Document:

Agreement for Standby Letter of Credit

 Exhibit 10.2 
 

 
 Agreement for Standby Letter of Credit 

(this “Agreement”) 
 In consideration of the issuance by Citibank, N.A. (“Citibank”), in its discretion, of a standby or direct pay letter of credit (the “Credit”) at the request of the party
signing below (the “Applicant”) substantially in accordance with the application corresponding hereto (the “Application”) or as otherwise requested by Applicant in writing, Applicant unconditionally agrees with
Citibank as follows: 

 

	1.	Reimbursement. 

Applicant will reimburse Citibank, on demand, the amount of each draft or other request for payment (each, a “Draft”)
drawn under the Credit, whether such Draft is presented to Citibank before, on or, if in accordance with applicable law or letter of credit customs and practice, after the expiry date stated in the Credit. Each such reimbursement shall be due
on the date Citibank makes payment under the Credit, subject to Section 3 below. 
  

	2.	Commissions, Fees and Expenses.

 Applicant will pay Citibank (a) commissions and fees with respect to the Credit for so long as Citibank shall be obligated under the Credit in accordance with applicable law or letter of credit
customs and practice (i) at such rates and times as Applicant and Citibank may agree in writing or (ii), in the absence of such an agreement, in advance and in accordance with Citibank’s standard commissions and fees then in effect, to
cover the full tenor of the Credit without refund for any unused portion of such tenor, and (b), on demand, all expenses which Citibank may pay or incur with respect to the Credit. 

 

	3.	Payments; Interest on Past Due Amounts; Computations. 

 All amounts due from Applicant shall be paid to Citibank at 399 Park Avenue, New York, New York 10043 (or such other address notified to Applicant in writing), without defense, set-off, cross-claim or
counterclaim of any kind, in United States Dollars and in same day funds, provided, that if any such amount due is based on Citibank’s payment in a currency other than United States Dollars, Applicant will, at Citibank’s option,
reimburse Citibank in such currency or pay the equivalent of such amount in United States Dollars computed at Citibank’s or its correspondent’s currency selling rate applicable to the

 
place, currency and value date on which Citibank pays such amount. Applicant’s obligation to make payments in United States Dollars shall not be satisfied by any tender, or any recovery
by Citibank pursuant to any judgment, which is expressed in or converted into any currency other than United States Dollars, except to the extent that such tender or recovery results in the actual receipt by Citibank in New York of the full amount
of United States Dollars payable under this Agreement. Any amount not paid when due shall bear interest until paid in full at a daily fluctuating interest rate per annum equal to two percent per annum above (a) the rate of interest
announced publicly from time to time by Citibank in New York as Citibank’s Base Rate or (b), if another currency for Applicant’s payment is selected by Citibank, a corresponding base rate in that currency, as selected by
Citibank. Applicant authorizes Citibank to charge any account of Applicant for any amount when due. Unless otherwise agreed in writing as to the Credit and subject to any other provision of this Agreement, all computations of commissions,
fees and interest shall be based on a 360-day year and actual days elapsed. 
  

	4.	Additional Costs. 

 If
Citibank determines that the introduction or effectiveness of, or any change in, any law or regulation or compliance with any guideline or request from any central bank or other governmental or quasi-governmental authority (whether or not having the
force of law) affects or would affect the amount of capital or reserves required or expected to be maintained by Citibank or any corporation controlling Citibank, and Citibank determines that the amount of such capital or reserves is increased by or
based upon the existence of the Credit, then Applicant shall pay Citibank on demand from time to time additional amounts sufficient in Citibank’s judgment to compensate for the increase. Citibank’s certificate as to amounts due shall
be conclusive, in the absence of manifest error. 

 

  
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	5.	Taxes. 

 (a) Any and all
payments made to Citibank hereunder shall be made free and clear of and without deduction for any and all present and future taxes (including value-added taxes and withholding taxes), levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding therefrom (i) taxes imposed on Citibank’s overall net income and franchise taxes imposed on Citibank in lieu of net income taxes by the jurisdiction under the laws of which Citibank is
organized or any political subdivision thereof and (ii) taxes imposed on Citibank’s overall net income and franchise taxes imposed on Citibank in lieu of net income taxes by the jurisdiction in which the office issuing the Credit is
located or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities are hereinafter referred to as “Taxes”).

(b) If any Taxes shall be required by law to be deducted from any amount payable to Citibank under this Agreement, Applicant shall
increase such amount as may be necessary so that, after making all required deductions (including deductions applicable to any additional amounts payable under this section), Citibank receives an amount equal to the amount Citibank would have
received had no such deductions been made, Applicant shall make such deductions and Applicant shall pay the full amount deducted to the relevant taxing authority or other authority in accordance with applicable law. 

(c) In addition, Applicant shall pay any and all present and future stamp and documentary taxes and any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or under the Credit or from the execution, delivery, registration of, performing under, or otherwise with respect to, this Agreement or as a result of the issuance,
maintenance or negotiation of the Credit hereunder (each such payment, an “Other Tax”). 
 (d) Applicant
shall indemnify Citibank for and hold Citibank harmless against the full amount of Taxes and Other Taxes (including any taxes of any kind imposed or asserted by any jurisdiction on amounts payable under this section) imposed on or paid by Citibank
or any affiliate of Citibank in respect of any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. Payment under this
indemnity shall be made within 30 days from the date Citibank makes written demand therefor. 
 (e) Within 30 days after
the date of any payment of Taxes, Applicant shall furnish to Citibank at its address hereunder, the original or a certified copy of a receipt evidencing such payment. In case of any payment hereunder by or on behalf of Applicant, if Applicant
determines that no Taxes are payable in respect

 
thereof, Applicant shall, at Citibank’s request, furnish, or cause the payor to furnish, to Citibank an opinion of counsel acceptable to Citibank stating that such payment is exempt from
Taxes. 
  

	6.	Indemnification. 

Applicant will indemnify and hold Citibank and its officers, directors, affiliates, employees, attorneys and agents (each, an
“Indemnified Person”) harmless from and against any and all claims, liabilities, losses, damages, costs and expenses, including reasonable attorneys’ fees and disbursements, other dispute resolution expenses (including fees and
expenses in preparation for a defense of any investigation, litigation or proceeding) and costs of collection that arise out of or in connection with: (a) the issuance of the Credit, (b) any payment or action taken or omitted to be
taken in connection with the Credit (including any action or proceeding seeking (i) to restrain any drawing under the Credit, (ii) to compel or restrain the payment of any amount or the taking of any other action under the Credit,
(iii) to compel or restrain the taking of any action under this Agreement, or (iv) to obtain similar relief (including by way of interpleader, declaratory judgment, attachment or otherwise), regardless of who the prevailing party is in any
such action or proceeding), (c) the enforcement of this Agreement or (d) any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority or any other cause beyond
Citibank’s control, except in each of (a) through (d) above, to the extent such claim, liability, loss, damage, cost or expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Person’s gross negligence or willful misconduct. Applicant will pay on demand from time to time all amounts owing under this section. 
  

