EXHIBIT 4.4
SUBSIDIARY GUARANTY
Dated as of February 11, 2003
From
THE GUARANTORS NAMED HEREIN
and
THE ADDITIONAL GUARANTORS REFERRED TO HEREIN
as Guarantors
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
TABLE OF CONTENTS
SECTION PAGE
Section 1. Guaranty; Limitation of Liability................................ 1
Section 2. Guaranty Absolute................................................ 2
Section 3. Waivers and Acknowledgments...................................... 3
Section 4. Subrogation...................................................... 4
Section 5. Payments Free and Clear of Taxes, Etc............................ 5
Section 6. Representations and Warranties................................... 7
Section 7. Covenants........................................................ 7
Section 8. Amendments, Guaranty Supplements, Etc............................ 7
Section 9. Notices, Etc..................................................... 8
Section 10. No Waiver; Remedies............................................. 8
Section 11. Right of Set-off................................................ 9
Section 12. Indemnification................................................. 9
Section 13. Subordination................................................... 10
Section 14. Continuing Guaranty; Assignments under the Credit Agreement..... 10
Section 15. Execution in Counterparts....................................... 11
Section 16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.......... 11
Exhibit A - Guaranty Supplement
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY dated as of February __, 2003 made by the Persons
listed on the signature pages hereof under the caption "Subsidiary Guarantors"
and the Additional Guarantors (as defined in Section 8(b)) (such Persons so
listed and the Additional Guarantors being, collectively, the "GUARANTORS" and,
individually, each a "GUARANTOR") in favor of the Secured Parties (as defined in
the Credit Agreement referred to below).
PRELIMINARY STATEMENT. McDermott International, Inc., a Panamanian
corporation ("MII"), J. Ray McDermott, S.A., a Panamanian corporation ("JRMSA"),
J. Ray McDermott Holdings, Inc., a Delaware corporation ("JRMHI"), J. Ray
McDermott, Inc., a Delaware corporation ("JRMI"), and BWX Technologies, Inc., a
Delaware corporation ("BWXT", and together with JRMSA, JRMHI and JRMI, the
"BORROWERS" and each, a "BORROWER"), are parties to a Credit Agreement dated as
of February __, 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"; capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined), with the banks, financial institutions and other institutional lenders
listed on the signature pages thereof as the Initial Lender Parties, Citicorp
USA, Inc. ("CUSA"), as Collateral Agent and Administrative Agent for the Lender
Parties, Salomon Smith Barney ("SSB"), as lead arranger and book runner, [NAME
OF INSTITUTION], as documentation agent, and [NAME OF INSTITUTION], as
syndication agent. Each Guarantor may receive, directly or indirectly, a portion
of the proceeds of the Advances under the Credit Agreement and will derive
substantial direct and indirect benefits from the transactions contemplated by
the Credit Agreement. It is a condition precedent to the making of Advances and
the issuance of Letters of Credit by the Lender Parties under the Credit
Agreement and the entry by the Hedge Banks into Secured Hedge Agreements from
time to time that each Guarantor shall have executed and delivered this
Guaranty.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lender Parties to make Advances and to issue Letters of Credit under the Credit
Agreement and the Hedge Banks to enter into Secured Hedge Agreements from time
to time, each Guarantor, jointly and severally with each other Guarantor, hereby
agrees as follows:
Section 1. Guaranty; Limitation of Liability. (a) Each Guarantor hereby
unconditionally and irrevocably guarantees the punctual payment when due,
whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise pursuant to the terms of this Agreement, of
all Bilateral Obligations and all Obligations of each other Loan Party now or
hereafter existing under or in respect of the Loan Documents (including, without
limitation, any extensions, modifications, substitutions, amendments or renewals
of any or all of the foregoing Obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, fees, expenses or
otherwise (such Obligations being the "GUARANTEED OBLIGATIONS"), and agrees to
pay any and all expenses (including, without limitation, reasonable fees and
expenses of counsel) incurred by the Agents or any other Secured Party in
enforcing any rights under this Guaranty or any other Loan Documents. Without
limiting the generality of the foregoing, each Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by any other Loan Party to any Secured Party under or in respect
of the Loan Documents but for the
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fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such other Loan
Party.
(b) Each Guarantor, and by its acceptance of this Guaranty, the Agents and
each other Secured Party, hereby confirms that it is the intention of all such
Persons that this Guaranty and the Obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law
(as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Agents, the other Secured
Parties and the Guarantors hereby irrevocably agree that the Obligations of each
Guarantor under this Guaranty at any time shall be limited to the maximum amount
as will result in the Obligations of such Guarantor under this Guaranty not
constituting a fraudulent transfer or conveyance. For purposes hereof,
"BANKRUPTCY LAW" means Section 548 of Title 11, U.S. Code, or any similar
foreign, federal or state law for the relief of debtors.
(c) Each Guarantor hereby unconditionally and irrevocably agrees that in
the event any payment shall be required to be made to any Secured Party under
this Guaranty or the Parent Guaranty or any other guaranty, such Guarantor will
contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and the Parent and each other guarantor so as to maximize the
aggregate amount paid to the Secured Parties (up to the amount of the payment so
required to be made) under or in respect of the Loan Documents.
