Document:

Exhibit 10.31

 

EXECUTION FORM

 

DATED  23 NOVEMBER 2012

 

BNP PARIBAS 

as Security Agent

 

- and -

 

KOSMOS ENERGY FINANCE INTERNATIONAL
  as Original Senior Borrower

 

- and -

 

KOSMOS ENERGY LTD.
  as HY Note Issuer

 

and

 

RCF Borrower

 

- and -

 

STANDARD CHARTERED BANK
  as RCF Agent

 

- and -

 

BNP PARIBAS

as Security and Intercreditor Agent

 

and

 

Proceeds Agent

 

 

INTERCREDITOR AGREEMENT

 

 

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

 

513402118

 

 

CONTENTS

 

	
Clause
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS   AND INTERPRETATION
    	
4
    
	
 
    	
 
    	
 
    
	
2.
    	
RANKING   AND PRIORITY
    	
19
    
	
 
    	
 
    	
 
    
	
3.
    	
SENIOR   CREDITORS AND SENIOR LIABILITIES
    	
20
    
	
 
    	
 
    	
 
    
	
4.
    	
JUNIOR   LENDERS AND JUNIOR LIABILITIES
    	
21
    
	
 
    	
 
    	
 
    
	
5.
    	
EFFECT   OF INSOLVENCY EVENT
    	
27
    
	
 
    	
 
    	
 
    
	
6.
    	
TURNOVER   OF RECEIPTS
    	
28
    
	
 
    	
 
    	
 
    
	
7.
    	
REDISTRIBUTION
    	
30
    
	
 
    	
 
    	
 
    
	
8.
    	
DISPOSALS
    	
31
    
	
 
    	
 
    	
 
    
	
9.
    	
APPLICATION   OF PROCEEDS
    	
32
    
	
 
    	
 
    	
 
    
	
10.
    	
PERMITTED   REFINANCING
    	
34
    
	
 
    	
 
    	
 
    
	
11.
    	
ROLE   OF THE PROCEEDS AGENT
    	
35
    
	
 
    	
 
    	
 
    
	
12.
    	
CHANGE   OF PROCEEDS AGENT AND DELEGATION
    	
39
    
	
 
    	
 
    	
 
    
	
13.
    	
CHANGES   TO THE PARTIES
    	
41
    
	
 
    	
 
    	
 
    
	
14.
    	
COSTS   AND EXPENSES
    	
43
    
	
 
    	
 
    	
 
    
	
15.
    	
INDEMNITIES
    	
44
    
	
 
    	
 
    	
 
    
	
16.
    	
INFORMATION
    	
46
    
	
 
    	
 
    	
 
    
	
17.
    	
NOTICES
    	
46
    
	
 
    	
 
    	
 
    
	
18.
    	
PRESERVATION
    	
50
    
	
 
    	
 
    	
 
    
	
19.
    	
CONSENTS,   AMENDMENTS AND OVERRIDE
    	
52
    
	
 
    	
 
    	
 
    
	
20.
    	
COUNTERPARTS
    	
55
    
	
 
    	
 
    	
 
    
	
21.
    	
GOVERNING   LAW
    	
55
    
	
 
    	
 
    	
 
    
	
22.
    	
JURISDICTION
    	
55
    
	
 
    	
 
    	
 
    
	
23.
    	
SERVICE   OF PROCESS
    	
56
    
				

 

2

 

	
SCHEDULE 1 FORM OF AGENT ACCESSION UNDERTAKING
    	
57
    

 

3

 

THIS AGREEMENT is dated 23 November 2012 and made between:

 

(1)                                BNP PARIBAS in its capacity as security agent for the Senior Secured Parties on the terms and conditions set out herein (the “Security Agent” which expression includes its successors in title and assigns);

 

(2)                                KOSMOS ENERGY FINANCE INTERNATIONAL or “KEFI” 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 Senior Borrower”);

 

(3)                                KOSMOS ENERGY LTD. or “KEL” a company incorporated under the laws of Bermuda with registered number 45011 and having its registered office at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda in its capacities as (i) high yield bond issuer (the “HY Note Issuer”); and (ii) revolving credit facility borrower (the “RCF Borrower”);

 

(4)                                STANDARD CHARTERED BANK as agent of the RCF Lenders (the “RCF Agent”);

 

(5)                                BNP PARIBAS as security and intercreditor agent of the Junior Finance Parties (the “Security and Intercreditor Agent”) and as Proceeds Agent under this Agreement (the “Proceeds Agent”).

 

WHEREAS

 

(A)                              By a senior facility agreement dated 28 March 2011 (as amended from time to time) (the “Senior Facility Agreement”) made between, among others, KEFI as Original Senior Borrower and BNP Paribas as Security Agent, the Lenders (as defined therein) have agreed to make certain facilities available to KEFI in order to finance project costs relating to Kosmos Energy Ghana’s interest in the Jubilee Field, offshore Ghana.

 

(B)                              On or around the date of this Agreement, KEL entered into the RCF Agreement and intends to issue HY Notes in the future. It has been agreed, among other matters, that the liabilities outstanding under (i) the Senior Facility Agreement and (ii) the RCF Agreement and the HY Note Indenture (as and when this is entered into), should rank in accordance with the terms of this Agreement.

 

IT IS AGREED as follows:

 

1.                                     DEFINITIONS AND INTERPRETATION

 

1.1                              Definitions

 

In this Agreement:

 

“Acceleration Event” means (as applicable):

 

(a)                                 the RCF Agent exercising any of its rights under Clause 21.15 (Acceleration) of the RCF Agreement;

 

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(b)                                 the Security Agent exercising any of its rights under Clause 29.17 (Acceleration — all Lenders) or 29.18 (Acceleration — IFC and Lenders) of the Senior Facility Agreement; and/or

 

(c)                                  the HY Noteholder Trustee exercising any of its rights of acceleration and/or enforcement under the HY Note Indenture.

 

“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 the Security and Intercreditor Agent and the Security Agent.

 

“Agent Accession Undertaking” means an undertaking substantially in the form set out in Schedule 1 (Form of Agent Accession Undertaking).

 

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

 

“Charge over Shares in KEH” means the first ranking charge governed by English law dated on or around the date of this Agreement, granted by KEL over its shares in Kosmos Energy Holdings in favour of the Security and Intercreditor Agent, for and on behalf of the Junior Secured Parties.

 

“Charged Property” means all of the assets which from time to time are, or are expressed to be, the subject of the Transaction Security.

 

“Commitment” means (as applicable):

 

(a)                                 in relation to an “Original Lender” (as defined in the Senior Facility Agreement), the amount set opposite its name under the heading “Commitment” in Schedule 2 to the Senior Facility Agreement and the amount of any other Commitment transferred to it; and

 

(b)                                 in relation to any other “Lender” (as defined in the Senior Facility Agreement), the amount of any Commitment transferred to it;

 

(c)                                  in relation to an “Original Lender” (as defined in the RCF Agreement), the amount set opposite its name under the heading “Commitment” in Schedule 2 to the RCF Agreement and the amount of any other Commitment transferred to it; and

 

(d)                                 in relation to any other “Lender” (as defined in the RCF Agreement), the amount of any Commitment transferred to it,

 

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

 

“Consent” means any consent, approval, release or waiver or agreement to any amendment.

 

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“Credit Participation” means, in relation to a Senior Creditor, its Commitment and, in relation to a Junior Creditor, all amounts actually and contingently accrued to it under the RCF and the HY Notes, if any, and as applicable.

 

“Creditors” means the Junior Creditors and the Senior Creditors, or any of them, as the context so requires.

 

“Deed of Guarantee” means the deed of guarantee and indemnity in respect of the Junior Liabilities entered into on or around the date of this Agreement between inter alios, the Security and Intercreditor Agent and each Junior Guarantor.

 

“Default” means a Senior Default or a Junior Default, as the context so requires.

 

“Discharge Date” means the later to occur of the Junior Discharge Date and the Senior Discharge Date.

 

“Disposal Proceeds” has the meaning given to that term in Clause 8 (DISPOSALS).

 

“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 Senior Obligor (or a disposal of a Senior Obligor) which is:

 

(a)                                 being effected at the request of the Instructing Senior Creditors in circumstances where the Senior Transaction Security has become enforceable in accordance with the terms of the Senior  Finance Documents; or

 

(b)                                 being effected by enforcement of the Senior Transaction Security in accordance with the terms of the Senior Security Documents.

 

“Dollar Currency Amount” means, in relation to an amount, that amount converted (to the extent not already denominated in USD) into USD at the relevant Agent’s Spot Rate of Exchange on the Business Day prior to the relevant calculation.

 

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“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 Finance Party 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 which is otherwise expressly permitted under the Senior Facility Agreement, the RCF Agreement or the HY Note Indenture; 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 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);

 

(c)                                  the entering into of any composition, compromise, assignment or arrangement with any member of the Group 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

 

(d)                                 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

 

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                                                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: the taking of any action falling within paragraph (a)(vii) above or this paragraph (d) 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.

 

“Event of Default” means, as applicable, an “Event of Default” (as defined in the Senior Facility Agreement), an “Event of Default” (as defined in the RCF Agreement) and an “Event of Default” (as defined in the HY Note Indenture).

 

“Finance Documents” means the Junior Finance Documents and the Senior Finance Documents, as the context so requires.

 

“Finance Party” means a Junior Finance Party and a Senior Finance Party.

 

“First  Discharge Date” means the earlier to occur of the Junior Discharge Date and the Senior Discharge Date.

 

“Group” means KEL and each of its direct and indirect Subsidiaries for the time being and “Group Company” means any one of them.

 

“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 Finance Party 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).

 

“Holding Company” means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

 

“HY Enforcement Recovery” has the meaning given to it in clause 4.10(B)(ii) (Permitted Enforcement: Junior Creditors).

 

“HY Note Indenture” means the indenture pursuant to which all or any of the HY Notes are constituted or any other agreement under which HY Notes are constituted and any other agreement under which any guarantee for the HY Notes is given (including but not limited to the Deed of Guarantee).

 

“HY Noteholder” means a holder of HY Notes from time to time.

 

“HY Noteholder Trustee” means any collateral agent, trustee or other representative of the HY Noteholders.

 

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“HY Noteholder Trustee Liabilities” means all present and future liabilities and obligations, actual and contingent, of any Obligor to the HY Noteholder Trustee under or in connection with the Finance Documents.

 

“HY Notes” means the senior secured notes issued by the HY Note Issuer from time to time to the HY Noteholders, pursuant to the terms of the HY Note Indenture.

 

“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;

 

(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 Junior Creditors” means the group of Junior Creditors which is entitled to instruct the Security and Intercreditor Agent to take or refrain from taking any action pursuant to the terms of the KEL Intercreditor Agreement or, if no such agreement is in effect, the group of RCF Lenders which is entitled to instruct the Security and Intercreditor Agent to take or refrain from taking any action pursuant to the terms of the RCF Agreement.

 

“Instructing Senior Creditors” means the group of Senior Creditors which is entitled to instruct the Security Agent to take or refrain from taking any action pursuant to the terms of the Senior Finance Documents.

 

“Intercreditor Amendment” means any amendment or waiver which is subject to Clause 19 (CONSENTS, AMENDMENTS AND OVERRIDE).

 

“Junior Agent” means the RCF Agent and/or any HY Noteholder Trustee, as the context so requires.

 

“Junior Commitment” means:

 

(a)                                 in relation to an “Original Lender” (as defined in the RCF Agreement), the amount set opposite its name under the heading “Commitment” in Schedule 2 to the RCF Agreement and the amount of any other Commitment transferred to it; and

 

(b)                                 in relation to any other “Lender” (as defined in the RCF Agreement), the amount of any Commitment transferred to it,

 

9

 

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

 

“Junior  Credit Participation” means, in relation to a Junior Creditor, all amounts actually and contingently accrued to it under the HY Notes and the amount of its Junior Commitment, if any.

 

“Junior Creditor” means an RCF Lender or a HY Noteholder, or both of them, as the context so requires.

 

“Junior Default” means a “Default” (as defined in the RCF Agreement) and a “Default” (as defined in the HY Note Indenture).

 

“Junior Discharge Date” means the first date on which all Junior Liabilities have been fully and finally discharged, whether or not as the result of an Enforcement Action, and the Junior Creditors are under no further obligation to provide financial accommodation to any of the Junior Obligors under the Junior Finance Documents.

 

“Junior Enforcement Notice” has the meaning given to that term in Clause 4.10 (Permitted Enforcement: Junior Creditors).

 

“Junior Event of Default” means an “Event of Default” (as defined in the RCF Agreement) and a “Event of Default” (as defined in the HY Note Indenture).

 

“Junior Fee Letter” means any letter or letters between the Company and any Junior Finance Party setting out any fees payable by the Company to a Junior Finance Party pursuant to a Junior Finance Document.

 

“Junior Finance Party” means a “Finance Party” as defined in the RCF Agreement, any HY Noteholder and any HY Noteholder Trustee.

 

“Junior  Finance Document” means this Agreement, the KEL Intercreditor Agreement (to the extent the same is in effect), the RCF Agreement, the HY Note Indenture, the Junior Security Documents, any Junior Fee Letter and any document designated as a “Finance Document” by the Security and Intercreditor Agent and KEL in accordance with the terms of the KEL Intercreditor Agreement (if in force and effect) or, if not in force and effect), by the RCF Agent and KEL in accordance with the RCF Agreement.

 

“Junior  Guarantor” means a “Guarantor” from time to time under (and as defined under) the Deed of Guarantee.

 

“Junior  Liabilities” means all present and future liabilities and obligations at any time of any Junior Obligor to any Junior Finance Party under the Junior 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:

 

(a)           any refinancing, novation, deferral or extension;

 

10

 

(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 Junior 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.

 

“Junior  Obligor” means KEL, the Junior Guarantors and any person which becomes a “Party” as an “Obligor” (and “Party” and “Obligor” for these purposes are as defined in the KEL Intercreditor Agreement) in accordance with the terms of the Junior Finance Documents.

 

“Junior Payment Stop Event” shall occur if, pursuant to Clause 24.8 (Sources and Uses) of the Senior Facility Agreement, a Sources and Uses Statement (as defined therein) dated within 12 months of the proposed date for any payment of Junior Liabilities, shows a shortfall in funding pursuant to Clause 24.8 of the Senior Facility Agreement.

 

“Junior Payment Stop Notice” has the meaning given to it in Clause 4.4(B) (Issue of Junior Payment Stop Notice).

 

“Junior Secured Party” means a “Secured Party” as defined in the RCF Agreement, any HY Noteholder and any HY Noteholder Trustee.

 

“Junior  Secured Property” means:

 

(a)                                 the Junior Transaction Security expressed to be granted in favour of the Security and Intercreditor Agent as trustee for the Junior Secured Parties and all proceeds of that Junior Transaction Security;

 

(b)                                 all obligations expressed to be undertaken by a Junior Obligor to pay amounts in respect of the Junior Liabilities to the Security and Intercreditor Agent as trustee for the Junior Secured Parties and secured by the Junior Transaction Security together with all representations and warranties expressed to be given by a Junior Obligor in favour of the Security and Intercreditor Agent as trustee for the Junior Secured Parties;

 

(c)                                  the Security and Intercreditor Agent’s interest in any trust fund created pursuant to Clause 6 (TURNOVER OF RECEIPTS); and

 

(d)                                 any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security and Intercreditor Agent is

 

11

 

required by the terms of the Junior Finance Documents to hold as trustee on trust for the Junior Secured Parties.

 

“Junior  Security Documents” means the “Security Documents” as defined in the KEL Intercreditor Agreement”.

 

“Junior Transaction Security” means the Security created or evidenced or expressed to be created or evidenced under or pursuant to the Junior Security Documents.

 

“KEL Intercreditor Agreement” means, to the extent entered into and in force and effect, the intercreditor agreement between, inter alios, the Security and Intercreditor Agent, the RCF Agent, the HY Noteholder Trustee and KEL, the form of which (subject to any amendments thereto) is attached to the RCF Agreement.

 

“Liabilities” means the Junior Liabilities and the Senior Liabilities.

 

“Majority Creditors” means the Instructing Junior Creditors and the Instructing Senior Creditors.

 

“Mandatory Prepayment” means a mandatory prepayment of any of the Liabilities pursuant either to Clause 10 (Prepayment and Cancellation) of the Senior Facility Agreement, Clause 8 (PREPAYMENT AND CANCELLATION) of the RCF Agreement or pursuant to the HY Note Indenture.

 

“Margin” means the “Margin” as defined in the Senior Facility Agreement, the RCF Agreement or the HY Note Indenture, as the context so requires.

 

“Obligor Liabilities” means, in relation to any Obligor, any liabilities owed to any other Obligor (whether actual or contingent and whether incurred solely or jointly) by that Obligor.

 

“Obligors” means the Junior Obligors and the Senior Obligors, or any of them, as the context so requires.

 

“Party” means a party to this Agreement.

 

“Payment” means, in respect of any Junior Liabilities or Senior Liabilities, as applicable (or any other liabilities or obligations), a payment, prepayment, repayment, redemption, defeasance or discharge of those Liabilities (or other liabilities or obligations).

 

“Permitted Junior Payment” means a “Scheduled KEL Debt Payment” (as defined in the Senior Facility Agreement) made in accordance with the terms of the Senior Facility Agreement.

 

“Permitted Payment” means a Permitted Junior Payment or a Permitted Senior Payment.

 

“Permitted Senior Payment” means a Payment made in accordance with Clause 3.1 (Payment of Senior Liabilities)

 

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“Prior Junior Enforcement Notice” has the meaning given to that term in paragraph 4.10(A)(iii)(b) (Permitted Enforcement: Junior Creditors).

