 3 (Undertakings), the Subordinated Party shall:

 

(i)                        within three (3) Business Days notify details of the receipt or recovery to the Security Agent;

 

(ii)                     hold any such assets and moneys received or recovered by it (up to a maximum of an amount equal to the Secured Liabilities on trust for the Security Agent for application against the Secured Liabilities in accordance with the order and priority set forth in the Intercreditor Agreement; and

 

(iii)                  within three (3) Business Days of demand by the Security Agent, pay an amount equal to such receipt or recovery (up to a maximum of an amount equal to the Secured Liabilities) to the Security Agent for application against the Secured Liabilities in accordance with the order and priority set forth in the Intercreditor Agreement.

 

184

 

7.        SUBORDINATION ON INSOLVENCY

 

7.1      Subordination

 

If an Insolvency Event or Insolvency Proceedings occur, the Subordinated Debt will be subordinate to the Secured Liabilities.

 

7.2      Filing of Claims

 

(a)                    If an Insolvency Event or Insolvency Proceedings occur or any Event of Default is continuing, the Security Agent may, and is hereby irrevocably authorised on behalf of the Obligor and the Subordinated Party to:

 

(i)                        take any Subordinated Debt Enforcement Action;

 

(ii)                     demand, claim, enforce and prove for the Subordinated Debt;

 

(iii)                  file claims and proofs, give receipts and take any proceedings in respect of filing such claims or proofs and do anything which the Security Agent reasonably considers necessary or desirable to recover the Subordinated Debt; and

 

(iv)                 receive all distributions of the Subordinated Debt for application first against the Secured Liabilities in accordance with the order and priority set forth in the Intercreditor Agreement.

 

(b)                   If and to the extent that the Security Agent is not entitled, or elects not, to take any of the action mentioned in paragraph (a) above, the Subordinated Party will do so promptly on request by the Security Agent.

 

7.3      Distributions

 

If an Insolvency Event or Insolvency Proceedings occur, the Subordinated Party will:

 

(a)                    hold all payments and distributions in cash or in kind received or receivable by it in respect of the Subordinated Debt on trust for the Security Agent and promptly pay the same for application first against the Secured Liabilities in accordance with the order and priority set forth in the Intercreditor Agreement;

 

(b)                   within three Business Days of demand by Security Agent, pay an amount equal to any Subordinated Debt owing to it and discharged by set-off or otherwise to the Security Agent for application in accordance first against the Secured Liabilities in accordance with the order and priority set fourth in the Intercreditor Agreement;

 

185

 

(c)                    promptly direct the trustee in bankruptcy, liquidator, assignee or other person distributing the assets of the Obligor or their proceeds to pay any and all distributions in respect of the Subordinated Debt directly to the Security Agent; and

 

(d)      promptly undertake any action requested by the Security Agent to give effect to this clause 7.3.

 

7.4      Voting

 

(a)                    If an Insolvency Event or Insolvency Proceedings occur:

 

(i)                        the Security Agent may, and is hereby irrevocably so authorised on behalf of the Subordinated Party, to exercise all powers of convening meetings, voting and representation in respect of the Subordinated Debt; and

 

(ii)                     the Subordinated Party shall promptly execute and/or deliver to the Security Agent such forms of proxy and representation as it may require to facilitate any such action.

 

(b)                   If and to the extent that the Security Agent is not entitled, or elects not, to exercise a power under paragraph (a) above, the Subordinated Party will:

 

(i)                        exercise that power in such manner as the Security Agent directs; and

 

(ii)                     exercise that power so as not to impair the ranking and/or subordination contemplated by this Deed.

 

8.        PROTECTION OF SUBORDINATION

 

8.1      Continuing subordination

 

The subordination provisions in this Deed shall remain in full force and effect by way of continuing subordination and shall not be affected in any way by any intermediate payment or discharge in whole or in part of the Secured Liabilities.

 

8.2      Waiver of defences

 

Neither the subordination in this Deed nor the obligations of the Obligor or the Subordinated Party shall be affected in any way by an act, omission, matter or thing which, but for this clause 8, would reduce, release or prejudice the subordination or any of those obligations in whole or in part, including, without limitation, the following:

 

(a)                    any time, waiver or consent granted to, or composition with, any person;

 

(b)                   the release of any person under the terms of any composition or arrangement with any creditor of any person;

 

186

 

(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 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 any person;

 

(e)                    any amendment, novation, supplement, extension (whether of maturity or otherwise) or restatement (in each case, however fundamental and of whatever nature) or replacement of any Finance Document or any other document or security;

 

(f)                      any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security;

 

(g)                   any insolvency or similar proceedings; or

 

(h)                   any postponement, discharge, reduction, non-provability or other similar circumstance affecting any obligation of any person under any Finance Document resulting from any insolvency, liquidation or dissolution proceedings or from any law, regulation or order.

 

8.3      Immediate recourse

 

The Subordinated Party waives any right it may have of first requiring the Security Agent (or any other trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person claiming the benefit of this Deed. The Security Agent may refrain from applying or enforcing any money, rights or security.

 

8.4      Appropriations

 

The Security Agent (or any trustee or agent on its behalf) may, subject to its obligations under this Deed:

 

(a)                    apply any moneys or other assets received or recovered by it under this Deed or from any person against the Secured Liabilities, in accordance with the order and priority set forth in the Intercreditor Agreement;

 

(b)                   apply any moneys or other assets received or recovered by it from any person (other than any moneys or other assets received or recovered under the applicable Finance Documents or under this Deed) against any liability of the relevant person to it other than the Secured Liabilities owed to it; and

 

187

 

(c)                    unless or until such moneys or other assets received or recovered by it under the applicable Finance Documents or under this Deed in aggregate are sufficient to end the Subordination Period if otherwise applied in accordance with the provisions of this Deed, hold in an interest-bearing suspense account any moneys or other assets received from any person.

 

9.        PRESERVATION OF DEBT

 

9.1      Preservation of Subordinated Debt

 

Notwithstanding any term of this Deed postponing, subordinating or preventing the payment of all or any part of the Subordinated Debt, the Subordinated Party shall, as between the Obligor and the Subordinated Party, be deemed to remain owing or due and payable (and interest, default interest or indemnity payments shall continue to accrue) in accordance with the Subordinated Documents.

 

9.2      No liability

 

The Security Agent will have no liability to the Obligor or to the Subordinated Party for any act, default, or omission in relation to the manner of exercise or any non-exercise of its rights, remedies, powers, authorities or discretions under this Deed or any failure to collect or preserve any Subordinated Debt or delay in doing so.

 

10.      SUBROGATION

 

If any of the Secured Liabilities are wholly or partially paid out of any proceeds received in respect of or on account of the Subordinated Debt, the Subordinated Party will to that extent be subrogated to the Secured Liabilities so paid (and all securities and guarantees for those Secured Liabilities), but not before the expiry of the Subordination Period.

 

11.      NO OBJECTION BY SUBORDINATED PARTY

 

The Subordinated Party is deemed to consent to, and the Subordinated Party shall not have any claim or remedy against the Obligor or any Secured Party by reason of:

 

(a)                    the entry by any of them into any Finance Document or any other agreement between any Secured Party and the Obligor;

 

(b)                   any waiver or consent given by any Secured Party under any Finance Document or any such other agreement; or

 

(c)                    any requirement or condition imposed by or on behalf of any Secured Party under any Finance Document or any such other agreement,

 

from time to time which breaches or causes an event of default or potential event of default (however described) under any Subordinated Document.

 

188

 

12.      POWER OF ATTORNEY

 

(a)                    During the Subordination Period, the Subordinated Party, by way of security for the obligations of the Subordinated Party under this Deed, irrevocably appoints Security Agent as its attorney (with full power of substitution and delegation), on its behalf and in its name or otherwise as its act and deed, and in such manner as the attorney thinks fit to do anything which the Subordinated Party is obliged to do under this Deed but has not done, and the taking of action by the attorney shall (as between it and any third party) be conclusive evidence of its right to take such action.

 

(b)                   The Subordinated Party ratifies and confirms and agrees to ratify and confirm everything that such attorney does or purports to do in the exercise or purported exercise of the power of attorney granted by it in this clause 12.

 

13.      NEW MONEY

 

The Subordinated Party agrees and acknowledges that the Secured Parties may, at their discretion, increase any amounts payable or make further advances under the Finance Documents and/or make further facilities available to the Borrower. Any such increased payments, further advances and/or additional facilities will be deemed to be made under the terms of the Finance Documents.

 

14.      FAILURE OF TRUSTS

 

If any trust intended to arise pursuant to any provision of this Deed fails or for any reason (including the laws of any jurisdiction in which any assets, moneys, payments or distributions may be situated) cannot be given effect to, the Subordinated Party will pay to the Security Agent for application against the Secured Liabilities an amount equal to the amount (or the value of the relevant assets) intended to be so held on trust for the Security Agent.

 

15.      TRUSTS

 

(a)                    The Security Agent shall hold the benefit of this Deed upon trust for itself and the other relevant Secured Parties.

 

(b)                   The perpetuity period of the trusts created under this Deed shall be 80 years.

 

16.      NON-CREATION OF CHARGE

 

No provision of this Deed is intended to or shall create a charge or other security.

 

17.      CERTIFICATES AND DETERMINATIONS

 

Any certification or determination by the Security Agent of a rate or amount under this Deed will be, in the absence of manifest error, conclusive evidence of the matters to which it relates.

 

189

 

18.      CHANGES TO THE PARTIES

 

18.1   The Obligor and the Subordinated Party

 

Neither the Obligor nor the Subordinated Party may assign or transfer any of its rights or obligations under this Deed without prior written consent of the Security Agent.

 

18.2   The Security Agent

 

(a)                    The Security Agent may assign or otherwise dispose of all or any of its rights under this Deed as permitted under the Finance Documents.

 

(b)                   References in this Deed to the Security Agent include any successor in title and assigns or any person appointed as an additional trustee for the purposes of and in accordance with the Intercreditor Agreement.

 

19.      INFORMATION

 

19.1   Defaults

 

Any Subordinated Creditor will notify the Security Agent, of the occurrence of an event of default or potential event of default (however described) under or breach of any Subordinated Document, promptly upon becoming aware of it.

 

19.2   Amounts of Subordinated Debt

 

Any Subordinated Creditor will, on request by the Security Agent from time to time notify it of details of the amount of outstanding Subordinated Debt.

 

20.      NOTICES

 

20.1   Communications in writing

 

Any communication or document to be made or delivered under or in connection with this Deed shall be made in writing and, unless otherwise stated, may be made or delivered by fax or letter.

 

20.2   Addresses

 

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each party for any communication or document to be made or delivered under or in connection with this Deed is that identified in accordance with the terms of this Agreement (or in the case of the Subordinated Party, the Finance Documents to which it is a party) or otherwise as notified to the other parties on the date of this Deed, or any substitute address, fax number or department or officer as the party notifies to the other parties by not less than five Business Days’ notice.

 

190

 

20.3   Delivery

 

Any communication or document made or delivered by one person to another under or in connection with this Deed will only be effective:

 

(a)                    if by way of fax, when received in legible form; or

 

(b)                   if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

 

and, if a particular department or officer is specified as part of its address details provided under clause 20.2 (Addresses), if addressed to that department or officer.

 

20.4   English language

 

Any notice given under or in connection with this Deed must be in English.

 

21.      REMEDIES AND WAIVERS

 

No delay or omission by the Security Agent in exercising any right provided by law or under this Deed shall impair, affect, or operate as a waiver of, that or any other right. The single or partial exercise by the Security Agent of any right shall not, unless otherwise expressly stated, preclude or prejudice any other or further exercise of that, or the exercise of any other, right. The rights of the parties under this Deed are in addition to and do not affect any other rights available to them by law.

 

22.      PARTIAL INVALIDITY

 

(a)                    If, at any time, any provision of this Deed is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions under the law of that jurisdiction or any other jurisdiction will in any way be affected or impaired.

 

(b)                   The parties shall enter into good faith negotiations, but without any liability whatsoever in the event of no agreement being reached, to replace any illegal, invalid or unenforceable provision with a view to obtaining the same commercial effect as this Deed would have had if such provision had been legal, valid and enforceable.

 

23.      AMENDMENTS

 

No amendment may be made to this Deed (whether in writing or otherwise) without the prior written consent of the parties to this Deed.

 

191

 

24.      COUNTERPARTS

 

This Deed may be executed in any number of counterparts, and by the parties on separate counterparts, but will not be effective until each party has executed at least one counterpart. Each counterpart shall constitute an original of this Deed, but all the counterparts will together constitute one and the same instrument.

 

25.      EXECUTION AS A DEED

 

Each of the parties to this Deed intends it to be a deed and confirms that it is executed and delivered as a deed, in each case notwithstanding the fact that any one or more of the parties may only execute it under hand.

 

26.      ENFORCEMENT

 

26.1   Jurisdiction

 

(a)                    The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Deed (including a dispute regarding the existence, validity or termination of this Deed) (a “Dispute”).

 

(b)                   The parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no party will argue to the contrary.

 

(c)                    This clause 26.1 is for the benefit of the Security Agent only. As a result but subject to paragraph (d) below, the Security Agent shall not be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Security Agent may take concurrent proceedings in any number of jurisdictions.

 

(d)                   The Subordinated Party agrees that it will not take proceedings relating to a Dispute in relation to the Subordinated Debt in any other courts with jurisdiction.

 

26.2   Service of process

 

(a)                    Without prejudice to any other mode of service allowed under any relevant law the Subordinated Party (which is not incorporated in England and Wales) irrevocably appoints [name] of [address] as its agent for service of process in relation to any proceedings before the English courts in connection with this Deed.

 

(b)                   The Subordinated Party agrees that failure by a process agent to notify the relevant party of the process will not invalidate the proceedings concerned.

 

192

 

27.      FURTHER ASSURANCE

 

Each of the Obligor and the Subordinated Party agrees that it will promptly, at the direction of the Security Agent (acting reasonably), execute and deliver at its own expense any document (to be executed as a deed or under hand) and do any act or thing in order to confirm or establish the validity and enforceability of the subordination effected by, and the obligations of the Obligor and the Subordinated Party under, this Deed.

 

28.      GOVERNING LAW

 

This Deed is governed by and is to be construed in accordance with English law. Any matter, claim or dispute arising out of or in connection with this Deed, whether contractual or non-contractual, is to be governed by and construed in accordance with English law.

 

IN WITNESS of which this document has been executed as a deed and delivered on the date stated at the beginning of this Deed.

 

193

 

	
Executed   and Delivered as a Deed by
    	
)
    	
 
    	
 
    
	
[name of Obligor] in the presence of:
    	
)
    	
 
    	
 
    
	
 
    	
)
    	
Per:
    	
 
    
	
 
    	
 
    	
Title:
    	
Director/Attorney-in-Fact
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Witness’s   Signature
    	
 
    	
 
    	
 
    

 

	
(Name)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(Address)
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(Occupation)
    	
 
    	
 
    	
 
    

 

	
 
    	
 
    	
 
    
	
Executed   as a deed BNP PARIBAS
    	
 
    	
 
    
	
acting   by [a director and its
    	
 
    	
Director
    
	
[secretary/two   directors]]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Secretary/Director]
    
	
 
    	
 
    	
 
    
	
[Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Fax   Number:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Department:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Executed   as a deed [name of Subordinated
    	
 
    	
 
    
	
Party] acting by [a director and its
    	
 
    	
Director
    
	
[secretary/two   directors]]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Secretary/Director]
    
	
 
    	
 
    	
 
    
	
[Address:
    	
 
    	
 
    

 

194

 

Fax Number:

 

Department:

 

Attention:]

 

195

 

Schedule 15

Form of Sources and Uses Statement

 

	
“A” is   the aggregate of:
    	
 
    	
$ 000’s
    	
 
    	
“B”   is the aggregate of:
    	
 
    	
$ 000’s
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net   Cash Flow minus Facility debt service (ds) for next 12 months as derived from   latest Forecast
    	
 
    	
 
    	
 
    	
committed   exploration and appraisal costs for next 12 month period, not included in Net   Cash Flow calculation, for Obligor group
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Net   free cash-flows after ds for next 12 month period from KEO assets other than   the Borrowing Base Assets from Obligor group corporate cash-flow model using   same economic assumptions as in Forecast
    	
 
    	
 
    	
 
    	
committed   development costs, not included in Net Cash Flow calculation, for the next 12   months for Obligor group
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Cash   balance of KEO excluding balances of accounts used as collateral for Secured   LCs or other specific purposes (other than such balances securing amounts   taken into account in “B”)
    	
 
    	
 
    	
 
    	
payment   obligations under rigs contracts or other similar operational contracts, for   the next 12 months, not included in the Net Cash Flow, for Obligor group
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Total   Available Facility Amount less Relevant Capital Expenditures
    	
 
    	
 
    	
 
    	
payment   obligations under a sale and purchase agreement in the context of an   acquisition or otherwise, not included in the Net Cash Flow, for Obligor   group for the next 12 months
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
any   off balance sheet or contingent liability as per the capital commitments   noted in the latest consolidated financials for KEO which could reasonably be   expected to entail a cash outflow for the next 12 months
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Any   other committed undrawn and uncancelled amount available under any other   external finance source of KEO
    	
 
    	
 
    	
 
    	
approximate   dividends or other shareholder payments projected to be paid by KEO for the   next 12 months (or in case of Borrower level,   by Borrower)
    	
 
    	
 
    

 

196

 

	
Amount   provided by a person/persons to KEO or Obligors made available for the   purpose of meeting projected liabilities unrelated to the Borrowing Base   Assets that the Facility Agent is satisfied will be available
    	
 
    	
 
    	
 
    	
any   other material committed liability for the next 12 months period including   any guarantee, indemnity or other contingent liability, which could be   reasonably be expected to entail a cash outflow for the next 12 month period
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL   OBLIGOR GROUP
    	
 
    	
 
    	
 
    	
TOTAL   OBLIGOR GROUP
    	
 
    	
 
    

 

197

 

Schedule 16

(Copy of ORGL LC)

 

198

 

SIGNATURES

 

	
Original Borrower
    	
 
    
	
 
    	
 
    
	
KOSMOS ENERGY FINANCE   INTERNATIONAL
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Ryan Turner
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
Ryan Turner
    	
 
    
	
Title:
    	
Attorney In Fact
    	
 
    
				

 

 

	
Original Guarantors
    	
 
    
	
 
    	
 
    
	
KOSMOS ENERGY OPERATING
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Ryan Turner
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
Ryan Turner
    	
 
    
	
Title: 
    	
Attorney In Fact
    	
 
    

 

 

	
KOSMOS ENERGY GHANA HC
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Ryan Turner
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Name:
    	
Ryan Turner
    	
 
    
	
Title:
    	
Attorney In Fact
    	
 
    
				

 

 

	
KOSMOS ENERGY DEVELOPMENT
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Ryan Turner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Ryan Turner
    	
 
    
	
Title:
    	
Attorney In Fact
    	
 
    

 

 

	
KOSMOS ENERGY INTERNATIONAL
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Ryan Turner
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Ryan Turner
    	
