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EXHIBIT 10.12
REGISTRATION RIGHTS AGREEMENT
Dated December 9, 2003
between
J. RAY MCDERMOTT, S.A.,
THE GUARANTORS NAMED HEREIN
and
MORGAN STANLEY & CO. INCORPORATED
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and
entered into December 9, 2003, among J. Ray McDermott, S.A., a Panamanian
corporation (the "COMPANY"), the guarantors named on the signature pages hereto
(the "GUARANTORS") and MORGAN STANLEY & CO. INCORPORATED (the "INITIAL
PURCHASER").
This Agreement is made pursuant to the Purchase Agreement dated
November 21, 2003, among the Company, the Guarantors and the Initial Purchaser
(the "PURCHASE AGREEMENT"), which provides for the sale by the Company to the
Initial Purchaser of $200,000,000 aggregate principal amount of the Company's
11% Senior Secured Notes due 2013 (the "NOTES" and, together with the related
guaranties of the Guarantors, the "SECURITIES"). In order to induce the Initial
Purchaser to enter into the Purchase Agreement, the Company and the Guarantors
have agreed to provide to the Initial Purchaser and its direct and indirect
transferees the registration rights set forth in this Agreement. The execution
of this Agreement is a condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended from time
to time.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"CLOSING DATE" shall mean the Closing Date as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble and shall
also include any successor to the Company.
"EXCHANGE OFFER" shall mean the exchange offer by the Company and the
Guarantors of Exchange Securities for Registrable Securities pursuant to Section
2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the 1933
Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form) and all amendments and supplements to such registration statement, in each
case including the Prospectus contained therein, and all exhibits thereto.
"EXCHANGE SECURITIES" shall mean securities issued by the Company and
the Guarantors under the Indenture containing terms identical to the Securities
(except that (i) interest on the senior secured notes included in the Exchange
Securities (the "EXCHANGE NOTES") shall accrue from the last date on which
interest was paid on the Notes or, if no such interest has been paid, from
December 9, 2003 and (ii) the Exchange Securities will not contain restrictions
on transfer) and to be offered to Holders of Securities in exchange for
Securities pursuant to the Exchange Offer.
"HOLDER" shall mean the Initial Purchaser, for so long as they own any
Registrable Securities, and each of its successors, assigns and direct and
indirect transferees who become registered owners of Registrable Securities
under the Indenture; provided that for purposes of Sections 4 and 5 of this
Agreement, the term "HOLDER" shall include Participating Broker-Dealers (as
defined in Section 4(a)).
"INDENTURE" shall mean the Indenture relating to the Securities dated
as of the date hereof among the Company, the Guarantors and The Bank of New
York, as trustee, and as the same may be amended from time to time in accordance
with the terms thereof.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Registrable Securities; provided that
whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by the
Company or any of its affiliates (as such term is defined in Rule 405 under the
1933 Act) (other than the Initial Purchaser or subsequent Holders of Registrable
Securities if such subsequent holders are deemed to be such affiliates solely by
reason of their holding of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage or amount.
"PERSON" shall mean an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, or a government or
agency or political subdivision thereof.
"INITIAL PURCHASER" shall have the meaning set forth in the preamble.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
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supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to such prospectus, and in each case including
all material incorporated by reference therein.
"REGISTRABLE SECURITIES" shall mean the Securities; provided, however,
that the Securities shall cease to be Registrable Securities on the first to
occur of: (i) when a Registration Statement with respect to such Securities
shall have been declared effective under the 1933 Act and such Securities shall
have been exchanged or disposed of pursuant to such Registration Statement; (ii)
when such Securities are eligible to be sold to the public pursuant to Rule
144(k) (or any similar provision then in force, but not Rule 144A) under the
1933 Act; or (iii) when such Securities shall have ceased to be outstanding.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company and the Guarantors with this
Agreement, including without limitation: (i) all applicable SEC, stock exchange
or National Association of Securities Dealers, Inc. registration and filing
fees, (ii) all fees and expenses incurred in connection with compliance with
state securities or blue sky laws (including reasonable fees and disbursements
of counsel for any underwriters or Holders in connection with blue sky
qualification of any of the Registrable Securities), (iii) all expenses of any
Persons in preparing or assisting in preparing, word processing, printing and
distributing any Registration Statement, any Prospectus, any amendments or
supplements thereto, any underwriting agreements, securities sales agreements
and other documents relating to the performance of and compliance with this
Agreement, (iv) all rating agency fees relating to the Securities or the
Exchange Securities, (v) all fees and disbursements relating to the
qualification of the Indenture under applicable securities laws, (vi) the fees
and disbursements of the Trustee and its counsel, (vii) the fees and
disbursements of counsel for the Company and, in the case of a Shelf
Registration Statement, the reasonable fees and disbursements of one counsel for
the Holders (which counsel shall be selected by the Majority Holders and
reasonably satisfactory to the Company and which counsel may also be counsel for
the Initial Purchaser) and (viii) the fees and disbursements of the independent
public accountants of the Company, including the expenses of any opinions or
"cold comfort" letters required by or incident to such performance and
compliance, but excluding fees and expenses of counsel to the underwriters
(other than fees and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Registrable Securities by a Holder.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company and the Guarantors that covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, and all exhibits thereto.