 

“Proceeds 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 and Intercreditor 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.

 

“RCF” means the facility made available by the RCF Lenders to, amongst others, the RCF Borrower pursuant to the RCF Agreement.

 

“RCF Agent Liabilities” means all present and future liabilities and obligations, actual and contingent, of any Junior Obligor to the RCF Agent under or in connection with the Junior Finance Documents.

 

“RCF Agreement” means the agreement dated on or around the date of this Agreement pursuant to which the RCF is made available.

 

“RCF Lender” means a “Lender” (as defined under the RCF Agreement).

 

“Relevant Junior Enforcement Notice” has the meaning given to that term in paragraph 4.10(A)(iii)(a) (Permitted Enforcement: Junior Creditors).

 

“Relevant Liabilities” means:

 

(a)           in the case of a Finance Party:

 

(i)                                    the Liabilities owed to Finance Parties ranking (in accordance with the terms of this Agreement) pari passu with or in priority to that Finance Party (as the case may be); and

 

(ii)                                 all present and future liabilities and obligations, actual and contingent, of the Obligors to the Agents; and

 

(b)                                 in the case of an Obligor, the Liabilities owed to the Finance Parties together with the RCF Agent Liabilities, the HY Noteholder Trustee Liabilities and all present and future liabilities and obligations, actual and contingent, of the Obligors to the Agents.

 

“Secured Parties” means the Junior Secured Parties, the Senior Secured Parties and the Proceeds Agent.

 

“Secured Property” means the Junior Secured Property and the Senior Secured Property.

 

“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.

 

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“Security Documents” means:

 

(a)           the Junior Security Documents;

 

(b)           the Senior Security Documents;

 

(c)                                  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 Liabilities; and

 

(d)                                 any Security granted under any covenant for further assurance in any of the documents set out in paragraphs (a), (b) and (c) above.

 

“Senior Commitment” means:

 

(a)                                 in relation to an “Original Lender” (as defined in the Senior Facility Agreement), the amount set opposite its name under the heading “Commitment” in Schedule 2 to the Senior Facility Agreement and the amount of any other Commitment transferred to it; and

 

(b)                                 in relation to any other “Lender” (as defined in the Senior Facility Agreement), the amount of any Commitment transferred to it,

 

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

 

“Senior Creditor” means a “Creditor” as defined in the Senior Intercreditor Agreement.

 

“Senior Default” means a “Default” as defined in the Senior Facility Agreement.

 

“Senior Discharge Date” means the first date on which all Senior Liabilities have been fully and finally discharged, whether or not as the result of an Enforcement Action, and the Senior Creditors are under no further obligation to provide financial accommodation to any of the Senior Obligors under the Senior Finance Documents.

 

“Senior Facility” means the facility made available by the Senior Creditors to the Senior Borrower pursuant to the Senior Facility Agreement.

 

“Senior Facility Agreement” means the facility agreement referred to in recital (A).

 

“Senior Finance Document” means a “Finance Document” as defined under the Senior Facility Agreement.

 

“Senior Finance Party” means a “Finance Party” as defined in the Senior Facility Agreement.

 

“Senior Hedging Counterparty” means a “Hedging Counterparty” as defined in the Senior Facility Agreement.

 

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“Senior Intercreditor Agreement” means the “Intercreditor Agreement” as defined in the Senior Facility Agreement.

 

“Senior Lender” means a “Lender” as defined in the Senior Facility Agreement.

 

“Senior  Liabilities” means all present and future liabilities and obligations at any time of any Senior Obligor to any Senior Finance Party under the Senior 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:

 

(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 Senior 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.

 

“Senior Obligor” means an “Obligor” as defined under the Senior Facility Agreement.

 

“Senior Secured Party” means a “Secured Party” as defined in the Senior Facility Agreement.

 

“Senior  Secured Property” means:

 

(a)                                 the Senior Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Senior Secured Parties and all proceeds of that Senior Transaction Security;

 

(b)                                 all obligations expressed to be undertaken by a Senior Obligor to pay amounts in respect of the Senior Liabilities to the Security Agent as trustee for the Senior Secured Parties and secured by the Senior Transaction Security together with all representations and warranties expressed to be given by a Senior Obligor in favour of the Security Agent as trustee for the Senior Secured Parties;

 

(c)                                  the Security Agent’s interest in any trust fund created pursuant to Clause 6 (TURNOVER OF RECEIPTS); and

 

(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

 

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terms of the Senior Finance Documents to hold as trustee on trust for the Senior Secured Parties.

 

“Senior Security Document” means a “Security Document” as defined under the Senior Facility Agreement.

 

“Senior Transaction Security” means the Security created or evidenced or expressed to be created or evidenced under or pursuant to the Senior Security Documents

 

“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.

 

“Subordinated Guarantor” means a Junior Guarantor which at that time is also a Senior Obligor.

 

“Subordinated Liabilities” means any Junior Liabilities which are owed by a Subordinated Guarantor.

 

“Subsidiary” means in relation to any company or corporation, a company or corporation:

 

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

 

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

 

(c)                                  which is a Subsidiary of another Subsidiary of the first mentioned company or corporation,

 

and for this purpose, 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.

 

“Taxes” includes any present or future 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).

 

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“Total Commitments” means all Senior Commitments and all Junior Credit Participations.

 

“Transaction Security” means the Junior Transaction Security and/or the Senior Transaction Security, as the context so requires.

 

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, and the rules and regulations promulgated thereunder.

 

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 Senior Facility Agreement shall apply to this Agreement.  In addition a reference in this Agreement to:

 

(i)                                    any “Agent”, “Creditor”, “Obligor”, “Party”, or “Junior Agent” shall be construed to be a reference to it in its capacity as such and not in any other capacity;

 

(ii)                                 any “Agent”, “Creditor”, “Obligor”, “Party”, or “Junior Agent” or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees.

 

(iii)                              “assets” includes present and future properties, revenues and rights of every description;

 

(iv)                             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;

 

(v)                                “enforcing” (or any derivation) the Transaction Security shall include the appointment of an administrator of an Obligor by the relevant Agent;

 

(vi)                             “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;

 

(vii)                          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;

 

(viii)                       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);

 

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(ix)                             “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;

 

(x)                                a provision of law is a reference to that provision as amended or re enacted;

 

(xi)                             when it is stated in this Agreement that the Security and Intercreditor Agent or the Security Agent may take instructions from, make requests of, or otherwise communicate with the Creditors (a “Communication” and “Communicate” shall be interpreted accordingly), the right of the Security and Intercreditor Agent to Communicate with the Creditors shall be limited to Communications with the Junior Creditors and the right of the Security Agent to Communicate with the Creditors shall be limited to Communications with the Senior Creditors;

 

(xii)                          where a reference is made in this Agreement to a “relevant Agent”, including but not limited to provisions in this Agreement which provide such “relevant Agent” with rights or obligations, the person or persons who are included in the concept of “relevant Agent” in that instance shall be determined by whether the Junior Liabilities or the Senior Liabilities (or both) are relevant to the interpretation of the provision in question, or otherwise as the context so requires;

 

(xiii)                       where a reference is made in this Agreement to a “relevant Creditor”, including but not limited to provisions in this Agreement which provide such “relevant Creditor” with rights or obligations, the person or persons who are included in the concept of “relevant Creditor” in that instance shall be determined by whether the Junior Liabilities or the Senior Liabilities (or both) are relevant to the interpretation of the provision in question, or otherwise as the context so requires;

 

(xiv)                      where a reference is made in this Agreement to a “relevant Obligor”, including but not limited to provisions in this Agreement which provide such “relevant Obligor” with rights or obligations, the person or persons who are included in the concept of “relevant Obligor” in that instance shall be determined by whether the Junior Liabilities or the Senior Liabilities (or both) are relevant to the interpretation of the provision in question, or otherwise as the context so requires; and

 

(xv)                         where a reference is made in this Agreement to a “relevant Group Company”, including but not limited to provisions in this Agreement which provide such “relevant Group Company” with rights or obligations, the person or persons who are included in the concept of “relevant Group Company” in that instance shall be determined by whether the Junior Liabilities or the Senior Liabilities (or both) are relevant to the interpretation of the provision in question, or otherwise as the context so requires.

 

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(B)                               Section, Clause and Schedule headings are for ease of reference only.

 

(C)                               A Default or an Event of 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 (the “Third Parties Rights Act”) to enforce or to enjoy the benefit of any term of this Agreement.

 

(B)                               This Agreement confers benefits on the Finance Parties and the Obligors who are not party to this Agreement (each, for the purposes of this clause, a “Third Party”). It is intended that any benefit conferred on a Third Party should be enforceable by that Third Party by virtue of the Third Parties Rights Act.

 

(C)                               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.

 

2.                                     RANKING AND PRIORITY

 

2.1                              Creditor Liabilities

 

Each of the Parties agrees that the Liabilities owed by the Subordinated Guarantors to the Finance Parties shall rank in right and priority of payment in the following order and are postponed and subordinated to any prior ranking Liabilities as follows:

 

(A)                               first, the Senior Liabilities; and

 

(B)                               second, the Junior Liabilities.

 

2.2                              Agreement binding on Senior Finance Parties

 

The Security Agent hereby confirms that in entering into this Agreement it is acting on its own behalf and as agent of each Senior Finance Party and that it is authorised by the terms of the Senior Finance Documents to enter into this Agreement for and on behalf of each Senior Finance Party from time to time and to bind each Senior Finance Party under and subject to the terms of this Agreement.

 

2.3                              Agreement binding on HY Noteholders

 

The HY Noteholder Trustee hereby confirms that in entering into this Agreement it is acting on its own behalf and as the agent of each HY Noteholder and that it is authorised by the terms of the HY Note Indenture to enter into this Agreement for and on behalf of each HY Noteholder from time to time and to bind each HY Noteholder under and subject to the terms of this Agreement.

 

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2.4                              Agreement binding on RCF Finance Parties

 

The RCF Agent hereby confirms that in entering into this Agreement it is acting on its own behalf and as the agent of each RCF Finance Party and that it is authorised by the terms of the RCF Agreement to enter into this Agreement for and on behalf of each RCF Finance Party from time to time and to bind each RCF Finance Party under and subject to the terms of this Agreement.

 

2.5                              Agreement binding on Junior Obligors

 

KEL hereby confirms that in entering into this Agreement it is acting on its own behalf and as agent of each Junior Obligor and that it is authorised by the terms of the Junior Finance Documents to enter into this Agreement for and on behalf of each Junior Obligor from time to time and to bind each Junior Obligor under and subject to the terms of this Agreement.

 

2.6                              Agreement binding on Senior Obligors

 

KEFI hereby confirms that in entering into this Agreement it is acting on its own behalf and as agent of each Senior Obligor and that it is authorised by the terms of the Senior Finance Documents to enter into this Agreement for and on behalf of each Senior Obligor from time to time and to bind each Senior Obligor under and subject to the terms of this Agreement.

 

3.                                     SENIOR CREDITORS AND SENIOR LIABILITIES

 

3.1                              Payment of Senior Liabilities

 

The Obligors may make Payments of the Senior Liabilities at any time in accordance with the Finance Documents.

 

3.2                              Amendments and Waivers: Senior Finance Documents

 

(A)                               Subject to paragraph (B) below, the Senior Creditors may amend or waive the terms of the Senior Finance Documents in accordance with the terms thereof, at any time.

 

(B)                               The Senior Creditors may not amend or waive the terms of the Senior Finance Documents in the form as at the date of this Agreement, or as subsequently amended in accordance with this Agreement, if the amendment or waiver is:

 

(i)                                    any amendment of the concept of “Permitted Financial Indebtedness” in the Senior Facility Agreement, the effect of which would be to remove the contractual entitlement of Senior Obligors to guarantee the Junior Liabilities pursuant to the Deed of Guarantee;

 

(ii)                                 any amendment of the definition of “Scheduled KEL Debt Payments” in the Senior Facility Agreement (as defined in the Senior Facility Agreement);

 

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(iii)                              any amendment or waiver of the permission that amounts standing to the credit of the “DSRA” (as defined in the Senior Facility Agreement) may be used to pay Scheduled KEL Debt Payments in accordance with the “Cash Waterfall” (as defined in the Senior Facility Agreement); or

 

(iv)                             other than to the extent required in order to comply with any applicable law or regulation, any amendment of the Cash Waterfall, the effect of which would be to move the permission to pay Scheduled KEL Debt Payments further down the Cash Waterfall, or otherwise to place additional or new classes of amounts above the permission to pay Scheduled KEL Debt Payments in the Cash Waterfall.

 

4.                                     JUNIOR LENDERS AND JUNIOR LIABILITIES

 

4.1                              Amendments and Waivers: Junior Finance Documents

 

(A)                               Subject to paragraph (B) below, the Junior Creditors may amend or waive the terms of the Junior Finance Documents in accordance with the terms thereof, at any time.

 

(B)                               The Junior Creditors may not, without the prior written consent of the Security Agent, amend or waive the terms of the Junior Finance Documents, in the form as at the date of this Agreement, or as subsequently amended in accordance with this Agreement, if such amendment or waiver of a Junior Finance Document is:

 

(i)                                    an amendment or waiver constituting an increase in the Margin, or the inclusion of an additional margin, relating to the Junior Liabilities (as applicable) other than such an increase or addition which is contemplated by the Junior Finance Documents; or

 

(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 contemplated by the Junior Finance Documents.

 

4.2                              Restriction on Payment: Junior Liabilities

 

The Subordinated Guarantors shall not make any Payments of the Junior Liabilities at any time unless:

 

(A)                               that Payment is permitted under Clause 4.3 (Permitted Payments: Junior Liabilities); or

 

(B)                               the taking or receipt of that Payment is permitted under paragraphs (A)(iii) or (A)(iv) of Clause 4.10 (Permitted Enforcement: Junior Creditors).

 

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4.3                              Permitted Payments: Junior Liabilities

 

(A)                               The Subordinated Guarantors may, prior to the Senior Discharge Date, make Payments to the Junior Secured Parties in respect of the Junior Liabilities then due in accordance with the Junior Finance Documents:

 

(i)                                    if the Payment is a Permitted Junior Payment and no Junior Payment Stop Event is outstanding; or

 

(ii)                                 if the Instructing Senior Creditors give prior written consent to that Payment being made.

 

(B)                               The Subordinated Guarantors may, on or after the Senior Discharge Date, make Payments to the Junior Secured Parties in respect of the Junior Liabilities in accordance with the Junior Finance Documents.

 

4.4                              Issue of Junior Payment Stop Notice

 

(A)                               A Junior Payment Stop Event is “outstanding” during the period from the date of the occurrence of a Junior Payment Stop Event and shall be “continuing” until the earlier of:

 

(i)                                    the next-occurring date on which Junior Liabilities are due and payable and in relation to which no Sources and Uses Statement (as defined in the Senior Facility Agreement) dated within 12 months thereof shows a shortfall in funding pursuant to Clause 24.8 of the Senior Facility Agreement, unless another Junior Payment Stop Event has occurred in the meantime in which case a Junior Payment Stop Event shall be continuing until the next-occurring date on which Junior Liabilities are due and payable and in relation to which no Sources and Uses Statement (as defined in the Senior Facility Agreement) dated within 12 months thereof shows a shortfall in funding pursuant to Clause 24.8 of the Senior Facility Agreement; and

 

(ii)                                 the Senior Discharge Date.

 

(B)                               The Security Agent shall issue a notice to the Security and Intercreditor Agent (with a copy to KEL) advising that a Junior Payment Stop Event has occurred and is continuing (a “Junior Payment Stop Notice”).

 

4.5                              Effect of Junior Payment Stop Event

 

(A)                               Any failure to make a Payment due to the Junior Finance Parties under the Junior Finance Documents as a result of a Junior Payment Stop Event shall not prevent:

 

(i)                                    the occurrence of an Event of Default under the Junior Finance Documents as a consequence of any failure to make a Payment in relation to the Junior Finance Documents; or

 

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(ii)                                 the issue of a Junior Enforcement Notice on behalf of the Junior Finance Parties.

 

(B)                               The Junior Finance Parties acknowledge the right of the Senior Finance Parties to issue a Junior Payment Stop Notice in accordance with the provisions of Clause 4.4(B) (Issue of Junior Payment Stop Notice). Each Junior Finance Party agrees that it will not make any claim against any Senior Finance Party in relation to any Junior Liabilities which have fallen due but which are prevented from being paid by virtue of the occurrence of a Junior Payment Stop Event and/or valid issuance of, and the valid subsistence of, a Junior Payment Stop Notice in accordance with Clause 4.4(B) (Issue of Junior Payment Stop Notice).

 

4.6                              Payment obligations and capitalisation of interest continue

 

(A)                               No Subordinated Guarantor shall be released from the liability to make any Payment (including of default interest, which shall continue to accrue) under any Junior Finance Document by the operation of Clauses 4.2 (Restriction on Payment: Junior Liabilities) and 4.5 (Effect of Junior Payment Stop Event) even if its obligation to make that Payment is restricted at any time by the terms of any of those Clauses.

 

(B)                               The accrual and capitalisation of interest in accordance with the Junior Finance Documents shall continue notwithstanding the occurrence of a Junior Payment Stop Event.

 

4.7                              Cure of Payment Stop: Junior Creditors

 

If:

 

(A)                               at any time following the occurrence of a Junior Payment Stop Event that Junior Payment Stop Event ceases to be outstanding; and

 

(B)                               the relevant Subordinated Guarantor then promptly pays to the Junior Finance Parties an amount equal to any Payments which had accrued under the Junior Finance Documents and which would have been Permitted Junior Payments but for that Junior Payment Stop Event,

 

then any Event of Default which may have occurred under the Junior Finance Documents as a result of that suspension of Payments shall be deemed withdrawn as from the date of such payment, and any Junior Payment Enforcement Notice which may have been issued as a result of that Event of Default shall be waived, in each case without any further action being required on the part of the Junior Finance Parties.