 
    
	
Title:
    	
Attorney In Fact
    	
 
    

 

 

SIGNATURES

 

	
Mandated Lead Arrangers
    	
 
    
	
 
    	
 
    
	
ABSA CAPITAL, A DIVISION OF ABSA   BANK LIMITED
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Narisa Balgobind
    	
By:
    	
/s/   David Pilling
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Narisa Balgobind
    	
Name:
    	
David   Pilling
    
	
Title:
    	
Principal
    	
Title:
    	
Associate   Principal
    
	
 
    	
 
    
	
 
    	
 
    
	
BNP PARIBAS
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Xavier Venereau
    	
By:
    	
/s/   Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier Venereau
    	
Name:
    	
Olivier   Warnan
    
	
Title:
    	
Managing Director
    	
Title:
    	
Director-BNP   Paribas
    
	
 
    	
 
    
	
 
    	
 
    
	
CRÉDIT AGRICOLE CORPORATE AND   INVESTMENT BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ L. Renard
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
L. Renard
    	
Name:
    
	
Title:
    	
Associate Director
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
HSBC BANK PLC
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ William Stevens
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
William Stevens
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    

 

 

	
SOCIÉTÉ GÉNÉRALE, LONDON BRANCH
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Marie-Aimée Bowy
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Marie-Aimée Bowy
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
STANDARD CHARTERED BANK
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Andrew Bartlett
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Andrew Bartlett
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    

 

 

	
Original Lenders
    	
 
    
	
 
    	
 
    
	
ABSA CAPITAL, A DIVISION OF ABSA   BANK LIMITED
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Narisa Balgobind
    	
By:
    	
/s/ David Pilling
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Narisa Balgobind
    	
Name:
    	
David Pilling
    
	
Title:
    	
Principal
    	
Title:
    	
Associate Principal
    
	
 
    	
 
    
	
 
    	
 
    
	
BARCLAYS BANK PLC
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ C.J. Morphett
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
C.J. Morphett
    	
Name:
    
	
Title:
    	
Director
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
BNP PARIBAS
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Xavier Venereau
    	
By:
    	
/s/ Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier Venereau
    	
Name:
    	
Olivier Warnan
    
	
Title:
    	
Managing Director
    	
Title:
    	
Director - BNP Paribas
    
	
 
    	
 
    
	
 
    	
 
    
	
CRÉDIT AGRICOLE CORPORATE AND   INVESTMENT BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ L. Renard
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
L. Renard
    	
Name:
    
	
Title:
    	
Associate Director
    	
Title:
    

 

 

	
HSBC BANK PLC
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   William Stevens
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
William   Stevens
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
SOCIÉTÉ GÉNÉRALE, LONDON BRANCH
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Marie-Aimée Bowy
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Marie-Aimée   Bowy
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
STANDARD CHARTERED BANK
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Andrew Bartlett
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Andrew   Bartlett
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    

 

 

	
Underwriters
    	
 
    
	
 
    	
 
    
	
ABSA CAPITAL, A DIVISION OF ABSA   BANK LIMITED
    
	
 
    	
 
    
	
By:
    	
/s/   Narisa Balgobind
    	
 
    	
By:
    	
/s/   David Pilling
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Narisa   Balgobind
    	
 
    	
Name:
    	
David   Pilling
    
	
Title:
    	
Principal
    	
 
    	
Title:
    	
Associate   Principal
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
BNP PARIBAS
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Xavier Venereau
    	
 
    	
By:
    	
/s/   O. Warnan
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier   Venereau
    	
 
    	
Name:
    	
Olivier   Warnan
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    	
Director-BNP   Paribas
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    
	
CRÉDIT AGRICOLE CORPORATE AND   INVESTMENT BANK
    
	
 
    	
 
    
	
By:
    	
/s/   L. Renard
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
L.   Renard
    	
 
    	
Name:
    
	
Title:
    	
Associate   Director
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
HSBC BANK PLC
    
	
 
    	
 
    
	
By:
    	
/s/   William Stevens
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
William   Stevens
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    

 

 

	
SOCIÉTÉ GÉNÉRALE, LONDON BRANCH
    
	
 
    	
 
    
	
By:
    	
/s/   Marie-Aimée Bowy
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Marie-Aimée   Bowy
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
STANDARD CHARTERED BANK
    
	
 
    	
 
    
	
By:
    	
/s/   Andrew Bartlett
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Andrew   Bartlett
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    

 

 

SIGNATURES

 

	
Technical   Bank:
    	
 
    
	
 
    	
 
    
	
SOCIÉTÉ GÉNÉRALE, LONDON BRANCH as lead   technical bank
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Marie-Aimée Bowy
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Marie-Aimée   Bowy
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
CRÉDIT AGRICOLE CORPORATE AND   INVESTMENT BANK as co-technical bank
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   L. Renard
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
L.   Renard
    	
 
    	
Name:
    
	
Title:
    	
Associate   Director
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
HSBC BANK PLC as co-technical bank
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   William Stevens
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
William   Stevens
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    
					

 

 

SIGNATURES

 

	
Modelling   Bank
    	
 
    
	
 
    	
 
    
	
SOCIÉTÉ GÉNÉRALE, LONDON BRANCH as lead   modelling bank
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Marie-Aimée Bowy
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Marie-Aimée   Bowy
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
CRÉDIT AGRICOLE CORPORATE AND   INVESTMENT BANK as co-modelling bank
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   L. Renard
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
L.   Renard
    	
 
    	
Name:
    
	
Title:
    	
Associate   Director
    	
 
    	
Title:
    

 

 

SIGNATURES

 

	
Onshore   Account Bank
    	
 
    
	
 
    	
 
    
	
STANDARD CHARTERED BANK
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Andrew Bartlett
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Andrew   Bartlett
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    

 

 

SIGNATURES

 

	
Offshore   Account Bank
    	
 
    
	
 
    	
 
    
	
HSBC BANK PLC
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   William Stevens
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
William   Stevens
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    

 

 

SIGNATURES

 

	
Facility   Agent
    	
 
    
	
 
    	
 
    
	
BNP PARIBAS
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Xavier Venereau
    	
 
    	
By:
    	
/s/   Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier   Venereau
    	
 
    	
Name:
    	
Olivier   Warnan
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    	
Director-BNP   Paribas
    

 

 

SIGNATURES

 

	
Documentation   Bank
    	
 
    
	
 
    	
 
    
	
HSBC BANK PLC
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   William Stevens
    	
 
    	
By:
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
William   Stevens
    	
 
    	
Name:
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    

 

 

SIGNATURES

 

	
Security   Agent
    	
 
    
	
 
    	
 
    
	
BNP PARIBAS
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Xavier Venereau
    	
 
    	
By:
    	
/s/   Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier   Venereau
    	
 
    	
Name:
    	
Olivier   Warnan
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    	
Director-BNP   Paribas
    

 

 

SIGNATURES

 

	
Intercreditor   Agent
    	
 
    
	
 
    	
 
    
	
BNP PARIBAS
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Xavier Venereau
    	
 
    	
By:
    	
/s/   Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier   Venereau
    	
 
    	
Name:
    	
Olivier   Warnan
    
	
Title:
    	
Managing   Director
    	
 
    	
Title:
    	
Director-BNP   ParibasExhibit 10.20

 

EXECUTION VERSION

 

DATED 28 March 2011

 

BNP PARIBAS

as Facility Agent

 

The Lenders

 

The Hedging Counterparties

 

KOSMOS ENERGY FINANCE INTERNATIONAL

as Borrower

 

KOSMOS ENERGY FINANCE INTERNATIONAL, KOSMOS ENERGY OPERATING, KOSMOS ENERGY INTERNATIONAL, KOSMOS ENERGY DEVELOPMENT AND KOSMOS ENERGY GHANA HC

as Original Obligors

 

BNP PARIBAS

acting as Security Agent

 

and others

 

 

INTERCREDITOR AGREEMENT

 

 

Slaughter and May
 One Bunhill Row
 London EC1Y 8YY

 

(Ref: SRG/JKW)

 

507050046

 

 

CONTENTS

 

	
Clause
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS   AND INTERPRETATION
    	
1
    
	
 
    	
 
    	
 
    
	
2.
    	
RANKING   AND PRIORITY
    	
13
    
	
 
    	
 
    	
 
    
	
3.
    	
LENDERS   AND LENDER LIABILITIES
    	
13
    
	
 
    	
 
    	
 
    
	
4.
    	
HEDGE   COUNTERPARTIES AND HEDGING LIABILITIES
    	
17
    
	
 
    	
 
    	
 
    
	
5.
    	
EFFECT   OF INSOLVENCY EVENT
    	
21
    
	
 
    	
 
    	
 
    
	
6.
    	
TURNOVER   OF RECEIPTS
    	
23
    
	
 
    	
 
    	
 
    
	
7.
    	
REDISTRIBUTION
    	
25
    
	
 
    	
 
    	
 
    
	
8.
    	
ENFORCEMENT   OF TRANSACTION SECURITY
    	
26
    
	
 
    	
 
    	
 
    
	
9.
    	
DISPOSALS
    	
27
    
	
 
    	
 
    	
 
    
	
10.
    	
APPLICATION   OF PROCEEDS
    	
31
    
	
 
    	
 
    	
 
    
	
11.
    	
THE   SECURITY AGENT
    	
34
    
	
 
    	
 
    	
 
    
	
12.
    	
CHANGE   OF SECURITY AGENT AND DELEGATION
    	
41
    
	
 
    	
 
    	
 
    
	
13.
    	
CHANGES   TO THE PARTIES
    	
43
    
	
 
    	
 
    	
 
    
	
14.
    	
COSTS   AND EXPENSES
    	
45
    
	
 
    	
 
    	
 
    
	
15.
    	
INDEMNITIES
    	
46
    
	
 
    	
 
    	
 
    
	
16.
    	
INFORMATION
    	
48
    
	
 
    	
 
    	
 
    
	
17.
    	
NOTICES
    	
49
    
	
 
    	
 
    	
 
    
	
18.
    	
PRESERVATION
    	
52
    
	
 
    	
 
    	
 
    
	
19.
    	
CONSENTS,   AMENDMENTS AND OVERRIDE
    	
53
    
	
 
    	
 
    	
 
    
	
20.
    	
COUNTERPARTS
    	
57
    
	
 
    	
 
    	
 
    
	
21.
    	
GOVERNING   LAW
    	
57
    
	
 
    	
 
    	
 
    
	
22.
    	
ENFORCEMENT
    	
57
    
	
 
    	
 
    	
 
    
	
Schedule 1 FORM OF OBLIGOR ACCESSION DEED
    	
59
    
				

 

 

	
Schedule 2 FORM OF CREDITOR/AGENT ACCESSION   UNDERTAKING
    	
62
    

 

 

THIS AGREEMENT is dated 28 March 2011 and made between:

 

(1)           BNP PARIBAS as Facility Agent;

 

(2)           THE FINANCIAL INSTITUTIONS named on the signing pages as Lenders;

 

(3)           ABSA CAPITAL, A DIVISION OF ABSA BANK LIMITED, BNP PARIBAS, CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK, HSBC BANK PLC, SOCIÉTÉ GÉNÉRALE LONDON BRANCH AND STANDARD CHARTERED BANK as mandated lead arrangers of the Facilities (in such capacity, the “Arrangers”);

 

(4)           THE FINANCIAL INSTITUTIONS named on the signing pages as Hedging Counterparties;

 

(5)           KOSMOS ENERGY FINANCE INTERNATIONAL (incorporated under the laws of the Cayman Islands with registered number 253656) (the “Borrower”);

 

(6)           KOSMOS ENERGY INTERNATIONAL (incorporated under the laws of the Cayman Islands with registered number 218274) (“KEI”);

 

(7)           KOSMOS ENERGY OPERATING (incorporated under the laws of the Cayman Islands with registered number 231417) (“KEO”);

 

(8)           KOSMOS ENERGY GHANA HC (incorporated under the laws of the Cayman Islands with registration number 135710) (“Kosmos”);

 

(9)           KOSMOS ENERGY DEVELOPMENT (incorporated under the laws of the Cayman Islands with registered number 225879) (“KED”);

 

(10)         BNP PARIBAS as security agent for the Secured Parties (the “Security Agent”).

 

IT IS AGREED as follows:

 

1.            DEFINITIONS AND INTERPRETATION

 

1.1          Definitions

 

In this Agreement, unless the context otherwise requires or as otherwise defined in this Agreement, words and expressions defined in clause 1.1 of the facility agreement (the “Facility Agreement”) dated the date of this Agreement made between, among others, the parties to this Agreement, have the same meanings when used herein.  In addition:

 

“1992 ISDA Master Agreement” means the Master Agreement (Multicurrency Cross Border) as published by the International Swaps and Derivatives Association, Inc.

 

“2002 ISDA Master Agreement” means the 2002 Master Agreement as published by the International Swaps and Derivatives Association, Inc.

 

“Acceleration Event” means the Facility Agent exercising any of its rights under clause 29.17 (Acceleration - all Lenders) of the Facility Agreement.

 

 

“Borrowing Liabilities” means, in relation to an Obligor, the liabilities (not being Guarantee Liabilities) it may have as a principal debtor to a Creditor, or Obligor in respect of Financial Indebtedness arising under the Finance Documents (whether incurred solely or jointly).

 

“Charged Property” means all of the assets which from time to time are, or are expressed to be, the subject of the Transaction Security.

 

“Close Out Netting” means:

 

(a)           in respect of a Hedging Agreement based on a 1992 ISDA Master Agreement, any step involved in determining the amount payable in respect of an Early Termination Date (as defined in the 1992 ISDA Master Agreement) under section 6(e) of the 1992 ISDA Master Agreement before the application of any subsequent Set off (as defined in the 1992 ISDA Master Agreement);

 

(b)           in respect of a Hedging Agreement based on a 2002 ISDA Master Agreement, any step involved in determining an Early Termination Amount (as defined in the 2002 ISDA Master Agreement) under section 6(e) of the 2002 ISDA Master Agreement; and

 

(c)           in respect of a Hedging Agreement not based on an ISDA Master Agreement, any step involved on a termination of the Hedging Transactions under that Hedging Agreement pursuant to any provision of that Hedging Agreement which has a similar effect to either provision referenced in paragraph (a) and paragraph (b) above.

 

“Common Assurance” means any guarantee, indemnity or other assurance against loss in respect of any of the Liabilities, the benefit of which (however conferred) is, to the extent legally possible, given to all the Secured Parties in respect of their Liabilities.

 

“Consent” means any consent, approval, release or waiver or agreement to any amendment.

 

“Creditor/Agent Accession Undertaking” means:

 

(a)           an undertaking substantially in the form set out in Schedule 2 (Form of Creditor/Agent Accession Undertaking); or

 

(b)           a Transfer Certificate.

 

“Creditors” means the Lenders and the Hedging Counterparties.

 

“Credit Participation” means, in relation to a Creditor, the aggregate of:

 

(a)           all amounts actually and contingently accrued to it under the Facility Agreements and the Facility Agreement, if any; and

 

(b)           in respect of any Hedging Transaction of that Creditor under any Hedging Agreement that has, as of the date the calculation is made, been terminated or

 

2

 

closed out in accordance with the terms of this Agreement, the amount, if any, payable to it under any Hedging Agreement in respect of that termination or close out as of the date of termination or close out (and before taking into account any interest accrued on that amount since the date of termination or close out) to the extent that amount is unpaid (that amount to be certified by the relevant Creditor and as calculated in accordance with the relevant Hedging Agreement); and

 

(c)           after the Lender Discharge Date or following a Distress Event only, in respect of any Hedging Transaction of that Creditor under any Hedging Agreement that has, as of the date the calculation is made, not been terminated or closed out:

 

(i)            if the relevant Hedging Agreement is based on an ISDA Master Agreement the amount, if any, which would be payable to it under that Hedging Agreement in respect of that Hedging Transaction, if the date on which the calculation is made was deemed to be an Early Termination Date (as defined in the relevant ISDA Master Agreement) for which the relevant Obligor is the Defaulting Party (as defined in the relevant ISDA Master Agreement); or

 

(ii)           if the relevant Hedging Agreement is not based on an ISDA Master Agreement, the amount, if any, which would be payable to it under that Hedging Agreement in respect of that Hedging Transaction, if the date on which the calculation is made was deemed to be the date on which an event similar in meaning and effect (under that Hedging Agreement) to an Early Termination Date (as defined in any ISDA Master Agreement) occurred under that Hedging Agreement for which the relevant Obligor is in a position similar in meaning and effect (under that Hedging Agreement) to that of a Defaulting Party (under and as defined in the same ISDA Master Agreement),

 

that amount, in each case, to be certified by the relevant Creditor and as calculated in accordance with the relevant Hedging Agreement.

 

“Debt Purchase Transaction” means, in relation to a person, a transaction where such person:

 

(a)           purchases by way of assignment or transfer;

 

(b)           enters into any sub-participation in respect of; or

 

(c)           enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of,

 

any Commitment or amount outstanding under the Facility Agreements.

 

“Delegate” means any delegate, agent, attorney or co trustee appointed by the Security Agent.

 

“Disposal Proceeds” has the meaning given to that term in Clause 9 (Disposals).

 

3

 

“Distress Event” means any of:

 

(a)           an Acceleration Event; or

 

(b)           the enforcement of any Transaction Security in accordance with the terms of the Security Documents.

 

“Distressed Disposal” means a disposal of an asset of a member of the Group or KEH which is:

 

(a)           being effected at the request of the Majority Lenders in circumstances where the Transaction Security has become enforceable in accordance with the terms of the Finance Documents;

 

(b)           being effected by enforcement of the Transaction Security in accordance with the terms of the Security Documents; or

 

(c)           being effected, after the occurrence of a Distress Event, by a member of the Group or KEH to a person or persons which is not a member of the Group.

 

“Dollar Currency Amount” means, in relation to an amount, that amount converted (to the extent not already denominated in USD) into USD at the Security Agent’s Spot Rate of Exchange on the Business Day prior to the relevant calculation.