	7.	Obligations Absolute. 

Applicant’s obligations to Citibank under this Agreement and in respect of the Credit (whether absolute or contingent, present or
future, collectively, the “Obligations”) shall be unqualified, irrevocable and payable in the manner and method provided for under this Agreement irrespective of any one or more of the following circumstances: (a) any lack
of validity or enforceability of this Agreement, the Credit or any other agreement, application, amendment, guaranty, document, or instrument relating thereto, (b) any change in the time, manner or place of payment of or

 

  
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in any other term of all or any of the Obligations of Applicant or the obligations of any person or entity that guarantees any of the Obligations, (c) the existence of any claim, set-off,
defense or other right that Applicant may have at any time against any beneficiary or any transferee of the Credit (or any person or entity for whom any such beneficiary or transferee may be acting), Citibank or any other person or entity, whether
in connection with any transaction contemplated by this Agreement or any unrelated transaction, or any claim by Citibank or Applicant against the beneficiary of the Credit for breach of warranty, (d) any exchange, release or non-perfection of
any collateral or release or amendment or waiver of or consent to depart from the terms of any guarantee or security agreement, for all or any of the Obligations, (e) any Draft, certificate or other document presented under the Credit being
forged, fraudulent, invalid or insufficient or any statement therein being untrue or inaccurate, (f) the issuance of the Credit (or any amendment thereto) in a form other than substantially as requested by Applicant, unless Citibank receives
written notice from Applicant of such error within three business days after Applicant shall have received a copy of the Credit (or such amendment), (g) the decision by Citibank not to issue an amendment to the Credit requested by Applicant,
(h) any previous Obligation, whether or not paid, arising from Citibank’s payment against any Draft, certificate or other document which appeared on its face to be signed or presented by the proper entity but was in fact forged, fraudulent
or invalid or any statement therein was untrue or inaccurate, (i) payment by Citibank under the Credit against presentation of a Draft or other document that does not comply with the terms and conditions of the Credit unless Citibank receives
written notice from Applicant of such discrepancy within three business days following Applicant’s receipt of such Draft or other document, and (j) any action or inaction taken or suffered by Citibank or any of its affiliates or
correspondents in connection with the Credit or any relevant Draft, certificate or other document, if taken in Good Faith (as defined in Article 5 of the New York Uniform Commercial Code (the “NY UCC”)) and in conformity with
applicable New York, United States or non-United States laws, regulations or letter of credit customs and practice. 
  

	8.	Limitations of Liability. 

 Without limiting any other provision of this Agreement, Citibank, its affiliates and any of its

 
correspondents: (a) may rely upon any oral, telephonic, telegraphic, facsimile, electronic, written or other communication believed in Good Faith to have been authorized by Applicant,
whether or not given or signed by an authorized person, (b) shall not be responsible for errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document in connection with the Credit, whether
transmitted by courier, mail, telex, any other telecommunication, or otherwise (whether or not they be in cipher), or for errors in interpretation of technical terms or in translation (and Citibank, its affiliates and its correspondents may transmit
terms of the Credit without translating them), (c) shall not be responsible for the identity or authority of any signer or the form, accuracy, genuineness, falsification or legal effect of any Draft, certificate or other document presented
under the Credit if such Draft, certificate or other document on its face appears substantially to comply with the terms and conditions of the Credit, (d) shall not be responsible for any acts or omissions by or the solvency of the beneficiary
of the Credit or any other person or entity having any role in any transaction underlying the Credit, (e) may accept or pay as complying with the terms and conditions of the Credit any Draft, certificate or other document appearing on its face
(i) substantially to comply with the terms and conditions of the Credit, (ii) to be signed or presented by or issued to any successor of the beneficiary or any other person in whose name the Credit requires or authorizes that any Draft,
certificate or other document be signed, presented or issued, including any administrator, executor, personal representative, trustee in bankruptcy, debtor in possession, liquidator, receiver, or successor by merger or consolidation, or any other
person or entity purporting to act as the representative of or in place of any of the foregoing, or (iii) to have been signed, presented or issued after a change of name of the beneficiary, (f) may disregard (i) any requirement stated
in the Credit that any Draft, certificate or other document be presented to it at a particular hour or place and (ii) any discrepancies that do not reduce the value of the beneficiary’s performance to Applicant in any transaction
underlying the Credit, (g) may accept as a “Draft” any written or electronic demand or other request for payment under the Credit, even if such demand or other request is not in the form of a negotiable instrument,
(h) shall not be responsible for the effectiveness or suitability of the Credit for Applicant’s purpose, or be regarded as the drafter of the Credit regardless of any assistance that Citibank

 

  
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may, in its discretion, provide to Applicant in preparing the text of the Credit or amendments thereto, (i) shall not be liable to Applicant for any consequential or special damages, or for
any damages resulting from any change in the value of any foreign currency, services or goods or other property covered by the Credit, (j) may assert or waive application of any UCP or ISP (in each case, as defined below) article primarily
benefiting bank issuers, (k) may honor a previously dishonored presentation under the Credit, whether pursuant to court order, to settle or compromise any claim that it wrongfully dishonored or otherwise and shall be entitled to reimbursement
to the same extent as if it had initially honored said presentation plus reimbursement of any interest paid by it, (l) is authorized (but shall not be required) to disregard any non-documentary conditions stated in the Credit and (m) may
pay any nominated bank (as such term is defined in UCP 600 (see below) or nominated person (as such term is defined in ISP (see below)) (in either case as designated or permitted by the terms of the Credit) claiming that it rightfully honored under
the laws, customs or practice of the place where it is located. None of the circumstances described in this section shall place Citibank or any of its affiliates or correspondents under any resulting liability to Applicant. 

 

	9.	Independence. 

Applicant acknowledges that the rights and obligations of Citibank under the Credit are independent of the existence, performance or
nonperformance of any contract or arrangement underlying the Credit, including contracts or arrangements between Citibank and Applicant and between Applicant and the beneficiary of the Credit. Citibank shall have no duty to notify Applicant of
its receipt .of a demand or a Draft, certificate or other document presented under the Credit or of its decision to honor such demand. Citibank may, without incurring any liability to Applicant or impairing its entitlement to reimbursement
under this Agreement, honor a demand under the Credit despite notice from Applicant of, and without any duty to inquire into, any defense to payment or any adverse claims or other rights against the beneficiary of the Credit or any other
person. Citibank shall have no duty to request or require the presentation of any document, including any default certificate, not required to be presented under the terms and conditions of the Credit. Citibank shall have no duty to seek
any waiver of discrepancies from Applicant, nor any duty to grant any waiver of discrepancies that Applicant approves or requests. Citibank shall have no duty to extend the

 
expiration date or term of the Credit or to issue a replacement letter of credit on or before the expiration date of the Credit or the end of such term. 

 

	10.	Transfers; Assignments of Proceeds. 

 If, at Applicant’s request, the Credit is issued in transferable form, Citibank shall have no duty to determine the proper identity of anyone appearing in any transfer request, Draft, or other
document as transferor or transferee, nor shall Citibank be responsible for the validity, appropriateness or correctness of any transfer. Citibank is not obligated to recognize an assignment of proceeds of the Credit unless and until Citibank
consents to such assignment; and, except as otherwise required by applicable law, Citibank shall not be obligated to give or withhold its consent to an assignment of proceeds of the Credit. However, if Citibank consents to an assignment of
proceeds of the Credit, Citibank shall have no duty to determine the proper identity of anyone appearing to be the assignor or assignee, nor shall Citibank be responsible for the validity, appropriateness or correctness of any such assignment.