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"SEC" shall mean the Securities and Exchange Commission.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "SHELF" registration
statement of the Company and the Guarantors pursuant to the provisions of
Section 2(b) of this Agreement which covers all of the Registrable Securities
(but no other securities unless approved by the Holders whose Registrable
Securities are covered by such Shelf Registration Statement) on an appropriate
form under Rule 415 under the 1933 Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, and all exhibits thereto and all material incorporated by
reference therein.
"SUSPENSION PERIOD" shall have the meaning set forth in Section 3
hereof.
"TRUSTEE" shall mean the trustee with respect to the Securities under
the Indenture.
"UNDERWRITER" shall have the meaning set forth in Section 3 hereof.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" shall mean a
registration in which Registrable Securities are sold to an Underwriter for
reoffering to the public.
2. Registration Under the 1933 Act.
(a) To the extent not prohibited by any applicable law or
applicable interpretation of the Staff of the SEC, the Company and the
Guarantors shall use commercially reasonable efforts to cause to be
filed an Exchange Offer Registration Statement covering the offer by
the Company to the Holders to exchange all of the Registrable
Securities for Exchange Securities and to have such Registration
Statement remain effective until the closing of the Exchange Offer. The
Company shall commence the Exchange Offer promptly after the Exchange
Offer Registration Statement has been declared effective by the SEC and
use commercially reasonable efforts to have the Exchange Offer
consummated not later than 30 days after such effective date. The
Company shall commence the Exchange Offer by mailing the related
exchange offer Prospectus and accompanying documents to each Holder
stating, in addition to such other disclosures as are required by
applicable law:
(i) that the Exchange Offer is being made
pursuant to this Registration Rights Agreement and that all
Registrable Securities validly tendered will be accepted for
exchange;
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(ii) the dates of acceptance for exchange (which
shall be a period of at least 20 business days from the date
such notice is mailed) (the "EXCHANGE DATES");
(iii) that any Registrable Security not tendered
will remain outstanding and continue to accrue interest, but
will not retain any rights under this Registration Rights
Agreement;
(iv) that Holders electing to have a Registrable
Security exchanged pursuant to the Exchange Offer will be
required to surrender such Registrable Security, together with
the enclosed letters of transmittal, to the institution and at
the address (located in the Borough of Manhattan, The City of
New York) specified in the notice prior to the close of
business on the last Exchange Date; and
(v) that Holders will be entitled to withdraw
their election, not later than the close of business on the
last Exchange Date, by sending to the institution and at the
address (located in the Borough of Manhattan, The City of New
York) specified in the notice a telegram, telex, facsimile
transmission or letter setting forth the name of such Holder,
the principal amount of Registrable Securities delivered for
exchange and a statement that such Holder is withdrawing his
election to have such Securities exchanged.
As soon as practicable after the last Exchange Date,
the Company shall:
(i) accept for exchange Registrable Securities
or portions thereof tendered and not validly withdrawn
pursuant to the Exchange Offer; and
(ii) deliver, or cause to be delivered, to the
Trustee for cancellation all Registrable Securities or
portions thereof so accepted for exchange by the Company and
issue, and cause the Trustee to promptly authenticate and mail
to each Holder, an Exchange Security equal in principal amount
to the principal amount of the Registrable Securities
surrendered by such Holder.
The Company shall use commercially reasonable efforts to complete the
Exchange Offer as provided above and shall comply with the applicable
requirements of the 1933 Act, the 1934 Act and other applicable laws and
regulations in connection with the Exchange Offer. The Exchange Offer shall not
be subject to any conditions, other than that the Exchange Offer does not
violate applicable law or any applicable interpretation of the Staff of the SEC.
The Company shall inform the Initial Purchaser of the names and addresses of the
Holders to whom the Exchange Offer is made, and the Initial Purchaser shall have
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the right, subject to applicable law, to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer.