 

“Enforcement Action” means:

 

(a)           in relation to any Liabilities:

 

(i)            the acceleration of any Liabilities or the making of any declaration that any Liabilities are prematurely due and payable (other than as a result of it becoming unlawful for a Lender to perform its obligations under, or of any voluntary or mandatory prepayment arising under, the Finance Documents);

 

(ii)           the making of any declaration that any Liabilities are payable on demand;

 

(iii)          the making of a demand in relation to a Liability that is payable on demand;

 

(iv)          the making of any demand against any member of the Group in relation to any Guarantee Liabilities of that member of the Group;

 

(v)           the exercise of any right to require any member of the Group to acquire any Liability (including exercising any put or call option against any member of the Group for the redemption or purchase of any Liability);

 

(vi)          the exercise of any right of set off, account combination or payment netting against any member of the Group in respect of any Liabilities other than the exercise of any such right:

 

4

 

(A)          as Close Out Netting by a Hedging Counterparty;

 

(B)          as Payment Netting by a Hedging Counterparty;

 

(C)          as Inter-Hedging Agreement Netting by a Hedging Counterparty; or

 

(D)          which is otherwise expressly permitted under the Facility Agreement to the extent that the exercise of that right gives effect to a Permitted Payment; and

 

(vii)         the suing for, commencing or joining of any legal or arbitration proceedings against any member of the Group to recover any Liabilities;

 

(b)           the premature termination or close-out of any Hedging Transaction under any Hedging Agreement;

 

(c)           the taking of any steps to enforce or require the enforcement of any Transaction Security (including the crystallisation of any floating charge forming part of the Transaction Security);

 

(d)           the entering into of any composition, compromise, assignment or arrangement with any member of the Group or KEH which owes any Liabilities, or has given any Security, guarantee or indemnity or other assurance against loss in respect of the Liabilities (other than any action permitted under Clause 13 (Changes to the Parties)); or

 

(e)           the petitioning, applying or voting for, or the taking of any steps (including the appointment of any liquidator, provisional liquidator, receiver, administrator or similar officer) in relation to, the winding up, dissolution, administration, reorganisation merger or consolidation of any member of the Group which owes any Liabilities, or has given any Security, guarantee, indemnity or other assurance against loss in respect of any of the Liabilities, or any of such member of the Group’s assets or any suspension of payments or moratorium of any indebtedness of any such member of the Group, or any analogous procedure or step in any jurisdiction

 

except that the following shall not constitute Enforcement Action:

 

(i)            the taking of any action falling within paragraphs (a)(vii) or (e) above which is necessary (but only to the extent necessary) to preserve the validity, existence or priority of claims in respect of Liabilities, including the registration of such claims before any court or governmental authority and the bringing, supporting or joining of proceedings to prevent any loss of the right to bring, support or join proceedings by reason of applicable limitation periods; or

 

(ii)           a Hedging Counterparty or LC Issuing Bank bringing legal proceedings against any person solely for the purpose of:

 

5

 

(A)          obtaining injunctive relief (or any analogous remedy outside England and Wales) to restrain any actual or putative breach of any Finance Document to which it is party;

 

(B)          obtaining specific performance (other than specific performance of an obligation to make a payment) with no claim for damages; or

 

(C)          requesting judicial interpretation of any provision of any Finance Document to which it is party with no claim for damages.

 

“Facility Agent Liabilities” means all present and future liabilities and obligations, actual and contingent, of any Obligor to the Facility Agent under or in connection with the Finance Documents.

 

“Facility Agreement” has the meaning ascribed above to such term.

 

“Final Discharge Date” means the first date on which all Liabilities have been fully and finally discharged, whether or not as the result of an Enforcement Action, and the Creditors are under no further obligation to provide financial accommodation to any of the Obligors under the Finance Documents.

 

“Guarantee Liabilities” means, in relation to a member of the Group, the liabilities under the Finance Documents (present or future, actual or contingent and whether incurred solely or jointly) it may have to a Creditor or Obligor as or as a result of its being a guarantor or surety (including, without limitation, liabilities arising by way of guarantee, indemnity, contribution or subrogation and in particular any guarantee or indemnity arising under or in respect of the Finance Documents).

 

“Hedging Counterparty” means:

 

(a)           any person which is named on the signing pages as a Hedging Counterparty and;

 

(b)           any person which becomes a Party as a Hedging Counterparty pursuant to Clause 13.5 (Creditor/Agent Accession Undertaking).

 

“Hedging Liabilities” means the Liabilities owed by any Obligor to the Hedging Counterparties under or in connection with the Hedging Agreements.

 

“Insolvency Event” means, in relation to any member of the Group:

 

(a)           any resolution is passed or order made for the winding up, dissolution or administration of that member of the Group or a moratorium is declared in relation to any indebtedness of that member of the Group;

 

(b)           any composition, compromise, assignment or arrangement is made with any of its creditors;

 

6

 

(c)           the appointment of any liquidator, provisional liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of that member of the Group or any of its assets; or

 

(d)           any analogous procedure or step is taken in any jurisdiction.

 

“Instructing Group” means at any time the Majority Creditors;

 

“Intercreditor Amendment” means any amendment or waiver which is subject to Clause 19 (Consents, Amendments and Override).

 

“Inter-Hedging Agreement Netting” means the exercise of any right of set-off, account combination, close-out netting or payment netting (whether arising out of a cross agreement netting agreement or otherwise) by a Hedging Counterparty against liabilities owed to an Obligor by that Hedging Counterparty under a Hedging Agreement in respect of Hedging Liabilities owed to that Hedging Counterparty by that Obligor under another Hedging Agreement.

 

“KEH” means Kosmos Energy Holdings, a company incorporated under the laws of the Cayman Islands with registered number 133483 and having its registered office at PO Box 32332, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1-1209, Cayman Islands.

 

“KEI” means Kosmos Energy International a company incorporated under the laws of the Cayman Islands with registered number 218274 and having its registered office at P.O. Box 32322, 4th Floor, Century Yard, Cricket Square, Elgin Avenue, George Town, Grand Cayman KY1-1209, Cayman Islands.

 

“ISDA Master Agreement” means the 1992 ISDA Master Agreement or the 2002 ISDA Master Agreement, as the case may be.

 

“LC Cash Cover” has the meaning given to the term “cash collateral” in clause 7.1(B)(viii) of the Facility Agreement.

 

“Lender Discharge Date” means the first date on which all Lender Liabilities have been fully and finally discharged to the satisfaction of the Facility Agent, whether or not as the result of an enforcement, and the Lenders are under no further obligation to provide financial accommodation to any of the Obligors under any of the Finance Documents.

 

“Lender Liabilities” means the Liabilities owed by the Obligors to the Lenders under the Finance Documents (other than the Hedging Agreements).

 

“Lender Refinancing” means a refinancing (or repayment) and cancellation in full of the Lender Liabilities.

 

“Liabilities” means all present and future liabilities and obligations at any time of any Obligor to any Creditor under the Finance Documents, both actual and contingent and whether incurred solely or jointly or in any other capacity together with any of the following matters relating to or arising in respect of those liabilities and obligations:

 

7

 

(a)           any refinancing, novation, deferral or extension;

 

(b)           any claim for breach of representation, warranty or undertaking or on an event of default or under any indemnity given under or in connection with any document or agreement evidencing or constituting any other liability or obligation falling within this definition;

 

(c)           any claim for damages or restitution; and

 

(d)           any claim as a result of any recovery by any Obligor of a Payment on the grounds of preference or otherwise,

 

and any amounts which would be included in any of the above but for any discharge, non provability, unenforceability or non allowance of those amounts in any insolvency or other proceedings.

 

“Liabilities Acquisition” means, in relation to a person and to any Liabilities, a transaction where that person:

 

(a)           purchases by way of assignment or transfer;

 

(b)           enters into any sub-participation in respect of; or

 

(c)           enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of,

 

the rights and benefits in respect of those Liabilities.

 

“Majority Creditors” means, at any time, prior to a Distress Event occurring, the Majority Lenders and thereafter those Creditors whose Credit Participations at that time aggregate more than 662/3 per cent. of the total Credit Participations at that time.

 

“Mandatory Prepayment” means a mandatory prepayment of any of the Lender Liabilities pursuant to clause 10 (Prepayment and Cancellation) of the Facility Agreement

 

“Mandatory Prepayment Waiver” means any amendment or waiver of the requirement to make a Mandatory Prepayment.

 

“Non-Distressed Disposal” has the meaning given to such term in Clause 9.1 of this Agreement.

 

“Obligor” means each Original Obligor and any person which becomes a Party as an Obligor in accordance with the terms of Clause 13 (Changes to the Parties).

 

“Obligor Accession Deed” means a deed substantially in the form set out in Schedule 1 (Form of Obligor Accession Deed).

 

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“Obligor Liabilities” means, in relation to any Obligor, any liabilities owed to any Obligor (whether actual or contingent and whether incurred solely or jointly) by that Obligor.

 

“Original Obligors” means the Borrower, KEO, KEI, KED and Kosmos.

 

“Party” means a party to this Agreement.

 

“Payment” means, in respect of any Liabilities (or any other liabilities or obligations), a payment, prepayment, repayment, redemption, defeasance or discharge of those Liabilities (or other liabilities or obligations).

 

“Payment Default” means an Event of Default under clause 29.1 (Non payment) of the Facility Agreement relating to amounts payable to the Lenders under the Finance Documents.

 

“Payment Netting” means:

 

(a)           in respect of a Hedging Agreement or a Hedging Ancillary Document based on an ISDA Master Agreement, netting under section 2(c) of the relevant ISDA Master Agreement; and

 

(b)           in respect of a Hedging Agreement or a Hedging Ancillary Document not based on an ISDA Master Agreement, netting pursuant to any provision of that Hedging Agreement or a Hedging Ancillary Document which has a similar effect to the provision referenced in paragraph (a) above.

 

“Permitted Hedge Payments” means the Payments permitted by Clause 4.3 (Permitted Payments:  Hedging Liabilities).

 

“Permitted Lender Payments” means the Payments permitted by Clause 3.1 (Payment of Lender Liabilities).

 

“Permitted Payment” means a Permitted Hedge Payment or a Permitted Lender Payment.

 

“Receiver” means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.

 

“Recoveries” has the meaning given to that term in Clause 10.1 (Order of Application).

 

“Relevant LC Issuing Bank” means, in respect of any LC Cash Cover, the LC Issuing Bank (if any) for which that LC Cash Cover is provided.

 

“Relevant Liabilities” means:

 

(a)           in the case of a Creditor:

 

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(i)            the Liabilities owed to Creditors ranking (in accordance with the terms of this Agreement) pari passu with or in priority to that Creditor (as the case may be) together with all Facility Agent Liabilities; and

 

(ii)           all present and future liabilities and obligations, actual and contingent, of the Obligors to the Security Agent; and

 

(b)           in the case of an Obligor, the Liabilities owed to the Creditors together with the Facility Agent Liabilities and all present and future liabilities and obligations, actual and contingent, of the Obligors to the Security Agent.

 

“Retiring Security Agent” has the meaning given to that term in Clause 12 (Change of Security Agent and Delegation).

 

“Secured Obligations” means all the Liabilities and all other present and future obligations at any time due, owing or incurred by any member of the Group to any Secured Party under the Finance Documents, both actual and contingent and whether incurred solely or jointly and as principal or surety or in any other capacity.

 

“Secured Parties” means the Security Agent, any Receiver or Delegate and each of the Agents, the Arrangers and the Creditors from time to time but, in the case of each Agent, Arranger or Creditor, only if it is a party to this Agreement or (in the case of an Agent or a Creditor) has acceded to this Agreement, in the appropriate capacity, pursuant to Clause 13.5 (Creditor/Agent Accession Undertaking).

 

“Security” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

 

“Security Documents” means:

 

(a)           each of the Security Documents;

 

(b)           any other document entered into at any time by any of the Obligors creating any guarantee, indemnity, Security or other assurance against financial loss in favour of any of the Secured Parties as security for any of the Secured Obligations; and

 

(c)           any Security granted under any covenant for further assurance in any of the documents set out in paragraphs (a) and (b) above.

 

“Security Property” means:

 

(a)           the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Secured Parties and all proceeds of that Transaction Security;

 

(b)           all obligations expressed to be undertaken by an Obligor to pay amounts in respect of the Liabilities to the Security Agent as trustee for the Secured Parties and secured by the Transaction Security together with all representations and

 

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warranties expressed to be given by an Obligor in favour of the Security Agent as trustee for the Secured Parties;

 

(c)           the Security Agent’s interest in any trust fund created pursuant to Clause 6 (Turnover of Receipts);

 

(d)           any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties.

 

“Security Agent’s Spot Rate of Exchange” means, in respect of the conversion of one currency (the “First Currency”) into another currency (the “Second Currency”) the Security Agent’s spot rate of exchange for the purchase of the Second Currency with the First Currency in the London foreign exchange market at or about 11:00 am (London time) on a particular day, which shall be notified by the Security Agent in accordance with paragraph 11.6(D) (Security Agent’s obligations).

 

“Sponsor Affiliate” means each of Blackstone Capital Partners (Cayman) IV LP, Warburg Pincus Private Equity VIII, L.P. and Warburg Pincus International Partners, L.P. (each a “Sponsor Management Company”), each of their Affiliates, any trust of which a Sponsor Management Company or any of their Affiliates is a trustee, any partnership of which a Sponsor Management Company or any of their Affiliates is a partner and any trust, fund or other entity which is managed by, or is under the control of, a Sponsor Management Company or any of their Affiliates provided that any such trust, fund or other entity which has been established for at least 6 months solely for the purpose of making, purchasing or investing in loans or debt securities and which is managed or controlled independently from all other trusts, funds or other entities managed or controlled by a Sponsor Management Company or any of their Affiliates which have been established for the primary or main purpose of investing in the share capital of companies shall not constitute a Sponsor Affiliate.

 

“Transaction Security” means the Security created or evidenced or expressed to be created or evidenced under or pursuant to the Security Documents.

 

1.2          Construction

 

(A)          Unless a contrary indication appears, the rules of construction and interpretation set out in clause 1.2 (Construction of particular terms) and clause 1.3 (Interpretation) of the Facility Agreement shall apply to this Agreement.  In addition a reference in this Agreement to:

 

(i)            any “Agent”, “Arranger”, “Borrower”, “Creditor”, “Hedging Counterparty”, “LC Issuing Bank”, “KEH”, “KEI”, “Obligor”, “Party”, “Security Agent”, “Facility Agent”, “Arranger” or “Lender” shall, subject to paragraph (iii) below, be construed to be a reference to it in its capacity as such and not in any other capacity;

 

(ii)           any “Agent”, “Arranger”, “Creditor”, “Obligor”, “Hedging Counterparty”, “LC Issuing Bank”, any “Party”, or the “Security

 

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Agent” or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with this Agreement;

 

(iii)          any reference to a Lender includes a reference to such Lender in its capacity as LC Issuing Bank, Technical Bank or Account Bank;

 

(iv)          “assets” includes present and future properties, revenues and rights of every description;

 

(v)           a “Finance Document” or any other agreement or instrument is (other than a reference to a “Finance Document” or any other agreement or instrument in “original form”) a reference to that Finance Document, or other agreement or instrument, as amended, novated, supplemented, extended or restated as permitted by this Agreement;

 

(vi)          “enforcing” (or any derivation) the Transaction Security shall include the appointment of an administrator of an Obligor by the Security Agent;

 

(vii)         “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;

 

(viii)        the “original form” of a “Finance Document” or any other agreement or instrument is a reference to that Finance Document, agreement or instrument as originally entered into;

 

(ix)          a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

 

(x)           “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 of any regulatory, self regulatory or other authority or organisation; and

 

(xi)          a provision of law is a reference to that provision as amended or re enacted.

 

(B)           Section, Clause and Schedule headings are for ease of reference only.

 

(C)           A Default is “continuing” if it has not been remedied or waived.

 

1.3          Third Party Rights

 

(A)          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

 

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(the “Third Parties Rights Act”) to enforce or to enjoy the benefit of any term of this Agreement.

 

(B)           Notwithstanding any term of this Agreement, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

(C)           Any Receiver, Delegate or any other person described in Clause 11.9 (No Proceedings) may, subject to this Clause 1.3 (Third Party Rights) and the Third Parties Rights Act, rely on any Clause of this Agreement which expressly confers rights on it.

 

2.            RANKING AND PRIORITY

 

2.1          Creditor Liabilities

 

Each of the Parties agrees that the Lender Liabilities and the Hedging Liabilities owed by the Obligors to the Creditors shall rank in right and priority of payment pari passu and without any preference between them.

 

2.2          Transaction Security

 

Each of the Parties agrees that the Transaction Security shall rank and secure the Lender Liabilities and the Hedging Liabilities pari passu and without any preference between them (but only to the extent that such Transaction Security is expressed to secure those Liabilities).

 

3.            LENDERS AND LENDER LIABILITIES

 

3.1          Payment of Lender Liabilities

 

The Obligors may make Payments of the Lender Liabilities at any time in accordance with the Finance Documents.

 

3.2          Amendments and Waivers:  Lenders

 

(A)          The Majority Lenders may amend or waive the terms of the Finance Documents in accordance with the terms of the Facility Agreement at any time.

 

(B)           The Majority Lenders may not amend or waive the terms of the Finance Documents if the amendment or waiver is, in relation to the original form of the Finance Documents:

 

(i)            an amendment or waiver constituting an increase in the Margin, or the inclusion of an additional margin, relating to the Lender Liabilities other than such an increase or addition which is:

 

(a)           contemplated by the original form of the Finance Documents; or

 

(b)           not so contemplated but which is made pursuant to an agreement with the relevant Obligors prior to completion of

 

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primary syndication of the Senior Facilities and is intended to enhance the prospects of a successful syndication of the Senior Facilities;

 

(ii)           an amendment or waiver constituting an increase in, or addition of, any fees or commission other than such an increase or addition which is:

 

(a)           contemplated by the original form of the Finance Documents; or

 

(b)           not so contemplated but which is made pursuant to an agreement with the relevant Obligors prior to completion of primary syndication of the Senior Facilities and is intended to enhance the prospects of a successful syndication of the Senior Facilities; or

 

(iii)          an amendment or waiver which results in any deferral of any scheduled repayment of the Lender Liabilities to a date more than 150 days after the Final Maturity Date for the Facilities.

 

(C)           Without prejudice to Clause 9.2 (Distressed Disposals), the Senior Lenders may not:

 

(i)            amend or waive the terms of the Finance Documents if the amendment or waiver:

 

(a)           would have the effect of changing, or relates to, the nature or scope of the guarantee and indemnity granted under clause 25 (Guarantee and Indemnity) of the Facility Agreement; or

 

(b)           relates to the release of any guarantee and indemnity granted under clause 25 (Guarantee and Indemnity) of the Facility Agreement unless expressly envisaged by the original form of a Finance Document or relating to a sale or disposal of an asset which is a Non-Distressed Disposal; or

 

(ii)           consent to the resignation of an Obligor which has granted a guarantee and indemnity under clause 25 (Guarantee and Indemnity) of the Facility Agreement unless each Hedging Counterparty has notified the Security Agent that no payment is due to it from that member of the Group under clause 25 (Guarantee and Indemnity) of the Facility Agreement,

 

unless the prior consent of the Hedging Counterparties is obtained.

 

3.3          Designation of Finance Documents

 

The Facility Agent and Kosmos shall not designate a document a “Finance Document” without the prior consent of the Hedging Counterparties if the terms of that document effect a change which would otherwise require the consent of the Hedging Counterparties under Clause 3.2 (Amendments and Waivers: Lenders).