 

4.8                              Security: Junior Creditors

 

At any time prior to the Senior Discharge Date, the Junior Finance Parties may not take, accept or receive from any Senior Obligor the benefit of any Security, guarantee, indemnity or other assurance against loss in respect of the Junior Liabilities other than any guarantee, indemnity or other assurance against loss contained in the Deed of

 

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Guarantee, unless the prior written consent of the Instructing Senior Creditors is obtained.

 

4.9                              Restriction on Enforcement: Junior Creditors

 

Subject to Clause 4.10 (Permitted Enforcement: Junior Creditors), no Junior Finance Party shall be entitled to take any Enforcement Action in respect of any of the Subordinated Liabilities prior to the Senior Discharge Date.

 

4.10                       Permitted Enforcement: Junior Creditors

 

(A)                               Each Junior Finance Party may take the following action against any Subordinated Guarantor (notwithstanding Clause 4.9 (Restriction on Enforcement: Junior Creditors)) in respect of any of the Subordinated Liabilities:

 

(i)                                    if an Insolvency Event has occurred in relation to a Subordinated Guarantor, each Junior Finance Party may:

 

(a)                                accelerate any of that Subordinated Guarantor’s Junior Liabilities or declare them prematurely due and payable or payable on demand;

 

(b)                                make a demand under any guarantee, indemnity or other assurance against loss given by that Subordinated Guarantor in respect of any Junior Liabilities;

 

(c)                                 exercise any right of set off or take or receive any Payment in respect of any Junior Liabilities of that Subordinated Guarantor; or

 

(d)                                claim and prove in the liquidation of that Subordinated Guarantor for the Junior Liabilities owing to it;

 

(ii)                                 if an Acceleration Event has occurred in relation to the Senior Facility Agreement, each Junior Finance Party may take the same Enforcement Action (but in respect of the Junior Liabilities) as constitutes that Acceleration Event in relation to the Senior Facility Agreement;

 

(iii)                              if the Security and Intercreditor Agent has given notice (a “Junior Enforcement Notice”) to the Security Agent specifying that a Junior Event of Default has occurred and is continuing, and the earlier of the following dates has occurred:

 

(a)                                the date falling 179 days after the date upon which that Junior Enforcement Notice (the “Relevant Junior Enforcement Notice”) was served; and

 

(b)                                the date falling 179 days after the date upon which any other Junior Enforcement Notice was served (a “Prior Junior

 

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Enforcement Notice”), in circumstances where the Prior Junior Enforcement Notice was already outstanding on the date upon which the Relevant Junior Enforcement Notice was served,

 

then provided that the Event of Default in respect of which the Relevant Junior Enforcement Notice or the Prior Junior Enforcement Notice (as applicable) was given is continuing, each Junior Finance Party may take any action (including any Enforcement Action) whatsoever permitted under the Junior Finance Documents; or

 

(iv)                             if the Instructing Senior Creditors have given their prior written consent to any action by a Junior Finance Party, the Junior Finance Party may take that action.

 

(B)                               Notwithstanding any provision of this Agreement to the contrary, should the HY Note Indenture be qualified under the Trust Indenture Act or otherwise subject to Section 316 of the Trust Indenture Act, the right of any HY Noteholder to:

 

(i)                                    receive payment of the principal of and interest on the HY Notes held by them, on or after the respective due dates expressed in the HY Note Indenture; or

 

(ii)                                 to institute suit for the enforcement of any such payment on or after such respective dates (giving rise, if such payment or part thereof is recovered, to a “HY Enforcement Recovery”),

 

shall not be impaired or affected without the consent of such HY Noteholder, except to the extent permitted by the Trust Indenture Act. Clause 6.1 (Turnover by the Creditors) shall apply to any HY Enforcement Recovery, which shall be paid to the Proceeds Agent for application in accordance with Clause 9 (APPLICATION OF PROCEEDS) and the other terms of this Agreement.

 

4.11                       Notification of Junior Event of Default

 

The Security and Intercreditor Agent shall notify the Security Agent of the occurrence of any Junior Event of Default, promptly (and in any event within three Business Days) following the receipt by the Security and Intercreditor Agent of notification of the same from the RCF Agent or from the HY Note Trustee, as applicable.  Such notice shall state the date of occurrence of such Junior Event of Default.

 

4.12                       Option to purchase:  Junior Creditors

 

(A)                               Subject to paragraph (B) below, all the Junior Creditors (acting as a whole) may at any time after a Distress Event has occurred pursuant to the Senior Finance Documents, by giving not less than 10 Business Days’ notice to the Security Agent, require the transfer to them (or to a nominee or nominees), in accordance with Clause 13.2 (Change of Creditor) of the Senior Intercreditor Agreement, of all, but not part, of the rights, benefits and obligations in respect

 

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of the Senior Liabilities (other than the Hedging Liabilities as defined in the Senior Intercreditor Agreement) if:

 

(i)                                    that transfer is lawful and subject to paragraph (ii) below, otherwise permitted by the terms of the Senior Facility Agreement (provided that for these purposes Clause 30.2 (Conditions of Assignment and Transfer or change in Facility Office) of the Senior Facility Agreement will be ignored);

 

(ii)                                 any conditions relating to such a transfer contained in the Senior Facility Agreement are complied with, other than any requirement to obtain the consent of, or consult with, any Obligor relating to such transfer, which consent or consultation shall not be required;

 

(iii)                              the Security Agent, on behalf of the Agents (as defined in the Senior Facility Agreement) and the Senior Lenders, is paid (no later than at the time of such transfer) an amount equal to the aggregate of:

 

(a)                                all of the Senior Liabilities (other than the “Hedging Liabilities”, as defined in the Senior Intercreditor Agreement) at that time (whether or not due), including all amounts that would have been payable under the Senior Facility Agreement if the Senior Facilities were being prepaid in full by the relevant Obligors on the date of that payment; and

 

(b)                                all costs and expenses (including legal fees) incurred by the Senior Finance Parties as a consequence of giving effect to that transfer;

 

(iv)                             as a result of that transfer the Senior Lenders have no further actual or contingent liability to any Obligor under the Senior Finance Documents;

 

(v)                                an indemnity is provided from each Junior Creditor (or from another third party acceptable to all the Senior Lenders) in a form satisfactory to each Senior Lender in respect of all losses which may be sustained or incurred by any Senior Lender in consequence of any sum received or recovered by any Senior Lender from any person being required (or it being alleged that it is required) to be paid back by or clawed back from any Senior Lender for any reason; and

 

(vi)                             the transfer is made without recourse to, or representation or warranty from, the Senior Lenders, except that each Senior Lender shall be deemed to have represented and warranted on the date of that transfer that it has the corporate power to effect that transfer and it has taken all necessary action to authorise the making by it of that transfer.

 

(B)                               The Security Agent shall, within 5 Business Days of a request by Security and Intercreditor Agent, notify the Junior Creditors of the sum of the amounts described in paragraphs (A)(iii)(a) and (A)(iii)(b) above.

 

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4.13                       No independent power

 

Except as set out in Clause 4.10(B) above, the Junior Finance Parties shall not have any independent power to enforce, or have recourse to the Deed of Guarantee or to exercise any rights or powers arising under the Deed of Guarantee, except through the Security and Intercreditor Agent.

 

5.                                     EFFECT OF INSOLVENCY EVENT

 

5.1                              Payment of distributions

 

(A)                               After the occurrence of an Insolvency Event in relation to a Subordinated Guarantor, any Junior Finance Party entitled to receive a distribution out of the assets of that Subordinated Guarantor in respect of Liabilities owed to that Junior Finance Party shall, to the extent it is able to do so, direct the person responsible for the distribution of the assets of that Subordinated Guarantor to pay that distribution to the Proceeds Agent until the Liabilities owing to the Senior Secured Parties have been paid in full.

 

(B)                               The Proceeds Agent shall apply distributions paid to it under paragraph (a) above in accordance with Clause 9 (APPLICATION OF PROCEEDS).

 

5.2                              Set Off

 

To the extent that any Junior Guarantor’s Liabilities are discharged by way of set off (mandatory or otherwise) after the occurrence of an Insolvency Event in relation to that Junior Guarantor, any Junior Finance Party which benefited from that set off shall pay an amount equal to the amount of the Junior Liabilities owed to it which are discharged by that set off to the Proceeds Agent for application in accordance with Clause 9 (APPLICATION OF PROCEEDS).

 

5.3                              Non cash distributions

 

If the Proceeds Agent or any Junior 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.

 

5.4                              Filing of claims

 

After the occurrence of an Insolvency Event in relation to any Subordinated Guarantor, each Junior Finance Party irrevocably authorises the relevant Agent, on its behalf, to:

 

(A)                               take any Enforcement Action (in accordance with the terms of this Agreement) against that Subordinated Guarantor;

 

(B)                               demand, sue, prove and give receipt for any or all of that Subordinated Guarantor’s Liabilities;

 

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(C)                               collect and receive all distributions on, or on account of, any or all of that Subordinated Guarantor’s Liabilities; and

 

(D)                               file claims, take proceedings and do all other things the relevant Agent considers reasonably necessary to recover that Subordinated Guarantor’s Liabilities.

 

5.5                              Creditors’ actions

 

Save as prohibited by any applicable law or regulation, each Junior Finance Party will (insofar as the relevant Agent in each case acts in accordance with Clause 5.6 (Agent instructions)):

 

(A)                               do all things that the relevant Agent requests in order to give effect to this Clause 5; and

 

(B)                               if the relevant Agent is not entitled to take any of the actions contemplated by this Clause 5 or if the relevant Agent requests that a relevant Finance Party take that action, undertake that action itself in accordance with the instructions of the relevant Agent or grant a power of attorney to the relevant Agent (on such terms as the relevant Agent may reasonably require) to enable the relevant Agent to take such action.

 

5.6                              Agent instructions

 

For the purposes of Clause 5.4 (Filing of claims) and Clause 5.5 (Creditors’ actions), the Security and Intercreditor Agent shall act:

 

(A)                               on the instructions of the Instructing Junior Creditors; or

 

(B)                               in the absence of any such instructions, as it sees fit.

 

6.                                     TURNOVER OF RECEIPTS

 

6.1                              Turnover by the Creditors

 

Subject to Clause 6.2 (Permitted assurance and receipts), if at any time prior to the First Discharge Date, any Junior Finance Party receives or recovers from a Subordinated Guarantor:

 

(A)                               any Payment or distribution of, or on account of or in relation to, any of the Subordinated Liabilities which is not either:

 

(i)                                    a Permitted Payment; or

 

(ii)                                 made in accordance with Clause 9 (APPLICATION OF PROCEEDS);

 

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(B)                               other than where Clause 5.2 (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 5.2 (Set Off) applies, any amount:

 

(i)                                    on account of, or in relation to, any of the Subordinated Liabilities:

 

(a)                                after the occurrence of a Distress Event; or

 

(b)                                as a result of any other litigation or proceedings against a Subordinated Guarantor (other than after the occurrence of an Insolvency Event in respect of that Obligor); or

 

(ii)                                 by way of set-off in respect of any of the Subordinated Liabilities owed to it after the occurrence of a Distress Event;

 

(iii)                              the proceeds of any enforcement of any Subordinated Guarantee except in accordance with Clause 9 (APPLICATION OF PROCEEDS); or

 

(iv)                             other than where Clause 5.2 (Set Off) applies, any distribution in cash or in kind or Payment of, or on account of or in relation to, any of the Subordinated Liabilities owed by any Subordinated Guarantor which is not in accordance with Clause 9 (APPLICATION OF PROCEEDS) and which is made as a result of, or after, the occurrence of an Insolvency Event in respect of that Subordinated Guarantor,

 

that Junior Finance Party will:

 

(v)                                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 Proceeds Agent and promptly pay that amount to the Proceeds 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 Proceeds Agent for application in accordance with the terms of this Agreement; and

 

(vi)                             in relation to receipts and recoveries received or recovered by way of set-off, promptly pay an amount equal to that recovery to the Proceeds Agent for application in accordance with the terms of this Agreement.

 

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6.2                              Permitted assurance and receipts

 

Nothing in this Agreement shall restrict the ability of any Finance Party to:

 

(A)                               arrange with any person which is not an Obligor 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

 

(B)                               make any assignment or transfer,

 

which is permitted by the Finance Documents to which it is a party and that Finance Party shall not be obliged to account to any other Party for any sum received by it as a result of that action.

 

6.3                              Sums received by Obligors

 

If any of the Obligors receives or recovers any sum from a Subordinated Guarantor which, under the terms of any of the Finance Documents, should have been paid to the Security Agent or to the Security and Intercreditor Agent (as applicable), 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 Proceeds Agent and promptly pay that amount to the Proceeds 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 Proceeds Agent for application in accordance with the terms of this Agreement.

 

6.4                              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 Junior Finance Party or Obligor will promptly pay an amount equal to that receipt or recovery to the Proceeds Agent to be held on trust by the Proceeds 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 Junior Finance Party (a “Recovering Finance Party”) to the Proceeds 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 Finance Parties (each a “Sharing Finance Party”) in accordance with the terms of this Agreement.

 

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(B)                               On a distribution by the Proceeds Agent under paragraph (A) above of a Payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party an amount equal to the amount received or recovered by the Recovering Finance Party and paid to the Proceeds Agent (the “Shared Amount”) will be treated as not having been paid by that Obligor.

 

7.2                              Reversal of redistribution

 

(A)                               If any part of the Shared Amount received or recovered by a Recovering Finance Party becomes repayable to an Obligor and is repaid by that Recovering Finance Party to that Obligor, then:

 

(i)                                    each Sharing Finance Party shall, upon request of the Proceeds Agent, pay to the Proceeds Agent for the account of that Recovering Finance Party 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 Finance Party for its proportion of any interest on the Shared Amount which that Recovering Finance Party is required to pay) (the “Redistributed Amount”); and

 

(ii)                                 as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

 

(B)                               The Proceeds Agent shall not be obliged to pay any Redistributed Amount to a Recovering Finance Party 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 Finance Party.

 

7.3                              Deferral of Subrogation

 

No Junior Finance Party or Junior 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 Finance Party 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 Finance Party (or, in the case of any Obligor, owing to each Finance Party) have been irrevocably paid in full.

 

8.                                     DISPOSALS

 

8.1                              Distressed Disposals

 

If a Distressed Disposal is being effected, the Security and Intercreditor Agent shall, and is irrevocably authorised  to (at the cost of the relevant Senior Obligor or Group Company and without any consent, sanction, authority or further confirmation from any Finance Party, any Senior Obligor or Group Company) release the Deed of Guarantee.

 

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9.                                     APPLICATION OF PROCEEDS

 

9.1                              Order of application

 

Subject to Clause 9.2 (Prospective liabilities), all amounts from time to time received or recovered by the Proceeds Agent in respect of the Subordinated Liabilities pursuant to the terms of any Finance Document (for the purposes of this Clause 9, the “Recoveries”), shall be held by the Proceeds Agent on trust to apply them at any time as the Proceeds Agent (in its discretion) sees fit, to the extent permitted by applicable law (and subject to the provisions of this Clause 9)), in the following order of priority:

 

(A)                               in payment to the Security Agent for application in accordance with the Senior Intercreditor Agreement;

 

(B)                               in discharging any sums owing to the Proceeds Agent;

 

(C)                               in payment of all costs and expenses incurred by any Junior Finance Party 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 and Intercreditor Agent under Clause 5.5 (Creditors’ actions);

 

(D)                               if the KEL Intercreditor Agreement is in force and effect, in payment on a pro rata basis to the RCF Agent on its own behalf for the RCF Agent Liabilities and the HY Noteholder Trustee on its own behalf for the HY Noteholder Trustee Liabilities;

 

(E)                                in payment to the Security and Intercreditor Agent on behalf of the Junior Finance Parties for application towards the discharge of the Junior Liabilities (on a pro rata basis between the Junior Liabilities of each Junior Lender) in accordance with the terms of the KEL Intercreditor Agreement (if it is in force and effect at such time) or the RCF Agreement (if it is not);

 

(F)                                 if none of the Obligors is under any further actual or contingent liability under any Finance Document in payment to any person to whom the Proceeds Agent is obliged to pay in priority to any Obligor; and

 

(G)                               the balance, if any, in payment to KEL or to the Original Senior Borrower at KEL’s discretion.

 

9.2                              Prospective liabilities

 

Following a Distress Event the Proceeds 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 Proceeds Agent with such financial institution (including itself) and for so long as the Proceeds Agent shall think fit (the interest being credited to the relevant account) for later application under Clause 9.1 (Order of application) in respect of:

 

(A)                               any sum to any Agent or Junior Agent; and

 

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(B)                               any part of the Liabilities,

 

that the Proceeds Agent reasonably considers, in each case, might become due or owing at any time in the future.

 

9.3                              Investment of proceeds

 

Prior to the application of any proceeds in accordance with Clause 9.1 (Order of application) the Proceeds 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 Proceeds Agent with such financial institution (including itself) and for so long as the Proceeds Agent shall think fit (the interest being credited to the relevant account) pending the application from time to time of those monies in the Proceeds Agent’s discretion in accordance with the provisions of this Clause 9.