(b) In the event that (i) the Company determines that the
Exchange Offer Registration provided for in Section 2(a) above is not
available or may not be consummated as soon as practicable after the
last Exchange Date because it would violate applicable law or the
applicable interpretations of the Staff of the SEC, (ii) the Exchange
Offer is not for any other reason consummated by July 6, 2004 or the
Exchange Offer has been completed and in the opinion of counsel for the
Initial Purchaser a Registration Statement must be filed and a
Prospectus must be delivered by the Initial Purchaser in connection
with any offering or sale of Registrable Securities, the Company shall
use commercially reasonable efforts to cause to be filed as soon as
practicable after such determination, date or notice of such opinion of
counsel is given to the Company, as the case may be, a Shelf
Registration Statement providing for the sale by the Holders of all of
the Registrable Securities and to have such Shelf Registration
Statement declared effective by the SEC. In the event the Company is
required to file a Shelf Registration Statement solely as a result of
the matters referred to in clause (iii) of the preceding sentence, the
Company shall use commercially reasonable efforts to file and have
declared effective by the SEC both an Exchange Offer Registration
Statement pursuant to Section 2(a) with respect to all Registrable
Securities and a Shelf Registration Statement (which may be a combined
Registration Statement with the Exchange Offer Registration Statement)
with respect to offers and sales of Registrable Securities held by the
Initial Purchaser after completion of the Exchange Offer. The Company
agrees to use commercially reasonable efforts to keep the Shelf
Registration Statement continuously effective until the expiration of
the period referred to in Rule 144(k) with respect to the Registrable
Securities or such shorter period that will terminate when all of the
Registrable Securities covered by the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement. The Company
further agrees to supplement or amend the Shelf Registration Statement
if required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration
Statement or by the 1933 Act or by any other rules and regulations
thereunder for shelf registration or if reasonably requested by a
Holder with respect to information relating to such Holder, and to use
commercially reasonable efforts to cause any such amendment to become
effective and such Shelf Registration Statement to become usable as
soon as thereafter practicable. The Company agrees to furnish to the
Holders of Registrable Securities copies of any such supplement or
amendment promptly after its being used or filed with the SEC.
(c) The Company shall pay all Registration Expenses in
connection with the registration pursuant to Section 2(a) and Section
2(b).
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Each Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such
Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
(d) An Exchange Offer Registration Statement pursuant to
Section 2(a) hereof or a Shelf Registration Statement pursuant to
Section 2(b) hereof will not be deemed to have become effective unless
it has been declared effective by the SEC; provided, however, that, if,
after it has been declared effective, the offering of Registrable
Securities pursuant to a Shelf Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the
SEC or any other governmental agency or court, such Registration
Statement will be deemed not to have become effective during the period
of such interference until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume. In the
event the Exchange Offer Registration Statement or the Shelf
Registration Statement is not declared effective on or prior to June 6,
2004, the interest rate on the Securities will be increased by 0.50%
per annum until the Exchange Offer Registration Statement or the Shelf
Registration Statement is declared effective by the SEC. Unless the
Shelf Registration Statement shall have become effective, in the event
the Exchange Offer is not consummated on or prior to July 6, 2004, the
interest rate on the Securities will be increased by 0.50% per annum
until the Exchange Offer is consummated; provided, however, that on the
effectiveness of the Shelf Registration Statement, any such increased
interest will cease to accrue.
(e) Without limiting the remedies available to the
Initial Purchaser and the Holders, the Company acknowledges that any
failure by the Company to comply with its obligations under Section
2(a) and Section 2(b) hereof may result in material irreparable injury
to the Initial Purchaser or the Holders for which there is no adequate
remedy at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of any such failure, the
Initial Purchaser or any Holder may obtain such relief as may be
required to specifically enforce the Company's obligations under
Section 2(a) and Section 2(b) hereof.
3. Registration Procedures.
In connection with the obligations of the Company with respect to the
Registration Statements pursuant to Section 2(a) and Section 2(b) hereof, the
Company shall as expeditiously as possible:
(a) prepare and file with the SEC a Registration
Statement on the appropriate form under the 1933 Act, which form (x)
shall be selected by the Company and (y) shall, in the case of a Shelf
Registration, be available for the sale of the Registrable Securities
by the selling Holders thereof and (z) shall comply as to form in all
material respects with the
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requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith, and use
commercially reasonable efforts to cause such Registration Statement to
become effective and remain effective in accordance with Section 2
hereof;
(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 effective for the
applicable period and cause each Prospectus to be supplemented by any
required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the 1933 Act; to keep each Prospectus
current during the period described under Section 4(3) and Rule 174
under the 1933 Act that is applicable to transactions by brokers or
dealers with respect to the Registrable Securities or Exchange
Securities;
(c) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities, to counsel for the Initial Purchaser,
to counsel for the Holders and to each Underwriter of an Underwritten
Offering of Registrable Securities, if any, without charge, as many
copies of each Prospectus, including each preliminary Prospectus, and
any amendment or supplement thereto and such other documents as such
Holder or Underwriter may reasonably request, in order to facilitate
the public sale or other disposition of the Registrable Securities; and
the Company consents to the use of such Prospectus and any amendment or
supplement thereto in accordance with applicable law by each of the
selling Holders of Registrable Securities and any such Underwriters in
connection with the offering and sale of the Registrable Securities