 

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3.4          Security:  Lenders

 

Other than as set out in Clause 3.5 (Security: LC Issuing Banks), the Lenders may take, accept or receive the benefit of:

 

(A)          any Security in respect of the Lender Liabilities in addition to the Transaction Security if (except for any Security, permitted under Clause 3.4(B)(iii) (Security:  LC Issuing Banks)) and to the extent legally possible, at the same time it is also offered either:

 

(i)            to the Security Agent as trustee for the other Secured Parties in respect of their Liabilities; or

 

(ii)           in the case of any jurisdiction in which effective Security cannot be granted in favour of the Security Agent as trustee for the Secured Parties:

 

(a)           to the other Secured Parties in respect of their Liabilities; or

 

(b)           to the Security Agent under a parallel debt structure for the benefit of the other Secured Parties

 

and ranks in the same order of priority as that contemplated in Clause 2.2 (Transaction Security); and

 

(B)           any guarantee, indemnity or other assurance against loss in respect of the Lender Liabilities in addition to those in:

 

(i)            the Facility Agreement;

 

(ii)           this Agreement; or

 

(iii)          any Common Assurance,

 

if (except for any guarantee, indemnity or other assurance against loss permitted under Clause 3.5 (Security: LC Issuing Banks)) and to the extent legally possible, at the same time it is also offered to the other Secured Parties in respect of their Liabilities and ranks in the same order of priority as that contemplated in Clause 2 (Ranking and Priority).

 

3.5          Security:  LC Issuing Banks

 

No LC Issuing Bank will, unless the prior consent of the Majority Creditors is obtained, take, accept or receive from any member of the Group or KEH the benefit of any Security, guarantee, indemnity or other assurance against loss in respect of any of the Liabilities owed to it other than:

 

(A)          the Transaction Security;

 

(B)           each guarantee, indemnity or other assurance against loss contained in:

 

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(i)            the Facility Agreement;

 

(ii)           this Agreement; or

 

(iii)          any Common Assurance;

 

(C)           indemnities and assurances against loss contained in any ancillary documents no greater in extent than any of those referred to in paragraph (B) above; or

 

(D)          any LC Cash Cover or Cash Deposit permitted under the Facility Agreement for any Letter of Credit issued by an LC Issuing Bank.

 

3.6          Restriction on Enforcement:  LC Issuing Banks

 

Subject to Clause 3.7 (Permitted Enforcement: LC Issuing Banks), so long as any of the Liabilities (other than any Liabilities owed to the Issuing Banks) are or may be outstanding, none of the Issuing Banks shall be entitled to take any Enforcement Action in respect of any of the Liabilities owed to it.

 

3.7          Permitted Enforcement:  LC Issuing Banks

 

The LC Issuing Banks may take Enforcement Action if:

 

(A)          at the same time as, or prior to, that action, Enforcement Action has been taken in respect of the Lender Liabilities (excluding the Liabilities owing to the LC Issuing Banks), in which case the LC Issuing Banks may take the same Enforcement Action as has been taken in respect of those Lender Liabilities;

 

(B)           that action is contemplated by clause 8 of the Facility Agreement (Letters of Credit - General Provisions) or Clause 3.5 (Security:  LC Issuing Banks);

 

(C)           that Enforcement Action is taken in respect of LC Cash Cover which has been provided in accordance with the Facility Agreements;

 

(D)          at the same time as or prior to, that action, the consent of the Majority Creditors to that Enforcement Action is obtained; or

 

(E)           an Insolvency Event has occurred in relation to any Obligor or KEI, in which case after the occurrence of that Insolvency Event, each LC Issuing Bank shall be entitled (if it has not already done so) to exercise any right it may otherwise have in respect of that Obligor to:

 

(i)            accelerate any of that Obligor’s Lender Liabilities or declare them prematurely due and payable on demand;

 

(ii)           make a demand under any guarantee, indemnity or other assurance against loss given by that Obligor in respect of any Lender Liabilities;

 

(iii)          exercise any right of set off or take or receive any Payment in respect of any Lender Liabilities of that Obligor; or

 

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(iv)                             claim and prove in the liquidation of that Obligor for the Lender Liabilities owing to it.

 

4.                                     HEDGE COUNTERPARTIES AND HEDGING LIABILITIES

 

4.1                              Identity of Hedging Counterparties

 

No person providing hedging arrangements to any Obligor shall be entitled to share in any of the Transaction Security or in the benefit of any guarantee or indemnity in respect of any of the liabilities arising in relation to those hedging arrangements nor shall those liabilities be treated as Hedging Liabilities unless that person is or becomes a party to this Agreement as a Hedging Counterparty.

 

4.2                              Restriction on Payment:  Hedging Liabilities

 

The Obligors shall not make any Payment of the Hedging Liabilities at any time unless:

 

(A)                              that Payment is permitted under Clause 4.3 (Permitted Payments:  Hedging Liabilities); or

 

(B)                                the taking or receipt of that Payment is permitted under paragraph 4.9(C) 
  (Permitted Enforcement:  Hedging Counterparties).

 

4.3                              Permitted Payments:  Hedging Liabilities

 

The Obligors may make Payments to any Hedging Counterparty in respect of the Hedging Liabilities then due to that Hedging Counterparty under any Hedging Agreement in accordance with the terms of that Hedging Agreement and clause 21.2 (Withdrawals — No Default Outstanding) of the Facility Agreement:

 

4.4                              Payment obligations continue

 

No Obligor shall be released from the liability to make any Payment (including of default interest, which shall continue to accrue) under any Finance Document by the operation of Clauses 4.2 (Restriction on Payment:  Hedging Liabilities).

 

4.5                              No acquisition of Hedging Liabilities

 

The Obligors shall not, and shall procure that no other member of the Group will:

 

(A)                              enter into any Liabilities Acquisition; or

 

(B)                                beneficially own all or any part of the share capital of a company that is party to a Liabilities Acquisition,

 

in respect of any of the Hedging Liabilities unless the prior consent of the Majority Creditors is obtained.

 

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4.6                              Amendments and Waivers:  Hedging Agreements

 

(A)                              Subject to paragraph (B) below, the Hedging Counterparties may not, at any time, amend or waive any term of the Hedging Agreements.

 

(B)                                A Hedging Counterparty may amend or waive any term of a Hedging Agreement in accordance with the terms of that Hedging Agreement if:

 

(i)                                    that amendment or waiver does not breach another term of this Agreement; and

 

(ii)                                 that amendment or waiver would not result in a breach of any Finance Document.

 

4.7                              Security:  Hedging Counterparties

 

The Hedging Counterparties may not take, accept or receive the benefit of any Security, guarantee, indemnity or other assurance against loss from any member of the Group or KEH in respect of the Hedging Liabilities other than:

 

(A)                              the Transaction Security;

 

(B)                                any guarantee, indemnity or other assurance against loss contained in:

 

(i)                                    the Facility Agreement;

 

(ii)                                 this Agreement;

 

(iii)                              any Common Assurance; or

 

(iv)                             the relevant Hedging Agreement no greater in extent than any of those referred to in paragraphs (i) to (iii) above;

 

(C)                                as otherwise contemplated by Clause 3.3 (Security: Lenders); and

 

(D)                               the indemnities contained in the ISDA Master Agreements (in the case of a Hedging Agreement which is based on an ISDA Master Agreement) or any indemnities which are similar in meaning and effect to those indemnities (in the case of a Hedging Agreement which is not based on an ISDA Master Agreement).

 

4.8                              Restriction on Enforcement:  Hedging Counterparties

 

Subject to Clause 4.9 (Permitted Enforcement:  Hedging Counterparties) and Clause 4.10 (Required Enforcement:  Hedging Counterparties) and without prejudice to each Hedging Counterparty’s rights under Clauses 8.2 (Enforcement Instructions) and 8.3 (Manner of enforcement), the Hedging Counterparties shall not take any Enforcement Action in respect of any of the Hedging Liabilities or any of the Hedging Transactions under any of the Hedging Agreements at any time.

 

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4.9                              Permitted Enforcement:  Hedging Counterparties

 

(A)                              To the extent it is able to do so under the relevant Hedging Agreement, a Hedging Counterparty may terminate or close out in whole or in part any Hedging Transaction under that Hedging Agreement prior to its stated maturity:

 

(i)                                    if, prior to a Distress Event, Kosmos has certified to that Hedging Counterparty that that termination or close out would not result in a breach of any Finance Document;

 

(ii)                                 if a Distress Event has occurred;

 

(iii)                              if:

 

(a)                                 in relation to a Hedging Agreement which is based on the 1992 ISDA Master Agreement:

 

(1)                                 an Illegality or Tax Event or Tax Event Upon Merger (each as defined in the 1992 ISDA Master Agreement); or

 

(2)                                 an event similar in meaning and effect to a “Force Majeure Event” (as defined in paragraph (B) below),

 

has occurred in respect of that Hedging Agreement;

 

(b)                                in relation to a Hedging Agreement which is based on the 2002 ISDA Master Agreement, an Illegality or Tax Event, Tax Event Upon Merger or a Force Majeure Event (each as defined in the 2002 ISDA Master Agreement) has occurred in respect of that Hedging Agreement; or

 

(c)                                 in relation to a Hedging Agreement which is not based on an ISDA Master Agreement, any event similar in meaning and effect to an event described in paragraphs (A) or (B) above has occurred under and in respect of that Hedging Agreement;

 

(iv)                             if an Event of Default has occurred under either clause 29.6 (Insolvency) or clause 29.7 (Insolvency proceedings) of the Facility Agreement in relation to the Borrower;

 

(v)                                if the Majority Creditors give prior consent to that termination or close-out being made;

 

(vi)                             following a Lender Refinancing;

 

(vii)                          to the extent that that termination or close out is necessary to comply with any Finance Document; or

 

(viii)                       if the Final Discharge Date has occurred.

 

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(B)                                If the Borrower has defaulted on any Payment due under a Hedging Agreement (after allowing any applicable notice or grace periods) and the default has continued unwaived for more than 15 Business Days after notice of that default has been given to the Security Agent pursuant to paragraph 16.3(A) (Notification of prescribed events), the relevant Hedging Counterparty:

 

(i)                                    may, to the extent it is able to do so under the relevant Hedging Agreement, terminate or close out in whole or in part any Hedging Transaction under that Hedging Agreement; and

 

(ii)                                 until such time as the Security Agent has given notice to that Hedging Counterparty that the Transaction Security is being enforced (or that any formal steps are being taken to enforce the Transaction Security), shall be entitled to exercise any right it might otherwise have to sue for, commence or join legal or arbitration proceedings against any Obligor to recover any Hedging Liabilities due under that Hedging Agreement.

 

(C)                                After the occurrence of an Insolvency Event in relation to an Obligor or KEI, each Hedging Counterparty shall be entitled to exercise any right it may otherwise have in respect of that member of the Group to:

 

(i)                                    prematurely close out or terminate any Hedging Liabilities of that Obligor;

 

(ii)                                 make a demand under any guarantee, indemnity or other assurance against loss given by that Obligor in respect of any Hedging Liabilities;

 

(iii)                              exercise any right of set off or take or receive any Payment in respect of any Hedging Liabilities of that Obligor; or

 

(iv)                             claim and prove in the liquidation of that Obligor for the Hedging Liabilities owing to it.

 

4.10                       Required Enforcement:  Hedging Counterparties

 

(A)                              Subject to paragraph (B) below, a Hedging Counterparty shall promptly terminate or close out in full any Hedging Transaction under all or any of the Hedging Agreements to which it is party prior to their stated maturity, following:

 

(i)                                    the occurrence of an Acceleration Event and delivery to it of a notice from the Security Agent that that Acceleration Event has occurred; and

 

(ii)                                 delivery to it of a subsequent notice from the Security Agent (acting on the instructions of an Instructing Group) instructing it to do so.

 

(B)                                Paragraph (A) above shall not apply to the extent that that Acceleration Event occurred as a result of an arrangement made between any Obligor and any Creditor with the purpose of bringing about that Acceleration Event.

 

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(C)                                If a Hedging Counterparty is entitled to terminate or close-out any Hedging Transaction under paragraph 4.9(B) (Permitted Enforcement: Hedging Counterparties) (or would have been able to if that Hedging Counterparty had given the notice referred to in that paragraph) but has not terminated or closed out each such Hedging Transaction, that Hedging Counterparty shall promptly terminate or close-out in full each such Hedging Transaction following a request to do so by the Security Agent (acting on the instructions of an Instructing Group).

 

4.11                       Treatment of Payments due to Obligors on termination of Hedging Transactions

 

(A)                              If, on termination of any Hedging Transaction under any Hedging Agreement occurring after a Distress Event, a settlement amount or other amount (following the application of any Close Out Netting, Payment Netting or Inter-Hedging Agreement Netting in respect of that Hedging Agreement) falls due from a Hedging Counterparty to the relevant Obligor then that amount shall be paid by that Hedging Counterparty to the Security Agent, treated as the proceeds of enforcement of the Transaction Security and applied in accordance with the terms of this Agreement.

 

(B)                                The payment of that amount by the Hedging Counterparty to the Security Agent in accordance with paragraph (A) above shall discharge the Hedging Counterparty’s obligation to pay that amount to that Obligor.

 

5.                                     EFFECT OF INSOLVENCY EVENT

 

5.1                              LC Cash Cover

 

This Clause 5 is subject to Clause 10.3 (Treatment of LC Cash Cover).

 

5.2                              Payment of distributions

 

(A)                              After the occurrence of an Insolvency Event in relation to an Obligor, KEI or KEH, any Party entitled to receive a distribution out of the assets of that Obligor, KEI or KEH in respect of Liabilities owed to that Party shall, to the extent it is able to do so, direct the person responsible for the distribution of the assets of that Obligor, KEI or KEH to pay that distribution to the Security Agent until the Liabilities owing to the Secured Parties have been paid in full.

 

(B)                                The Security Agent shall apply distributions paid to it under paragraph (A) above in accordance with Clause 10 (Application of Proceeds).

 

5.3                              Set Off

 

(A)                              Subject to paragraph (B) below, to the extent that any Obligor’s, KEI’s or KEH’s Liabilities are discharged by way of set off (mandatory or otherwise) after the occurrence of an Insolvency Event in relation to that Obligor, KEI or KEH, any Creditor which benefited from that set off shall pay an amount equal to the amount of the Liabilities owed to it which are discharged by that set off to the

 

21

 

Security Agent for application in accordance with Clause 10 (Application of Proceeds).

 

(B)                                Paragraph (A) above shall not apply to:

 

(i)                                    any Close Out Netting by a Hedging Counterparty;

 

(ii)                                 any Payment Netting by a Hedging Counterparty; and

 

(iii)                              any Inter-Hedging Agreement Netting by a Hedging Counterparty.

 

5.4                              Non cash distributions

 

If the Security Agent or any other Secured Party receives a distribution in a form other than in cash in respect of any of the Liabilities, the Liabilities will not be reduced by that distribution until and except to the extent that the realisation proceeds are actually applied towards the Liabilities.

 

5.5                              Filing of claims

 

After the occurrence of an Insolvency Event in relation to any Obligor, KEI or KEH, each Creditor irrevocably authorises the Security Agent (acting in accordance with Clause 5.7 (Security Agent instructions)), on its behalf, to:

 

(A)                              take any Enforcement Action (in accordance with the terms of this Agreement) against that Obligor, KEI or KEH;

 

(B)                                demand, sue, prove and give receipt for any or all of that Obligor’s, KEI’s or KEH’s Liabilities;

 

(C)                                collect and receive all distributions on, or on account of, any or all of that Obligor’s, KEI’s or KEH’s Liabilities; and

 

(D)                               file claims, take proceedings and do all other things the Security Agent considers reasonably necessary to recover that Obligor’s, KEI’s or KEH’s Liabilities.

 

5.6                              Creditors’ actions

 

Save as prohibited by any applicable law or regulation, each Creditor will:

 

(A)                              do all things that the Security Agent (acting in accordance with Clause 5.7 (Security Agent instructions)) requests in order to give effect to this Clause 5; and

 

(B)                                if the Security Agent is not entitled to take any of the actions contemplated by this Clause 5 or if the Security Agent (acting in accordance with Clause 5.7 (Security Agent instructions)) requests that a Creditor take that action, undertake that action itself in accordance with the instructions of the Security Agent (acting in accordance with Clause 5.7 (Security Agent instructions)) or

 

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grant a power of attorney to the Security Agent (on such terms as the Security Agent (acting in accordance with Clause 5.7 (Security Agent instructions)) may reasonably require) to enable the Security Agent to take such action.

 

5.7                              Security Agent instructions

 

For the purposes of Clause 5.5 (Filing of claims) and Clause 5.6 (Creditors’ actions) the Security Agent shall act:

 

(A)                              on the instructions of the group of Creditors entitled, at that time, to give instructions under Clause 8.2 (Enforcement Instructions) or Clause 8.3 (Manner of enforcement); or

 

(B)                                in the absence of any such instructions, as the Security Agent sees fit.

 

6.                                     TURNOVER OF RECEIPTS

 

6.1                              LC Cash Cover

 

This Clause 6 is subject to Clause 10.3 (Treatment of LC Cash Cover).

 

6.2                              Turnover by the Creditors

 

Subject to Clause 6.3 (Exclusions) and to Clause 6.4 (Permitted assurance and receipts), if at any time prior to the Final Discharge Date, any Creditor receives or recovers:

 

(A)                              any Payment or distribution of, or on account of or in relation to, any of the Liabilities which is not either:

 

(i)                                    a Permitted Payment; or

 

(ii)                                 made in accordance with Clause 10 (Application of Proceeds);

 

(B)                                other than where Clause 5.3 (Set Off) applies, any amount by way of set off in respect of any of the Liabilities owed to it which does not give effect to a Permitted Payment;

 

(C)                                notwithstanding paragraphs (A) and (B) above, and other than where Clause 5.3  (Set-Off) applies, any amount:

 

(i)                                    on account of, or in relation to, any of the Liabilities:

 

(a)                                 after the occurrence of a Distress Event; or

 

(b)                                as a result of any other litigation or proceedings against an Obligor (other than after the occurrence of an Insolvency Event in respect of that Obligor); or

 

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(ii)                                 by way of set-off in respect of any of the Liabilities owed to it after the occurrence of a Distress Event;

 

(D)                               the proceeds of any enforcement of any Transaction Security except in accordance with Clause 10 (Application of Proceeds); or

 

(E)                                 other than where Clause 5.3 (Set-Off) applies, any distribution in cash or in kind or Payment of, or on account of or in relation to, any of the Liabilities owed by any Obligor which is not in accordance with Clause 10 (Application of Proceeds) and which is made as a result of, or after, the occurrence of an Insolvency Event in respect of that Obligor,

 

that Creditor will:

 

(i)                                    in relation to receipts and recoveries not received or recovered by way of set-off:

 

(a)                                 hold an amount of that receipt or recovery equal to the Relevant Liabilities (or if less, the amount received or recovered) on trust for the Security Agent and promptly pay that amount to the Security Agent for application in accordance with the terms of this Agreement; and

 

(b)                                promptly pay an amount equal to the amount (if any) by which the receipt or recovery exceeds the Relevant Liabilities to the Security Agent for application in accordance with the terms of this Agreement; and

 

(ii)                                 in relation to receipts and recoveries received or recovered by way of set-off, promptly pay an amount equal to that recovery to the Security Agent for application in accordance with the terms of this Agreement.