 

9.4                              Currency Conversion

 

(A)                               For the purpose of, or pending the discharge of, any of the Liabilities the Proceeds Agent may convert any moneys received or recovered by the Proceeds Agent from one currency to another, at the Proceeds 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.

 

9.5                              Permitted Deductions

 

The Proceeds 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 Proceeds Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

 

9.6                              Good Discharge

 

(A)                               Any payment to be made in respect of the Liabilities by the Proceeds Agent may be made to the relevant Agent on behalf of the relevant Finance Party and any payment made in that way shall be a good discharge, to the extent of that payment, by the Proceeds Agent.

 

(B)                               The Proceeds Agent is under no obligation to make the payments to the Agents under paragraph (A) above in the same currency as that in which the Liabilities owing to the relevant Finance Party are denominated.

 

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9.7                              Calculation of Amounts

 

For the purpose of calculating any person’s share of any sum payable to or by it, the Proceeds 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 Proceeds Agent), that notional conversion to be made at the spot rate at which the Proceeds Agent is able to 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 Secured Property are applied in discharge of the Liabilities in accordance with the terms of the Finance Documents under which those Liabilities have arisen.

 

10.                              PERMITTED REFINANCING

 

10.1                       Permitted Refinancing of the Senior Liabilities

 

Notwithstanding any other term of this Agreement, it is agreed that, in the event the Senior Liabilities are amended, restated, refinanced, replaced or restructured in whole or in part (a “New Senior Financing”), then that New Senior Financing and any reconstituted, new, amended or replacement Security, guarantees and other assurances of whatever kind given in support of such New Senior Financing will rank senior in priority in terms of payment and security to the Subordinated Liabilities.

 

10.2                       Further Assurance

 

It is agreed that, in the event of a New Senior Financing, each Party shall, at the cost of KEL, do or procure the doing of all acts and/or execute or procure the execution of all documents, notices and filings in a form satisfactory to KEL and the creditors under the New Senior Financing (who may for these purposes act through an agent) (each acting reasonably) which KEL and the creditors under the New Senior Financing (who may for these purposes act through an agent) (each acting reasonably) considers necessary or appropriate to ensure that the New Senior Financing and any Security, guarantees and other assurances of whatever kind given in support of such New Senior Financing rank senior in priority in terms of payment and security to the Subordinated Liabilities (including, but without limitation, any replacement intercreditor or subordination agreement or undertakings) and which KEL and the creditors under the New Senior Financing  (each acting reasonably) consider necessary or appropriate for giving full effect to the New Senior Financing, and any Security, guarantees and other assurances of whatever kind given in support of such New Senior Financing and their ranking senior to the Subordinated Liabilities.

 

10.3                       Permitted Refinancing of the Junior Liabilities

 

Notwithstanding any other term of this Agreement, it is agreed that, in the event the Junior Liabilities are amended, restated, refinanced, replaced or restructured in whole or

 

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in part (a “New Junior Financing”), then any Junior Transaction Security may be reconstituted, amended or replaced with Security (“New Junior Security”) on substantially the same terms as the Junior Transaction Security, provided that the Subordinated Liabilities will rank junior in priority to the Senior Liabilities as specified in, and on the terms and conditions set out in this Agreement.

 

10.4                       Further assurance

 

It is agreed that, in the event of a New Junior Financing, each Party shall, at the cost of KEL, do or procure the doing of all acts and/or execute or procure the execution of all documents, notices and filings in a form satisfactory to KEL and the creditors under the New Junior Financing (who may for these purposes act through an agent) (each acting reasonably) which KEL and the creditors under the New Junior Financing (who may for these purposes act through an agent) (each reasonably) considers necessary or appropriate to ensure that the Subordinated Liabilities will rank junior in priority to the Senior Liabilities as specified in, and on the terms and conditions set out in, this Agreement (including, but without limitation, relating to any replacement intercreditor or subordination agreement or undertakings) and which KEL and the creditors under the New Senior Financing (each acting reasonably) consider necessary or appropriate for giving full effect to the New Junior Financing and any New Junior Security.

 

11.                              ROLE OF THE PROCEEDS AGENT

 

11.1                       Role

 

(A)                               For the purposes of Clauses 5 (EFFECT OF INSOLVENCY EVENT), 6 (TURNOVER OF RECEIPTS), 7 (REDISTRIBUTION) and 9 (APPLICATION OF PROCEEDS) the Proceeds Agent shall act for the benefit and in the interest of all Finance Parties who are Parties to this Agreement, in order to ensure, among other things, that the application of proceeds envisaged by Clause 9 (APPLICATION OF PROCEEDS) is carried out in accordance with the terms of this Agreement.

 

(B)                               The Proceeds Agent shall take such action in the exercise of any of its powers and duties under this Agreement as it considers in its discretion to be appropriate.

 

11.2                       Trust

 

(A)                               The Proceeds Agent declares that it shall hold the property received pursuant to Clauses 5 (EFFECT OF INSOLVENCY EVENT), 6 (TURNOVER OF RECEIPTS) and 7 (REDISTRIBUTION) on trust for the Finance Parties on the terms contained in this Agreement.

 

(B)                               Each of the parties to this Agreement agrees that the Proceeds Agent shall have only those duties, obligations and responsibilities expressly specified in this Agreement (and no others shall be implied).

 

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11.3                       Proceeds Agent’s discretions

 

The Proceeds Agent may:

 

(A)                               assume (unless it has received actual notice to the contrary from a Senior Hedging Counterparty or one of the Agents) that (i) no Default has occurred and no Obligor is in breach of or in default of 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)                               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 Proceeds Agent or by any other Secured Party) whose advice or services may at any time seem necessary, expedient or desirable;

 

(C)                               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

 

(D)                               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.

 

11.4                       Excluded obligations

 

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Proceeds 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.

 

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11.5                       Exclusion of liability

 

The Proceeds Agent shall not accept responsibility or be liable for:

 

(A)                               the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Proceeds 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 Secured 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 Secured 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 Secured Property or otherwise, unless directly caused by its gross negligence or wilful misconduct;

 

(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 Secured 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 Secured Property; or

 

(E)                                any shortfall which arises on the enforcement or realisation of the Secured Property.

 

11.6                       Obligors’ indemnity to the Proceeds Agent

 

The Obligors shall jointly and severally indemnify the Proceeds Agent, 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 Proceeds Agent’s gross negligence or wilful misconduct) in acting as Proceeds Agent under this Agreement.

 

11.7                       No proceedings

 

No Party (other than the Proceeds Agent) may take any proceedings against any officer, employee or agent of the Proceeds Agent in respect of any claim it might have against the Proceeds Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to this Agreement or any Secured Property and any officer, employee or agent of the Proceeds Agent may rely on this Clause subject to Clause 1.3 (Third Party Rights) and the provisions of the Third Parties Rights Act.

 

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11.8                       Custodians and nominees

 

The Proceeds 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 Proceeds 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 Proceeds Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or 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.

 

11.9                       Refrain from illegality

 

Notwithstanding anything to the contrary expressed or implied in this Agreement, the Proceeds 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 Proceeds Agent may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.

 

11.10                Business with the Obligors

 

The Proceeds Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with any of the Obligors.

 

11.11                Winding up of trust

 

If the Proceeds Agent is informed by all of the Agents and the Senior Hedging Counterparties that (a) all of the Liabilities 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 the trusts set out in this Agreement shall be wound up.

 

11.12                Perpetuity period

 

The perpetuity period under the rule against perpetuities, if applicable to this Agreement, shall be the period of 125 years from the date of this Agreement.

 

11.13                Powers supplemental

 

The rights, powers and discretions conferred upon the Proceeds Agent by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Proceeds Agent by general law or otherwise.

 

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11.14                Trustee division separate

 

(A)                               In acting as trustee for the Secured Parties, the Proceeds 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 Proceeds Agent, it may be treated as confidential to that division or department and the Proceeds Agent shall not be deemed to have notice of it.

 

11.15                Disapplication

 

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Proceeds 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.

 

11.16                Obligors:  Power of Attorney

 

Each Obligor by way of security for its obligations under this Agreement irrevocably appoints the Proceeds Agent to be its attorney to do anything which that Obligor has authorised the Proceeds 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 Proceeds Agent may delegate that power on such terms as it sees fit).

 

11.17                Information from Agents

 

Each Agent shall provide the Proceeds Agent with such information of which it is aware requested by the Proceeds Agent in relation to the discharge of its obligations under this Agreement.

 

12.                              CHANGE OF PROCEEDS AGENT AND DELEGATION

 

12.1                       Resignation of the Proceeds Agent

 

(A)                               The Proceeds Agent may resign and appoint one of its affiliates as successor by giving notice to each of the Agents.

 

(B)                               Alternatively the Proceeds Agent may resign by giving notice to each of the Parties in which case the Instructing Junior Creditors and the Instructing Senior Creditors together may appoint a successor Proceeds Agent.

 

(C)                               If the Majority Creditors have not appointed a successor Proceeds Agent in accordance with paragraph (B) above within 30 days after the notice of resignation was given, the Proceeds Agent (after consultation with the Agents) may appoint a successor Proceeds Agent.

 

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(D)                               The retiring Proceeds Agent (the “Retiring Proceeds Agent”) shall, at its own cost, make available to the successor Proceeds Agent such documents and records and provide such assistance as the successor Proceeds Agent may reasonably request for the purposes of performing its functions as Proceeds Agent under this Agreement.

 

(E)                                The Proceeds Agent’s resignation notice shall take effect upon the appointment of a successor.

 

(F)                                 Upon the appointment of a successor, the Retiring Proceeds Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 11.11 (Winding up of trust) and under paragraph (D) above) but shall, in respect of any act or omission by it whilst it was the Proceeds Agent, remain entitled to the benefit of Clauses 11 (ROLE OF THE PROCEEDS AGENT), 15.1 (Obligors’ indemnity) and 15.2 (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 Proceeds Agent, require it to resign in accordance with paragraph (B) above.  In this event, the Proceeds Agent shall resign in accordance with paragraph (B) above but the cost referred to in paragraph (D) above shall be for the account of KEL.

 

12.2                       Delegation

 

(A)                               The Proceeds Agent 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 this Agreement.

 

(B)                               That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Proceeds Agent 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 Proceeds Agents

 

(A)                               The Proceeds 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 Proceeds Agent deems to be relevant, and the Proceeds Agent shall give prior notice to KEL 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 Proceeds Agent by this Agreement) and the

 

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duties and obligations that are conferred or imposed by the instrument of appointment.

 

(C)                              The remuneration that the Proceeds Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Proceeds 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 Creditor

 

Subject to Clauses 13.3 (Change of Agent) and 13.4 (Accession of HY Noteholder Trustee), a Finance Party may assign any of its rights and benefits or transfer by novation any of its rights, benefits and obligations in respect of any Finance Document to which it is party or the related Liabilities if that assignment or transfer is in accordance with the terms of the Finance Documents, as applicable.

 

13.3                       Change of Agent

 

Except in the case of an accession to this Agreement for the first time by a HY Noteholder Trustee (in which case Clause 13.4 (Accession of HY Noteholder Trustee) shall apply), no person shall become an Agent, a Proceeds Agent or a Junior Agent unless at the same time, it accedes to this Agreement either as a Security and Intercreditor Agent, a Security Agent, a Proceeds Agent, a RCF Agent or a HY Noteholder Trustee, as applicable, pursuant to Clause 13.5 (Agent Accession Undertaking).

 

13.4                       Accession of HY Noteholder Trustee

 

(A)                               Each Finance Party and each Obligor agrees that any HY Noteholder Trustee may enter into and accede to this Agreement as a Junior Secured Party for the first time for and on behalf of itself and each HY Noteholder without the requirement for any consent or approvals from the Finance Parties or the Obligors (or any of them).  Such accession shall confer upon the HY Noteholders all of the rights and privileges set out in this Agreement.  KEL may by five Business Days written Notice (the “Amendment Notice Period”) to the Agents request that such amendments and/or additions be made to this Agreement as any HY Noteholder Trustee (whether appointed at that time or not) may reasonably require (the “HY Noteholder Trustee Amendments”). During the Amendment Notice Period, either:

 

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(i)                                    the relevant Agent shall enter into any agreement effecting the HY Noteholder Trustee Amendments, on the instructions of the Instructing Senior Creditors and the Instructing Junior Creditors; or

 

(ii)                                 the relevant Agent shall notify KEL and KEFI in writing of any determination by the Instructing Senior Creditors and/or the Instructing Junior Creditors that the HY Noteholder Trustee Amendments would materially and adversely prejudice their interests.

 

(B)                               If, on the instructions of the Instructing Senior Creditors and/or the Instructing Junior Creditors, the relevant Agent is required to make the notification described in paragraph (A)(ii) above, the relevant Agent shall promptly contact KEL and KEFI in writing, setting out in reasonable detail the basis and reasons for that decision and the changes which the Instructing Senior Creditors and/or the Instructing Junior Creditors (acting reasonably) would require for the relevant Agent to enter into the revised version of this Agreement with the HY Noteholder Trustee Amendments incorporated.   If such changes are made, and subject to Clause 13.4(C), then the relevant Agent will be deemed to have been instructed by the Instructing Senior Creditors and/or the Instructing Junior Creditors (as applicable) promptly to enter into any agreement effecting the HY Noteholder Amendments, together with the changes required by the Instructing Senior Creditors and/or the Instructing Junior Creditors, as applicable.

 

(C)                               Nothing in this clause 13.4 will require the Security Agent to act otherwise than in accordance with the terms of the Senior Intercreditor Agreement and the Senior Facility Agreement.

 

13.5                       Agent Accession Undertaking

 

With effect from the date of acceptance by the Security and Intercreditor Agent of an Agent Accession Undertaking or, if later, the date specified in that Agent Accession Undertaking, and otherwise with effect from the date specified in the Agent Accession Undertaking, in each case duly executed and delivered to the Parties by the relevant acceding party:

 

(A)                               any Party ceasing entirely to be an Agent, a Proceeds Agent or Junior Agent shall be discharged from further obligations towards the 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 Agent, Proceeds Agent or Junior 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.

 

13.6                       Additional Junior Agents

 

(A)                               Each of the Parties appoints the Security and Intercreditor Agent to receive on its behalf each Agent Accession Undertaking to the Security and Intercreditor Agent and the Security and Intercreditor Agent shall, subject to paragraph (B)

 

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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.

 

(B)                               The Security and Intercreditor Agent shall only be obliged to sign and accept an 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.

 

(C)                               Each Party shall promptly upon the request of the Security and Intercreditor Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Security and Intercreditor Agent (for itself) from time to time in order for the Security and Intercreditor 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 relevant Finance Documents.

 

14.                              COSTS AND EXPENSES

 

14.1                       Agents’ ongoing costs

 

(A)                               In the event of (i) a Default; (ii) any Agent or Proceeds Agent considering it necessary or expedient; or (iii) any Agent being requested by an Obligor or by the Instructing Junior Creditors or the Instructing Senior Creditors (as applicable) to undertake duties which that Agent and KEL agree to be of an exceptional nature and/or outside the scope of the normal duties of that Agent under the Finance Documents, KEL shall pay to that Agent any additional remuneration (together with any applicable VAT) that may be agreed between them.

 

(B)                               If an Agent and KEL or the Proceeds Agent and KEL 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 that Agent or the Proceeds Agent (as applicable) and approved by KEL or, failing approval, nominated (on the application of that Agent or the Proceeds Agent (as applicable)) 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 KEL) 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

 

KEL shall, within 15 Business Days, pay to each Agent and the Proceeds Agent the amount of all costs and expenses (including legal fees) (together with any applicable VAT) reasonably incurred by each Agent and the Proceeds Agent 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

 

KEL shall (in accordance with the terms of the other Finance Documents) pay and, within five Business Days of demand, indemnify each Agent and the Proceeds Agent against any cost, loss or liability any Agent or Proceeds 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 relevant Agent or Proceeds 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 relevant  Agent may from time to time select.

 

14.5                       Enforcement and preservation costs

 

KEL or KEFI shall, within five Business Days of demand, pay to the relevant Agent or Proceeds 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 relevant 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 relevant Agent and the Proceeds Agent 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:

 

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(i)                                    any failure by KEL or KEFI to comply with obligations under Clause 14 (COSTS AND EXPENSES);

 

(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 relevant Agent 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 Secured Property or the performance of the terms of this Agreement (otherwise than as a result of its gross negligence or wilful misconduct).

 

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 8.1 (Distressed Disposals) taking into account the operation of Clause 8.1.

 

15.2                       Creditors’ indemnity

 

Each Junior Creditor shall (in the proportion that the Liabilities due to it bears to the aggregate of the Liabilities due to all the Junior Creditors for the time being (or, if the Liabilities due to each of those Junior Creditors is zero, immediately prior to their being reduced to zero)), indemnify the Security and Intercreditor Agent and the Proceeds Agent, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the Security and Intercreditor Agent’s or Proceeds Agent’s gross negligence or wilful misconduct in acting as Security and Intercreditor Agent or Proceeds Agent under the Junior Finance Documents and unless the Security and Intercreditor Agent or Proceeds Agent has already been reimbursed by a Junior Obligor pursuant to a Junior Finance Document) and the Junior Obligors shall jointly and severally indemnify each Junior Creditor against any payment made by it under this Clause 15.

 

15.3                       Borrower’s indemnity to Creditors

 

KEL shall promptly and as principal obligor indemnify each Junior Creditor and KEFI shall promptly and as principal obligor indemnify each Senior 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 8.1 (Distressed Disposals).

 

45

 

16.                              INFORMATION

 

16.1                       Information and dealing

 

(A)                               The Creditors shall provide to the relevant Agent from time to time (through their respective Junior Agents in the case of a Junior Creditor) any information that each Agent may reasonably specify as being necessary or desirable to enable each Agent to perform its functions as trustee.