  

	11.	Extensions and Modifications of the Credit. 

 This Agreement shall be binding upon Applicant with respect to any extension or modification of the Credit made at Applicant’s request or with Applicant’s consent. Applicant’s
Obligations shall not be reduced or impaired in any way by any agreement by Citibank and the beneficiary of the Credit extending Citibank’s time to honor or to give notice of discrepancies and any such agreement shall be binding upon Applicant.

  

	12.	Bond or Collateral. 

(a) If at any time Applicant shall seek to restrain or preclude payment of any drawing under the Credit or any court shall extend the
term of the Credit or take any other action which has a similar effect, then, in each such case, Applicant shall provide Citibank with a bond or other collateral of a type and value satisfactory to Citibank as security for Applicant’s
Obligations relative to the Credit; and 
 (b) If at any time and from time to time Citibank, in its discretion, requires
collateral (or additional collateral), Applicant will on demand assign and deliver to Citibank as security for the Obligations, collateral of a type and value satisfactory to Citibank or make such cash payment as Citibank may require.

 

  
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	13.	Covenants of Applicant. 

Applicant will (a) comply with all New York, United States and non-United States laws, regulations and rules (including foreign
exchange and foreign assets control regulations and other trade-related regulations) and letter of credit customs and practice now or later applicable to the Credit, transactions related to the Credit, or Applicant’s execution, delivery and
performance under this Agreement and deliver to Citibank, upon reasonable request, satisfactory evidence of such compliance, (b) deliver to Citibank, upon reasonable request, independently audited financial statements and other information
concerning Applicant’s financial condition and business operations, (c) permit Citibank to inspect its books and records on reasonable notice, and (d) inform Citibank immediately upon Applicant becoming aware of the occurrence of an
Event of Default (as defined below). 
  

	14.	Representations and Warranties of Applicant.

 Applicant represents and warrants that (a) it is validly existing and in good standing under the laws of the jurisdiction in which it is organized, (b) its execution, delivery and performance of
this Agreement are within its powers, have been duly authorized, do not contravene any contract binding on or affecting it or any of its properties, do not violate any applicable law or regulation, and do not require any notice to, filing with or
other action to or by any governmental authority, (c) this Agreement is valid and binding upon Applicant, (d) the financial statements most recently received by Citibank from Applicant fairly present its financial condition in accordance
with generally accepted accounting principles consistently applied, and there has been no material adverse change in the business, financial condition or results of operations of Applicant and its subsidiaries, taken as a whole, since the date of
such financial statements; and (e) there is no pending or threatened action which may materially adversely affect its financial condition or business or which purports to affect the validity or enforceability of this Agreement, the Credit or
any transaction related to the Credit.
 Each request by Applicant for an amendment to this Agreement or for the issuance of
the Credit or for any amendment to the Credit shall constitute Applicant’s representation and warranty that the foregoing statements are true and correct as if made on the date of such request.

	15.	Default. 

 Each of the
following shall be an “Event of Default” under this Agreement: (a) Applicant’s failure to pay when due any obligation to Citibank or to any of its subsidiaries or affiliates (under this Agreement or otherwise),
(b) Applicant’s failure to perform or observe any other term or covenant of this Agreement, (c) Applicant’s breach of any representation or warranty made in this Agreement or any document delivered by it under this Agreement,
(d) Applicant’s dissolution or termination, (e) institution by or against Applicant of any proceeding under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or seeking the appointment of a receiver,
trustee, or other similar official for Applicant or for any substantial part of its property, (f) any actual or threatened seizure, vesting or intervention by or under authority of a government by which Applicant’s management is displaced
or its authority or control of its business is curtailed, (g) attachment or restraint of any funds or other property which may be in, or come into, the possession or control of Citibank or of any third party acting on Citibank’s behalf,
for the account or benefit of Applicant, or the issuance of any order of any court or other legal process against the same, (h) a material adverse change in Applicant’s business or condition (financial or otherwise), or (i) the
occurrence of any of the above events with respect to any person or entity which has heretofore or hereafter guaranteed or provided any collateral security for any of the Obligations.

 

	16.	Remedies. 

 If any Event
of Default shall have occurred and be continuing, the face amount of the Credit as well as any or all other Obligations, whether or not matured or contingent, shall, at Citibank’s option, become due and payable immediately without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived by Applicant; provided, however, that in the event of an actual or deemed entry of an order for relief with respect to Applicant under applicable bankruptcy or
insolvency law, the face amount of the Credit as well as all other Obligations, whether or not matured or contingent, shall automatically become due and payable without presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived by Applicant. 

 

  
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	17.	Set-off. 

 If any Event
of Default shall occur and be continuing, Citibank may set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by Citibank or any of its affiliates
to or for the credit or the account of Applicant (“Deposits”) against any and all of the Obligations, irrespective of whether or not Citibank shall have made any demand under this Agreement and although such Deposits or Obligations
may be unmatured or contingent. Citibank’s rights under this section are in addition to other rights and remedies (including other rights of set-off) which Citibank may have under this Agreement or applicable law. 

 

	18.	Waiver of Immunity. 

Applicant acknowledges that this Agreement is, and the Credit will be, entered into for commercial purposes and, to the extent that
Applicant now or later acquires any immunity from jurisdiction of any court or from any legal process with respect to itself or its property, Applicant now irrevocably waives its immunity with respect to the Obligations. 

 

	19.	Notices; Co-Applicants; Interpretation; Severability.

 (a) Notices shall be effective, if to Applicant, when sent to its address indicated below the signature line and, if to Citibank, when received at 399 Park Avenue, New York, New York 10043, with a copy to
Citicorp North America, Inc., 3800 Citibank Center, Tampa FL 33610, or, as to either party, such other address as either may notify the other in writing. Notices to the beneficiary of the Credit shall be effective when sent to the address
maintained in Citibank’s letter of credit records for such beneficiary, and Applicant agrees to hold Citibank harmless with respect to any claim by the beneficiary of non-receipt of such a notice.

(b) If this Agreement is signed by two or more persons or entities, (i) each such person or entity shall be deemed an
“Applicant” hereunder, (ii) each Applicant shall be jointly and severally liable for all Obligations and waives any defense that might otherwise be available to a guarantor of such Obligations, and (iii) notices from
Citibank in connection with this Agreement or the Credit to any Applicant and notices from, or the consent of, any Applicant in connection with this Agreement or the Credit shall be sufficient to bind all Applicants.

(c) Headings are included only for convenience and are not interpretive. The term “including” means
“including without limitation.” 
 (d) If any provision of this Agreement is held illegal or
unenforceable, the validity of the remaining provisions shall not be affected.

	20.	Successors and Assigns. 

This Agreement shall be binding upon Applicant and its successors and permitted assigns, and shall inure to the benefit of and be
enforceable by Citibank, its successors and assigns. Applicant shall not voluntarily transfer or otherwise assign any of its obligations under this Agreement. Citibank may transfer or otherwise assign its rights and obligations under this
Agreement, in whole or in part, and shall be forever relieved from any liability with respect to the portion of Citibank’s rights or obligations transferred or assigned. Applicant acknowledges that information pertaining to Applicant as it
relates to this Agreement or the Credit may be disclosed to (actual or potential) transferees, assignees, affiliates, contractors or, if required by law, court order or mandate, governmental authorities. This Agreement shall not be construed to
confer any right or benefit upon any person or entity other than Applicant and Citibank and their respective successors and permitted assigns. 
  