covered by and in the manner described in such Prospectus or any
amendment or supplement thereto in accordance with applicable law;
(d) use commercially reasonable efforts to register or
qualify the Registrable Securities under all applicable state
securities or "BLUE SKY" laws of such jurisdictions as any Holder of
Registrable Securities covered by a Registration Statement shall
reasonably request in writing by the time the applicable Registration
Statement is declared effective by the SEC, to cooperate with such
Holders in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. and do any and all
other acts and things which may be reasonably necessary or advisable to
enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that the Company shall not be required to (i)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to qualify but
for this Section 3(d), (ii) file any general consent to service of
process, (iii) subject itself to taxation in any such jurisdiction if
it is not so subject or (iv) amend its articles of incorporation or
bylaws;
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(e) in the case of a Shelf Registration, notify each
Holder of Registrable Securities, counsel for the Holders and counsel
for the Initial Purchaser promptly and, if requested by any such Holder
or counsel, confirm such advice in writing (i) when a Registration
Statement has become effective and when any post-effective amendment
thereto has been filed and becomes effective, (ii) of any request by
the SEC or any state securities authority for amendments and
supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose, (iv) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company contained in
any underwriting agreement, securities sales agreement or other similar
agreement, if any, relating to the offering cease to be true and
correct in all material respects or if the Company receives any
notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation
of any proceeding for such purpose, of the happening of any event
during the period a Shelf Registration Statement is effective which
makes any statement made in such Registration Statement or the related
Prospectus untrue in any material respect or which requires the making
of any changes in such Registration Statement or Prospectus in order to
make the statements therein not misleading and (vi) of any
determination by the Company that a post-effective amendment to a
Registration Statement would be appropriate;
(f) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of a Registration
Statement at the earliest possible moment and provide prompt notice to
each Holder of the withdrawal of any such order;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities, without charge, at least one
conformed copy of each Registration Statement and any post-effective
amendment thereto (without exhibits thereto, unless specifically
requested);
(h) in the case of a Shelf Registration, cooperate with
the selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends and
enable such Registrable Securities to be in such denominations
(consistent with the provisions of the Indenture) and registered in
such names as the selling Holders may reasonably request at least one
business day prior to the closing of any sale of Registrable
Securities;
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(i) in the case of a Shelf Registration, upon the
occurrence of any event contemplated by Section 3(e)(v) hereof, use
commercially reasonable efforts to prepare and file with the SEC a
supplement or post-effective amendment to a Registration Statement or
the related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading. The Company agrees to notify the Holders to suspend use of
the Prospectus as promptly as practicable after the occurrence of such
an event, and the Holders hereby agree to suspend use of the Prospectus
until the Company has amended or supplemented the Prospectus to correct
such misstatement or omission;
(j) a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a Registration
Statement or any amendment or supplement to a Prospectus after initial
filing of a Registration Statement, provide copies of such document to
the Initial Purchaser (and, in the case of a Shelf Registration
Statement, the Holders) and make such of the representatives of the
Company as shall be reasonably requested by the Initial Purchaser or
its counsel (and, in the case of a Shelf Registration Statement, the
Holders) available for discussion of such document, and shall not at
any time file or make any amendment to the Registration Statement, any
Prospectus or any amendment of or supplement to a Registration
Statement or a Prospectus, of which the Initial Purchaser (and, in the
case of a Shelf Registration Statement, the Holders) shall not have
previously been advised and furnished a copy or to which the Initial
Purchaser (and, in the case of a Shelf Registration Statement, the
Holders) shall reasonably object pursuant to a written notice delivered
to the Company prior to such filing;
(k) obtain a CUSIP number for all Exchange Securities or
Registrable Securities, as the case may be, not later than the
effective date of a Registration Statement;
(l) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection with the
registration of the Exchange Securities or Registrable Securities, as
the case may be, cooperate with the Trustee and the Holders to effect
such changes to the Indenture as may be required for the Indenture to
be so qualified in accordance with the terms of the TIA and execute,
and use commercially reasonable efforts to cause the Trustee to
execute, all documents as may be required to effect such changes and
all other forms and documents required to be filed with the SEC to
enable the Indenture to be so qualified in a timely manner;
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(m) in the case of a Shelf Registration, make available
for inspection by a representative of the Holders of the Registrable
Securities, any Underwriter participating in any disposition pursuant
to such Shelf Registration Statement, and attorneys and accountants
designated by the Holders, at reasonable times and in a reasonable
manner, all financial and other records, pertinent documents and
properties of the Company, and cause the respective officers, directors
and employees of the Company to supply all information reasonably
requested by any such representative, Underwriter, attorney or
accountant in connection with a Shelf Registration Statement;
(n) if reasonably requested by any Holder of Registrable
Securities covered by a Registration Statement, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information with respect to such Holder as such Holder reasonably
requests to be included therein and (ii) make all required filings of
such Prospectus supplement or such post-effective amendment promptly
after the Company has received notification of the matters to be
incorporated in such filing; and
(o) in the case of a Shelf Registration, enter into such