 

6.3                              Exclusions

 

Clause 6.2 (Turnover by the Creditors) shall not apply to any receipt or recovery by way of:

 

(A)                              Close-Out Netting by a Hedging Counterparty;

 

(B)                                Payment Netting by a Hedging Counterparty; or

 

(C)                                Inter-Hedging Agreement Netting by a Hedging Counterparty.

 

6.4                              Permitted assurance and receipts

 

Nothing in this Agreement shall restrict the ability of any Creditor to:

 

(A)                              arrange with any person which is not a member of the Group any assurance against loss in respect of, or reduction of its credit exposure to, an Obligor (including assurance by way of credit based derivative or sub participation); or

 

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(B)                                make any assignment or transfer permitted by Clause 13 (Changes to the Parties),

 

which:

 

(i)                                    is permitted by the Facility Agreement

 

(a)                                 is not in breach of Clause 4.5 (No acquisition of Hedging Liabilities),

 

and that Creditor shall not be obliged to account to any other Party for any sum received by it as a result of that action.

 

6.5                              Sums received by Obligors

 

If any of the Obligors receives or recovers any sum which, under the terms of any of the Finance Documents, should have been paid to the Security Agent, that Obligor will:

 

(A)                              hold an amount of that receipt or recovery equal to the Relevant Liabilities (or if less, the amount received or recovered) on trust for the Security Agent and promptly pay that amount to the Security Agent for application in accordance with the terms of this Agreement; and

 

(B)                                promptly pay an amount equal to the amount (if any) by which the receipt or recovery exceeds the Relevant Liabilities to the Security Agent for application in accordance with the terms of this Agreement.

 

6.6                              Saving provision

 

If, for any reason, any of the trusts expressed to be created in this Clause 6 (Turnover of Receipts) should fail or be unenforceable, the affected Creditor or Obligor will promptly pay an amount equal to that receipt or recovery to the Security Agent to be held on trust by the Security Agent for application in accordance with the terms of this Agreement.

 

7.                                     REDISTRIBUTION

 

7.1                              Recovering Creditor’s rights

 

(A)                              Any amount paid by a Creditor (a “Recovering Creditor”) to the Security Agent under Clause 5 (Effect of Insolvency Event) or Clause 6 (Turnover of Receipts) shall be treated as having been paid by the relevant Obligor and distributed to the Security Agent, Agents, Arrangers and Creditors (each a “Sharing Creditor”) in accordance with the terms of this Agreement.

 

(B)                                On a distribution by the Security Agent under paragraph (A) above of a Payment received by a Recovering Creditor from an Obligor, as between the relevant Obligor and the Recovering Creditor an amount equal to the amount received or recovered by the Recovering Creditor and paid to the Security Agent (the “Shared Amount”) will be treated as not having been paid by that Obligor.

 

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7.2                              Reversal of redistribution

 

(A)                              If any part of the Shared Amount received or recovered by a Recovering Creditor becomes repayable to an Obligor and is repaid by that Recovering Creditor to that Obligor, then:

 

(i)                                    each Sharing Creditor shall, upon request of the Security Agent, pay to the Security Agent for the account of that Recovering Creditor an amount equal to the appropriate part of its share of the Shared Amount (together with an amount as is necessary to reimburse that Recovering Creditor for its proportion of any interest on the Shared Amount which that Recovering Creditor is required to pay) (the “Redistributed Amount”); and

 

(ii)                                 as between the relevant Obligor and each relevant Sharing Creditor, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

 

(B)                                The Security Agent shall not be obliged to pay any Redistributed Amount to a Recovering Creditor under paragraph (A)(i) above until it has been able to establish to its satisfaction that it has actually received that Redistributed Amount from the relevant Sharing Creditor.

 

7.3                              Deferral of Subrogation

 

(A)                              No Creditor or Obligor will exercise any rights which it may have by reason of the performance by it of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights under the Finance Documents of any Creditor which ranks ahead of it in accordance with the priorities set out in Clause 2 (Ranking and Priority) until such time as all of the Liabilities owing to each prior ranking Creditor (or, in the case of any Obligor, owing to each Creditor) have been irrevocably paid in full.

 

(B)                                No Subordinated Creditor will exercise any rights which it may have to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights under the Finance Documents of any Creditor until such time as all of the Liabilities owing to each Creditor have been irrevocably paid in full.

 

8.                                     ENFORCEMENT OF TRANSACTION SECURITY

 

8.1                              LC Cash Cover

 

This Clause 8 is subject to Clause 10.3 (Treatment of LC Cash Cover).

 

8.2                              Enforcement Instructions

 

(A)                              The Security Agent may refrain from enforcing the Transaction Security unless instructed otherwise by the Instructing Group.

 

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(B)           Subject to the Transaction Security having become enforceable in accordance with the terms of the Security Documents the Instructing Group may give or refrain from giving instructions to the Security Agent to enforce or refrain from enforcing the Transaction Security as they see fit.

 

(C)           The Security Agent is entitled to rely on and comply with instructions given in accordance with this Clause 8.2 (Enforcement Instructions).

 

8.3          Manner of enforcement

 

If the Transaction Security is being enforced in accordance with the terms of the Security Documents pursuant to Clause 8.2 (Enforcement Instructions), the Security Agent shall enforce the Transaction Security in such manner (including, without limitation, the selection of any administrator of any Obligor to be appointed by the Security Agent) as the Instructing Group shall instruct or, in the absence of any such instructions, as the Security Agent sees fit.

 

8.4          Exercise of voting rights

 

(A)          Each Creditor agrees with the Security Agent that it will cast its vote in any proposal put to the vote by or under the supervision of any judicial or supervisory authority in respect of any insolvency, pre insolvency or rehabilitation or similar proceedings relating to any Obligor as instructed by the Security Agent.

 

(B)           The Security Agent shall give instructions for the purposes of paragraph (A) of this Clause 8.4 (Exercise of voting rights) as directed by an Instructing Group.

 

8.5          Waiver of rights

 

To the extent permitted under applicable law and subject to Clause 8.2 (Enforcement Instructions), Clause 8.3 (Manner of enforcement), Clause 9.2(C) (Distressed Disposals) and Clause 10 (Application of Proceeds), each of the Secured Parties and the Obligors waives all rights it may otherwise have to require that the Transaction Security be enforced in any particular order or manner or at any particular time or that any sum received or recovered from any person, or by virtue of the enforcement of any of the Transaction Security or of any other security interest, which is capable of being applied in or towards discharge of any of the Secured Obligations is so applied.

 

9.            DISPOSALS

 

9.1          Non-Distressed Disposals

 

(A)          In this Clause 9.1:

 

“Disposal Proceeds” means the proceeds of a Non-Distressed Disposal (as defined in paragraph (B) below).

 

(B)           If, in respect of a disposal of:

 

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(i)            an asset by an Obligor, KEI or KEH; or

 

(ii)           an asset which is subject to the Transaction Security

 

to a person or persons which are not members of the Group:

 

(a)           that disposal is permitted under the Facility Agreement; and

 

(b)           that disposal is not a Distressed Disposal,

 

(a “Non-Distressed Disposal”),

 

the Security Agent is irrevocably authorised (at the cost of the relevant Obligor, KEI or KEH and without any consent, sanction, authority or further confirmation from any Creditor or Obligor, KEI or KEH) but subject to paragraph (C) below:

 

(iii)          to release the Transaction Security or any other claim (relating to a Finance Document) over that asset;

 

(iv)          where that asset consists of shares in the capital of an Obligor or KEI to release the Transaction Security or any other claim (relating to a Finance Document) over that Obligor’s, KEI’s or KEH’s assets;

 

(v)           to execute and deliver or enter into any release of the Transaction Security or any claim described in paragraphs (iii) and (iv) above and issue any certificates of non crystallisation of any floating charge or any consent to dealing that may, in the discretion of the Security Agent, be considered necessary or desirable.

 

(C)           If that Non-Distressed Disposal is not made, each release of Transaction Security or any claim described in paragraph (B) above shall have no effect and the Transaction Security or claim subject to that release shall continue in such force and effect as if that release had not been effected.

 

(D)          Any Disposal Proceeds required by the Facility Agreement to be applied in mandatory prepayment of the Lender Liabilities shall be so applied in accordance with the terms of the Facility Agreement:

 

9.2          Distressed Disposals

 

(A)          Subject to paragraph (D) below, if a Distressed Disposal is being effected the Security Agent is irrevocably authorised (at the cost of the relevant Obligor, KEI or KEH and without any consent, sanction, authority or further confirmation from any Creditor, any Obligor, KEI or KEH):

 

(i)            release of Transaction Security/non crystallisation certificates:  to release the Transaction Security or any other claim over that asset and execute and deliver or enter into any release of that Transaction Security or claim and issue any letters of non crystallisation of any

 

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floating charge or any consent to dealing that may, in the discretion of the Security Agent, be considered necessary or desirable;

 

(ii)           release of liabilities and Transaction Security on a share sale (Obligor):  if the asset which is disposed of consists of shares in the capital of an Obligor, to release:

 

(a)           that Obligor and any Subsidiary of that Obligor from all or any part of:

 

(1)           its Borrowing Liabilities; and

 

(2)           its Guarantee Liabilities.

 

(b)           any Transaction Security granted by that Obligor or KEH or any Subsidiary of that Obligor, over any of its assets; and

 

(c)           any other claim of another Obligor, KEI or KEH over that Obligor’s assets or over the assets of any Subsidiary of that Obligor,

 

on behalf of the relevant Creditors, Obligors, KEI and KEH;

 

(iii)          disposal of liabilities on a share sale:  if the asset which is disposed of consists of shares in the capital of an Obligor and the Security Agent (acting in accordance with paragraph (D) below) decides to dispose of all or any part of:

 

(a)           the Liabilities; or

 

(b)           the Obligor Liabilities,

 

owed by any Obligor or KEI or any Subsidiary of any Obligor or Holding Company:

 

(c)           (if the Security Agent (acting in accordance with paragraph (D) below) does not intend that any transferee of those Liabilities or Obligor Liabilities (the “Transferee”) will be treated as a Creditor or a Secured Party for the purposes of this Agreement) to execute and deliver or enter into any agreement to dispose of all or part of those Liabilities or Obligor Liabilities provided that notwithstanding any other provision of any Finance Document the Transferee shall not be treated as a Creditor or a Secured Party for the purposes of this Agreement; and

 

(d)           (if the Security Agent (acting in accordance with paragraph (D) below) does intend that any Transferee will be treated as a Creditor or a Secured Party for the purposes of this Agreement) to execute and deliver or enter into any agreement to dispose of:

 

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(1)           all (and not part only) of the Liabilities owed to the Creditors; and

 

(2)           all or part of any other Liabilities and the Obligor Liabilities,

 

on behalf of, in each case, the relevant Creditors and Obligors;

 

(iv)          transfer of obligations in respect of liabilities on a share sale:  if the asset which is disposed of consists of shares in the capital of an Obligor (the “Disposed Entity”) and the Security Agent (acting in accordance with paragraph (D) below) decides to transfer to another Obligor, KEI or KEH (the “Receiving Entity”) all or any part of the Disposed Entity’s obligations or any obligations of any Subsidiary of that Disposed Entity in respect of the Obligor Liabilities to execute and deliver or enter into any agreement to:

 

(a)           agree to the transfer of all or part of the obligations in respect of those Obligor Liabilities on behalf of the relevant Obligors to which those obligations are owed and on behalf of the Obligors which owe those obligations; and

 

(b)           to accept the transfer of all or part of the obligations in respect of those Obligor Liabilities on behalf of the Receiving Entity or Receiving Entities to which the obligations in respect of those Obligor Liabilities are to be transferred.

 

(B)           The net proceeds of each Distressed Disposal (and the net proceeds of any disposal of Liabilities or Obligor Liabilities pursuant to paragraph (A)(iii) above) shall be paid to the Security Agent for application in accordance with Clause 10 (Application of Proceeds) as if those proceeds were the proceeds of an enforcement of the Transaction Security and, to the extent that any disposal of Liabilities or Obligor Liabilities has occurred pursuant to paragraph (A)(iii)(d) above, as if that disposal of Liabilities or Obligor Liabilities had not occurred.

 

(C)           In the case of a Distressed Disposal (or a disposal of Liabilities pursuant to paragraph (A)(iii)(d) above) effected by or at the request of the Security Agent (acting in accordance with paragraph (D) below), the Security Agent shall take reasonable care to obtain a fair market price in the prevailing market conditions (though the Security Agent shall have no obligation to postpone any such Distressed Disposal or disposal of Liabilities in order to achieve a higher price).

 

(D)          For the purposes of paragraphs (A)(i), (A)(ii), (A)(iii), (A)(iv) and (C) above, the Security Agent shall act:

 

(i)            if the relevant Distressed Disposal is being effected by way of enforcement of the Transaction Security, in accordance with Clause 8.3 (Manner of enforcement); and

 

(ii)           in any other case:

 

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(a)           on the instructions of the Instructing Group; or

 

(b)           in the absence of any such instructions, as the Security Agent sees fit.

 

10.          APPLICATION OF PROCEEDS

 

10.1        Order of application

 

Subject to Clause 10.2 (Prospective liabilities) and Clause 10.3 (Treatment of LC Cash Cover), all amounts from time to time received or recovered by the Security Agent pursuant to the terms of any Finance Document or in connection with the realisation or enforcement of all or any part of the Transaction Security (for the purposes of this Clause 10, the “Recoveries”) shall be held by the Security Agent on trust to apply them at any time as the Security Agent (in its discretion) sees fit, to the extent permitted by applicable law (and subject to the provisions of this Clause 10 (Application of Proceeds)), in the following order of priority:

 

(A)          in discharging any sums owing to the Security Agent, any Receiver or any Delegate;

 

(B)           in payment of all costs and expenses incurred by any Agent or Creditor in connection with any realisation or enforcement of the Transaction Security taken in accordance with the terms of this Agreement or any action taken at the request of the Security Agent under Clause 5.6 (Creditors’ actions);

 

(C)           in payment to the Facility Agent on its own behalf for the Facility Agent Liabilities (to the extent such liabilities relate to the non-payment of fees due);

 

(D)          in payment to:

 

(i)            the Facility Agent on behalf of the Lenders; and

 

(ii)           the Hedging Counterparties

 

for application towards the discharge of:

 

(a)           the Lender Liabilities (on a pro rata basis between the Lender Liabilities of each Lender); and

 

(b)           the Hedging Liabilities (on a pro rata basis between the Hedging Liabilities of each Hedging Counterparty);

 

on a pro rata basis between paragraph (A) above and paragraph (B) above and provided that such payments shall be deemed to be paid firstly, towards any interest payments under the Facilities due but unpaid and any scheduled payments due but unpaid under a Hedging Agreement and secondly, towards the remaining Lender Liabilities and Hedging Liabilities:

 

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(E)           if none of the Obligors is under any further actual or contingent liability under any Finance Document or Hedging Agreement, in payment to any person to whom the Security Agent is obliged to pay in priority to any Obligor; and

 

(F)           the balance, if any, in payment to the relevant Obligor.

 

10.2        Prospective liabilities

 

Following a Distress Event the Security Agent may, in its discretion, hold any amount of the Recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) for later application under Clause 10.1 (Order of Application) in respect of:

 

(A)          any sum to any Security Agent, any Receiver or any Delegate; and

 

(B)           any part of the Liabilities or the Facility Agent Liabilities,

 

that the Security Agent reasonably considers, in each case, might become due or owing at any time in the future.

 

10.3        Treatment of LC Cash Cover

 

(A)          Nothing in this Agreement shall prevent any LC Issuing Bank taking any Enforcement Action in respect of any LC Cash Cover which has been provided for it in accordance with the Facility Agreements.

 

(B)           To the extent that any LC Cash Cover is not held with the Relevant LC Issuing Bank, all amounts from time to time received or recovered in connection with the realisation or enforcement of that LC Cash Cover shall be paid to the Security Agent and shall be held by the Security Agent on trust to apply them at any time as the Security Agent (in its discretion) sees fit, to the extent permitted by applicable law, in the following order of priority:

 

(i)            to the Relevant LC Issuing Bank towards the discharge of the Lender Liabilities for which that LC Cash Cover was provided; and

 

(ii)           the balance, if any, in accordance with Clause 10.1 (Order of Application).

 

10.4        Investment of proceeds

 

Prior to the application of the proceeds of the Security Property in accordance with Clause 10.1 (Order of Application) the Security Agent may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the application from time to time of those monies in the Security Agent’s discretion in accordance with the provisions of this Clause 10.

 

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10.5        Currency Conversion

 

(A)          For the purpose of, or pending the discharge of, any of the Secured Obligations the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another, at the Security Agent’s Spot Rate of Exchange.

 

(B)           The obligations of any Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

 

10.6        Permitted Deductions

 

The Security Agent shall be entitled, in its discretion, (a) to set aside by way of reserve amounts required to meet and (b) to make and pay, any deductions and withholdings (on account of taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement, and to pay all Taxes which may be assessed against it in respect of any of the Charged Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

 

10.7        Good Discharge

 

(A)          Any payment to be made in respect of the Secured Obligations by the Security Agent:

 

(i)            may be made to the relevant Agent on behalf of its Creditors;

 

(ii)           may be made to the Relevant LC Issuing Bank in accordance with paragraph 10.3(B)(i) (Treatment of LC Cash Cover); or

 

(iii)          shall be made directly to the Hedging Counterparties,

 

and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.

 

(B)           The Security Agent is under no obligation to make the payments to the Agents or the Hedging Counterparties under paragraph (A) of this Clause 10.7 in the same currency as that in which the Liabilities owing to the relevant Creditor are denominated.

 

10.8        Calculation of Amounts

 

For the purpose of calculating any person’s share of any sum payable to or by it, the Security Agent shall be entitled to:

 

(A)          notionally convert the Liabilities owed to any person into a common base currency (decided in its discretion by the Security Agent), that notional conversion to be made at the spot rate at which the Security Agent is able to

 

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purchase the notional base currency with the actual currency of the Liabilities owed to that person at the time at which that calculation is to be made; and

 

(B)           assume that all moneys received or recovered as a result of the enforcement or realisation of the Security Property are applied in discharge of the Liabilities in accordance with the terms of the Finance Documents under which those Liabilities have arisen.

 

11.          THE SECURITY AGENT

 

11.1        Trust

 

(A)          The Security Agent declares that it shall hold the Security Property on trust for the Secured Parties on the terms contained in this Agreement.

 

(B)           Each of the parties to this Agreement agrees that the Security Agent shall have only those duties, obligations and responsibilities expressly specified in this Agreement or in the Security Documents to which the Security Agent is expressed to be a party (and no others shall be implied).

 

11.2        No independent power

 

Subject to Clause 10.3 (Treatment of LC Cash Cover), the Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any rights or powers arising under the Security Documents except through the Security Agent.

 

11.3        Instructions to Security Agent and exercise of discretion

 

(A)          Subject to paragraphs (D) and (E) below, the Security Agent shall act in accordance with any instructions given to it by an Instructing Group or, if so instructed by an Instructing Group, refrain from exercising any right, power, authority or discretion vested in it as Security Agent and shall be entitled to assume that (i) any instructions received by it from an Agent, the Creditors or a group of Creditors are duly given in accordance with the terms of the Finance Documents and (ii) unless it has received actual notice of revocation, that those instructions or directions have not been revoked.