 

(B)                               Each Junior Creditor shall deal with the Security and Intercreditor Agent exclusively through its Junior Agent.

 

16.2                       Disclosure

 

Notwithstanding any agreement to the contrary, each of the Obligors consents, until the Discharge Date, to the disclosure by any of (a) the Junior Creditors, the Junior Agents and the Security and Intercreditor Agent to each other (whether or not through a Junior Agent or the Security and Intercreditor Agent) and (b) the Senior Creditors and the Agents to each other (whether or not through an Agent) of such information concerning the Obligors obtained by it in that capacity as any Creditor, any Agent or any Junior Agent shall see fit.

 

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.

 

17.2                       Security and Intercreditor Agent’s communications with Creditors

 

The Security and Intercreditor Agent shall be entitled to carry out all dealings with the Creditors through their respective Agent or Junior Agent and may give to the Agents or Junior Agents, as applicable, any notice or other communication required to be given by the Security and Intercreditor Agent to a Creditor.

 

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:

 

46

 

(A)                               in the case of KEL:

 

	
Clarendon House
   2 Church Street 
   Hamilton HM11 
   Bermuda
    	
 
    	
c/o Kosmos Energy LLC   
   8176 Park Lane 
   Suite 500 
   Dallas 
   Texas 75231 
   USA
    
	
 
    	
 
    	
 
    
	
Fax: +1 441 292 4720
    	
 
    	
Fax: +1 214 445 9705
    
	
 
    	
 
    	
 
    
	
Attention: Company Secretary
    	
 
    	
Attention: Jason Doughty;
    

 

 

(B)                               in the case of KEFI:

 

	
P.O. Box   32322
   4th Floor, Century Yard
   Cricket Square
   Elgin Avenue
   George Town
   Grand Cayman
   KY1-1209
   Cayman Islands
    	
 
    	
c/o   Kosmos Energy LLC
   8176 Park Lane
   Suite 500
   Dallas
   Texas 75231
   USA
    
	
 
    	
 
    	
 
    
	
Fax:  (345) 946 4090
    	
 
    	
Fax: +1 214 445 9705
    
	
 
    	
 
    	
 
    
	
Attention: Andrew Johnson
    	
 
    	
Attention: Jason Doughty;
    

 

 

(C)                               in the case of the Security Agent:

 

	
Address:
    	
 
    	
BNP Paribas 
   16 Rue de Hanovre
   75078 Paris Cedex 2 
   France
    
	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
33 1 42 98 49 25
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Alexandra Arhab
    
	
 
    	
 
    	
 
    
	
Email:
    	
 
    	
alexandra.arhab@bnpparibas.com;
    

 

47

 

(D)                               in the case of the Security and Intercreditor Agent:

 

	
Address:
    	
 
    	
BNP Paribas 
   16 Rue de Hanovre 
   75078 Paris Cedex 2 
   France
    
	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
33 1 42 98 49 25
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Phoi-Van Phuong
    
	
 
    	
 
    	
 
    
	
Email:
    	
 
    	
phoi-van.phuong@bnpparibas.com;
    

 

 

(E)                                in the case of the RCF Agent:

 

	
Address:
    	
 
    	
Standard Chartered   Bank 
   5th Floor 
   1 Basinghall Avenue
   London 
   EC2V 5DD
    
	
 
    	
 
    	
 
    
	
Fax:
    	
 
    	
+44 207 885 3632
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Matthew Breadon;
    

 

 

(F)                                 in the case of the Proceeds Agent:

 

	
Address:
    	
 
    	
BNP Paribas
   16 Rue de Hanovre
   75078 Paris Cedex 2
   France
    
	
 
    	
 
    	
 
    
	
Fax: 
    	
 
    	
33 1 42 98 49 25
    
	
 
    	
 
    	
 
    
	
Attention:
    	
 
    	
Phoi-Van Phuong
    
	
 
    	
 
    	
 
    
	
Email:
    	
 
    	
phoi-van.phuong@bnpparibas.com;   and
    

 

 

(G)                               in the case of each other Party, that notified in writing to the other Parties 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 other Parties, by not less than five Business Days’ notice.

 

48

 

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 an Agent will be effective only when actually received by that Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent’s signature below (or any substitute department or officer as that Agent shall specify for this purpose).

 

(C)                               Any communication or document made or delivered to KEL or KEFI in accordance with this Clause 17.4 will be deemed to have been made or delivered to each of the Senior Obligors (where delivery has been made to KEFI) and each of the Junior Obligors (where delivery has been made to KEL).

 

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 relevant Party shall notify the other Parties.

 

17.6                       Electronic communication

 

(A)                               Any communication to be made between an Agent and another Agent, the Proceeds Agent or a Creditor under or in connection with this Agreement may be made by electronic mail or other electronic means, if the relevant Agent or Creditor:

 

(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.

 

49

 

(B)                               Any electronic communication made between an Agent and another Agent, the Proceeds Agent or Creditor will be effective only when actually received in readable form and in the case of any electronic communication made by a Creditor or Agent to the another Agent only if it is addressed in such a manner as that 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 relevant 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.

 

(C)                               The relevant Agent and/or receiving party shall be entitled to assume the accuracy of and rely upon any English translation of any document provided pursuant to this Clause 17.7 and the English translation shall prevail unless the document is a statutory or other official document.  Translation costs are for the account of the Obligors.

 

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 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 or parties 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

 

50

 

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 ranking of liabilities 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 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;

 

51

 

(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 paragraphs (B) below, to Clause 19.3 (Exceptions) and to Clause 19.5 (Snooze/Lose), this Agreement may be amended only with the consent of the Instructing Junior Creditors and the Instructing Senior Creditors and any provision of this Agreement may be waived only with the consent of the Instructing Senior Creditors.

 

(B)                               An amendment or waiver that has the effect of changing or which relates to:

 

(i)                                    Clause 7 (REDISTRIBUTION), Clause 9 (APPLICATION OF PROCEEDS) or this Clause 19 (CONSENTS, AMENDMENTS AND OVERRIDE); or

 

(ii)                                 the order of priorities and ranking of liabilities under this Agreement,

 

shall not be made without the consent of all of the Creditors.

 

19.2                       Effectiveness

 

Any amendment, waiver or consent given in accordance with this Clause 19 (CONSENTS, AMENDMENTS AND OVERRIDE) will be binding on all Parties, each Obligor and each Creditor and the relevant Agent may effect, on behalf of any Junior Agent or Creditor, any amendment, waiver or consent permitted by this Clause 19 (CONSENTS, AMENDMENTS AND OVERRIDE).

 

19.3                       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 Finance Party, in a way which affects or would affect Finance Parties of that Party’s class generally; or

 

(ii)                                 in the case of an Obligor, to the extent consented to by KEL (provided that, if the KEL Intercreditor Agreement is in effect, such consent must be given in accordance with its terms) or KEFI (in accordance with the Senior Intercreditor Agreement),

 

52

 

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 or the Proceeds Agent (including, without limitation, any ability of an Agent or the Proceeds Agent to act in its discretion under this Agreement) may not be effected without the consent of that Agent or the Proceeds Agent.

 

(C)                               Neither paragraph (A) nor (B) above shall apply:

 

(i)                                    to any release of Transaction Security, claim or Liabilities; or

 

(ii)                                 to any consent

 

which, in each case, the relevant Agent gives in accordance with Clause 8 (DISPOSALS).

 

19.4                       Enforcement Action

 

For the avoidance of doubt, as between on the one hand, the Finance Party and, on the other hand, the Obligors, nothing in this Agreement shall give the Finance Parties 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.

 

19.5                       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 relevant Agent), fails to provide details

 

53

 

of its Credit Participation to the relevant Agent within the timescale specified by that 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 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.

 

19.6                       Disenfranchisement of Sponsor Affiliates

 

(A)                               For so long as a Sponsor Affiliate beneficially owns a Commitment or Credit Participation or (ii) has entered into a sub-participation agreement relating to a Commitment or Credit Participation or other agreement or arrangement having a substantially similar economic effect and such agreement or arrangement has not been terminated:

 

(i)                                    in ascertaining:

 

(a)                                the Instructing Junior Creditors or the Instructing Senior Creditors (as applicable); 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 or 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 Creditor.

 

(ii)                                 Paragraph (A) above shall not apply to the extent that a Counterparty (other than a Sponsor Affiliate) is a Creditor by virtue otherwise than by beneficially owning the relevant Commitment or Credit Participation.

 

(B)                               Each Sponsor Affiliate that is a Creditor 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

 

54

 

same if so requested by the relevant Agent or, unless the relevant Agent otherwise agrees, be entitled to receive the agenda or any minutes of the same; and

 

(ii)                                 it shall not, unless the relevant Agent otherwise agrees, be entitled to receive any report or other document prepared at the behest of, or on the instructions of, the relevant Agent or one or more of the Creditors.

 

19.7                       Calculation of Credit Participations

 

For the purpose of ascertaining whether any relevant percentage of Credit Participations has been obtained under this Agreement, the relevant Agent may notionally convert the Credit Participations into their Dollar Currency Amounts.

 

19.8                       No liability

 

None of the Finance Parties or the Agents will be liable to any other Finance Party, Agent or Obligor for any Consent given or deemed to be given under this Clause 19.

 

19.9                       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 shall be governed by and construed in accordance with English law.

 

22.                              JURISDICTION

 

22.1                       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”).

 

22.2                       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.

 

55

 

22.3                       Concurrent jurisdiction

 

This Clause 22 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

 

23.                              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 proceedings before the English courts in connection with this Agreement; and

 

(ii)                                 agrees that failure by a process agent to notify an 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, KEL or KEFI, as applicable (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 relevant Agent.  Failing this, the relevant Agent may appoint another agent for this purpose.

 

This Agreement has been entered into on the date stated at the beginning of this Agreement.

 

56

 

SCHEDULE 1
  FORM OF AGENT ACCESSION UNDERTAKING

 

To:                            BNP PARIBAS as Security Agent.

 

To:                            BNP PARIBAS as Security and Intercreditor Agent.

 

To:                            STANDARD CHARTERED BANK as RCF Agent.

 

To:                            [·] as HY Noteholder Trustee.

 

From:            [Acceding Agent]

 

THIS UNDERTAKING is made on [date] by [insert full name of new Agent] (the “Acceding [Security Agent / Security and Intercreditor Agent / RCF Agent / HY Noteholder Trustee]”) in relation to the intercreditor agreement (the “Intercreditor Agreement”) dated [·] 2012 between, among others, BNP Paribas as Security Agent, BNP Paribas as Security and Intercreditor Agent, Standard Chartered Bank as RCF Agent and [·] as HY Noteholder Trustee, (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 [Security Agent / Security and Intercreditor Agent / RCF Agent / HY Noteholder Trustee] being accepted as a [Security Agent / Security and Intercreditor Agent / RCF Agent / HY Noteholder Trustee] for the purposes of the Intercreditor Agreement, the Acceding [Security Agent / Security and Intercreditor Agent / RCF Agent / HY Noteholder Trustee] confirms that, as from [date], it intends to be party to the Intercreditor Agreement as a [Security Agent / Security and Intercreditor Agent / RCF Agent / HY Noteholder Trustee] and undertakes to perform all the obligations expressed in the Intercreditor Agreement to be assumed by a [Security Agent / Security and Intercreditor Agent / RCF Agent / HY Noteholder Trustee] 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.

 

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 [Security Agent / Security and Intercreditor Agent / RCF Agent / HY Noteholder Trustee]

 

57

 

	
[insert full name of Acceding
    	
 
    
	
Agent]
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    
	
 
    	
 
    
	
Fax:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted by the   Security Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
for and on behalf   of
    	
 
    
	
 
    	
 
    
	
BNP   PARIBAS
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted by the   Security and Intercreditor Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
for and on behalf   of
    	
 
    
	
 
    	
 
    
	
BNP   PARIBAS
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Accepted by the   RCF Agent
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
for and on behalf   of
    	
 
    
	
 
    	
 
    
	
STANDARD   CHARTERED BANK
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    

 

58

 

	
Accepted by the HY   Noteholder Trustee
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
for and on behalf   of
    	
 
    
	
 
    	
 
    
	
[·]
    	
 
    
	
 
    	
 
    
	
Date:
    	
 
    

 

59

 

SIGNATURES

 

The Original Senior Borrower

 

KOSMOS ENERGY FINANCE INTERNATIONAL

 

	
By:
    	
/s/ Neal Shah
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name: 
    	
Neal Shah 
    	
 
    	
 
    
	
Title:
    	
Attorney-in-fact
    	
 
    	
 
    

 

 

The HY Note Issuer

 

KOSMOS ENERGY LTD.

 

	
By:
    	
/s/ Neal Shah
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name: 
    	
Neal Shah 
    	
 
    	
 
    
	
Title:
    	
Attorney-in-fact
    	
 
    	
 
    

 

 

The RCF Borrower

 

KOSMOS ENERGY LTD.

 

	
By:
    	
/s/ Neal Shah
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Name::
    	
Neal Shah
    	
 
    	
 
    
	
Title
    	
Attorney-in-fact
    	
 
    	
 
    

 

 

The Security Agent

 

BNP PARIBAS

 

	
By:
    	
/s/   Christophe Rouze
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Christophe   Rouze
    	
 
    
	
Title:
    	
Head   of Business Management E&C EMEA
    	
 
    

 

 

BNP PARIBAS

 

	
By:
    	
/s/   Eric de Menibus
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   
    	
Eric   de Menibus 
    	
 
    
	
Title:
    	
Deputy   Director
    	
 
    

 

 

The Security and Intercreditor Agent and Proceeds Agent

 

BNP PARIBAS

 

	
By:
    	
/s/   Christophe Rouze
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Christophe   Rouze
    	
 
    
	
Title:
    	
Head   of Business Management E&C EMEA
    	
 
    

 

 

BNP PARIBAS

 

	
By:
    	
/s/   Eric de Menibus
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Eric   de Menibus
    	
 
    
	
Title:
    	
Deputy   Director
    	
 
    

 

 

The RCF Agent

 

STANDARD CHARTERED BANK

 

	
By:
    	
/s/   Paul Thompson
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Paul   Thompson
    	
 
    
	
Title:
    	
DirectorExhibit 10.32

 

Execution Copy

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

 

This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of October 7, 2009, is by and among Kosmos Energy Holdings, a Cayman Islands Exempted Company limited by guarantee but not having a share capital and the expected predecessor company to the IPO Corporation (as hereinafter defined) (“Kosmos”), and each of the parties listed on Annex A (the “Initial Stockholders”, and as such Annex A is updated and amended pursuant to Section 12(c) hereof, the “Stockholders”), and amends and restates that certain Registration Rights Agreement, dated as of March 9, 2004, by and among Kosmos and the other parties thereto.

 

Whereas, the Initial Stockholders and Kosmos are parties to that certain Fourth Amended and Restated Operating Agreement of Kosmos of even date herewith, as the same may hereafter be amended from time to time (the “Operating Agreement”);

 

Whereas, if Kosmos elects to effect an underwritten public offering of equity securities, the Operating Agreement contemplates that Kosmos will convert or otherwise succeed into the IPO Corporation pursuant to Section 5.9 of the Operating Agreement and that in connection therewith the Members (as defined in the Operating Agreement) of Kosmos will receive Common Stock (as defined below); and

 

Whereas, Kosmos has agreed to bind the IPO Corporation (its successor) to provide registration rights with respect to the Registrable Securities (as defined below), as set forth in this Agreement.

 

Now, therefore, for and in consideration of the mutual agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:

 

Section 1.              Definitions. As used in this Agreement, the following terms shall have the following meanings, and terms used herein but not otherwise defined herein shall have the meanings assigned to them in the Operating Agreement:

 

“Blackstone Qualified Holder” shall mean each of Blackstone Capital Partners (Cayman) IV L.P., Blackstone Capital Partners (Cayman) IV-A L.P., Blackstone Family Investment Partnership (Cayman) IV-A L.P., Blackstone Family Investment Partnership (Cayman) IV-A SMD L.P., and Blackstone Participation Partnership (Cayman) IV L.P., or any Person with whom any of the foregoing entities has agreed in writing (a copy of which writing has been received by the Corporation) shall be entitled to make a demand under Section 3.

 

“Common Stock” shall mean all shares hereafter authorized of any class of common stock of the Corporation which has the right (subject always to the rights of any class or series of preferred stock of the Corporation) to participate in the distribution of the assets and earnings of the Corporation without limit as to per share amount.

 

 

“Contribution Agreement” shall mean that certain Second Amended and Restated Contribution Agreement of even date herewith by and among Kosmos and the Initial Stockholders, as the same may hereafter be amended from time to time.

 

“Corporation” shall mean the IPO Corporation or such other corporation as shall be the successor to the IPO Corporation.

 

“Defaulting Investor” shall have the meaning set forth in the Contribution Agreement.

 

“Demand Conditions” shall mean that (i) Blackstone or Warburg, as the case may be, owns at least 10% of the then outstanding Convertible Preferred Units, (ii) the Registrable Securities are to be sold in a firm commitment underwritten offering, and (iii) Blackstone or Warburg, as the case may be, has agreed to include in such offering the number of Registrable Securities that is equal to the lesser of (A) all of its Registrable Securities and (B) such maximum number or dollar amount of Registrable Securities that, in the opinion of the managing underwriter, can be sold on commercially reasonable terms (including, without limitation, securities proposed to be included by other holders of securities entitled to include securities in such Registration Statement pursuant to incidental or piggyback registration rights).

 

“Demand Notice” shall have the meaning set forth in Section 3(a) hereof.