	21.	Modification; No Waiver. 

None of the terms of this Agreement may be waived or amended except in a writing signed by the party against whose interest the term is
waived or amended. Forbearance, failure or delay by Citibank in the exercise of a remedy shall not constitute a waiver, nor shall any exercise or partial exercise of any remedy preclude any further exercise of that or any other remedy. Any
waiver or consent by Citibank shall be effective only in the specific instance and for the specific purpose for which it is given and shall not be deemed, regardless of frequency given, to be a further or continuing waiver or consent. 

 

	22.	Multiple Role Disclosure. 

 Citibank and its affiliates offer a wide range of financial services, including back-office letter of credit processing services on behalf of financial institutions and letter of credit
beneficiaries. Such services are provided internationally to a wide range of customers, some of whom may be Applicant’s counterparties or competitors. Applicant acknowledges and accepts that Citibank and its affiliates may perform
more than one role in relation to the Credit, including to advise the Credit notwithstanding the selection by Applicant of an additional or alternative advising bank.

 

  
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	23.	Entire Agreement; Remedies Cumulative; Delivery of Documents Related to this Agreement. 

(a) This Agreement constitutes the entire agreement between the parties concerning Citibank’s issuance of the Credit for
Applicant’s account and supersedes all prior agreements governing such issuance unless specifically excluded in an annex hereto.
 (b) All rights and remedies of Citibank under this Agreement and other documents delivered in connection with this Agreement or otherwise directly or indirectly related to the Obligations are
cumulative and in addition to any other right or remedy available under this Agreement, the Credit or applicable law.

(c) Applicant may submit an executed Application for the Credit in original form, via a Citibank electronic banking platform such
as “CitiDirect”, or by fax, email attachment or other electronic means. Applicant will be bound by any instructions so given. Delivery of a signed signature page to this Agreement by facsimile transmission or email attachment
shall be effective as, and shall constitute physical delivery of, a signed original counterpart of this Agreement. 
  

	24.	Termination; Surviving Provisions. 

 (a) This Agreement may be terminated by Applicant only upon the occurrence of all of the following: (i) thirty (30) days shall have passed since Citibank shall have actually received
written notice of such termination from Applicant; (ii) the amount of all Obligations, whether matured or contingent, shall have been paid to Citibank (and for the avoidance of doubt, the creation of any overdraft in Applicant’s account
with Citibank shall not discharge Applicant’s Obligations hereunder); (iii) the Credit, if expiring at Citibank’s counters, shall have expired or been cancelled by Citibank; and (iv) if the Credit expires at the counters of an
institution other than Citibank, a reasonable time (at least thirty (30) days, as determined in good faith by Citibank) shall have passed following the expiration or cancellation by Citibank of the Credit in order to allow such institution to
present documents to Citibank.
 (b) Restrictive provisions in this Agreement, such as indemnity, tax, immunity and
jurisdiction provisions shall survive termination of this Agreement, expiration of the Credit, and payment of the Obligations.

(c) If the Credit is issued in favor of any bank, Citibank branch or other entity in support of an undertaking issued by such bank,
branch or entity on

 
behalf of Applicant or Citibank, Applicant shall remain liable under this Agreement (even after expiry of the Credit) for amounts paid and expenses incurred by Citibank with respect to the Credit
or such undertaking until such time as Citibank or such other bank, branch or entity shall have no further liability, under applicable law, in connection with such undertaking. 

 

	25.	Governing Law; Governing Rules. 

 (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF APPLICANT AND CITIBANK HEREUNDER SHALL BE GOVERNED BY AND SUBJECT TO THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE UNITED STATES FEDERAL LAWS.
 
 (b) Applicant agrees that Citibank may issue the Credit subject to the Uniform Customs and Practice for
Documentary Credits, International Chamber of Commerce (“ICC”) Publication Nos. 500 (1993 Revision) or 600 (2007 Revision) (the “UCP 500” or the “UCP 600”) or, at Citibank’s option, such
later revision thereof in effect at the time of issuance of the Credit (as so chosen for the Credit, the “UCP”) or the International Standby Practices 1998, ICC Publication No. 590 or, at Citibank’s option, such later
revision thereof in effect at the time of issuance of the Credit (as so chosen for the Credit, the “ISP”, and each of the UCP and the ISP, an “ICC Rule”). Citibank’s privileges, rights and remedies under
such ICC Rules shall be in addition to, and not in limitation of, its privileges, rights and remedies expressly provided for herein. The UCP and the ISP (or such later revision of either) shall serve, in the absence of proof to the contrary, as
evidence of general banking usage with respect to the subject matter thereof.
 (c) Applicant agrees that for matters not
addressed by the chosen ICC Rule, the Credit shall be subject to and governed by the laws of the State of New York and applicable United States Federal laws. If, at Applicant’s request, the Credit expressly chooses a state or country law
other than New York State law and United States Federal law or is silent with respect to the choice of an ICC Rule or a governing law, Citibank shall not be liable for any payment, cost, expense or loss resulting from any action or inaction taken by
Citibank if such action or inaction is or would be justified under an ICC Rule, New York law, applicable United States Federal law or the law governing the Credit.

 

  
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	26.	Jurisdiction; Service of Process 

 (a) This Agreement shall be deemed to have been made in New York County, New York, regardless of the order in which the signatures of the parties shall be affixed hereto. Applicant now irrevocably
submits to the non-exclusive jurisdiction of any state or federal court sitting in New York County, New York, for itself, and in respect of any of its property, and, if a law other than New York State law has been chosen to govern the Credit,
Applicant also now irrevocably submits to the non-exclusive jurisdiction of any court sitting in such jurisdiction with respect to the Credit. Applicant agrees not to bring any action or proceeding against Citibank with respect to the Credit in
any jurisdiction other than those described in the immediately preceding sentence. Applicant irrevocably waives any objection to venue or any claim of inconvenient forum.
 (b) If Applicant is an entity formed under the laws of the United States, any state of the United States or the District of Columbia, Applicant agrees that any service of process or other notice of
legal process may be served upon it by mail or hand delivery if sent to: 
 Care of Pacific Drilling Services, Inc., at

 3050 Post Oak Blvd., Suite 1500, Houston, TX 77056 which Applicant now designates its authorized agent for
service of process with respect to the courts located in the State of

 
New York in relation to the Credit and this Agreement. (If no authorized agent is designated in the space provided above, Applicant agrees that process shall be deemed served if sent to its
address given for notices under this Agreement.) (c) If Applicant is an entity other than one described in (b) above, Applicant agrees that any service of process or other notice of legal process may be served upon it by mail or hand
delivery if sent to: 

                      
                                         
                          at 
                                  
                                         
               in 
 the State of New York, which
Applicant now confirms it has designated as its authorized agent for service of process with respect to the courts located in the State of New York in relation to the Credit and this Agreement. 