customary agreements and take all such other actions in connection
therewith (including those requested by the Holders of a majority of
the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities including,
but not limited to, an Underwritten Offering and in such connection, to
the extent possible, make such representations and warranties to the
Holders and any Underwriters of such Registrable Securities with
respect to the business of the Company and its subsidiaries, the
Registration Statement, and the Prospectus, in each case, in form,
substance and scope as are customarily made by issuers to underwriters
in similar underwritten offerings of debt securities and confirm the
same if and when requested, (ii) obtain opinions of counsel to the
Company (which counsel and opinions, in form, scope and substance,
shall be reasonably satisfactory to the Holders and such Underwriters)
addressed to each selling Holder and Underwriter of Registrable
Securities, covering the matters customarily covered in opinions
requested in similar underwritten offerings of debt securities, (iii)
obtain "cold comfort" letters from the independent certified public
accountants of the Company (and, if necessary, any other certified
public accountant of any subsidiary of the Company, or of any business
acquired by the Company for which financial statements and financial
data are or are required to be included in the Registration Statement)
addressed to each selling Holder and Underwriter of Registrable
Securities, such letters to be in customary form and covering matters
of the type customarily covered in "cold comfort" letters in connection
with similar underwritten offerings of debt securities, and (iv)
deliver such documents and certificates as may be reasonably requested
by the Holders of a majority in
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principal amount of the Registrable Securities being sold or the
Underwriters, and which are customarily delivered in similar
underwritten offerings of debt securities, to evidence the continued
validity of the representations and warranties of the Company made
pursuant to clause (i) above and to evidence compliance with any
customary conditions contained in an underwriting agreement; provided
that the Company shall not be required to enter into any such agreement
with respect to any or all of the Registrable Securities more than
once.
In the case of a Shelf Registration Statement, the Company may require
each Holder of Registrable Securities to furnish to the Company such information
regarding the Holder and the proposed distribution by such Holder of such
Registrable Securities as the Company may from time to time reasonably request
in writing. No Holder of Registrable Securities shall be entitled to the
increased interest rate described in Section 2(d) unless and until such Holder
shall have provided all such information which is required by rules of the
Commission to be included in the Shelf Registration Statement prior to the time
it is declared effective. Each selling Holder agrees to promptly furnish
additional information required to be disclosed in order to make the information
previously furnished to the Company by such Holder not misleading.
In the case of a Shelf Registration Statement, each Holder agrees that,
upon receipt of any notice from the Company of the happening of any event of the
kind described in Section 3(e)(v) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement until
such Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in its
possession, other than permanent file copies then in such Holder's possession,
of the Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
The Holders of Registrable Securities covered by a Shelf Registration
Statement who desire to do so may sell such Registrable Securities in an
Underwritten Offering. In any such Underwritten Offering, the investment banker
or investment bankers and manager or managers (the "UNDERWRITERS") that will
administer the offering will be selected by the Majority Holders of the
Registrable Securities included in such offering, provided that such investment
banker or manager is reasonably satisfactory to the Company.
The Company may suspend the Shelf Registration Statement (a "SUSPENSION
PERIOD"), if the Company determines, upon advice of counsel, that the continued
effectiveness and use of the Shelf Registration Statement would require the
disclosure of confidential information or interfere with any financing,
acquisition, reorganization or other material transaction involving the Company.
A Suspension Period shall commence on and include the date that the Company
gives notice that the Shelf Registration Statement is no longer effective or the
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Prospectus included therein is no longer usable for offers and sales of
Registrable Securities covered by such Registration Statement and continue until
Holders of such Registrable Securities either receive the copies of the
supplemented or amended prospectus or are advised in writing by the Company that
use of the Prospectus may be resumed. Any such suspension may not exceed 60 days
in the aggregate during any twelve month period.
As a condition to its participation in the Exchange Offer, each Holder
of Registrable Securities (including, without limitation, any Holder who is a
Participating Broker-Dealer) shall furnish, upon the request of the Company,
prior to the consummation of the Exchange Offer, a written representation to the
Company to the effect that (A) that such Holder is not an Affiliate of the
Company or a Participating Broker-Dealer tendering Registrable Securities
acquired directly from the Company for its own account, (B) such Holder will
have no arrangement or understanding with any person to participate in the
distribution of the Registrable Securities or the Exchange Securities within the
meaning of the Act, (C) if the Holder is not a Participating Broker-Dealer or is
a Participating Broker-Dealer but will not receive Exchange Securities for its
own account in exchange for Registrable Securities, neither the Holder nor any
such other Person is engaged in or intends to participate in a distribution of
the Exchange Securities, and (D) any Exchange Securities received by such Holder
will be acquired in the ordinary course of its business. If the Holder is a
Participating Broker-Dealer that will receive Exchange Securities for its own
account in exchange for Registrable Securities, it will represent that the
Registrable Securities to be exchanged for the Exchange Securities were acquired
by it as a result of market-making activities or other trading activities, and
will acknowledge that it will deliver a prospectus meeting the requirements of
the 1933 Act in connection with any resale of such Exchange Securities. It is
understood that, by acknowledging that it will deliver, and by delivering, a
prospectus meeting the requirement of the 1933 Act in connection with any resale
of such Exchange Securities, the Holder is not admitting that it is an
"underwriter" within the meaning of the 1933 Act.