 

(B)           The Security Agent shall be entitled to request instructions, or clarification of any direction, from an Instructing Group as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Agent may refrain from acting unless and until those instructions or clarification are received by it.

 

(C)           Save as provided in Clause 8 (Enforcement of Transaction Security), any instructions given to the Security Agent by an Instructing Group shall override any conflicting instructions given by any other Parties.

 

(D)          Paragraph (A) above shall not apply:

 

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(i)            where a contrary indication appears in this Agreement;

 

(ii)           where this Agreement requires the Security Agent to act in a specified manner or to take a specified action;

 

(iii)          in respect of any provision which protects the Security Agent’s own position in its personal capacity as opposed to its role of Security Agent for the Secured Parties including, without limitation, the provisions set out in Clauses 11.5 (Security Agent’s discretions) to Clause 11.21 (Disapplication);

 

(iv)          in respect of the exercise of the Security Agent’s discretion to exercise a right, power or authority under any of:

 

(a)           Clause 9.1 (Non-Distressed Disposals);

 

(b)           Clause 10.1 (Order of application);

 

(c)           Clause 10.2 (Prospective liabilities);

 

(d)           Clause 10.3 (Treatment of LC Cash Cover); and

 

(e)           Clause 10.6 (Permitted Deductions).

 

(E)           If giving effect to instructions given by an Instructing Group would (in the Security Agent’s opinion) have an effect equivalent to an Intercreditor Amendment, the Security Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Security Agent) whose consent would have been required in respect of that Intercreditor Amendment.

 

(F)           In exercising any discretion to exercise a right, power or authority under this Agreement where either:

 

(i)            it has not received any instructions from an Instructing Group as to the exercise of that discretion; or

 

(ii)           the exercise of that discretion is subject to paragraph (D)(iv) above,

 

the Security Agent shall do so having regard to the interests of all the Secured Parties.

 

11.4        Security Agent’s Actions

 

Without prejudice to the provisions of Clause 8 (Enforcement of Transaction Security) and Clause 11.3 (Instructions to Security Agent and exercise of discretion), the Security Agent may (but shall not be obliged to), in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.

 

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11.5        Security Agent’s discretions

 

The Security Agent may:

 

(A)          assume (unless it has received actual notice to the contrary from a Hedging Counterparty or from one of the Agents) that (i) no Default has occurred and no Obligor is in breach of or default under its obligations under any of the Finance Documents and (ii) any right, power, authority or discretion vested by any Finance Document in any person has not been exercised;

 

(B)           if it receives any instructions or directions under Clause 8 (Enforcement of Transaction Security) to take any action in relation to the Transaction Security, assume that all applicable conditions under the Finance Documents for taking that action have been satisfied;

 

(C)           engage, pay for and rely on the advice or services of any legal advisers, accountants, tax advisers, surveyors or other experts (whether obtained by the Security Agent or by any other Secured Party) whose advice or services may at any time seem necessary, expedient or desirable;

 

(D)          rely upon any communication or document believed by it to be genuine and, as to any matters of fact which might reasonably be expected to be within the knowledge of a Secured Party, any Creditor or an Obligor, upon a certificate signed by or on behalf of that person; and

 

(E)           refrain from acting in accordance with the instructions of any Party (including bringing any legal action or proceeding arising out of or in connection with the Finance Documents) until it has received any indemnification and/or security that it may in its discretion require (whether by way of payment in advance or otherwise) for all costs, losses and liabilities which it may incur in so acting.

 

11.6        Security Agent’s obligations

 

The Security Agent shall promptly:

 

(A)          copy to (i) each Agent and (ii) each Hedging Counterparty the contents of any notice or document received by it from any Obligor under any Finance Document;

 

(B)           forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party provided that, except where a Finance Document expressly provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party;

 

(C)           inform (i) each Agent and (ii) each Hedging Counterparty of the occurrence of any Default or any default by an Obligor in the due performance of or compliance with its obligations under any Finance Document of which the Security Agent has received notice from any other party to this Agreement; and

 

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(D)          to the extent that a Party (other than the Security Agent) is required to calculate a Dollar Currency Amount, and upon a request by that Party, notify that Party of the relevant Security Agent’s Spot Rate of Exchange.

 

11.7        Excluded obligations

 

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent shall not:

 

(A)          be bound to enquire as to (i) whether or not any Default has occurred or (ii) the performance, default or any breach by an Obligor of its obligations under any of the Finance Documents;

 

(B)           be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account;

 

(C)           be bound to disclose to any other person (including but not limited to any Secured Party) (i) any confidential information or (ii) any other information if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty;

 

(D)          have or be deemed to have any relationship of trust or agency with, any Obligor.

 

11.8        Exclusion of liability

 

None of the Security Agent, any Receiver nor any Delegate shall accept responsibility or be liable for:

 

(A)          the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Security Agent or any other person in or in connection with any Finance Document or the transactions contemplated in the Finance Documents, or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

 

(B)           the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;

 

(C)           any losses to any person or any liability arising as a result of taking or refraining from taking any action in relation to any of the Finance Documents, the Security Property or otherwise, whether in accordance with an instruction from an Agent or otherwise unless directly caused by its gross negligence or wilful misconduct (and in the case of the Security Agent under the Onshore Security Assignment directly caused by its breach of trust or the duty of care and diligence required of it as trustee under this Agreement);

 

(D)          the exercise of, or the failure to exercise, any judgment, discretion or power given to it by or in connection with any of the Finance Documents, the Security

 

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Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, the Finance Documents or the Security Property; or

 

(E)           any shortfall which arises on the enforcement or realisation of the Security Property.

 

11.9        No proceedings

 

No Party (other than the Security Agent, that Receiver or that Delegate) may take any proceedings against any officer, employee or agent of the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Security Property and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this Clause subject to Clause 1.3 (Third Party Rights) and the provisions of the Third Parties Rights Act.

 

11.10     Own responsibility

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Secured Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

 

(A)          the financial condition, status and nature of each Obligor;

 

(B)           the legality, validity, effectiveness, adequacy and enforceability of any Finance Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;

 

(C)           whether that Secured Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Security Property, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;

 

(D)          the adequacy, accuracy and/or completeness of any information provided by the Security Agent or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

 

(E)           the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security affecting the Charged Property,

 

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and each Secured Party warrants to the Security Agent that it has not relied on and will not at any time rely on the Security Agent in respect of any of these matters.

 

11.11     No responsibility to perfect Transaction Security

 

The Security Agent shall not be liable for any failure to:

 

(A)          require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged Property;

 

(B)           obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any of the Finance Documents or the Transaction Security;

 

(C)           register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any applicable laws in any jurisdiction or to give notice to any person of the execution of any of the Finance Documents or of the Transaction Security;

 

(D)          take, or to require any of the Obligors to take, any steps to perfect its title to any of the Charged Property or to render the Transaction Security effective or to secure the creation of any ancillary Security under the laws of any jurisdiction; or

 

(E)           require any further assurances in relation to any of the Security Documents.

 

11.12     Insurance by Security Agent

 

(A)          The Security Agent shall not be under any obligation to insure any of the Charged Property, to require any other person to maintain any insurance or to verify any obligation to arrange or maintain insurance contained in the Finance Documents.  The Security Agent shall not be responsible for any loss which may be suffered by any person as a result of the lack of or inadequacy of any such insurance.

 

(B)           Where the Security Agent is named on any insurance policy as an insured party, it shall not be responsible for any loss which may be suffered by reason of, directly or indirectly, its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless an Agent shall have requested it to do so in writing and the Security Agent shall have failed to do so within fourteen days after receipt of that request.

 

11.13     Custodians and nominees

 

The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any assets of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or

 

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proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.

 

11.14     Acceptance of title

 

The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any of the Obligors, KEI or KEH may have to any of the Charged Property and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.

 

11.15     Refrain from illegality

 

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent may refrain from doing anything which in its opinion will or may be contrary to any relevant law, directive or regulation of any jurisdiction and the Security Agent may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.

 

11.16     Business with the Obligors

 

The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with any of the Obligors.

 

11.17     Winding up of trust

 

If the Security Agent, with the approval of each of the Agents and each Hedging Counterparty, determines that (a) all of the Secured Obligations and all other obligations secured by the Security Documents have been fully and finally discharged and (b) none of the Secured Parties is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents:

 

(A)          the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and

 

(B)           any Retiring Security Agent shall release, without recourse or warranty, all of its rights under each of the Security Documents.

 

11.18     Perpetuity period

 

The perpetuity period under the rule against perpetuities, if applicable to this Agreement, shall be the period of eighty years from the date of this Agreement.

 

11.19     Powers supplemental

 

The rights, powers and discretions conferred upon the Security Agent by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition

 

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to any which may be vested in the Security Agent by general law or otherwise.

 

11.20     Trustee division separate

 

(A)          In acting as trustee for the Secured Parties, the Security Agent shall be regarded as acting through its trustee division which shall be treated as a separate entity from any of its other divisions or departments.

 

(B)           If information is received by another division or department of the Security Agent, it may be treated as confidential to that division or department and the Security Agent shall not be deemed to have notice of it.

 

11.21     Disapplication

 

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.

 

11.22     Obligors:  Power of Attorney

 

Each Obligor by way of security for its obligations under this Agreement irrevocably appoints the Security Agent to be its attorney to do anything which that Obligor has authorised the Security Agent or any other Party to do under this Agreement or is itself required to do under this Agreement but has failed to do (and the Security Agent may delegate that power on such terms as it sees fit).

 

12.          CHANGE OF SECURITY AGENT AND DELEGATION

 

12.1        Resignation of the Security Agent

 

(A)          The Security Agent may resign and appoint one of its affiliates as successor by giving notice to Kosmos and the Creditors.

 

(B)           Alternatively the Security Agent may resign by giving notice to the other Parties in which case the Majority Creditors may appoint a successor Security Agent.

 

(C)           If the Majority Creditors have not appointed a successor Security Agent in accordance with paragraph (B) above within 30 days after the notice of resignation was given, the Security Agent (after consultation with the Agents) may appoint a successor Security Agent.

 

(D)          The retiring Security Agent (the “Retiring Security Agent”) shall, at its own cost, make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents.

 

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(E)           The Security Agent’s resignation notice shall only take effect upon (i) the appointment of a successor and (ii) the transfer of all of the Security Property to that successor.

 

(F)           Upon the appointment of a successor, the Retiring Security Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph 11.17(B) (Winding up of trust) and under paragraph (D) above) but shall, in respect of any act or omission by it whilst it was the Security Agent, remain entitled to the benefit of Clauses 11 (The Security Agent), 15.1 (Obligors’ indemnity) and 15.3 (Creditors’ indemnity).  Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if that successor had been an original Party.

 

(G)           The Majority Creditors may, by notice to the Security Agent, require it to resign in accordance with paragraph (B) above.  In this event, the Security Agent shall resign in accordance with paragraph (B) above but the cost referred to in paragraph (D) above shall be for the account of the Kosmos.

 

12.2        Delegation

 

(A)          Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any of the rights, powers and discretions vested in it by any of the Finance Documents.

 

(B)           That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties and it shall not be bound to supervise, or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of any such delegate or sub delegate.

 

12.3        Additional Security Agents

 

(A)          The Security Agent may at any time appoint (and subsequently remove) any person to act as a separate trustee or as a co trustee jointly with it (i) if it considers that appointment to be in the interests of the Secured Parties or (ii) for the purposes of conforming to any legal requirements, restrictions or conditions which the Security Agent deems to be relevant or (iii) for obtaining or enforcing any judgment in any jurisdiction, and the Security Agent shall give prior notice to the Kosmos and each of the Agents of that appointment.

 

(B)           Any person so appointed shall have the rights, powers and discretions (not exceeding those conferred on the Security Agent by this Agreement) and the duties and obligations that are conferred or imposed by the instrument of appointment.

 

(C)           The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in

 

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performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.

 

13.          CHANGES TO THE PARTIES

 

13.1        Assignments and transfers

 

No Party may assign any of its rights and benefits or transfer any of its rights, benefits and obligations in respect of any Finance Documents or the Liabilities except as permitted by this Clause 13.

 

13.2        Change of Lender

 

(A)          A Lender may assign any of its rights and benefits or transfer by novation any of its rights, benefits and obligations in respect of any Finance Documents or the Liabilities if:

 

(i)            that assignment or transfer is in accordance with the terms of the Facility Agreement; and

 

(ii)           any assignee or transferee has (if not already party to this Agreement as a Lender acceded to this Agreement, as a Lender, pursuant to Clause 13.5 (Creditor/Agent Accession Undertaking).

 

(B)           For the avoidance of doubt, a person that is party to this Agreement as a Lender and a Hedging Counterparty, shall not cease to be a Hedging Counterparty solely by ceasing to be a Lender.

 

13.3        Change of Hedging Counterparty

 

A Hedging Counterparty may (in accordance with the terms of the relevant Hedging Agreement and subject to any consent required under that Hedging Agreement) transfer any of its rights and benefits or obligations in respect of the Hedging Agreements to which it is a party if any transferee has (if not already party to this Agreement as a Hedging Counterparty) acceded to:

 

(A)          this Agreement; and

 

(B)           the Facility Agreements,

 

as a Hedging Counterparty pursuant to Clause 13.5 (Creditor/Agent Accession Undertaking).

 

13.4        Change of Agent

 

No person shall become an Agent unless at the same time, it accedes to this Agreement as a Facility Agent, pursuant to Clause 13.5 (Creditor/Agent Accession Undertaking).

 

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13.5        Creditor/Agent Accession Undertaking

 

With effect from the date of acceptance by the Security Agent and, in the case of a Hedging Counterparty or an Affiliate of a Lender, the Facility Agent of a Creditor/Agent Accession Undertaking duly executed and delivered to the Security Agent by the relevant acceding party or, if later, the date specified in that Creditor/Agent Accession Undertaking:

 

(A)          any Party ceasing entirely to be a Creditor or Agent shall be discharged from further obligations towards the Security Agent and other Parties under this Agreement and their respective rights against one another shall be cancelled (except in each case for those rights which arose prior to that date); and

 

(B)           as from that date, the replacement or new Creditor or Agent shall assume the same obligations, and become entitled to the same rights, as if it had been an original Party to this Agreement in that capacity; and

 

(C)           any party acceding to this Agreement as a Hedging Counterparty shall also become party to the Facility Agreement as a Hedging Counterparty (as the case may be) and shall assume the same obligations and become entitled to the same rights as if it had been an original party to the Facility Agreement as a Hedging Counterparty.

 

13.6        New Obligor

 

(A)          If any member of the Group:

 

(i)            incurs any Liabilities; or

 

(ii)           gives any security, guarantee, indemnity or other assurance against loss in respect of any of the Liabilities

 

Kosmos will procure that the person incurring those Liabilities or giving that assurance accedes to this Agreement as an Obligor, in accordance with paragraph (B) below, no later than contemporaneously with the incurrence of those Liabilities or the giving of that assurance.

 

(B)           With effect from the date of acceptance by the Security Agent of an Obligor Accession Deed duly executed and delivered to the Security Agent by the new Obligor or, if later, the date specified in the Obligor Accession Deed, the new Obligor shall assume the same obligations and become entitled to the same rights as if it had been an original Party to this Agreement as an Obligor.

 

13.7        Additional parties

 

(A)          Each of the Parties appoints the Security Agent to receive on its behalf each Obligor Accession Deed and Creditor/Agent Accession Undertaking delivered to the Security Agent and the Security Agent shall, subject to paragraph (C) below, as soon as reasonably practicable after receipt by it, sign and accept the same if it appears on its face to have been completed, executed and, where applicable, delivered in the form contemplated by this Agreement or, where applicable, by the Facility Agreement.

 

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(B)           In the case of a Creditor/Agent Accession Undertaking delivered to the Security Agent by any party acceding to this Agreement as a Hedging Counterparty:

 

(i)            the Security Agent shall, as soon as practicable after signing and accepting that Creditor/Agent Accession Undertaking in accordance with paragraph (A) above, deliver that Creditor/Agent Accession Undertaking to the Facility Agent; and

 

(ii)           the Facility Agent shall, as soon as practicable after receipt by it, sign and accept that Creditor/Agent Accession Undertaking if it appears on its face to have been completed, executed and delivered in the form contemplated by this Agreement.

 

(C)           The Security Agent shall only be obliged to sign and accept an Obligor Accession Deed or Creditor/Agent Accession Undertaking received by it once it is satisfied that it has complied with all necessary “know your customer” or similar other checks under all applicable laws and regulations in relation to the accession by the prospective party to this Agreement.

 

(D)          Each Party shall promptly upon the request of the Security Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Security Agent (for itself) from time to time in order for the Security Agent to carry out and be satisfied with the results of all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

14.          COSTS AND EXPENSES

 

14.1        Security Agent’s ongoing costs

 

(A)          In the event of (i) a Default or (ii) the Security Agent considering it necessary or expedient or (iii) the Security Agent being requested by an Obligor or an Instructing Group to undertake duties which the Security Agent and the Borrower agree to be of an exceptional nature and/or outside the scope of the normal duties of the Security Agent under the Finance Documents, the Borrower shall pay to the Security Agent any additional remuneration (together with any applicable VAT) that may be agreed between them.

 

(B)           If the Security Agent and the Borrower fail to agree upon the nature of those duties or upon any additional remuneration, that dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Borrower or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Borrower) and the determination of any investment bank shall be final and binding upon the parties to this Agreement.

 

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14.2        Transaction expenses

 

The Borrower shall, within 15 Business Days, pay the Security Agent the amount of all costs and expenses (including legal fees) (together with any applicable VAT) reasonably incurred by the Security Agent and any Receiver or Delegate in connection with the negotiation, preparation, printing, execution, syndication and perfection of:

 

(A)          this Agreement and any other documents referred to in this Agreement and the Transaction Security; and

 

(B)           any other Finance Documents executed after the date of this Agreement.

 

14.3        Stamp taxes

 

The Borrower shall (in accordance with the terms of the other Finance Documents) pay and, within five Business Days of demand, indemnify the Security Agent against any cost, loss or liability the Security Agent incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

 

14.4        Interest on demand

 

If any Creditor or Obligor fails to pay any amount payable by it under this Agreement on its due date, interest shall accrue on the overdue amount (and be compounded with it) from the due date up to the date of actual payment (both before and after judgment and to the extent interest at a default rate is not otherwise being paid on that sum) at the rate which is one per cent. per annum over the rate at which the Security Agent was being offered, by leading banks in the London interbank market, deposits in an amount comparable to the unpaid amounts in the currencies of those amounts for any period(s) that the Security Agent may from time to time select.

 

14.5        Enforcement and preservation costs

 

Kosmos shall, within five Business Days of demand, pay to the Security Agent the amount of all costs and expenses (including legal fees and together with any applicable VAT) incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing these rights.