(d) Applicant agrees that nothing in this Agreement shall affect Citibank’s right to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against Applicant in any other jurisdiction. Applicant agrees that final judgment against it in any action or proceeding shall be enforceable in any other jurisdiction
within or outside the United States by suit on the judgment, a certified copy of which shall be conclusive evidence of the judgment. 
 (continued next page) 

 

  
 -8-

 

 
  

 

	27.	JURY TRIAL WAIVER.

APPLICANT AND CITIBANK EACH IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY CLAIM, COUNTERCLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, THE CREDIT, OR ANY DEALINGS WITH ONE ANOTHER RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT.

 

  

					
	Applicant:	 		 	
	Pacific Drilling Gibraltar Limited	 		 	Co-Applicant (if any):
	Company Name	 		 	 
	/s/ Christian Beckett	 		 	Company Name
	By: Authorized Signer	 		 	 
	 Christian Beckett
	 		 	By: Authorized Signer
	Print Name	 		 	 
	 Director
	 		 	Print Name
	Title	 		 	 
	 Care of Pacific Drilling Services, Inc.,
	 		 	Title
	Address	 		 	 
	 3050 Post Oak Blvd., Suite 1500, Houston, TX 77056
	 		 	Address
		 		 	 
	 June 27, 2011
	 		 	
	Date	 		 	 
		 		 	Date
			
		 		 	(For Citibank Use Only)
			
		 		 	 
		 		 	Approvals to Issue
			
		 		 	 
		 		 	Relationship Manager (Signature & Stamp)
			
		 		 	 
		 		 	Other required Signature & Stamp
			
		 		 	AFSBLOC 04/08
		
		 	 Global Transaction Services
 www.transactionservices.citigroup.com

		 	©2008 Citibank, N.A. All rights
reserved. Citi and Arc Design and CitiDirect are service marks of Citigroup Inc., used and registered throughout the world.

  
 -9-Guaranty

 Exhibit 10.3 
 GUARANTY 
 GUARANTY, dated as of June 27, 2011 (this
“Guaranty”), made by Quantum Pacific International Limited., a corporation organized and existing under the laws of the British Virgin Islands (the “Guarantor”), in favor of Citigroup Inc. and each subsidiary or
affiliate thereof (including Citibank, N.A. and each of its branches wherever located) (including its successors and assigns, “Citi”). 
 For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and to induce Citibank, N.A. to enter into an Agreement for Standby Letter of Credit, dated as of June 7,
2011 (the “SBLC Agreement”), with Pacific Drilling (Gibraltar) Ltd., a Gibraltar company (the “Obligor”), as the applicant therein named, pursuant to which, as therein provided, Citibank, N.A. in its discretion may,
inter alia, issue on or more stand-by or direct pay standby letters of credit to Citibank Nigeria Ltd. to support the operations in Nigeria of the dynamically-positioned drill ship named “Pacific Bora” (the
“Vessel”) owned by the Obligor’s subsidiary, Pacific Bora Ltd., a Liberian corporation ( the “Owner”), the Guarantor agrees as follows: 
 1. Guaranty. The Guarantor unconditionally guarantees the punctual payment when due, whether upon maturity, by acceleration or otherwise, of all obligations (now or hereafter existing) of the
Obligor under the SBLC Agreement and any other agreement or instrument relating thereto (all of the foregoing being, collectively, the “L/C Related Documents”), whether for principal, interest, fees, expenses or otherwise, in each
case strictly in accordance with the terms thereof (all such obligations being the “Obligations”). If the Obligor fails to pay any Obligation in full when due (whether at stated maturity, by acceleration or otherwise), the Guarantor
will promptly pay the same to Citi. The Guarantor will also pay to Citi any and all expenses (including without limitation, reasonable legal fees and expenses) incurred by Citi in enforcing its rights under this Guaranty. This Guaranty is a guaranty
of payment and not merely of collection. 
 2. Guaranty Absolute. The liability of the Guarantor under this Guaranty
shall be irrevocable, absolute and unconditional irrespective of, and the Guarantor hereby irrevocably waives any defenses it may now or hereafter acquire in any way relating to, any or all of the following: (i) any illegality, lack of validity
or enforceability of any Obligation, (ii) any amendment, modification, waiver or consent to departure from the terms of any Obligation, including any renewal or extension of the time or change of the manner or place of payment, (iii) any
exchange, substitution, release, non-perfection or impairment of any collateral securing payment of any Obligation, (iv) any change in the corporate existence, structure or ownership of the Obligor, or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting the Obligor or its assets or any resulting release or discharge of any Obligation, (v) the existence of any claim, set-off or other rights that the Guarantor may have at any time against the Obligor, Citi,
or any other corporation or person, whether in connection herewith or any unrelated transactions, provided that nothing herein will prevent the assertion of any such claim by separate suit or compulsory counterclaim, (vi) any law, regulation,
decree or order of any jurisdiction, or any other event, affecting any term of any Obligation or Citi’s rights with respect thereto, including, without limitation: (A) the application of any such law, regulation, decree or order, including
any prior approval, which would prevent the exchange of a Non-USD Currency (as hereinafter defined) for U.S. Dollars or the remittance of funds outside of such jurisdiction or the unavailability of U.S. Dollars in any legal exchange market in such
jurisdiction in accordance with normal commercial practice; or (B) a declaration of banking moratorium or any suspension of payments by banks in such jurisdiction or the imposition by such jurisdiction or any governmental authority thereof of
any moratorium on, the required rescheduling or restructuring of, or required approval of payments on, any indebtedness in such jurisdiction; or (C) any expropriation, confiscation, nationalization or requisition by such country or any
governmental authority that directly or indirectly deprives the Obligor of any assets or their use or of the ability to operate its business or a material part thereof; or (D) any war (whether or not declared), insurrection, revolution, hostile
act, civil strife or similar events occurring in such jurisdiction 

 
which has the same effect as the events described in clause (A), (B) or (C) above (in each of the cases contemplated in clauses (A) through (D) above, to the extent occurring
or existing on or at any time after the date of this Guaranty), and (vii) any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation by Citi that might otherwise
constitute a defense available to, or a legal or equitable discharge of, the Obligor or the Guarantor or any other guarantor or surety (other than the defense of payment or performance). 

Without limiting the generality of the foregoing, the Guarantor guarantees that it shall pay Citi strictly in accordance with the express
terms of any document or agreement evidencing any Obligation, including in the amounts and in the currency expressly agreed to thereunder, irrespective of and without giving effect to any laws of the jurisdiction where the Obligor is principally
located in effect from time to time, or any order, decree or regulation in the jurisdiction where the Obligor is principally located. 
 It is the intent of this Section 2 that the Guarantor’s obligations hereunder are and shall be absolute and unconditional under any and all circumstances. 

3. Waiver. The Guarantor waives promptness, diligence, notice of acceptance, notice of dishonor and any other notice with respect
to any Obligation and this Guaranty and any requirement that Citi exercise any right or take any action against the Obligor or any collateral security or credit support. 
 4. Reinstatement. This Guaranty will continue to be effective or be reinstated, as the case may be, if at any time any payment of any Obligation is rescinded or must otherwise be returned by Citi
upon the insolvency, bankruptcy or reorganization of the Obligor or otherwise, all as though such payment had not been made. 