4. Participation of Broker-Dealers in Exchange Offer.
(a) The Staff of the SEC has taken the position that any
broker-dealer that receives Exchange Securities for its own account in
the Exchange Offer in exchange for Securities that were acquired by
such broker-dealer as a result of market-making or other trading
activities (a "PARTICIPATING BROKER-DEALER"), may be deemed to be an
"underwriter" within the meaning of the 1933 Act and must deliver a
prospectus meeting the requirements of the 1933 Act in connection with
any resale of such Exchange Securities.
The Company understands that it is the Staff's position that if the
Prospectus contained in the Exchange Offer Registration Statement includes a
plan of distribution containing a statement to the above effect and the means by
13
which Participating Broker-Dealers may resell the Exchange Securities, without
naming the Participating Broker-Dealers or specifying the amount of Exchange
Securities owned by them, such Prospectus may be delivered by Participating
Broker-Dealers to satisfy their prospectus delivery obligation under the 1933
Act in connection with resales of Exchange Securities for their own accounts, so
long as the Prospectus otherwise meets the requirements of the 1933 Act.
(b) In light of the above, notwithstanding the other
provisions of this Agreement, the Company agrees that the provisions of
this Agreement as they relate to a Shelf Registration shall also apply
to an Exchange Offer Registration to the extent, and with such
reasonable modifications thereto as may be, reasonably requested by the
Initial Purchaser or by one or more Participating Broker-Dealers, in
each case as provided in clause (ii) below, in order to expedite or
facilitate the disposition of any Exchange Securities by Participating
Broker-Dealers consistent with the positions of the Staff recited in
Section 4(a) above; provided that:
(i) the Company shall not be required to amend
or supplement the Prospectus contained in the Exchange Offer
Registration Statement, as would otherwise be contemplated by
Section 3(i), for a period exceeding the earliest to occur of
(1) the date that is 180 days after the last Exchange Date and
(2) the date on which all Exchange Securities held by the
Participating Broker-Dealers on the Exchange Date have been
sold pursuant to the Exchange Offer Registration Statement or
are no longer outstanding, and Participating Broker-Dealers
shall not be authorized by the Company to deliver and shall
not deliver such Prospectus after such period in connection
with the resales contemplated by this Section 4; and
(ii) the application of the Shelf Registration
procedures set forth in Section 3 of this Agreement to an
Exchange Offer Registration, to the extent not required by the
positions of the Staff of the SEC or the 1933 Act and the
rules and regulations thereunder, will be in conformity with
the reasonable request to the Company by the Initial Purchaser
or with the reasonable request in writing to the Company by
one or more broker-dealers who certify to the Initial
Purchaser and the Company in writing that they anticipate that
they will be Participating Broker-Dealers; and provided
further that, in connection with such application of the Shelf
Registration procedures set forth in Section 3 to an Exchange
Offer Registration, the Company shall be obligated (x) to deal
only with one entity representing the Participating
Broker-Dealers, which shall be Morgan Stanley & Co.
Incorporated unless it elects not to act as such
representative, (y) to pay the fees and expenses of only
14
one counsel representing the Participating Broker-Dealers,
which shall be counsel to the Initial Purchaser unless such
counsel elects not to so act and (z) to cause to be delivered
only one, if any, "cold comfort" letter with respect to the
Prospectus in the form existing on the last Exchange Date and
with respect to each subsequent amendment or supplement, if
any, effected during the period specified in clause (i) above.
(c) The Initial Purchaser shall have no liability to the
Company or any Holder with respect to any request that it may make
pursuant to Section 4(b) above.
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless the
Initial Purchaser, each Holder and each Person, if any, who controls
the Initial Purchaser or any Holder within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, or is under
common control with, or is controlled by, the Initial Purchaser or any
Holder, from and against all losses, claims, damages and liabilities
(including, without limitation, any out-of-pocket legal or other
out-of-pocket expenses reasonably incurred by the Initial Purchaser,
any Holder or any such controlling or affiliated Person in connection
with defending or investigating any such action or claim) caused by any
untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto)
pursuant to which Exchange Securities or Registrable Securities were
registered under the 1933 Act, or caused by 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 caused
by any untrue statement or alleged untrue statement of a material fact
contained in any Prospectus (as amended or supplemented if the Company
shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or omission
based upon information relating to the Initial Purchaser or any Holder
furnished to the Company in writing by Morgan Stanley & Co.