 

“Demand Registration” shall have the meaning set forth in Section 3(a) hereof.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.

 

“Losses” shall have the meaning set forth in Section 8 hereof.

 

“Non-Consenting Investor” shall have the meaning set forth in the Contribution Agreement.

 

“Person” shall mean any natural person, corporation, limited partnership, general partnership, limited liability company, joint stock company, joint venture, association, company, estate, trust, bank trust company, land trust, business trust, or other organization, whether or not a legal entity, custodian, trustee-executor, administrator, nominee or entity in a representative capacity and any government or agency or political subdivision thereof.

 

“Piggyback Notice” shall have the meaning set forth in Section 4(a) hereof.

 

“Piggyback Registration” shall have the meaning set forth in Section 4(a) hereof.

 

“Preferred Stock” shall mean shares of the preferred stock of the Corporation initially issued in the IPO Conversion as provided in Section 5.9 of the Operating Agreement.

 

“Pre-QPO Demand Notice” shall have the meaning set forth in Section 3 hereof.

 

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“Pre-QPO Demand Registration” shall have the meaning set forth in Section 3 hereof.

 

“Proceeding” shall mean an action, claim, suit, arbitration or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” shall mean the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

“Qualified Holder” shall mean a Warburg Qualified Holder or a Blackstone Qualified Holder, as the case may be, or any of their respective Permitted Transferees (as defined in the Operating Agreement).

 

“Qualified Public Offering” means any firm commitment underwritten offering of Common Stock to the public pursuant to an effective registration statement under the Securities Act (i) for which aggregate cash proceeds to be received by the Corporation from such offering (without deducting underwriting discounts, expenses and commissions) are at least $50,000,000 or for which aggregate cash proceeds to be received by a Qualified Holder from such offering (without deducting underwriting discounts, expenses and commissions) are at least $10,000,000, and (ii) pursuant to which such shares of common stock are authorized and approved for listing on the New York Stock Exchange or admitted to trading and quoted in the Nasdaq National Market system.

 

“Registrable Securities” shall mean (i) all shares of Common Stock of the Corporation initially issued in the IPO Conversion as provided in Section 5.9 of the Operating Agreement, (ii) all shares of Common Stock issued and issuable upon conversion of outstanding shares of Preferred Stock (including any shares of Common Stock issued or distributed by way of dividend, stock split or other distribution in respect of such shares) held by the Stockholders and, subject to the next succeeding sentence and Section 12(c) hereof, any successor or assign of such shares, and (iii) the shares of Common Stock acquired by the Stockholders after the date hereof and prior to a Qualified Public Offering in accordance with the Operating Agreement. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (i) they are sold pursuant to an effective Registration Statement under the Securities Act, (ii) they are sold pursuant to Rule 144 (or any similar provision then in force under the Securities Act) and the transferee thereof does not receive “restricted securities” as defined in Rule 144, (iii) they shall have ceased to be outstanding, (iv) they have been sold in a private transaction in which the transferor’s rights under this Agreement are not assigned to the transferee of the securities, (v) they become eligible for resale pursuant to Rule 144(b)(1) (or any similar rule then in effect under the Securities Act) and the holder of such securities does not then beneficially own more than 2% of such class of securities. No Registrable Securities may

 

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be registered under more than one Registration Statement at any one time, or (vi) they become eligible for resale pursuant to Rule 144 (or any similar rule then in effect under the Securities Act) and the holder of such Registrable Securities does not then beneficially own more than 1% of such class of securities.

 

“Registration Statement” shall mean any registration statement of the Corporation under the Securities Act which permits the public offering of any of the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

 

“Rule 144” shall mean Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC.

 

“SEC” shall mean the Securities and Exchange Commission or any successor agency having jurisdiction under  the Securities Act.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, and any successor statute thereto and the rules and regulations of the SEC promulgated thereunder.

 

“Supermajority Holders” shall have the meaning ascribed to such term in the Operating Agreement if the time in question is before the IPO Conversion, and thereafter shall mean, (i) if any shares of Preferred Stock are then outstanding, the holders of at least 75% of the outstanding Preferred Stock (excluding Preferred Stock held by any Defaulting Investor), or (ii) if no shares of Preferred Stock are then outstanding, the holders of at least 75% of the outstanding Registrable Securities then held by holders of Registrable Securities.

 

“underwritten registration or underwritten offering” shall mean a registration in which securities of the Corporation are sold to an underwriter for reoffering to the public.

 

“Warburg Qualified Holder” shall mean each of Warburg Pincus International Partners, L.P., Warburg Pincus Netherlands International Partners I, C.V., Warburg Pincus Netherlands International Partners II, C.V., Warburg Pincus Germany International Partners, KG, Warburg Pincus Private Equity VIII, L.P., Warburg Pincus Netherlands Private Equity VIII I, C.V., Warburg Pincus Netherlands Private Equity VIII II, C.V. and Warburg Pincus Germany Private Equity VIII, KG, or any Person with whom any of the foregoing entities has agreed in writing (a copy of which writing has been received by the Corporation) shall be entitled to make a demand under Section 3.

 

Section 2.              Holders of Registrable Securities. A Person is deemed, and shall only be deemed, to be a holder of Registrable Securities if such Person owns  Registrable Securities or has a right to acquire such Registrable Securities through its ownership of the Preferred Stock and such Person is a Stockholder.

 

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Section 3.              Demand Registrations.

 

(a)           Requests for Registration. Subject to the following paragraph of this Section 3(a), a Qualified Holder shall have the right by delivering a written notice to the Corporation (a “Demand Notice”) to require the Corporation to register, pursuant to the terms of this Agreement under and in accordance with the provisions of the Securities Act, the number of Registrable Securities requested to be  so registered pursuant to the terms of this Agreement (a “Demand Registration”); provided, however, that a Demand Notice may only be made (i) at any time after a Qualified Public Offering (except in the case of a Pre-QPO Demand Registration) and (ii) if the sale of the Registrable Securities requested to be registered by such Qualified Holder is reasonably expected to result in aggregate gross cash proceeds in excess of $10,000,000. Following receipt of a Demand Notice for a Demand Registration (or of a Pre-QPO Demand Notice for a Pre-QPO Demand Registration), the Corporation shall use its reasonable best efforts to file a Registration Statement as promptly as practicable, but not later than 30 days after such Demand Notice (or 60 days in the case of a Pre-QPO Demand Registration), and shall use its reasonable best efforts to cause such Registration Statement to be declared effective under the Securities Act as promptly as practicable after the filing thereof.

 

The Warburg Qualified Holders shall be entitled to an aggregate maximum of two Demand Registrations and the Blackstone Qualified Holders shall be entitled to an aggregate maximum of two Demand Registrations; provided, however, that Qualified Holders shall not be limited in the number of Demand Registrations that constitute “shelf” registrations as contemplated by the next succeeding sentence, and provided, further, that each of Blackstone and Warburg shall have the right by delivering a written notice to the Corporation (a “Pre-QPO Demand Notice”) to require the Corporation to register, pursuant to the terms of this Agreement under and in accordance with the provisions of the Securities Act, the number of Registrable Securities requested to be so registered pursuant to the terms of this Agreement (each, a “Pre-QPO Demand Registration”); provided, however, that a Pre-QPO Demand Notice may only be made (i) at any time after March 9, 2011 and prior to the consummation of a Qualified Public Offering and (ii) so long as the Demand Conditions are satisfied by Blackstone or Warburg, as the case may be, as of the time of delivery to the Corporation of such Pre-QPO Demand Notice. After such time as the Corporation shall become eligible to use Form S-3 (or comparable form) for the registration under the Securities Act of any of its securities, each Qualified Holder shall be entitled to request that a Demand Registration be a “shelf” registration pursuant to Rule 415 under the Securities Act. Notwithstanding any other provisions of this Section 3, in no event shall more than one Demand Registration or Pre-QPO Demand Registration occur during any six-month period (measured from the effective date of the Registration Statement to the date of the next Demand Notice or Pre-QPO Demand Notice) or within 120 days after the effective date of a Registration Statement filed by the Corporation; provided that no Demand Registration or Pre-QPO Demand Registration may be prohibited for such 120-day period more often than once in a 12-month period.

 

No Demand Registration or Pre-QPO Demand Registration shall be deemed to have occurred for purposes of this Section 3 if the Registration Statement relating thereto (i) does not become effective (ii) is not maintained effective for the period required pursuant to this Section 3, or (iii) the offering of the Registrable Securities pursuant to such

 

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Registration Statement is subject to a stop order, injunction or similar order or requirement of the SEC during such period in which case such requesting holder of Registrable Securities shall be entitled to an additional Demand Registration or Pre-QPO Demand Registration, as the case may be, in lieu thereof.

 

Within 10 days after receipt by the Corporation of a Demand Notice or a Pre-QPO Demand Notice, the Corporation shall give written notice (the “Notice”) of such Demand Notice or Pre-QPO Demand Notice to all other holders of Registrable Securities and shall, subject to the provisions of Section 3(b) hereof, include in such registration all Registrable Securities with respect to which the Corporation received written requests for inclusion therein within 10 days after such Notice is given by the Corporation to such holders.

 

All requests made pursuant to this Section 3 will specify the number of Registrable Securities to be registered and the intended methods of disposition thereof.

 

The Corporation shall be required to maintain the effectiveness of the Registration Statement (except in the case of a requested “shelf” registration) with respect to any Demand Registration for a period of at least 180 days after the effective date thereof or such shorter period in which all Registrable Securities included in such Registration Statement have actually been sold; provided, however, that such period shall be extended for a period of time equal to the period the holder of Registrable Securities refrains from selling any securities included in such registration at the request of an underwriter of the Corporation or the Corporation pursuant to the provisions of this Agreement. The Corporation shall be required to maintain the effectiveness of a shelf Registration Statement with respect to any Demand Registration at all times after the effective date thereof until the earlier of such time that all Registrable Securities included in such Registration Statement have actually been sold or five years from such effectiveness; provided, however, that any Stockholder owning Common Stock that has been included on a shelf Registration Statement may request that such Common Stock be removed from such Registration Statement, in which event the Corporation shall promptly either withdraw such Registration Statement or file a post-effective amendment to such Registration Statement removing such Common Stock.

 

Notwithstanding anything contained herein to the contrary, the Corporation hereby agrees that (i) any Demand Registration that is a “shelf” registration pursuant to Rule 415 under the Securities Act shall contain all language (including, without limitation, on the Prospectus cover sheet, the principal stockholders’ chart and the plan of distribution) as may be reasonably requested by a holder of Registrable Securities to allow for a distribution to, and resale by, the direct and indirect partners, members or stockholders of a holder of Registrable Securities (a “Partner Distribution”) and (ii) the Corporation shall, at the request of any holder of Registrable Securities seeking to effect a Partner Distribution, file any Prospectus supplement or post-effective amendments and to otherwise take any action necessary to include such language, if such language was not included in the initial Registration Statement, or revise such language if deemed reasonably necessary by such holder to effect such Partner Distribution.

 

(b)           Priority on Demand Registration. If any of the Registrable Securities registered pursuant to a Demand Registration or a Pre-QPO Demand Registration are to be sold in a firm commitment underwritten offering, and the managing underwriter or

 

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underwriters advise the holders of such securities in writing that in its view the total number or dollar amount of Registrable Securities proposed to be sold in such offering is such as to adversely affect the success of such offering (including, without limitation, securities proposed to be included by other holders of securities entitled to include securities in such Registration Statement pursuant to incidental or piggyback registration rights), then there shall be included in such firm commitment underwritten offering the number or dollar amount of Registrable Securities that in the opinion of such managing underwriter can be sold without adversely affecting such offering, and such number of Registrable Securities shall be allocated as follows:

 

(i)            first, pro rata among the holders of Registrable Securities; and

 

(ii)           second, the securities for which inclusion in such Demand Registration or Pre-QPO Demand Registration, as the case may be, was requested by the Corporation.

 

In connection with any Demand Registration or Pre-QPO Demand Registration to which the provisions of this subsection (b) apply, no securities other than Registrable Securities shall be covered by such Demand Registration or Pre-QPO Demand Registration except as provided in subsection (e)(ii) hereof, and such registration shall not reduce the number of available registrations under this Section 3 in the event that the Registration Statement excludes more than 25% of the aggregate number of Registrable Securities that holders requested be included.

 

(c)        Postponement of Demand Registration. The Corporation shall be entitled to postpone (but not more than once in any 12 month period), for a reasonable period of time not in excess of 60 days, the filing of a Registration Statement if the Corporation delivers to the holders requesting registration a certificate signed by both the president and chief financial officer of the Corporation certifying that, in the good faith judgment of the board of directors of the Corporation, such registration and offering would reasonably be expected to materially adversely affect or materially interfere with any bona fide material financing of the Corporation or any material transaction under consideration by the Corporation or would require disclosure of information that has not been disclosed to the public, the premature disclosure of which would materially adversely affect the Corporation. Such certificate shall contain a statement of the reasons for such postponement and an approximation of the anticipated delay. The holders receiving such certificate shall keep the information contained in such certificate confidential subject to the same terms set forth in Section 6(p). If the Corporation shall so postpone the filing of a Registration Statement, the holder who made the Demand Registration or Pre-QPO Demand Registration shall have the right to withdraw the request for registration by giving written notice to the Corporation within 20 days of the anticipated termination date of the postponement period, as provided in the certificate delivered to the holders, and in the event of such withdrawal, such request shall not be counted for purposes of the number of Demand Registrations or Pre-QPO Demand Registrations to which such holder is entitled pursuant to the terms of this Agreement.

 

(d)        Use, and Suspension of Use, of Shelf Registration Statement. If the Corporation has filed a “shelf” Registration Statement and has included Registrable Securities

 

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therein, the Corporation shall be entitled to suspend (but not more than an aggregate of 90 days in any twelve month period), for a reasonable period of time not in excess of 90 days, the offer or sale of Registrable Securities pursuant to such Registration Statement by any holder of Registrable Securities if (i) a “road show” is not then in progress with respect to a proposed offering of Registrable Securities by such holder pursuant to such Registration Statement and such holder has not executed an underwriting agreement with respect to a pending sale of Registrable Securities pursuant to such Registration Statement and (ii) the Corporation delivers to the holders of Registrable Securities included in such Registration Statement a certificate signed by both the president and chief financial officer of the Corporation certifying that, in the good faith judgment of the board of directors of the Corporation, such offer or sale would reasonably be expected to materially adversely affect or materially interfere with any bona fide material financing of the Corporation or any material transaction under consideration by the Corporation or would require disclosure of information that has not been disclosed to the public, the premature disclosure of which would materially adversely affect the Corporation. Such certificate shall contain a statement of the reasons for such postponement and an approximation of the anticipated delay. The holders receiving such certificate shall keep the information contained in such certificate confidential subject to the same terms set forth in Section 6(p). IN ADDITION, A HOLDER OF REGISTRABLE SECURITIES MAY NOT USE A SHELF REGISTRATION STATEMENT TO EFFECT THE SALE OF ANY SUCH SECURITIES AFTER THE 30TH DAY FOLLOWING THE EFFECTIVENESS OF SUCH SHELF REGISTRATION STATEMENT UNLESS SUCH HOLDER HAS GIVEN THE COMPANY AT LEAST TWO BUSINESS DAYS’ (AS DEFINED IN THE OPERATING AGREEMENT) ADVANCE WRITTEN NOTICE OF THE DATE OR DATES OF A PROPOSED SALE OF SUCH SECURITIES BY SUCH HOLDER PURSUANT TO SUCH REGISTRATION STATEMENT (WHICH NOTICE MAY BE GIVEN AS OFTEN AS SUCH HOLDER DESIRES).

 

(e)           Registration of Other Securities. Whenever the Corporation shall effect a Demand Registration or Pre-QPO Demand Registration pursuant to this Section 3 in connection with an underwritten offering by one or more holders of Registrable Securities, no securities other than Registrable Securities shall be included among the securities covered by such Demand Registration or Pre-QPO Demand Registration unless (i) the managing underwriter of such offering shall have advised each holder of Registrable Securities requesting such registration in writing that it believes that the inclusion of such other securities would not adversely affect such offering or (ii) the inclusion of such other securities is approved by the affirmative vote of the holders of at least a majority of the Registrable Securities included in such Demand Registration or Pre-QPO Demand Registration, as the case may be, by the Qualified Holders requesting such Demand Registration or Pre-QPO Demand Registration, as the case may be.

 

Section 4.                                           Piggyback Registration.

 

(a)           Right to Piggyback. If the Corporation proposes to file a registration statement under the Securities Act with respect to an offering of Common Stock by and for the account of the Corporation (other than a registration statement (i) on Form S-4, Form S-8 or any successor forms thereto or (ii) filed solely in connection with an exchange offer or any employee

 

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benefit or dividend reinvestment plan), whether or not for its own account, then, each such time, the Corporation shall give prompt written notice of such proposed filing at least fifteen (15) days before the anticipated filing date (the “Piggyback Notice”) to all of the holders of Registrable Securities. The Piggyback Notice shall offer such holders the opportunity to include in such registration statement the number of Registrable Securities as each  such holder may request (a “Piggyback Registration”). Subject to Section 4(b) hereof, the Corporation shall include in each such Piggyback Registration all Registrable Securities with respect to which the Corporation has received written requests for inclusion therein within ten (10) days after notice has been given to the applicable holder. The eligible holders of Registrable Securities shall be permitted to withdraw all or part of the Registrable Securities from a Piggyback Registration at any time prior to the effective date of such Piggyback Registration. The Corporation shall not be required to maintain the effectiveness of the Registration Statement for a Piggyback Registration beyond the earlier to occur of (i) 180 days after the effective date thereof and (ii) consummation of the distribution by the holders of the Registrable Securities included in such Registration Statement; provided, however, that any Stockholder owning Common Stock that has been included on such shelf Registration Statement may request that such Common Stock be removed from such Registration Statement, in which event the Corporation shall promptly either withdraw such Registration Statement or file a post-effective amendment to such Registration Statement removing such Common Stock.