5. Subrogation. The Guarantor will not assert, enforce or otherwise exercise any rights which it may acquire by way of subrogation
under this Guaranty, by any payment made hereunder or otherwise, until payment in full of the Obligations and the termination of any and all agreements under which Citi is committed to provide extensions of credit. 

6. Taxes. Any and all payments by the Guarantor hereunder will be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding income or franchise taxes imposed on Citi’s net income by the jurisdiction under the laws of which Citi is
organized or any political subdivision thereof or by the jurisdiction of Citi’s lending office or any political subdivision thereof (all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being
“Taxes”). If the Guarantor is required by law to deduct any Taxes from or in respect of any sum payable hereunder (i) the sum payable will be increased as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) Citi will receive an amount equal to the sum it would have received had no such deductions been made, (ii) the Guarantor will make such deductions, and (iii) the
Guarantor will pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law. In addition, the Guarantor will pay any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Guaranty or the Obligations (“Other Taxes”). The Guarantor will
promptly furnish to Citi the original or a certified copy of a receipt evidencing payment thereof. The Guarantor will indemnify Citi for the full amount of Taxes or Other Taxes paid by Citi or any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted, within 30 days of Citi’s request therefor. Without prejudice to the survival of any other agreement contained
herein, the Guarantor’s agreements and obligations contained in this Section will survive the payment in full of the Obligations, principal and interest hereunder and any termination of this Guaranty. 

  
 2 

 7. Place and Currency of Payment. If any Obligation is payable in U.S. Dollars, the
Guarantor will make payment hereunder to Citi in U.S. Dollars at 399 Park Avenue, New York, New York or such other location in the United States of America as Citi specifies to the Guarantor. If any Obligation is payable in a currency other than
U.S. Dollars (a “Non-USD Currency”), the Guarantor will, at Citi’s option, either (i) make payment in such Non-USD Currency at the place where such Obligation is payable, or (ii) pay Citi in U.S. Dollars at 399 Park
Avenue, New York, New York or such other location in the United States as Citi specifies to the Guarantor. In the event of a payment pursuant to clause (ii) above, the Guarantor will pay Citi the equivalent of the amount of such Obligation in
U.S. Dollars calculated at the rate of exchange at which, in accordance with normal banking procedures, Citi may buy such Non-USD Currency in New York, New York on the date the Guarantor makes such payment; provided, however, that the
foregoing provisions of this sentence shall not apply to any payments hereunder in respect of Obligations that have been re-denominated into a Non-USD Currency as a result of the application of any law, order, decree or regulation in any
jurisdiction other than the United States, which Obligations shall, for purposes of this Guaranty, be deemed to remain denominated in U.S. Dollars and payable to Citi in accordance with the first sentence of this Section. 

8. Set-Off. If the Guarantor fails to pay any of its obligations hereunder when due and payable, Citi is authorized at any time
and from time to time, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by Citi to or for the Guarantor’s credit or account against
any and all of the Obligations, whether or not Citi has made any demand under this Guaranty. Citi will promptly notify the Guarantor after any such set-off and application, provided that the failure to give such notice will not affect the validity
of such set-off and application. Citi’s rights under this Section are in addition to other rights and remedies (including, without limitation, other rights of set-off) that Citi may have. 

9. Representations and Warranties. The Guarantor represents and warrants that: 

(i) the execution, delivery and performance by the Guarantor of this Guaranty are within its corporate powers, have been
duly authorized by all necessary corporate action, and do not contravene (x) its charter or by-laws or (y) any law or any contractual restriction binding on or affecting the Guarantor or any entity that controls it; 

(ii) no authorization or approval or other action by, and no notice to or filing with, any governmental authority or
regulatory body or any other third party is required for the due execution, delivery and performance by the Guarantor of this Guaranty; 
 (iii) this Guaranty has been duly executed and delivered by the Guarantor and is its legal, valid and binding obligation, enforceable against the Guarantor in accordance with its terms; 

(iv) the consolidated balance sheets of the Guarantor and its subsidiaries as at December 31, 2009, and the related
consolidated statements of income and retained earnings of the Guarantor and its subsidiaries for the fiscal year then ended, copies of which have been furnished to Citi, fairly present the financial condition of the Guarantor and its subsidiaries
as at such date and the results of the operations of the Guarantor and its subsidiaries for the period ended on such date, all in accordance with generally accepted accounting principles consistently applied, and since December 31, 2009, there
has been no material adverse change in the business, condition (financial or otherwise), operations, performance, properties or prospects of the Guarantor or of the Guarantor and its subsidiaries taken as a whole; 

  
 3 

 (v) there is no action, suit, investigation or proceeding pending against,
or to the Guarantor’s knowledge, threatened against or affecting the Guarantor or any of its subsidiaries before any court or arbitrator or any governmental body, agency or official in which there is a material likelihood of an adverse decision
which could reasonably be expected to have a material adverse affect on the business, condition (financial or other), operations, performance, properties or prospects of the Guarantor and its subsidiaries, taken as a whole, or which would impair the
ability of the Guarantor to perform its obligations hereunder, or which in any manner draws into question the legality, validity or enforceability of this Guaranty; 

(vi) no report, financial statement, certificate or other information furnished (whether in writing or orally) by or on
behalf of the Guarantor to Citi in connection with the transactions contemplated hereby and the negotiation of this Guaranty or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to any projected financial information, the Guarantor
represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time; and 
 (vii) each of the Guarantor and each of its consolidated subsidiaries is, individually and together with its subsidiaries, Solvent. “Solvent” means, with respect to any person on a
particular date, that on such date (a) the present fair salable value of the assets of such person is not less than the amount that will be required to pay the probable liability of such person on its debts as they become absolute and matured,
(b) such person does not intend to, and does not believe that it will, incur debts or liabilities beyond such person’s ability to pay as such debts and liabilities mature and (c) such person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for which person’s property would be unreasonably small in relation to such business or such transaction. 
 On the date that SBLC Agreement has been entered into, and on each date that a Letter of Credit under the SBLC Agreement is issued or renewed, the Guarantor will be deemed to have represented and
warranted that all of the foregoing statements are true on such date. 
 10. Covenants. So long as this Guaranty is in
effect, the Guarantor will: 
 (i) as soon as available, if at all, after the end of each of the first three
quarters of each fiscal year of the Guarantor, deliver to Citi consolidated balance sheets of the Guarantor and its subsidiaries as of the end of such quarter and consolidated statements of income and cash flows of the Guarantor and its subsidiaries
for the period commencing at the end of the previous fiscal year and ending with the end of such quarter, duly certified (subject to year-end audit adjustments) by the Guarantor’s chief financial officer as having been prepared in accordance
with generally accepted accounting principles (GAAP as defined in section (vi) (a) below); 
 (ii) as
soon as available and in any event within 105 days after the end of each fiscal year of the Guarantor, deliver to Citi a copy of the annual audit report for such year for the Guarantor and its subsidiaries, containing a consolidated balance sheet of
the Guarantor and its subsidiaries as of the end of such fiscal year and consolidated statements of income and cash flows of the Guarantor and its subsidiaries for such fiscal year, in each case accompanied by an opinion acceptable to Citi by
independent public accountants acceptable to Citi; 