Incorporated or any selling Holder expressly for use therein; provided,
however, that the foregoing indemnity shall not inure to the benefit of
any Holder if such Holder sold the Registrable Securities that are the
subject of the claim (x) after receipt of a notice from the Company
pursuant to Section 3(e) hereof and prior to receipt of copies of a
supplemented or amended Registration Statement or Prospectus or (y)
during a Suspension Period unless notice thereof has not been given. In
connection with any Underwritten Offering permitted by Section 3, the
Company will also
15
indemnify the Underwriters, if any, selling brokers, dealers and
similar securities industry professionals participating in the
distribution, their officers and directors and each Person who controls
such Persons (within the meaning of the 1933 Act and the 1934 Act) to
the same extent as provided above with respect to the indemnification
of the Holders, if requested in connection with the Shelf Registration
Statement.
(b) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Initial Purchaser and the
other selling Holders, and each of their respective directors, officers
who sign the Registration Statement and each Person, if any, who
controls the Company, the Initial Purchaser and any other selling
Holder within the meaning of either Section 15 of the 1933 Act or
Section 20 of the 1934 Act to the same extent as the foregoing
indemnity from the Company to the Initial Purchaser and the Holders,
but only with reference to information relating to such Holder
furnished to the Company in writing by such Holder expressly for use in
any Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto).
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of
which indemnity may be sought pursuant to either paragraph (a) or
paragraph (b) above, such Person (the "INDEMNIFIED PARTY") shall
promptly notify the Person against whom such indemnity may be sought
(the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified
party unless (i) the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel or (ii) the named
parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (A) the fees and expenses of more than one
separate firm (in addition to any local counsel) for the Initial
Purchaser and all Persons, if any, who control the Initial Purchaser
within the meaning of either Section 15 of the 1933 Act or Section 20
of the 1934 Act, the fees and expenses of more than one separate firm
(in addition to any local counsel) for the Company, its directors, its
officers who sign the Registration Statement and each Person, if any,
who controls the Company
16
within the meaning of either such Section and (c) the fees and expenses
of more than one separate firm (in addition to any local counsel) for
all Holders and all Persons, if any, who control any Holders within the
meaning of either such Section, and that all such fees and expenses
shall be reimbursed as they are incurred. In such case involving the
Initial Purchaser and Persons who control the Initial Purchaser, such
firm shall be designated in writing by Morgan Stanley & Co.
Incorporated. In such case involving the Holders and such Persons who
control Holders, such firm shall be designated in writing by the
Majority Holders. In all other cases, such firm shall be designated by
the Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but,
if settled with such consent or if there be a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this
paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party for
such fees and expenses of counsel in accordance with such request prior
to the date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which
such indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified party
from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in paragraph (a)
or paragraph (b) of this Section 5 is unavailable to an indemnified
party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under
such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or parties on the one hand and
of the indemnified party or parties on the other hand in connection
with the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company and the Holders shall
be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
supplied by the
17
Company or by the Holders and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The Holders' respective obligations to
contribute pursuant to this Section 5(d) are several in proportion to
the respective principal amount of Registrable Securities of such
Holder that were registered pursuant to a Registration Statement.
(e) The Company and each Holder agree that it would not
be just or equitable if contribution pursuant to this Section 5 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 paragraph (d) above. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject
to the limitations set forth above, any out-of-pocket legal or other
out-of-pocket expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5, no Holder shall be
required to contribute any amount in excess of the amount by which the
total price at which Registrable Securities were sold by such Holder
exceeds the amount of any damages that such Holder 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 1933 Act)
shall be entitled to contribution from any Person who was not guilty of
such fraudulent misrepresentation. The remedies provided for in this
Section 5 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Initial Purchaser, any Holder or any Person controlling the Initial
Purchaser or any Holder, or by or on behalf of the Company, its officers or
directors or any Person controlling the Company, (iii) acceptance of any of the
Exchange Securities and (iv) any sale of Registrable Securities pursuant to a
Shelf Registration Statement.
6. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not
entered into, and on or after the date of this Agreement will not enter
into, any agreement which is inconsistent with the rights granted to
the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof in any material respect. The
rights granted to the Holders hereunder do not in any way conflict with
and are not inconsistent with the rights granted to the holders of the
Company's other issued and outstanding securities under any such
agreements.