 

(b)           Priority on Piggyback Registrations. The Corporation shall use reasonable efforts to cause the managing underwriter or underwriters of a proposed underwritten offering to permit holders of Registrable Securities requested to be included in the registration for such offering to include all such Registrable Securities on the same terms and conditions as any other shares of capital stock, if any, of the Corporation included therein. Notwithstanding the foregoing, if the managing underwriter or underwriters of such underwritten offering have informed the Corporation in writing that it is their good faith opinion that the total amount of securities that such holders, the Corporation and any other Persons having rights to participate in such registration, intend to include in such offering is such as to adversely affect the success of such offering, then the amount of securities to be offered (i) for the account of holders of Registrable Securities (other than the Corporation) and (ii) for the account of all such other Persons (other than the Corporation) shall be reduced to the extent necessary to reduce the total amount of securities to be included in such offering to the amount recommended by such managing underwriter or underwriters by first reducing, or eliminating if necessary, all securities of the Corporation requested to be included by such other Persons (other than the Corporation) and then, if necessary, reducing the securities requested to be included by the holders of Registrable Securities requesting such registration pro rata among such holders on the basis of the percentage of the Registrable Securities requested to be included in such Registration Statement by such holders.

 

Notwithstanding anything contained herein to the contrary, the Corporation hereby agrees that (i) any Piggyback Registration that is a “shelf” registration pursuant to Rule 415 under the Securities Act shall contain all language (including, without limitation, on the Prospectus cover sheet, the principal stockholders’ chart and the plan of distribution) as may be requested by a holder of Registrable Securities to allow for a Partner Distribution and (ii) the Corporation shall, at the request of any holder of Registrable Securities

 

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seeking to effect a Partner Distribution, file any Prospectus supplement or post-effective amendments and to otherwise take any action necessary to include such language, if such language was not included in the initial Registration Statement, or revise such language if deemed reasonably necessary by such holder to effect such Partner Distribution.

 

Section 5.              Restrictions on Public Sale by Holders of Registrable Securities. Each Stockholder agrees, in connection with the Qualified Public Offering, and each holder of Registrable Securities agrees, in connection with any underwritten offering made pursuant to a Registration Statement filed pursuant to Section 3 or Section 4 hereof (whether or not such holder elected to include Registrable Securities in such Registration Statement), if requested (pursuant to a written notice) by the managing underwriter or underwriters in an underwritten offering, not to effect any public sale or distribution of any of the Corporation’s securities (except as part of such underwritten offering), including a sale pursuant to Rule 144, or to give any Demand Notice or Pre-QPO Demand Notice during the period commencing on the date of the request (which shall be no earlier than 14 days prior to the expected “pricing” of such offering) and continuing for not more than 180 days (with respect to the Qualified Public Offering) or 90 days (with respect to any underwritten public offering other than the Qualified Public Offering made prior to the second anniversary of the Qualified Public Offering and thereafter 60 days rather than 90) after the date of the Prospectus (or Prospectus supplement if the offering is made pursuant to a “shelf” registration) pursuant to which such public offering shall be made or such lesser period as is required by the managing underwriter, provided, however, that all officers and directors of the Corporation must be subject to similar restrictions.

 

Section 6.              Registration Procedures. If and whenever the Corporation is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 3 and Section 4 hereof, the Corporation shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Corporation shall cooperate in the sale of the securities and shall, as expeditiously as possible:

 

(a)           Prepare and file with the SEC a Registration Statement or Registration Statements on such form which shall be available for the sale of the Registrable Securities by the holders thereof or the Corporation in accordance with the intended method or methods of distribution thereof (including, without limitation, a Partner Distribution), and use its reasonable best efforts to cause such Registration Statement to become effective and to remain effective as provided herein; provided, however, that before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including documents that would be incorporated or deemed to be incorporated therein by reference), the Corporation shall furnish or otherwise make available to the holders of the Registrable Securities covered by such Registration Statement, their counsel and the managing underwriters, if any, copies of all such documents proposed to be filed, which documents will be subject to the reasonable review and comment of such counsel, and such other documents reasonably requested by such counsel, including any comment letter from the SEC, and, if requested by such counsel, provide such counsel reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein and such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the

 

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Corporation’s books and records, officers, accountants and other advisors. The Corporation shall not file any such Registration Statement or Prospectus or any amendments or supplements thereto (including such documents that, upon filing, would be incorporated or deemed to be incorporated by reference therein) with respect to a Demand Registration or Pre-QPO Demand Registration to which the holders of a majority of the Registrable Securities covered by such Registration Statement, their counsel, or the managing underwriters, if any, shall reasonably object, in writing, on a timely basis, unless, in the opinion of the Corporation, such filing is necessary to comply with applicable law.

 

(b)           Prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective during the period provided herein and comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement; and cause the related Prospectus to be supplemented by any Prospectus supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the securities covered by such Registration Statement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act.

 

(c)           Notify each selling holder of Registrable Securities, its counsel and the managing underwriters, if any, promptly, and (if requested by any such Person) confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other Federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) if at any time the representations and warranties of the Corporation contained in any agreement (including any underwriting agreement) contemplated by Section 6(o) below cease to be true and correct, (v) of the receipt by the Corporation of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (vi) of the happening of any event that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(d)           Use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the

 

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qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the reasonably earliest practical date.

 

(e)           If requested by the managing underwriters, if any, or the holders of a majority of the then outstanding Registrable Securities being sold in connection with an underwritten offering, promptly include in a Prospectus supplement or post-effective amendment such information as the managing underwriters, if any, and such holders may reasonably request in order to permit the intended method of distribution of such securities and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Corporation has received such request; provided, however, that the Corporation shall not be required to take any actions under this Section 6(e) that are not, in the opinion of counsel for the Corporation, in compliance with applicable law.

 

(f)            Furnish or make available to each selling holder of Registrable Securities, its counsel and each managing underwriter, if any, without charge, at least one conformed copy of the Registration Statement, the Prospectus and Prospectus supplements, if applicable, and each post-effective amendment thereto, including financial statements (but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits, unless requested in writing by such holder, counsel or underwriter).

 

(g)           Deliver to each selling holder of Registrable Securities, its counsel, and the underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of Prospectus) and each amendment or supplement thereto as such Persons may reasonably request in connection with the distribution of the Registrable Securities; and the Corporation, subject to the last paragraph of this Section 6, hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling holders of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any such amendment or supplement thereto.

 

(h)           Prior to any public offering of Registrable Securities, use its reasonable best efforts to register or qualify or cooperate with the selling holders of Registrable Securities, the underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of such jurisdictions within the United States as any seller or underwriter reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and to take any other action that may be necessary or advisable to enable such holders of Registrable Securities to consummate the disposition of such Registrable Securities in such jurisdiction; provided, however, that the Corporation will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject.

 

(i)            Cooperate with the selling holders of Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any legends) representing Registrable Securities to be sold after receiving written

 

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representations from each holder of such Registrable Securities that the Registrable Securities represented by the certificates so delivered by such holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, or holders may request at least two (2) business days prior to any sale of Registrable Securities in a firm commitment public offering, but in any other such sale, within ten (10) business days prior to having to issue the securities.

 

(j)            Use its reasonable best efforts to cause the Registrable Securities covered by the Registration Statement to be  registered with or approved by such other governmental agencies or authorities within the United States, except as may be required solely as a consequence of the nature of such selling holder’s business, in which case the Corporation will cooperate in all reasonable respects with the filing of such Registration Statement and the granting of such approvals, as may be necessary to enable the seller or sellers thereof or the underwriters, if any, to consummate the disposition of such Registrable Securities.

 

(k)           Upon the occurrence of any event contemplated by Section 6(c)(vi) above, prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(l)            Prior to the effective date of the Registration Statement relating to the Registrable Securities, provide a CUSIP number for the Registrable Securities.

 

(m)          Provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement.

 

(n)           Use its reasonable best efforts to cause all shares of Registrable Securities covered by such Registration Statement to be authorized to be quoted on the Nasdaq National Market or listed on a national securities exchange if shares of the particular class of Registrable Securities are at that time quoted on the Nasdaq National Market or listed on such exchange, as the case may be.

 

(o)           Enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) and take all such other actions reasonably requested by the holders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the managing underwriters, if any) to expedite or facilitate the disposition of such Registrable Securities, and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration, (i) make such representations and warranties to the holders of such Registrable Securities and the underwriters, if any, with respect to the business of the Corporation and its subsidiaries, and the Registration Statement, Prospectus and documents,

 

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if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and, if true, confirm the same if and when requested, (ii) use its reasonable best efforts to furnish to the selling holders of such Registrable Securities opinions of counsel to the Corporation and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and counsels to the selling holders of the Registrable Securities), addressed to each selling holder of Registrable Securities and each of the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and underwriters, (iii) use its reasonable best efforts to obtain “cold comfort” letters and updates thereof from the independent certified public accountants of the Corporation (and, if necessary, any other independent certified public accountants of any subsidiary of the Corporation or of any business acquired by the Corporation for which financial statements and financial data are, or are required to be, included in the Registration Statement) who have certified the financial statements included in such Registration Statement, addressed to each selling holder of Registrable Securities (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and each of the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings, (iv) use its reasonable best efforts to obtain a report of the independent petroleum engineers of the Corporation relating to the oil and gas reserves of the Corporation included in such Registration Statement if the Corporation has had its reserves prepared, audited or reviewed by an independent petroleum engineer, such report to be in customary form and covering matters of the type customarily covered in such reports, (v) if an underwriting agreement is entered into, the same shall contain indemnification provisions and procedures substantially to the effect set forth in Section 8 hereof with respect to all parties to be indemnified pursuant to said Section and (vi) deliver such documents and certificates as may be reasonably requested by the holders of a majority of the Registrable Securities being sold, their counsel and the managing underwriters, if any, to evidence the continued validity of the representations and warranties made pursuant to Section 6(o)(i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Corporation. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder.

 

(p)           Make available for inspection by a representative of the selling holders of Registrable Securities, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorneys or accountants retained by such selling holders or underwriter, at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Corporation and its subsidiaries, and cause the officers, directors and, employees of the Corporation and its subsidiaries to supply all information in each case reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration Statement; provided, however, that any information that is not generally publicly available at the time of delivery of such information shall be kept confidential by such Persons unless (i) disclosure of such information is required by court or administrative order, (ii) disclosure of such information, in the opinion of counsel to such Person, is required by law, or (iii) such

 

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information becomes generally available to the public other than as a result of a disclosure or failure to safeguard by such Person. In the case of a proposed disclosure pursuant to (i) or (ii) above, such Person shall be required to give the Corporation written notice of the proposed disclosure prior to such disclosure and, if requested by the Corporation, assist the Corporation in seeking to prevent or limit the proposed disclosure. Without limiting the foregoing, no such information shall be used by such Person as the basis for any market transactions in securities of the Corporation or its subsidiaries in violation of law.

 

(q)           Comply with all applicable rules and regulations of the SEC and make available to its security holders earning statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder, or any similar rule promulgated under the Securities Act, no later than 45 days after the end of any 12 month period (or 90 days after the end of any 12 month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Corporation after the effective date of a Registration Statement, which statements shall cover one of said 12 month periods.

 

(r)            Cause its officers to use their reasonable best efforts to support the marketing of the Registrable Securities covered by the Registration Statement (including, without limitation, participation in “road shows”) taking into account the Corporation’s business needs.

 

The Corporation may require each seller of Registrable Securities as to which any registration is being effected to furnish to the Corporation in writing such information required in connection with such registration regarding such seller and the distribution of such Registrable Securities as the Corporation may, from time to time, reasonably request in writing and the Corporation may exclude from such registration the Registrable Securities of any seller who unreasonably fails to furnish such information within a reasonable time after receiving such request.

 

Each holder of Registrable Securities agrees if such holder has Registrable Securities covered by such Registration Statement that, upon receipt of any notice from the Corporation of the happening of any event of the kind described in Section 6(c)(ii), 6(c)(iii), 6(c)(v) or 6(c)(vi) hereof, such holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus until such holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(k) hereof, or until it is advised in writing by the Corporation that the use of the applicable Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus; provided, however that the Corporation shall extend the time periods under Section 3 with respect to the length of time that the effectiveness of a Registration Statement must be maintained by the amount of time the holder is required to discontinue disposition of such securities.

 

Section 7.              Registration Expenses. All reasonable fees and expenses incident to the performance of or compliance with this Agreement by the Corporation (including, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses (A)

 

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with respect to filings required to be made with the National Association of Securities Dealers, Inc. and (B) of compliance with securities or Blue Sky laws, including, without limitation, any fees and disbursements of counsel for the underwriters in connection with Blue Sky qualifications of the Registrable Securities pursuant to Section 6(h)), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing Prospectuses if the printing of Prospectuses is requested by the managing underwriters, if any, or by the holders of a majority of the Registrable Securities included in any Registration Statement), (iii) messenger, telephone and delivery expenses of the Corporation, (iv) fees and disbursements of counsel for the Corporation, (v) expenses of the Corporation incurred in connection with any road show, (vi) fees and disbursements of all independent certified public accountants referred to in Section 6(o)(iii) hereof (including, without limitation, the expenses of any “cold comfort” letters or oil and gas reserve reports required by this Agreement) and any other persons, including special experts retained by the Corporation, and (vii) fees and disbursements of one counsel for the holders of Registrable Securities whose shares are included in a Registration Statement, which counsel shall be selected by the requesting Qualified Holders if such Registration Statement is pursuant to a Demand Registration or Pre-QPO Demand Registration and otherwise by the holders of a majority of the Registrable Securities included in such Registration Statement) shall be borne by the Corporation whether or not any Registration Statement is filed or becomes effective. In addition, the Corporation shall pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit, the fees  and expenses incurred in connection with the listing of the securities to be registered on any securities exchange on which similar securities issued by the Corporation are then listed and rating agency fees and the fees and expenses of any Person, including special experts, retained by the Corporation.

 

The Corporation shall not be required to pay (i) fees and disbursements of any counsel retained by any holder of Registrable Securities or by any underwriter (except as set forth in clauses 7(i)(B) and 7(vii)), (ii) any underwriter’s fees (including discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals) relating to the distribution of the Registrable Securities (other than with respect to Registrable Securities sold by the Corporation), or (iii) any other expenses of the holders of Registrable Securities not specifically required to be paid by the Corporation pursuant to the first paragraph of this Section 7.

 

Section 8.              Indemnification.

 

(a)           Indemnification by the Corporation. The Corporation shall, without limitation as to time, indemnify and hold harmless, to the fullest extent permitted by law, each holder of Registrable Securities whose Registrable Securities are covered by a Registration Statement or Prospectus, the officers, directors, partners, members, managers, stockholders, accountants, attorneys, agents and employees of each of them, each Person who controls each such holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, partners, members, managers, stockholders, accountants, attorneys, agents and employees of each such controlling person, each underwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act or

 

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Section 20 of the Exchange Act) such underwriter, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees and any legal or other fees or expenses incurred by such party in connection with any investigation or Proceeding), expenses, judgments, fines, penalties, charges and amounts paid in settlement (collectively, “Losses”), as incurred, arising out of or based upon any untrue statement (or alleged untrue statement) of a material fact contained in any Prospectus, offering circular, or other document (including any related Registration Statement, notification, or the like) incident to any such registration, qualification, or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Corporation of the Securities Act or any rule or regulation thereunder applicable to the Corporation and relating to action or inaction required of the Corporation in connection with any such registration, qualification, or compliance, and will reimburse each such holder, each of its officers, directors, partners, members, managers, stockholders, accountants, attorneys, agents and employees and each person controlling such holder, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action, provided that the Corporation will not be liable in any such case to the extent that any such claim, loss, damage, liability, or expense arises out of or is based on any untrue statement or omission by such holder or underwriter, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, Prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Corporation by such holder. It is agreed that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Corporation (which consent shall not be unreasonably withheld).

 

(b)           Indemnification by Holder of Registrable Securities. In connection with any Registration Statement in which a holder of Registrable Securities is participating, such holder of Registrable Securities shall furnish to the Corporation in writing such information as the Corporation reasonably requests for use in connection with any Registration Statement or Prospectus and agrees to indemnify, to the fullest extent permitted by law, severally and not jointly, the Corporation, its directors and officers and each Person who controls the Corporation (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), from and against all Losses arising out of or based on any untrue statement of a material fact contained in any such Registration Statement, Prospectus, offering circular, or other document, or any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Corporation and such directors, officers, partners, members, managers, stockholders, accountants, attorneys, employees, agents, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement or omission is made in such Registration Statement, Prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Corporation by such holder expressly for inclusion in such Registration Statement, Prospectus, offering circular or other document; provided, however, that the obligations of such holder hereunder shall not apply to

 

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amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such holder (which consent shall not be unreasonably withheld); and provided, further, that the liability of each selling holder of Registrable Securities hereunder shall be limited to the net proceeds received by such selling holder from the sale of Registrable Securities covered by such Registration Statement.