  
 4 

 (iii) as soon as possible, and in any event within five days after obtaining
knowledge of each Guarantor Event of Default (as defined in Section 11) and each event which, with the giving of notice and/or the passage of time would constitute a Guarantor Event of Default (a “Guarantor Default”), deliver
to Citi a statement of the Guarantor’s chief financial officer, setting forth details of such Guarantor Event of Default or Guarantor Default and the action that the Guarantor has taken or proposes to take with respect thereto; 

(iv) at any reasonable time and from time to time, permit Citi and any of its agents or representatives to examine and
make copies of and abstracts from the records and books of account of, and visit the properties of, the Guarantor and any of its subsidiaries, and to discuss the affairs, finances and accounts of the Guarantor and its subsidiaries with any of their
officers or directors and with their independent certified public accountants; 
 (v) ensure that the SBLC
Agreement contains (y) an event of default which is triggered by the occurrence of a Guarantor Event of Default, and (z) an event of default which is triggered in the event that this Guaranty ceases to be legal, valid, binding or
enforceable against the Guarantor in accordance with its terms . 
 (vi) 

(a) Consolidated Tangible Net Worth. Maintain at all times a Consolidated Tangible Net Worth of at least US$1
billion. 
 “Consolidated Tangible Net Worth” means, as of any date of determination, consolidated shareholders
equity of Guarantor and its subsidiaries determined in accordance with generally accepted accounting principles from time to time in effect in the United States, or International Financial Reporting Standards published by the International
Accounting Standards Board, as in effect from time to time, consistently applied (“GAAP”), but excluding the effect on shareholders equity of cumulative foreign exchange translation adjustments, and less the net book amount of all
assets of Guarantor and its subsidiaries that would be classified as intangible assets on the consolidated balance sheet of Guarantor as of such date prepared in accordance with GAAP. For purposes of this definition, SPVs shall be accounted for
pursuant to the equity method of accounting. 
 (b) Total Debt to Total Capitalization Ratio. Maintain, at
the end of each fiscal quarter of Guarantor , a ratio of Total Debt to Total Capitalization (each as defined below) for the four fiscal quarters ended as of the end of such quarter not greater than 3.0:5.0. 

“Total Debt” means, as to Guarantor and its Consolidated Subsidiaries at any time, the aggregate sum of (a) all
indebtedness (as reflected on the Consolidated balance sheet of Guarantor ) and (b) (without duplication): 

(i) moneys borrowed; 
 (ii) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; 
 (iii) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; 

  
 5 

 (iv) the amount of any liability in respect of any lease or hire purchase
contract that, in accordance with IFRS, would be treated as a finance or capital lease; 
 (v) receivables sold
or discounted (other than any receivables to the extent they are sold on a non-recourse basis); 
 (vi) the
amount of any liability in respect of any purchase price for assets or services the payment of which is deferred for a period in excess of ninety (90) days in order to raise finance or to finance the acquisition of those assets or services;

 (vii) any amount raised under any other transaction (including any forward sale or purchase agreement) having
the commercial effect of a borrowing; 
 (viii) 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; 
 (ix) transaction, the marked to market value shall not be taken into account until such time as the relevant derivative transaction is terminated); 

(x) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby; 

(xi) or documentary letter of credit or any other instrument issued by a bank or financial or other institution; and

 (xii) the amount of any liability (without duplication) in respect of any guarantee or indemnity for any of
the items referred to in paragraphs (i) to (xi) of this definition. 
 “Total Capitalization” means,
as of any date of determination, the sum of Total Debt plus Consolidated Tangible Net Worth as of such date. 

(vii) notify Citi promptly if: 
 (a) any payment is made by Star Deep Water Petroleum, a company organized under the laws of the Federal Republic of Nigeria (“Star Deep Water Petroleum”), in respect of the Temporary
Import Bond pursuant to the reimbursement obligations contained in Section 14.5 of the Offshore Drilling Contract - Dwd-2010-639426, dated 9 November 2010 (as the same may be from time to time amended, supplemented or otherwise modified,
the “Drilling Contract”), between Star Deep Water Petroleum Limited, and the Owner and Pacific International Drilling West Africa Limited, a Nigerian corporation (“PIDWAL”); 

  
 6 

 (b) the Vessel suffers a Total Loss or Major Casualty Event (as defined in
the Project Facilities Agreement, dated 9 September 2010, between the Owner as a borrower, the other borrowers and guarantor therein named, DnB NOR Bank ASA and the other parties therein named (as the same may be from time to time amended,
supplemented or otherwise modified, the “PFA”)); 
 (c) Star Deep Water Petroleum, on the one
hand, or the Owner or PIDWAL, collectively as Contractor, on the other hand, gives notice to the other party of a material breach or material default under the Drilling Contract or the Quiet Enjoyment Agreement, dated as of November 12, 2010
(the “QEA”), made by and between Star Deep Water Petroleum, DnB NOR Bank ASA as Security Trustee for the benefit of the secured parties under the PFA, and, collectively, the Owner and PIDW AL as the Contractor therein named (the
Drilling Contract and the QEA, each a “Drilling Document” and collectively, the “Drilling Documents”), or either party repudiates or threatens to repudiate a Drilling Document; or 

(d) a Change of Control (defined below) occurs. 
 A “Change of Control” means: 
 (i) the Guarantor
ceases to own and control, directly or indirectly, free and clear of encumbrances (other than the security interest of the lenders and hedging parties under the PFA): 

(A) (i) 70% of the issued and outstanding equity interests of Pacific Drilling Limited, a Liberian corporation
(“PDL”), the Obligor, or the Owner or (ii) in the event of a registered securities offering or a private placement of the Equity Interests of PDL, 42% of the issued and outstanding Equity Interests of PDL; or 

(B) at least 28% of the issued and outstanding equity interests of PIDWAL provided this item (B) shall not
apply if there has been a registered securities offering or a private placement of the equity interests of PDL; 

(ii) the current beneficial equity owners of the Guarantor (being such beneficial owners as of the date of this Guaranty)
cease to own and control, directly or indirectly, free and clear of encumbrances, more than 50% of the issued and outstanding equity interests of the Guarantor. 
 11. Guarantor Events of Default. Each of the following events constitutes a “Guarantor Event of Default”: 

(i) the Guarantor fails to pay any principal amount payable under this Guaranty when the same shall become due and payable
or (b) the Guarantor shall fail to pay any interest or make any other payment under this Guaranty, in each case under this clause (b) within five (5) Business Days after the same shall become due and payable; 

  
 7 

 (ii) (x) the Guarantor fails to perform or observe any term, covenant
or agreement contained in Section 10 (iii), (iv) or (vi); or (y) the Guarantor fails to perform or observe any other term, covenant or agreement contained in this Guaranty if such failure remains unremedied for 10 days after written
notice thereof has been given to the Guarantor by Citi; 
 (iii) any representation or warranty made or deemed
made by the Guarantor herein proves to have been incorrect in any material respect when made or deemed made; 