18
(b) 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 unless the
Company has obtained the written consent of Holders of at least a
majority in aggregate principal amount of the outstanding Registrable
Securities affected by such amendment, modification, supplement, waiver
or consent; provided, however, that no amendment, modification,
supplement, waiver or consent to any departure from the provisions of
Section 5 hereof shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, telex, telecopier, or any
courier guaranteeing overnight delivery (i) if to a Holder, at the most
current address given by such Holder to the Company by means of a
notice given in accordance with the provisions of this Section 6(c),
which address initially is, with respect to the Initial Purchaser, the
address set forth in the Purchase Agreement; and (ii) if to the
Company, initially at the Company's address set forth in the Purchase
Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 6(c).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(d) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including, without limitation and
without the need for an express assignment, subsequent Holders;
provided that nothing herein shall be deemed to permit any assignment,
transfer or other disposition of Registrable Securities in violation of
the terms of the Purchase Agreement. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such Person shall be conclusively
deemed to have agreed to be bound by and to perform all of the terms
and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof. The Initial Purchaser (in its
19
capacity as Initial Purchaser) shall have no liability or obligation to
the Company with respect to any failure by a Holder to comply with, or
any breach by any Holder of, any of the obligations of such Holder
under this Agreement.
(e) Purchases and Sales of Securities. The Company shall
not, and shall use its best efforts to cause its affiliates (as defined
in Rule 405 under the 1933 Act) not to, purchase and then resell or
otherwise transfer any Registrable Securities.
(f) Third Party Beneficiary. The Holders shall be third
party beneficiaries to the agreements made hereunder between the
Company, on the one hand, and the Initial Purchaser, on the other hand,
and shall have the right to enforce such agreements directly to the
extent it deems such enforcement necessary or advisable to protect its
rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the
same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(i) Governing Law. This Agreement shall be governed by
the laws of the State of New York.
(j) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be
affected or impaired thereby.
20
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
J. RAY MCDERMOTT, S.A.
By: /s/Francis S. Kalman
------------------------------------
Name: Francis S. Kalman
Title: Executive Vice President
and Chief Financial Officer
CHARTERING COMPANY (SINGAPORE)
PTE. LTD.
EASTERN MARINE SERVICES, INC.
HYDRO MARINE SERVICES, INC.
J. RAY MCDERMOTT, INC.
J. RAY MCDERMOTT (AUST.) HOLDING
PTY. LIMITED
J. RAY MCDERMOTT ENGINEERING
HOLDINGS, INC.
J. RAY MCDERMOTT FAR EAST, INC.
J. RAY MCDERMOTT HOLDINGS, INC.
J. RAY MCDERMOTT INTERNATIONAL,
INC.
J. RAY MCDERMOTT INTERNATIONAL
SERVICES LIMITED
J. RAY MCDERMOTT INTERNATIONAL
VESSELS, LTD.
J. RAY MCDERMOTT INVESTMENTS B.V.
J. RAY MCDERMOTT MIDDLE EAST, INC.
MCDERMOTT CASPIAN CONTRACTORS,
INC.
MCDERMOTT FAR EAST, INC.
MCDERMOTT GULF OPERATING
COMPANY, INC.
MCDERMOTT INDUSTRIES (AUST.) PTY
LIMITED
MCDERMOTT INTERNATIONAL MARINE
INVESTMENTS N.V.
MCDERMOTT OLD JV OFFICE, INC.
MCDERMOTT SOUTH EAST ASIA PTE.
LTD.
MCDERMOTT WEST INDIES COMPANY
MENTOR ENGINEERING CONSULTANTS
LIMITED
MENTOR SUBSEA TECHNOLOGY
SERVICES, INC.
NORTH ATLANTIC VESSEL, INC.
OPI VESSELS, INC.
SPARTEC, INC.
VARSY INTERNATIONAL N.V.
By: /s/Francis S. Kalman
------------------------------------
Name: Francis S. Kalman
Title: Authorized Representative
FIRST EMIRATES TRADING
CORPORATION
J. RAY MCDERMOTT DIVING
INTERNATIONAL, INC.
J. RAY MCDERMOTT EASTERN
HEMISPHERE LIMITED
J. RAY MCDERMOTT ENGINEERING, LLC
J. RAY MCDERMOTT UNDERWATER
SERVICES, INC.
MCDERMOTT MARINE CONSTRUCTION
LIMITED
MCDERMOTT MARINE UK LIMITED
MCDERMOTT OVERSEAS, INC.
By: /s/ James R. Easter
------------------------------------
Name: James R. Easter
Title: Authorized Representative
MCDERMOTT HOLDINGS (U.K.) LIMITED
By: /s/ Rudolph D. Hargis Jr.
------------------------------------
Name: Rudolph D. Hargis Jr.
Title: Authorized Representative
J. RAY MCDERMOTT CONTRACTORS,
INC.
MCDERMOTT OFFSHORE SERVICES
COMPANY, INC.
OCEANIC RED SEA COMPANY
By: /s/ Liane K. Hinrichs
------------------------------------
Name: Liane K. Hinrichs
Title: Authorized Representative
Confirmed and accepted as of
the date first above written:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ David Schwarzbach
----------------------------------
Name: David Schwarzbach
Title: Vice President