 

(c)           Conduct of Indemnification Proceedings. If any Person shall be entitled to indemnity hereunder (an “indemnified party”), such indemnified party shall give prompt notice to the party from which such indemnity is sought (the “indemnifying party”) of any claim or of the commencement of any Proceeding with respect to which such indemnified party seeks indemnification or contribution pursuant hereto; provided, however, that the delay or failure to so notify the indemnifying party shall not relieve the indemnifying party from any obligation or liability except to the extent that the indemnifying party has been prejudiced by such delay or failure. The indemnifying party shall have the right, exercisable by giving written notice to an indemnified party promptly after the receipt of written notice from such indemnified party of such claim or Proceeding, to, unless in the indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist in respect of such claim, assume, at the indemnifying party’s expense, the defense of any such claim or Proceeding, with counsel reasonably satisfactory to such indemnified party; provided, however,  that an indemnified party shall have the right to employ separate counsel in any such claim or Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless: (i) the indemnifying party agrees to pay such fees and expenses; or (ii) the indemnifying party fails promptly to assume, or in the event of a conflict of interest cannot assume, the defense of such claim or Proceeding or fails to employ counsel reasonably satisfactory to such indemnified party; in which case the indemnified party shall have the right to employ counsel and to assume the defense of such claim or proceeding; provided, however, that the indemnifying party shall not, in connection with any one such claim or Proceeding or separate but substantially similar or related claims or Proceedings in the same jurisdiction, arising out of the same general allegations or circumstances, be liable for the fees and expenses  of more than one firm of attorneys (together with appropriate local counsel) at any time for all of the indemnified parties, or for fees  and expenses that are not reasonable. Whether or not such defense is assumed by the indemnifying party, such indemnified party will not be subject to any liability for any settlement made without its consent (but such consent will not be unreasonably withheld). The indemnifying party shall not consent to entry  of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release, in form and substance reasonably satisfactory to the indemnified party, from all liability in respect of such claim or litigation for which such indemnified party would be entitled to indemnification hereunder.

 

(d)           Contribution. If the indemnification provided for in this Section 8 is unavailable to an indemnified party in respect of any Losses (other than in accordance with its terms), then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the indemnifying party, on the one hand, and such indemnified party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable

 

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considerations. The relative fault of such indemnifying party, on the one hand, and indemnified party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been taken by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent any such action, statement or omission.

 

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 8(d), an indemnifying party that is a selling holder of Registrable Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds from the sale of the Registrable Securities sold by such indemnifying party exceeds the amount of any damages that such indemnifying party has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

(e)           Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

 

Section 9.              Rule 144. After a Qualified Public Offering, the Corporation shall (i) file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner, (ii) take such further action as any holder of Registrable Securities may reasonably request, and (iii) furnish to each holder of Registrable Securities forthwith upon written request, (x) a written statement by the Corporation as to its compliance with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (y) a copy of the most recent annual or quarterly report of the Corporation, and (z) such other reports and documents so filed by the Corporation as such holder may reasonably request in availing itself of Rule 144, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144. Upon the request of any holder of Registrable Securities, the Corporation shall deliver to such holder a written statement as to whether it has complied with such requirements.

 

Section 10.              Underwritten Registrations. If any Demand Registration or Pre-QPO Demand Registration is an underwritten offering (including a Qualified Public Offering), the Qualified Holder making the demand shall have the right to select the investment banker or investment bankers and managers to administer the offering, subject to approval by the Corporation, not to be unreasonably withheld. The Corporation shall have the right to select the investment banker or investment bankers and managers to administer any Piggyback Registration.

 

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No Person may participate in any underwritten registration hereunder unless such Person (i) agrees to sell the Registrable Securities it desires to have covered by the Demand Registration or Pre-QPO Demand Registration on the basis provided in any underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements, provided that such Person shall not be required to make any representations or warranties other than those related to title and ownership of shares and as to the accuracy and completeness of statements made in a Registration Statement, Prospectus, offering circular, or other document in reliance upon and in conformity with written information furnished to the Corporation or the managing underwriter by such Person.

 

Section 11.            Limitation on Subsequent Registration Rights. From and after March 9, 2004 and prior to the IPO Conversion Kosmos shall not, and from and after the IPO Conversion the Corporation shall not, without the prior written consent of the Supermajority Holders, enter into any agreement with any holder or prospective holder of any securities of Kosmos or the Corporation, as the case may be, giving such holder or prospective holder any registration rights the terms of which are equivalent to or more favorable than the registration rights granted to holders of Registrable Securities hereunder, or which would reduce the amount of Registrable Securities the holders can include in any registration filed pursuant to Section 3 hereof, unless such rights are subordinate to those of the holders of Registrable Securities.

 

Section 12.            Miscellaneous.

 

(a)           Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given without the written consent of the Supermajority Holders; provided, however, that in no event shall the obligations of any holder of Registrable Securities be materially increased or the rights of any Stockholder be adversely affected (without similarly adversely affecting the rights of all Stockholders), except upon the written consent of such holder. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of holders of Registrable Securities whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect the rights of other holders of Registrable Securities may be given by holders of at least a majority of the Registrable Securities being sold by such holders pursuant to such Registration Statement.

 

(b)           Notices. All notices required to be given hereunder shall be in writing and shall be deemed to be duly given if personally delivered, telecopied and confirmed, or mailed by certified mail, return receipt requested, or overnight delivery service with proof of receipt maintained, at the following address (or any other address that any such party may designate by written notice to the other parties):

 

If to the Corporation, to the address of its principal executive offices. If to any Stockholder, at such Stockholder’s address as set forth on the records of the Corporation. Any such notice shall, if delivered personally, be deemed received upon delivery; shall, if delivered by telecopy, be deemed received on the first business day following confirmation; shall, if delivered by overnight delivery service, be deemed received the first business day after being

 

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sent; and shall, if delivered by mail, be deemed received upon the earlier of actual receipt thereof or five business days after the date of deposit in the United States mail.

 

(c)           Successors and Assigns; Stockholder Status. This Agreement shall inure to the benefit of the limited partners of a Stockholder who have received shares of Registrable Securities from a Stockholder pursuant to a Partner Distribution and shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties, including subsequent holders of Registrable Securities acquired, directly or indirectly, from the Stockholders; provided, however, that such successor or assign shall not be entitled to such rights unless the successor or assign shall have executed and delivered to the Corporation an Addendum Agreement substantially in the form of Exhibit A hereto (which shall also be executed, if prior to the IPO Conversion, by Kosmos and, if after the IPO Conversion, by the Corporation) promptly following the acquisition of such Registrable Securities, in which event such successor or assign shall be deemed a Stockholder for purposes of this Agreement and Annex A shall be updated by the Corporation accordingly. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any Person other than the parties hereto and their respective successors and permitted assigns any legal or equitable right, remedy or claim under, in or in respect of this Agreement or any provision herein contained.

 

(d)           Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

(e)           Headings. The section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 

(f)            Governing Law. The provisions of this Agreement shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the choice of law principles thereof).

 

(g)           Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

(h)           Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement, and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, with respect to the registration rights granted by the Corporation with

 

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respect to Registrable Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

(i)            Securities Held by the Corporation or its subsidiaries. Whenever the consent or approval of holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Corporation or its subsidiaries shall not be counted in determining whether such consent or approval was given by the holders of such required percentage.

 

(j)            Termination. This Agreement shall terminate on the earlier of (i) ten years following the consummation of a Qualified Public Offering and (ii) when no Registrable Securities remain outstanding; provided that Sections 7 and 8 shall survive any termination hereof.

 

(k)           Specific Performance. The parties hereto recognize and agree that money damages may be insufficient to compensate the holders of any Registrable Securities for breaches by the Corporation of the terms hereof and, consequently, that the equitable remedy of specific performance of the terms hereof will be available in the event of any such breach.

 

(l)            Consent to Jurisdiction. The parties hereto hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of New York and the federal courts of the United States of America located in New York, and appropriate appellate courts therefrom, over any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby, and each party hereby irrevocably agrees that all claims in respect of such dispute or proceeding may be heard and determined in such courts. The parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. This consent to jurisdiction is being given solely for purposes of this Agreement and is not intended to, and shall not, confer consent to jurisdiction with respect to any other dispute in which a party to this Agreement may become involved.

 

Each of the parties hereto hereby consents to process being served by any party to this Agreement in any suit, action, or proceeding of the nature specified in the paragraph above by the mailing of a copy thereof in the manner specified by the provisions of subsection (b) of this Section 12.

 

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Registration Rights Agreement to be duly executed as of the date first above written.

 

	
 
    	
 
    	
KOSMOS ENERGY HOLDINGS
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ W. Greg Dunlevy
    
	
 
    	
 
    	
Name:
    	
W. Greg Dunlevy
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer and Executive Vice President
    

 

Signature Page to Amended and Restated Registration Rights Agreement

 

 

WARBURG PINCUS INTERNATIONAL PARTNERS, L.P.

 

By: Warburg Pincus Partners LLC, its General Partner

By: Warburg Pincus & Co., its Managing Member

 

	
By:
    	
/s/   Jeffrey A. Harris
    	
 
    
	
Name:
    	
Jeffrey   A. Harris
    	
 
    
	
Title:
    	
Partner
    	
 
    

 

 

WARBURG PINCUS NETHERLANDS INTERNATIONAL PARTNERS I, C.V.

 

By: Warburg Pincus Partners LLC, its General Partner

By: Warburg Pincus & Co., its Managing Member

 

	
By:
    	
/s/   Jeffrey A. Harris
    	
 
    
	
Name:
    	
Jeffrey   A. Harris
    	
 
    
	
Title:
    	
Partner
    	
 
    

 

 

WP-WPIP INVESTORS, L.P.

 

By: Warburg Pincus Partners LLC, its General Partner

By: Warburg Pincus & Co., its Managing Member

 

	
By:
    	
/s/   Jeffrey A. Harris
    	
 
    
	
Name:
    	
Jeffrey   A. Harris
    	
 
    
	
Title:
    	
Partner
    	
 
    

 

 

WARBURG PINCUS PRIVATE EQUITY VIII, L.P.

 

By: Warburg Pincus Partners LLC, its General Partner

By: Warburg Pincus & Co., its Managing Member

 

	
By:
    	
/s/   Jeffrey A. Harris
    	
 
    
	
Name:
    	
Jeffrey   A. Harris
    	
 
    
	
Title:
    	
Partner
    	
 
    

 

Signature Page to Amended and Restated Registration Rights Agreement

 

 

WARBURG PINCUS NETHERLANDS PRIVATE

EQUITY VIII I, C.V.

 

By: Warburg Pincus Partners LLC, its General Partner

By: Warburg Pincus & Co., its Managing Member

 

	
By:
    	
/s/   Jeffrey A. Harris
    	
 
    
	
Name:
    	
Jeffrey   A. Harris
    	
 
    
	
Title:
    	
Partner
    	
 
    

 

 

WP-WP VIII INVESTORS, L.P.

 

By: Warburg Pincus Partners LLC, its General Partner

By: Warburg Pincus & Co., its Managing Member

 

	
By:
    	
/s/   Jeffrey A. Harris
    	
 
    
	
Name:
    	
Jeffrey   A. Harris
    	
 
    
	
Title:
    	
Partner
    	
 
    

 

Signature Page to Amended and Restated Registration Rights Agreement

 

 

BLACKSTONE CAPITAL PARTNERS (CAYMAN) IV L.P.

 

By: Blackstone Management Associates (Cayman) IV L.P.

By: Blackstone LR Associates (Cayman) IV Ltd.

 

	
By:
    	
/s/   David Foley
    	
 
    
	
Name:
    	
David   Foley
    	
 
    
	
Title:
    	
Member
    	
 
    

 

BLACKSTONE CAPITAL PARTNERS (CAYMAN) IV-A L.P.

 

By: Blackstone Management Associates (Cayman) IV L.P.

By: Blackstone LR Associates (Cayman) IV Ltd.

 

	
By:
    	
/s/   David Foley
    	
 
    
	
Name:
    	
David   Foley
    	
 
    
	
Title:
    	
Member
    	
 
    

 

BLACKSTONE FAMILY INVESTMENT PARTNERSHIP (CAYMAN) IV-A L.P.

 

By: Blackstone Management Associates (Cayman) IV L.P.

By: Blackstone LR Aassociates (Cayman) IV Ltd.

 

	
By:
    	
/s/   David Foley
    	
 
    
	
Name:
    	
David   Foley
    	
 
    
	
Title:
    	
Member
    	
 
    

 

Signature Page to Amended and Restated Registration Rights Agreement

 

 

BLACKSTONE FAMILY INVESTMENTPARTNERSHIP (CAYMAN) IV-A SMD L.P.

 

By: Blackstone Management Associates (Cayman) IV  L.P.

By: Blackstone LR Associates (Cayman) IV Ltd.

 

	
By:
    	
/s/   David Foley
    	
 
    
	
Name:
    	
David   Foley
    	
 
    
	
Title:
    	
Member
    	
 
    

 

 

BLACKSTONE PARTICIPATION PARTNERSHIP (CAYMAN) IV L.P.

 

By: Blackstone Management Associates (Cayman) IV L.P.

By: Blackstone LR Associates (Cayman) IV Ltd.

 

	
By:
    	
/s/   David Foley
    	
 
    
	
Name:
    	
David   Foley
    	
 
    
	
Title:
    	
Member
    	
 
    

 

Signature Page to Amended and Restated Registration Rights Agreement

 

 

 

Annex A

 

STOCKHOLDERS

 

Warburg Pincus International Partners, L.P.

Warburg Pincus Netherlands International Partners I, C.V.

WP-WPIP Investors, L.P.

Warburg Pincus Private Equity VIII, L.P.

Warburg Pincus Netherlands Private Equity VIII I, C.V.

WP-WP VIII Investors, L.P.

Blackstone Capital Partners (Cayman) IV L.P.

Blackstone Capital Partners (Cayman) IV-A L.P.

Blackstone Family Investment Partnership (Cayman) IV-A L.P.

Blackstone Family Investment Partnership (Cayman) IV-A SMD L.P.

Blackstone Participation Partnership (Cayman) IV L.P.

James C. Musselman 

Musselman-Kosmos, Ltd.

Brian F. Maxted 

W. Greg Dunlevy

Kiat Tze (Kenny) Goh 

Paul Dailly

Adebayo O. Ogunlesi 

John R. Kemp III 

Christopher A. Wright 

Sylvia J. Manor

Eric S. Hudgens 

Philip Lowry

Katherine A. Kanschat 

Scott L. Davis

Jan P. Hitchborn 

Margaret Gorman 

Tracey K. Henderson 

George Sneed

Kristin Brumfield 

Marvin M. Garrett 

Mary Kay Krenzer 

Nancy K. Lorts

Sanjaykumar Malani 

Jon W. Cappon

Monica S. Shank 

Grace K. Weisberg 

Robert S. Brashier 

Robert Miller

John Michael Hopkinson

Yaw Owusu

William S. Hayes

 

Annex A - 1

 

Kevin R. Black

Katie A. Mormon

Barbara Pearl

Tara M. Campbell

Erica S. Logan Hilton

Emma L. Byford

Doris B. McGuinness

Dennis C. McLaughlin

Kevin M. Hubble

Vickie L. Gammon

Eric J. Haas

Kelly A. Peterson (Huffman)

Stephen R. Sills

Steven J. Zrake

Yuliana Ryabova

Jennifer L. Roberts

Stephanie M. Allen

Chelsea G. Gilmore

Laurent M. Culembourg

Dennis P. Kucinskas

Heather L. Jank

Ryan A. Turner

Joseph L. Matthews

Brian A. Progar

Darran J. Lucas

Ralph H. Jones

Edward Glenn Cummings

Linda R. Correll

Edwin M. Ferguson

Thomas Oscar Fulford

Kina L. Jones

Tara A. Birkinbine

Lisa L. Fowler

Scott A. Bergeron

Sheri J. Collins

Wesley Jay Neeley

David Anderson Mormon

Jeffrey T. Elliott

Deandra R. Lee

Dalby Family Holdings, LP

2008 Carnegie, Ltd.

 

Annex A - 2

 

EXHIBIT A

 

ADDENDUM AGREEMENT

 

This Addendum Agreement is made this            day of                            , 20    , by and between                                     (the “New Stockholder”) and [Kosmos (the “Company”)] [the Corporation (the “Corporation”)], pursuant to an Amended and Restated Registration Rights Agreement dated as of October     , 2009 (the “Agreement”), between and among the Kosmos and the Stockholders. Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed to them in the Agreement.

 

WITNESSETH:

 

WHEREAS, [Kosmos has agreed to bind the IPO Corporation (its successor)][the Corporation has agreed] to provide registration rights with respect to the Registrable Securities as set forth in the Agreement; and

 

WHEREAS, the New Stockholder has acquired Registrable Securities directly or indirectly from a Stockholder; and

 

WHEREAS, Kosmos and the Stockholders have required in the Agreement that all persons desiring registration rights must enter into an Addendum Agreement binding the New Stockholder to the Agreement to the same extent as if it were an original party thereto;

 

NOW, THEREFORE, in consideration of the mutual promises of the parties, the New Stockholder acknowledges that it has received and read the Agreement and that the New Stockholder shall be bound by, and shall have the benefit of, all of the terms and conditions set out in the Agreement to the same extent as if it were an original party to the Agreement and shall be deemed to be a Stockholder thereunder.

 

[Amend Annex A of Agreement if necessary to reflect appropriate schedule for new Stockholder.]

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
New Stockholder
    
	
 
    	
 
    	
 
    
	
Address:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

Exhibit A - 1

 

AGREED TO on behalf of [Kosmos][the Corporation] pursuant to Section 12(c) of the Agreement.

 

	
 
    	
[KOSMOS][THE CORPORATION]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Printed Name and Title
    

 

Exhibit A - 2

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