(iv) the Guarantor or any of its subsidiaries fails to pay any principal of or premium or interest on any indebtedness for
borrowed money that is outstanding in a principal or notional amount of at least US$ 5,000,000 in the aggregate when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such
failure continues after the applicable grace period, if any, specified in the agreement or instrument relating to such indebtedness; or any other event shall occur or condition exists under any agreement or instrument relating to any such
indebtedness and continues after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate the maturity of such indebtedness; or any such indebtedness is declared to be
due and payable, or required to be prepaid or redeemed (other than by a regularly scheduled required prepayment or redemption), purchased or defeased, or an offer to prepay, redeem, purchase or defease such indebtedness is required to be made, in
each case prior to the stated maturity thereof; 
 (v) the Guarantor or any of its subsidiaries is generally not
paying its debts as such debts become due, or admits in writing its inability to pay such debts generally, or makes a general assignment for the benefit of creditors; or any proceeding is instituted by or against the Guarantor or any of its
subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, custodian or other similar official for the Guarantor or any of its subsidiaries or for any substantial part of the Guarantor’s or such
subsidiary’s property and, in the case of any such proceeding instituted against the Guarantor or such subsidiary (but not instituted by the Guarantor or such subsidiary), either such proceeding remains undismissed or unstayed for a period of
30 days, or any of the actions sought in such proceeding (including, without limitation, the entry of an order for relief against, or the appointment of a receiver, trustee, custodian or other similar official) occurs; or the Guarantor or any of its
subsidiaries takes any corporate action to authorize any of the actions set forth above in this subsection (v); 

(vi) any judgment or order for the payment of money in excess of US$ 5,000,000 is rendered against the Guarantor or any of
its subsidiaries and either (x) enforcement proceedings have been commenced by any creditor upon such judgment or order or (y) there is any period of 10 consecutive days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, is not in effect; and 
 (vii) a Change of Control shall occur.

 Upon the occurrence and during the continuance of a Guarantor Event of Default and upon the demand of Citi made from time to time, the
Guarantor will purchase from, and pay Citi for, the outstanding Obligations (including any contingent Obligations) at a purchase price equal to the aggregate amount of the outstanding Obligations (including any contingent Obligations); provided
however, that the Guarantor’s obligation to make such purchase shall be automatic (and Citi shall not be required to make demand therefore) 

  
 8 

 
immediately upon the occurrence of a Guarantor Event of Default set forth in clause (v) of this Section. Such purchase will be made not later than 12:00 noon two business days after the date
of such demand for purchase, and in a place and currency as set forth in Section 7; provided further however, that such purchase shall be made immediately upon the occurrence of a Guarantor Event of Default set forth in clause (v) of this
Section. The Guarantor hereby agrees that the purchase of the Obligations (including any contingent Obligations) by it hereunder will be without recourse to or representation or warranty by Citi. The foregoing remedy is in addition to any other
rights and remedies otherwise available to Citi, including without limitation, any rights and remedies available to it under the documents or instruments evidencing the Obligations (including any contingent Obligations). 

12. Continuing Guaranty. This is a continuing guaranty and applies to all Obligations whenever arising. This Guaranty is
irrevocable and will remain in full force and effect until the payment in full of the Obligations and all amounts payable hereunder and the termination of all of the agreements relating to the Obligations. 

13. Amendments, Etc. No amendment or waiver of any provision of this Guaranty, and no consent to departure by the Guarantor
herefrom, will in any event be effective unless the same is in writing and signed by Citibank, N.A., on behalf of Citi, and then such waiver or consent will be effective only in the specific instance and for the specific purpose for which given.

 14. Addresses. All notices and other communications provided for hereunder will be in writing (including telecopier
communication), and mailed, telecopied or delivered to it, if to the Guarantor, at its address at Villa Saint Jean, 83 Ruelle Saint Jean, 98000 Monaco, Attention: John Frank Megginson, and if to Citi, at its address c/o Citibank, N.A.,
__________________________________________, Attention: ________________________________ Department, or, as to either party, at such other address as is designated by such party in a written notice to the other party. All such notices and other
communications will, when mailed or telecopied, be effective when deposited in the mails or telecopied, respectively. 
 15.
Guarantor’s Credit Decision, Etc. The Guarantor has, independently and without reliance on Citi and based on such documents and information as the Guarantor has deemed appropriate, made its own credit analysis and decision to enter into
this Guaranty. The Guarantor has adequate means to obtain from the Obligor on a continuing basis information concerning the financial condition, operations and business of the Obligor, and the Guarantor is not relying on Citi to provide such
information now or in the future. The Guarantor acknowledges that it will receive substantial direct and indirect benefit from the extensions of credit contemplated by this Guaranty. 

16. Judgment. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder in U.S.
Dollars into a Non-USD Currency, the Guarantor agrees that the rate of exchange used will be that at which, in accordance with normal banking procedures, Citi could purchase U.S. Dollars with such Non-USD Currency on the business day preceding that
on which final judgment is given. The obligation of the Guarantor in respect of any sum due hereunder will, notwithstanding any judgment in a Non-USD Currency, be discharged only to the extent that on the date the Guarantor makes payment to Citi of
any sum adjudged to be so due in such Non-USD Currency, Citi may, in accordance with normal banking procedures, purchase U.S. Dollars with such Non-USD Currency; if the U.S. Dollars so purchased are less than the sum originally due to Citi in U.S.
Dollars, the Guarantor agrees, as a separate obligation and notwithstanding any such judgment, to indemnify Citi against such loss, and if the U.S. Dollars so purchased exceed the sum originally due to Citi in U.S. Dollars, Citi agrees to remit to
the Guarantor such excess. 
 17. Governing Law. This Guaranty shall be governed by, and construed in accordance with,
the laws of the State of New York. 

  
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 18. Consent to Jurisdiction, Etc. The Guarantor irrevocably and
unconditionally (i) submits to the non-exclusive jurisdiction of any New York State or Federal court located in the County of New York, State of New York, over any suit, action or proceeding arising out of or relating to this Guaranty,
(ii) accepts for itself and in respect of its property the jurisdiction of such courts, and (iii) waives any objection to the laying of venue of any such suit, action or proceeding brought in any such courts and any claim that any such
suit, action or proceeding has been brought in an inconvenient forum. The Guarantor hereby irrevocably appoints CT Corporation System (the “Process Agent”) with an office on the date hereof at 111 Eighth Avenue, 13th Floor, New York 10011, United States, as its agent to receive on
behalf of the Guarantor and its property service of copies of the summons and complaint and any other notice, document or process which may be served in such suit, action or proceeding. Such service may be made by mailing or delivering a copy of
such process to the Guarantor in care of the Process Agent, and the Guarantor hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. As an alternative method of service, the Guarantor also irrevocably
consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to the Company at its address specified in Section 14. A final judgment in any such suit, action or proceeding will be
conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing herein will affect the right of Citi to serve legal process in any other manner permitted by law or affect Citi’s
right to bring any suit, action or proceeding against the Guarantor or its property in the courts of other jurisdictions. To the extent that the Guarantor has or hereafter may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, the Guarantor irrevocably waives such immunity in respect of its obligations
under this Guaranty. 
 19. WAIVER OF JURY TRIAL. THE GUARANTOR IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS GUARANTY OR CITI’S ACTIONS IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT HEREOF. 

 

			
	Quantum Pacific International Ltd.
		
	By	 	/s/ D.U. Tugman
		 	Name: D.U. Tugman
		 	Title: Director

  
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