 

15.          INDEMNITIES

 

15.1        Obligors’ indemnity

 

Each Obligor shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability (together with any applicable VAT) incurred by any of them:

 

(A)          in relation to or as a result of:

 

(i)            any failure by the Borrower to comply with obligations under Clause 14 (Costs and Expenses);

 

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(ii)                                 the taking, holding, protection or enforcement of the Transaction Security;

 

(iii)                              the exercise of any of the rights, powers, discretions and remedies vested in the Security Agent, each Receiver and each Delegate by the Finance Documents or by law; or

 

(iv)                             any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or

 

(B)                                which otherwise relates to any of the Security Property or the performance of the terms of this Agreement (otherwise than as a result of its gross negligence or wilful misconduct and in the case of the Security Agent under the Onshore Security Assignment as a result of its breach of trust or the duty of care and diligence required of it as trustee under this Agreement).

 

Each Obligor expressly acknowledges and agrees that the continuation of its indemnity obligations under this Clause 15.1 (Obligors’ indemnity) will not be prejudiced by any release or disposal under Clause 9.2 (Distressed Disposals) taking into account the operation of that Clause 9.2.

 

15.2                       Priority of indemnity

 

The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in Clause 15.1 (Obligors’ indemnity) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.

 

15.3                       Creditors’ indemnity

 

(A)                              Each Creditor shall (in the proportion that the Liabilities due to it bears to the aggregate of the Liabilities due to all the Creditors for the time being (or, if the Liabilities due to each of those Creditors is zero, immediately prior to their being reduced to zero)), indemnify the Security Agent and every Receiver and every Delegate, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct and in the case of the Security Agent under the Onshore Security Assignment as a result of its breach of trust or the duty of care and diligence required of it as trustee under this Agreement) in acting as Security Agent, Receiver or Delegate under the Finance Documents (unless the relevant Security Agent, Receiver or Delegate has been reimbursed by an Obligor pursuant to a Finance Document) and the Obligors shall jointly and severally indemnify each Creditor against any payment made by it under this Clause 15.

 

(B)                                For the purposes only of paragraph (A) above, to the extent that any Hedging Transaction under a Hedging Agreement has not been terminated or closed out, the Hedging Liabilities due to any Hedging Counterparty in respect of that Hedging Transaction will be deemed to be:

 

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(i)                                    if the relevant Hedging Agreement is based on an ISDA Master Agreement, the amount, if any, which would be payable to it under that Hedging Agreement in respect of those Hedging Transactions, if the date on which the calculation is made was deemed to be an Early Termination Date (as defined in the relevant ISDA Master Agreement) for which the relevant Obligor is the Defaulting Party (as defined in the relevant ISDA Master Agreement); or

 

(ii)                                 if the relevant Hedging Agreement is not based on an ISDA Master Agreement, the amount, if any, which would be payable to it under that Hedging Agreement in respect of that Hedging Transaction, if the date on which the calculation is made was deemed to be the date on which an event similar in meaning and effect (under that Hedging Agreement) to an Early Termination Date (as defined in any ISDA Master Agreement) occurred under that Hedging Agreement for which the relevant Obligor is in a position similar in meaning and effect (under that Hedging Agreement) to that of a Defaulting Party (under and as defined in the same ISDA Master Agreement),

 

that amount, in each case, to be certified by the relevant Hedging Counterparty and as calculated in accordance with the relevant Hedging Agreement.

 

15.4                       Borrower’s indemnity to Creditors

 

The Borrower shall promptly and as principal obligor indemnify each Creditor against any cost, loss or liability (together with any applicable VAT), whether or not reasonably foreseeable, incurred by any of them in relation to or arising out of the operation of Clause 9.2 (Distressed Disposals).

 

16.                              INFORMATION

 

16.1                       Information and dealing

 

(A)                              The Creditors shall provide to the Security Agent from time to time (through their respective Agents in the case of a Lender) any information that the Security Agent may reasonably specify as being necessary or desirable to enable the Security Agent to perform its functions as trustee.

 

(B)                                Each Lender shall deal with the Security Agent exclusively through its Agent and the Hedging Counterparties shall deal directly with the Security Agent and shall not deal through any Agent.

 

(C)                                No Agent shall be under any obligation to act as agent or otherwise on behalf of any Hedging Counterparty except as expressly provided for in, and for the purposes of, this Agreement.

 

16.2                       Disclosure

 

Notwithstanding any agreement to the contrary, each of the Obligors consents, until the Final Discharge Date, to the disclosure by any of the Creditors, the Agents, the

 

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Arrangers and the Security Agent to each other (whether or not through an Agent or the Security Agent) of such information concerning the Obligors obtained by it in that capacity as any Creditor, any Agent, any Arranger or the Security Agent shall see fit.

 

16.3                       Notification of prescribed events

 

(A)                              If an Event of Default either occurs or ceases to be continuing the Facility Agent shall, upon becoming aware of that occurrence or cessation, notify the Security Agent and the Security Agent shall, upon receiving that notification, notify each Hedging Counterparty.

 

(B)                                If an Acceleration Event occurs the Facility Agent shall notify the Security Agent and the Security Agent shall, upon receiving that notification, notify each other Party.

 

(C)                                If the Security Agent enforces, or takes formal steps to enforce, any of the Transaction Security it shall notify each Party of that action.

 

(D)                               If any Creditor exercises any right it may have to enforce, or to take formal steps to enforce, any of the Transaction Security it shall notify the Security Agent and the Security Agent shall, upon receiving that notification, notify each Party of that action.

 

(E)                                 If an Obligor defaults on any Payment due under a Hedging Agreement, the Hedging Counterparty which is party to that Hedging Agreement shall, upon becoming aware of that default, notify the Security Agent and the Security Agent shall, upon receiving that notification, notify the Facility Agent and each other Hedging Counterparty.

 

(F)                                 If a Hedging Counterparty terminates or closes-out, in whole or in part, any Hedging Transaction under any Hedging Agreement under Clause 4.9 (Permitted Enforcement: Hedging Counterparties) it shall notify the Security Agent and the Security Agent shall, upon receiving that notification, notify each Agent and each other Hedging Counterparty.

 

(G)                                If a Mandatory Prepayment is waived the Facility Agent shall notify the Security Agent of the amount of the Mandatory Prepayment waived and the Security Agent shall, upon receiving that notification, notify each Hedging Counterparty.

 

17.                              NOTICES

 

17.1                       Communications in writing

 

Any communication to be made under or in connection with this Agreement shall be made in writing and, unless otherwise stated, may be made by fax or letter.

 

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17.2                       Security Agent’s communications with Lenders and Hedging Counterparties

 

The Security Agent shall be entitled to carry out all dealings:

 

(A)                              with the Lenders and the Arrangers through their respective Agents and may give to the Agents, as applicable, any notice or other communication required to be given by the Security Agent to a Lender or Arranger; and

 

(B)                                with each Hedging Counterparty directly with that Hedging Counterparty.

 

17.3                       Addresses

 

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with this Agreement is:

 

(A)                              in the case of the Original Obligors, that identified with its name below;

 

(B)                                in the case of the Security Agent, that identified with its name below; and

 

(C)                                in the case of each other Party, that notified in writing to the Security Agent on or prior to the date on which it becomes a Party

 

or any substitute address, fax number or department or officer which that Party may notify to the Security Agent (or the Security Agent may notify to the other Parties, if a change is made by the Security Agent) by not less than five Business Days’ notice.

 

17.4                       Delivery

 

(A)                              Any communication or document made or delivered by one person to another under or in connection with this Agreement will only be effective:

 

(i)                                    if by way of fax, when received in legible form; or

 

(ii)                                 if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

 

and, if a particular department or officer is specified as part of its address details provided under Clause 17.3 (Addresses), if addressed to that department or officer.

 

(B)                               Any communication or document to be made or delivered to the Security Agent will be effective only when actually received by the Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Security Agent’s signature below (or any substitute department or officer as the Security Agent shall specify for this purpose).

 

50

 

(C)                                Any communication or document made or delivered to the Kosmos in accordance with this Clause 17.4 will be deemed to have been made or delivered to each of the Obligors.

 

17.5                       Notification of address and fax number

 

Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 17.3 (Addresses) or changing its own address or fax number, the Security Agent shall notify the other Parties.

 

17.6                       Electronic communication

 

(A)                              Any communication to be made between the Security Agent and an Agent, an Arranger, a Lender or a Hedging Counterparty under or in connection with this Agreement may be made by electronic mail or other electronic means, if the Security Agent and the relevant Agent, Arranger, Lender or Hedging Counterparty:

 

(i)                                    agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

 

(ii)                                 notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

 

(iii)                              notify each other of any change to their address or any other such information supplied by them.

 

(B)                                Any electronic communication made between the Security Agent and an Agent, an Arranger, a Lender or a Hedging Counterparty will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender, Hedging Counterparty, Arranger or Agent to the Security Agent only if it is addressed in such a manner as the Security Agent shall specify for this purpose.

 

17.7                       English language

 

(A)                              Any notice given under or in connection with this Agreement must be in English.

 

(B)                                All other documents provided under or in connection with this Agreement must be:

 

(i)                                    in English; or

 

(ii)                                 if not in English, and if so required by the Security Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

51

 

18.                              PRESERVATION

 

18.1                       Partial invalidity

 

If, at any time, any provision of this Agreement is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of that provision under the law of any other jurisdiction will in any way be affected or impaired.

 

18.2                       No impairment

 

If, at any time after its date, any provision of a Finance Document (including this Agreement) is not binding on or enforceable in accordance with its terms against a person expressed to be a party to that Finance Document, neither the binding nature nor the enforceability of that provision or any other provision of that Finance Document will be impaired as against the other party(ies) to that Finance Document.

 

18.3                       Remedies and waivers

 

No failure to exercise, nor any delay in exercising, on the part of any Party, any right or remedy under this Agreement shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy.  The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

 

18.4                       Waiver of defences

 

The provisions of this Agreement will not be affected by an act, omission, matter or thing which, but for this Clause 18.4, would reduce, release or prejudice the subordination and priorities expressed to be created by this Agreement including (without limitation and whether or not known to any Party):

 

(A)                              any time, waiver or consent granted to, or composition with, any Obligor or other person;

 

(B)                                the release of any Obligor or any other person under the terms of any composition or arrangement with any creditor of any Obligor;

 

(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 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 any Obligor or other person;

 

(E)                                 any amendment, novation, supplement, extension (whether of maturity or otherwise) or restatement (in each case, however fundamental and of

 

52

 

whatsoever nature, and whether or not more onerous) or replacement of a Finance Document or any other document or security;

 

(F)                                 any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security;

 

(G)                                any intermediate Payment of any of the Liabilities owing to the Creditors in whole or in part; or

 

(H)                               any insolvency or similar proceedings.

 

18.5                       Priorities not affected

 

Except as otherwise provided in this Agreement the priorities referred to in Clause 2 (Ranking and Priority) will:

 

(A)                              not be affected by any reduction or increase in the principal amount secured by the Transaction Security in respect of the Liabilities owing to the Creditors or by any intermediate reduction or increase in, amendment or variation to any of the Finance Documents, or by any variation or satisfaction of, any of the Liabilities or any other circumstances;

 

(B)                                apply regardless of the order in which or dates upon which this Agreement and the other Finance Documents are executed or registered or notice of them is given to any person; and

 

(C)                                secure the Liabilities owing to the Creditors in the order specified, regardless of the date upon which any of the Liabilities arise or of any fluctuations in the amount of any of the Liabilities outstanding.

 

19.                              CONSENTS, AMENDMENTS AND OVERRIDE

 

19.1                       Required consents

 

(A)                              Subject to paragraph (B) below, to Clause 19.4 (Exceptions) and to Clause 19.5 (Snooze/Lose), this Agreement may be amended or waived only with the consent of the Agents, the Majority Lenders and the Security Agent.

 

(B)                                An amendment or waiver that has the effect of changing or which relates to:

 

(i)                                    Clause 7 (Redistribution), Clause 10 (Application of Proceeds) or this Clause 19 (Consents, amendments and override);

 

(ii)                                 paragraphs 11.3(D)(iii), 11.3(E) and11.3(F) (Instructions to Security Agent and exercise of discretion); or

 

(iii)                              the order of priority or subordination under this Agreement,

 

shall not be made without the consent of:

 

53

 

(a)                                the Agents;

 

(b)                               the Lenders;

 

(c)                                each Hedging Counterparty (to the extent that the amendment or waiver would adversely affect the Hedging Counterparty); and

 

(d)                               the Security Agent.

 

19.2                       Amendments and Waivers: Transaction Security Documents

 

(A)                              Subject to paragraph (B) below and to Clause 19.4 (Exceptions) and unless the provisions of any Finance Document expressly provide otherwise, the Security Agent may, if authorised by an Instructing Group, and if the Borrower consents, amend the terms of, waive any of the requirements of or grant consents under, any of the Transaction Security Documents which shall be binding on each Party.

 

(B)                                Subject to paragraph 19.4(C) (Exceptions), the prior consent of the Creditors is required to authorise any amendment or waiver of, or consent under, any Transaction Security Document which would affect the nature or scope of the Charged Property or the manner in which the proceeds of enforcement of the Transaction Security are distributed.

 

19.3                       Effectiveness

 

Any amendment, waiver or consent given in accordance with this Clause 19 (Consents, Amendments and Override) will be binding on all Parties and the Security Agent may effect, on behalf of any Agent, Arranger or Creditor, any amendment, waiver or consent permitted by this Clause 19 (Consents, Amendments and Override).

 

19.4                       Exceptions

 

(A)                              Subject to paragraph (C) below, if the amendment, waiver or consent may impose new or additional obligations on or withdraw or reduce the rights of any Party other than:

 

(i)                                    in the case of a Creditor, in a way which affects or would affect Creditors of that Party’s class generally; or

 

(ii)                                 in the case of an Obligor, to the extent consented to by Kosmos under paragraph 19.2(A) (Amendments and Waivers: Transaction Security Documents),

 

the consent of that Party is required.

 

(B)                                Subject to paragraph (C) below, an amendment, waiver or consent which relates to the rights or obligations of an Agent, an Arranger, the Security Agent (including, without limitation, any ability of the Security Agent to act in its discretion under this Agreement) or a Hedging Counterparty may not be

 

54

 

effected without the consent of that Agent or, as the case may be, that Arranger, the Security Agent or that Hedging Counterparty.

 

(C)                                Neither paragraph (A) nor (B)above, nor paragraph 19.2(B) (Amendments and Waivers: Transaction Security Documents) shall apply:

 

(i)                                    to any release of Transaction Security, claim or Liabilities; or

 

(ii)                                 to any consent

 

which, in each case, the Security Agent gives in accordance with Clause 9 (Disposals).

 

19.5                       Enforcement Action

 

For the avoidance of doubt, as between on the one hand, the Creditors and, on the other hand, the Obligors, nothing in this Agreement shall give the Creditors a greater or any additional right in relation to taking a particular Enforcement Action (including as to the time at which such Enforcement Action may be taken and/or the circumstances under which any Enforcement Action may be taken) than exists under the terms of the other Finance Documents or at law.

 

19.6                       Snooze/Lose

 

(A)                              If in relation to:

 

(i)                                    a request for a Consent in relation to any of the terms of this Agreement;

 

(ii)                                 a request to participate in any other vote of Creditors under the terms of this Agreement;

 

(iii)                              a request to approve any other action under this Agreement; or

 

(iv)                             a request to provide any confirmation or notification under this Agreement;

 

any Creditor:

 

(1)                                 fails to respond to that request within 10 Business Days of that request being made; or

 

(2)                                 (in the case of paragraphs (i) to (iii) above and if so requested by the Security Agent), fails to provide details of its Credit Participation to the Security Agent within the timescale specified by the Security Agent:

 

(v)                                in the case of paragraphs (i) to (iii) above, that Creditor’s Credit Participation (as the case may be) shall be deemed to be zero for the purpose of calculating the Credit Participations when ascertaining

 

55

 

whether any relevant percentage of Credit Participations has been obtained to give that Consent, carry that vote or approve that action;

 

(vi)                             in the case of paragraph (iv) above, that confirmation or notification shall be deemed to have been given.

 

19.7                       Disenfranchisement of Sponsor Affiliates

 

(A)                              For so long as a Sponsor Affiliate (i) beneficially owns a Commitment or (ii) has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement having a substantially similar economic effect and such agreement or arrangement has not been terminated:

 

(i)                                    in ascertaining:

 

(a)                                 an Instructing Group; or

 

(b)                                whether:

 

(1)                                 any relevant percentage of Commitments or Credit Participations; or

 

(2)                                 the agreement of any specified group of Creditors,

 

has been obtained to approve any request for a Consent or to carry any other vote or approve any action under this Agreement,

 

that Commitment and any associated Credit Participation shall be deemed to be zero and, subject to paragraph (ii) below, that Sponsor Affiliate (or the person with whom it has entered into that sub-participation, other agreement or arrangement (a “Counterparty”)) shall be deemed not to be a Lender.

 

(ii)                                 Paragraph (A) above shall not apply to the extent that a Counterparty (other than a Sponsor Affiliate) is a Lender by virtue otherwise than by beneficially owning the relevant Commitment.

 

(B)                                Each Sponsor Affiliate that is a Lender agrees that:

 

(i)                                    in relation to any meeting or conference call to which all the Creditors are invited to attend or participate, it shall not attend or participate in the same if so requested by the Security Agent or, unless the Security Agent otherwise agrees, be entitled to receive the agenda or any minutes of the same; and

 

(ii)                                 it shall not, unless the Security Agent otherwise agrees, be entitled to receive any report or other document prepared at the behest of, or on the instructions of, the Security Agent or one or more of the Creditors.

 

56

 

19.8                       Calculation of Credit Participations

 

For the purpose of ascertaining whether any relevant percentage of Credit Participations has been obtained under this Agreement, the Security Agent may notionally convert the Credit Participations into their Dollar Currency Amounts.

 

19.9                       No liability

 

None of the Lenders or the Facility Agent will be liable to any other Creditor, Agent or Obligor for any Consent given or deemed to be given under this Clause 19.

 

19.10                Agreement to override

 

Unless expressly stated otherwise in this Agreement, this Agreement overrides anything in the Finance Documents to the contrary.

 

20.                              COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

 

21.                              GOVERNING LAW

 

This Agreement is governed by English law.

 

22.                              ENFORCEMENT

 

22.1                       Jurisdiction

 

(A)                              The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or the consequences of its nullity) (a “Dispute”).

 

(B)                                The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

 

(C)                                This Clause 22.1 is for the benefit of the Secured Parties only.  As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction.  To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.

 

22.2                       Service of process

 

(A)                              Without prejudice to any other mode of service allowed under any relevant law, each Obligor (unless incorporated in England and Wales):

 

(i)                                    irrevocably appoints Trusec Limited of 2 Lambs Passage, London, EC1Y 8BB as its agent for service of process in relation to any

 

57

 

proceedings before the English courts in connection with this Agreement; and

 

(ii)                                 agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned;

 

(B)                                If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrower (in the case of an agent for service of process for an Obligor), must immediately (and in any event within 30 days of such event taking place) appoint another agent on terms acceptable to the Facility Agent.  Failing this, the Facility Agent may appoint another agent for this purpose.

 

This Agreement has been entered into on the date stated at the beginning of this Agreement and executed as a deed by the Obligors and is intended to be and is delivered by them as a deed on the date specified above.

 

58

 

Schedule 1
 FORM OF OBLIGOR ACCESSION DEED

 

THIS AGREEMENT is made on [·] and made between:

 

(1)                                 [Insert Full Name of New Obligor] (registration number [·]) (the “Acceding Obligor”); and

 

(2)                                 BNP PARIBAS (the “Security Agent”), for itself and each of the other parties to the Intercreditor Agreement referred to below.

 

This agreement is made on [date] by the Acceding Obligor in relation to an intercreditor agreement (the “Intercreditor Agreement”) dated [·] 2011 between, amongst others, BNP Paribas as Security Agent, BNP Paribas as Facility Agent, the Creditors and the Obligors (each as defined in the Intercreditor Agreement).

 

The Acceding Obligor intends to [incur Liabilities under the following documents]/[give a guarantee, indemnity or other assurance against loss in respect of Liabilities under the following documents]:

 

[Insert details (date, parties and description) of relevant documents]

 

the “Relevant Documents”.

 

IT IS AGREED as follows:

 

1.                                      Terms defined in the Intercreditor Agreement shall, unless otherwise defined in this Agreement, bear the same meaning when used in this Agreement.

 

2.                                      The Acceding Obligor and the Security Agent agree that the Security Agent shall hold:

 

(a)                                  [any Security in respect of Liabilities created or expressed to be created pursuant to the Relevant Documents;

 

(b)                                 all proceeds of that Security; and]

 

(c)                                  all obligations expressed to be undertaken by the Acceding Obligor to pay amounts in respect of the Liabilities to the Security Agent as trustee for the Secured Parties (in the Relevant Documents or otherwise) and secured by the Transaction Security together with all representations and warranties expressed to be given by the Acceding Obligor (in the Relevant Documents or otherwise) in favour of the Security Agent as trustee for the Secured Parties,

 

on trust for the Secured Parties on the terms and conditions contained in the Intercreditor Agreement.

 

3.                                      The Acceding Obligor confirms that it intends to be party to the Intercreditor Agreement as an Obligor, undertakes to perform all the obligations expressed to be assumed by an

 

59

 

Obligor under the Intercreditor Agreement and agrees that it shall be bound by all the provisions of the Intercreditor Agreement as if it had been an original party to the Intercreditor Agreement.

 

4.             This Agreement is governed by English law.

 

THIS AGREEMENT has been signed on behalf of the Security Agent and executed as a deed by the Acceding Obligor and is delivered on the date stated above.

 

 

	
The   Acceding Obligor
    	
 
    
	
 
    	
 
    
	
[EXECUTED AS A DEED
    	
)
    	
 
    
	
By: [Full Name of Acceding Obligor]
    	
)
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
Director
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Director/Secretary
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
OR
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
[EXECUTED AS A   DEED
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By: [Full name of Acceding Obligor]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature of   Director
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name of Director
    	
 
    
	
 
    	
 
    	
 
    
	
in the presence of
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Signature of   witness
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name of witness
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Address of witness
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Occupation of   witness]
    	
 
    
	
 
    	
 
    	
 
    
	
Address for   notices:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
 
    
							

 

60

 

	
The   Security Agent
    	
 
    
	
 
    	
 
    
	
BNP   PARIBAS
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    

 

61

 

Schedule 2
 FORM OF CREDITOR/AGENT ACCESSION UNDERTAKING

 

To:                             BNP PARIBAS for itself and each of the other parties to the Intercreditor Agreement referred to below.

 

To:          BNP PARIBAS as Facility Agent.

 

From:      [Acceding Creditor/Agent]

 

THIS UNDERTAKING is made on [date] by [insert full name of new Lender/Hedging Counterparty/Facility Agent /[Investor]] (the “Acceding [Lender/Hedging Counterparty/Facility Agent”) in relation to the intercreditor agreement (the “Intercreditor Agreement”) dated [·] 2011 between, among others, BNP Paribas as Security Agent, BNP Paribas as agent, the Creditors and the Obligors (each as defined in the Intercreditor Agreement).  Terms defined in the Intercreditor Agreement shall, unless otherwise defined in this Undertaking, bear the same meanings when used in this Undertaking.

 

In consideration of the Acceding [Lender/Hedging Counterparty/Agent being accepted as a [Lender/Hedging Counterparty/Facility Agent] for the purposes of the Intercreditor Agreement, the Acceding [Lender/Hedging Counterparty/Facility Agent] confirms that, as from [date], it intends to be party to the Intercreditor Agreement as a [Lender/Hedging Counterparty/Facility Agent] and undertakes to perform all the obligations expressed in the Intercreditor Agreement to be assumed by a [Lender/Hedging Counterparty/Facility Agent] and agrees that it shall be bound by all the provisions of the Intercreditor Agreement, as if it had been an original party to the Intercreditor Agreement.

 

[The Acceding Hedging Counterparty has become a provider of hedging arrangements to the [Borrower].

 

This Undertaking is governed by English law.

 

THIS UNDERTAKING has been entered into on the date stated above and is delivered on the date stated above].

 

Acceding [Creditor/Agent]

 

EXECUTED as a DEED

 

[insert full name of Acceding
 Creditor/Agent]

 

By:

 

Address:

 

Fax:

 

62

 

	
Accepted by the   Security Agent
    	
 
    	
Accepted by the   Facility Agent
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
for and on behalf   of
    	
 
    	
 
    	
for and on behalf   of
    
	
 
    	
 
    	
 
    	
 
    
	
BNP   PARIBAS
    	
 
    	
BNP   PARIBAS
    
	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
Date:
    

 

63

 

SIGNATURES

 

	
The   Obligors
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Borrower
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Executed and   Delivered as a Deed by
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
KOSMOS   ENERGY FINANCE INTERNATIONAL
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
in the presence   of:
    	
)
    	
/s/   Ryan Turner
    
	
 
    	
 
    	
 
    
	
 
    	
)
    	
Per: Ryan Turner
    
	
 
    	
 
    	
 
    
	
Joseph   Biesterfield
    	
 
    	
)
    	
Title: Attorney In   Fact
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness’s Signature
    	
/s/ Joseph Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(Name) Joseph   Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Address) One   Bunhill Row, London
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Occupation) Solicitor,
    	
 
    	
 
    
					

 

 

(Note: The above details are to be completed
 in the witness’s own handwriting.)

 

 

	
Address:
    	
 
    	
P.O. Box   32322
    	
 
    	
Copy:
    	
 
    	
c/o Kosmos Energy   LLC
    
	
 
    	
 
    	
4th Floor Century   Yard
    	
 
    	
 
    	
 
    	
8176 Park Lane
    
	
 
    	
 
    	
Cricket Square
    	
 
    	
 
    	
 
    	
Suite 500
    
	
 
    	
 
    	
Elgin Avenue
    	
 
    	
 
    	
 
    	
Dallas
    
	
 
    	
 
    	
Georgetown
    	
 
    	
 
    	
 
    	
Texas 75231
    
	
 
    	
 
    	
Grand Cayman
    	
 
    	
 
    	
 
    	
USA
    
	
 
    	
 
    	
KY1 — 1209
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Cayman Islands
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
+1 345 946 4090
    	
 
    	
Fax:
    	
 
    	
+1 214 445 9705
    
	
Attention:
    	
 
    	
Andrew Johnson
    	
 
    	
Attention:
    	
 
    	
William S. Hayes
    

 

64

 

	
The   Guarantors
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Executed and   Delivered as a Deed by
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
KOSMOS   ENERGY GHANA HC
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
in the presence   of:
    	
)
    	
/s/   Ryan Turner
    
	
 
    	
 
    	
 
    
	
 
    	
)
    	
Per: Ryan Turner
    
	
 
    	
 
    	
 
    
	
Joseph   Biesterfield
    	
 
    	
)
    	
Title: Attorney In   Fact
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness’s Signature
    	
/s/ Joseph Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Name) Joseph   Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Address) One   Bunhill Row, London
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Occupation) Solicitor
    	
 
    	
 
    
					

 

(Note: The above details are to be completed
 in the witness’s own handwriting.)

 

 

	
Address:
    	
 
    	
P.O. Box   32322
    	
 
    	
Copy:
    	
 
    	
c/o Kosmos Energy   LLC
    
	
 
    	
 
    	
4th Floor Century   Yard
    	
 
    	
 
    	
 
    	
8176 Park Lane
    
	
 
    	
 
    	
Cricket Square
    	
 
    	
 
    	
 
    	
Suite 500
    
	
 
    	
 
    	
Elgin Avenue
    	
 
    	
 
    	
 
    	
Dallas
    
	
 
    	
 
    	
Georgetown
    	
 
    	
 
    	
 
    	
Texas 75231
    
	
 
    	
 
    	
Grand Cayman
    	
 
    	
 
    	
 
    	
USA
    
	
 
    	
 
    	
KY1 — 1209
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Cayman Islands
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
+1 345 946 4090
    	
 
    	
Fax:
    	
 
    	
+1 214 445 9705
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Andrew Johnson
    	
 
    	
Attention:
    	
 
    	
William S. Hayes
    

 

65

 

	
Executed and Delivered   as a Deed by
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
KOSMOS   ENERGY OPERATING
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
in the presence   of:
    	
)
    	
/s/   Ryan Turner
    
	
 
    	
 
    	
 
    
	
 
    	
)
    	
Per: Ryan Turner
    
	
 
    	
 
    	
 
    
	
Joseph   Biesterfield
    	
 
    	
)
    	
Title: Attorney In   Fact
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness’s   Signature
    	
/s/ Joseph   Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(Name) Joseph   Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Address) One   Bunhill Row, London
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Occupation) Solicitor
    	
 
    	
 
    
					

 

(Note: The above details are to be completed
 in the witness’s own handwriting.)

 

 

	
Address:
    	
 
    	
P.O. Box   32322
    	
 
    	
Copy:
    	
 
    	
c/o Kosmos Energy   LLC
    
	
 
    	
 
    	
4th Floor Century   Yard
    	
 
    	
 
    	
 
    	
8176 Park Lane
    
	
 
    	
 
    	
Cricket Square
    	
 
    	
 
    	
 
    	
Suite 500
    
	
 
    	
 
    	
Elgin Avenue
    	
 
    	
 
    	
 
    	
Dallas
    
	
 
    	
 
    	
Georgetown
    	
 
    	
 
    	
 
    	
Texas 75231
    
	
 
    	
 
    	
Grand Cayman
    	
 
    	
 
    	
 
    	
USA
    
	
 
    	
 
    	
KY1 — 1209
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Cayman Islands
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
+1 345 946 4090
    	
 
    	
Fax:
    	
 
    	
+1 214 445 9705
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Andrew Johnson
    	
 
    	
Attention:
    	
 
    	
William S. Hayes
    

 

66

 

	
Executed and   Delivered as a Deed by
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
KOSMOS   ENERGY DEVELOPMENT
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
in the presence   of:
    	
)
    	
/s/   Ryan Turner
    
	
 
    	
 
    	
 
    
	
 
    	
)
    	
Per: Ryan Turner
    
	
 
    	
 
    	
 
    
	
Joseph   Biesterfield
    	
 
    	
)
    	
Title: Attorney In   Fact
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness’s   Signature
    	
/s/ Joseph   Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(Name) Joseph   Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Address) One   Bunhill Row, London
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Occupation)   Solicitor
    	
 
    	
 
    
					

 

(Note: The above details are to be completed
 in the witness’s own handwriting.)

 

 

	
Address:
    	
 
    	
P.O. Box   32322
    	
 
    	
Copy:
    	
 
    	
c/o Kosmos Energy   LLC
    
	
 
    	
 
    	
4th Floor Century   Yard
    	
 
    	
 
    	
 
    	
8176 Park Lane
    
	
 
    	
 
    	
Cricket Square
    	
 
    	
 
    	
 
    	
Suite 500
    
	
 
    	
 
    	
Elgin Avenue
    	
 
    	
 
    	
 
    	
Dallas
    
	
 
    	
 
    	
Georgetown
    	
 
    	
 
    	
 
    	
Texas 75231
    
	
 
    	
 
    	
Grand Cayman
    	
 
    	
 
    	
 
    	
USA
    
	
 
    	
 
    	
KY1 — 1209
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Cayman Islands
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
+1 345 946 4090
    	
 
    	
Fax:
    	
 
    	
+1 214 445 9705
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Andrew Johnson
    	
 
    	
Attention:
    	
 
    	
William S. Hayes
    

 

67

 

	
Executed and   Delivered as a Deed by
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
KOSMOS   ENERGY INTERNATIONAL
    	
)
    	
 
    
	
 
    	
 
    	
 
    
	
in the presence   of:
    	
)
    	
/s/ Ryan Turner
    
	
 
    	
 
    	
 
    
	
 
    	
)
    	
Per: Ryan Turner
    
	
 
    	
 
    	
 
    
	
Joseph   Biesterfield
    	
 
    	
)
    	
Title: Attorney In   Fact
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Witness’s   Signature
    	
/s/ Joseph   Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
(Name) Joseph   Biesterfield
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Address) One   Bunhill Row, London
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
(Occupation) Solicitor
    	
 
    	
 
    
					

 

(Note: The above details are to be completed
 in the witness’s own handwriting.)

 

 

	
Address:
    	
 
    	
P.O. Box   32322
    	
 
    	
Copy:
    	
 
    	
c/o Kosmos Energy   LLC
    
	
 
    	
 
    	
4th Floor Century   Yard
    	
 
    	
 
    	
 
    	
8176 Park Lane
    
	
 
    	
 
    	
Cricket Square
    	
 
    	
 
    	
 
    	
Suite 500
    
	
 
    	
 
    	
Elgin Avenue
    	
 
    	
 
    	
 
    	
Dallas
    
	
 
    	
 
    	
Georgetown
    	
 
    	
 
    	
 
    	
Texas 75231
    
	
 
    	
 
    	
Grand Cayman
    	
 
    	
 
    	
 
    	
USA
    
	
 
    	
 
    	
KY1 — 1209
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Cayman Islands
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
+1 345 946 4090
    	
 
    	
Fax:
    	
 
    	
+1 214 445 9705
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Andrew Johnson
    	
 
    	
Attention:
    	
 
    	
William S. Hayes
    

 

68

 

	
The   Security Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
BNP   PARIBAS
    	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Xavier Venereau
    	
 
    	
By:
    	
/s/ Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier Venereau
    	
Name:
    	
Olivier Warnan
    
	
Title:
    	
Managing Director
    	
Title:
    	
Director-BNP Paribas
    
	
 
    	
 
    
	
Address:
    	
BNP Paribas S.A.,   Paris
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
16, rue de Hanovre
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
75002 Paris   (France)
    	
 
    
	
 
    	
 
    	
 
    
	
Fax:
    	
+ 33 142 98 49 25
    	
 
    
	
 
    	
 
    	
 
    
	
Attention:
    	
Hong Ngoc PHAM /   Phoï-Van PHUONG
    
	
 
    	
 
    	
 
    
	
The   Facility Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
BNP   PARIBAS
    	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Xavier Venereau
    	
 
    	
By:
    	
/s/ Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier Venereau
    	
Name:
    	
Olivier Warnan
    
	
Title:
    	
Managing Director
    	
Title:
    	
Director-BNP Paribas
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
The   Lenders
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
ABSA CAPITAL, A DIVISION OF ABSA BANK LIMITED
    
	
 
    	
 
    
	
By:
    	
/s/ Narisa Balgobind
    	
 
    	
By:
    	
/s/ David Pilling
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Narisa Balgobind
    	
Name:
    	
David Pilling
    
	
Title:
    	
Principal
    	
Title:
    	
Associate Principal
    
						

 

69

 

	
BARCLAYS BANK PLC
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ C.J. Morphett
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
C.J. Morphett
    	
Name:
    
	
Title:
    	
Director
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
BNP PARIBAS
    
	
 
    	
 
    
	
By:
    	
/s/ Xavier Venereau
    	
 
    	
By:
    	
/s/ Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier Venereau
    	
Name:
    	
Olivier Warnan
    
	
Title:
    	
Managing Director
    	
Title:
    	
Director-BNP Paribas
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ L. Renard
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
L. Renard
    	
Name:
    
	
Title:
    	
Associate Director
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
HSBC BANK PLC
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ William Stevens
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
William Stevens
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    

 

70

 

	
SOCIÉTÉ GÉNÉRALE, LONDON BRANCH
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Maria Martin
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Maria Martin
    	
Name:
    
	
Title:
    	
Associate
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
STANDARD CHARTERED BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ A.D. Bartlett
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
Name:
    	
Andrew Bartlett
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
The Arrangers
    	
 
    
	
 
    	
 
    	
 
    
	
ABSA CAPITAL, A DIVISION OF ABSA BANK LIMITED
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Narisa Balgobind
    	
 
    	
By:
    	
/s/ David Pilling
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Narisa Balgobind
    	
Name:
    	
David Pilling
    
	
Title:
    	
Principal
    	
Title:
    	
Associate Principal
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
BNP PARIBAS
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Xavier Venereau
    	
 
    	
By:
    	
/s/ Olivier Warnan
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier Venereau
    	
Name:
    	
Olivier Warnan
    
	
Title:
    	
Managing Director
    	
Title:
    	
Director-BNP Paribas
    

 

71

 

	
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ L. Renard
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
L. Renard
    	
Name:
    
	
Title:
    	
Associate Director
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
HSBC BANK PLC
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ William Stevens
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
William Stevens
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SOCIÉTÉ GÉNÉRALE, LONDON BRANCH
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Maria Martin
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Maria Martin
    	
Name:
    
	
Title:
    	
Associate
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
STANDARD CHARTERED BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Andrew Bartlett
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
Name:
    	
Andrew Bartlett
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    

 

72

 

	
The Hedging Counterparties
    
	
 
    	
 
    	
 
    
	
ABSA CAPITAL, A DIVISION OF ABSA BANK LIMITED
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Narisa Balgobind
    	
 
    	
By:
    	
/s/ David Pilling
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Narisa Balgobind
    	
Name:
    	
David Pilling
    
	
Title:
    	
Principal
    	
Title:
    	
Associate Principal
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
BNP PARIBAS
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Xavier Venereau
    	
 
    	
By:
    	
/s/ O. Warnan
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Xavier Venereau
    	
Name:
    	
Olivier Warnan
    
	
Title:
    	
Managing Director
    	
Title:
    	
Director-BNP Paribas
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CREDIT SUISSE INTERNATIONAL
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
 
    	
Name:
    
	
Title:
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
SOCIÉTÉ GÉNÉRALE
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Maria Martin
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Maria Martin
    	
Name:
    
	
Title:
    	
Associate
    	
Title:
    

 

73

 

	
STANDARD CHARTERED BANK
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Andrew Bartlett
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Andrew Bartlett
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
HSBC BANK PLC
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ William Stevens
    	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
William Stevens
    	
Name:
    
	
Title:
    	
Managing Director
    	
Title:
    

 

74

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]