Section 2. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Secured
Party with respect thereto. The Obligations of each Guarantor under or in
respect of this Guaranty are independent of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against any Borrower or any other Loan Party or whether any
Borrower or any other Loan Party is joined in any such action or actions. To the
maximum extent permitted by applicable law, the liability of each Guarantor
under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses it
may now have or hereafter acquire in any way relating to, any or all of the
following:
(a) any lack of validity or enforceability of any Loan Document;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under or in respect of the Loan
Documents, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise;
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(c) any taking, exchange, release or non-perfection of any collateral,
or any taking, release or amendment or waiver of or consent to departure
from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Guaranteed Obligations
or any other Obligations of any Loan Party under the Loan Documents or any
other assets of any Loan Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate or other
legal structure or existence of any Loan Party or any of its Subsidiaries;
(f) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party
now or hereafter known to such Secured Party (each Guarantor waiving any
duty on the part of the Secured Parties to disclose such information);
(g) the failure of any other Person to execute or deliver this
Guaranty, any Guaranty Supplement (as hereinafter defined) or any other
guaranty or agreement or the release or reduction of liability of any
Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or
(h) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
any Secured Party that might otherwise constitute a defense available to,
or a discharge of, any Loan Party or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of any other Loan Party or otherwise,
all as though such payment had not been made.
Section 3. Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that any
Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives any right
to revoke this Guaranty and acknowledges that this Guaranty is continuing in
nature and applies to all Guaranteed Obligations, whether existing now or in the
future.
(c) Each Guarantor hereby unconditionally and irrevocably waives (i) any
defense arising by reason of any claim or defense based upon an election of
remedies by any
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Secured Party that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such Guarantor to
proceed against any of the other Loan Parties, any other guarantor or any other
Person or any Collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the Obligations of such Guarantor
hereunder.
(d) Each Guarantor acknowledges that the Collateral Agent may, except as
otherwise required by the Uniform Commercial Code as in effect from time to time
in the State of New York or other applicable law, without notice to or demand
upon such Guarantor and without affecting the liability of such Guarantor under
this Guaranty, foreclose under any mortgage by nonjudicial sale, and each
Guarantor hereby waives any defense to the recovery by the Collateral Agent and
the other Secured Parties against such Guarantor of any deficiency after such
nonjudicial sale and any defense or benefits that may be afforded by applicable
law.
(e) Each Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.
Section 4. Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against any Borrower, any other Loan Party or any other guarantor that
arise from the existence, payment, performance or enforcement of such
Guarantor's Obligations under or in respect of this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against any Borrower,
any Loan Party or any other guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Borrower, any Loan Party or any other guarantor, directly or indirectly, in cash
or other property or by setoff or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash, all Letters of Credit and all Secured Hedge Agreements
shall have expired or been terminated, or in the case of Letters of Credit cash
collateralized as provided for in the Credit Agreement, and the Commitments
shall have expired or been terminated. If any amount shall be paid to any
Guarantor in violation of the immediately preceding sentence at any time prior
to the latest of (a) the payment in full in cash of the Guaranteed Obligations
and all other amounts payable under this Guaranty, (b) the Termination Date and
(c) the latest date of expiration or termination of all Letters of Credit and
all Secured Hedge Agreements, or in the case of Letters of Credit cash
collateralized as provided for in the Credit Agreement, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Guarantor and shall forthwith
be paid or delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) any Guarantor
shall make payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all
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of the Guaranteed Obligations and all other amounts payable under this Guaranty
shall have been paid in full in cash, (iii) the Termination Date shall have
occurred and (iv) all Letters of Credit and all Secured Hedge Agreements shall
have expired or been terminated, or in the case of Letters of Credit cash
collateralized as provided for in the Credit Agreement, the Secured Parties
will, at such Guarantor's request and expense, execute and deliver to such
Guarantor appropriate documents, without recourse and without representation or
warranty, necessary to evidence the transfer by subrogation to such Guarantor of
an interest in the Guaranteed Obligations resulting from such payment made by
such Guarantor pursuant to this Guaranty.
Section 5. Payments Free and Clear of Taxes, Etc. (a) Any and all payments
made by any Guarantor under or in respect of this Guaranty or any other Loan
Document shall be made, in accordance with Section 2.12 of the Credit Agreement,
free and clear of and without deduction for any and all present or future Taxes.
If any Guarantor shall be required by law to deduct any Taxes from or in respect
of any sum payable under or in respect of this Guaranty or any other Loan
Document to any Secured Party, (i) the sum payable by such Guarantor shall be
increased as necessary so that after such Guarantor has made all required
deductions (including deductions applicable to additional sums payable under
this Section 5), such Secured Party receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Guarantor shall make
all such deductions and (iii) such Guarantor shall pay the full amount deducted
to the relevant taxation authority in accordance with applicable law.
(b) In addition, each Guarantor agrees to pay any present or future Other
Taxes that arise from any payment made by or on behalf of such Guarantor under
or in respect of this Guaranty or any other Loan Document or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Guaranty and the other Loan Documents.
(c) Each Guarantor will indemnify each Secured Party for and hold it
harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 5 paid by such Secured Party (including penalties, additions to
tax, interest and reasonable expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such
Secured Party makes a reasonable written demand (which demand shall be made
within a reasonable time), specifying in reasonable detail (with supporting
documentation reasonably requested by the Guarantors) the reasons therefor.
(d) If a Secured Party shall become aware that it is entitled to claim a
refund from a taxation authority in respect of Taxes or Other Taxes as to which
it has been indemnified by such Guarantor, or with respect to which such
Guarantor has paid Additional Amounts, pursuant to this Section 5, it shall
promptly notify such Guarantor of the availability of such refund claim and
shall, within 30 days after receipt of a request by such Guarantor, make a claim
to such taxation authority for such refund at such Guarantor's expense. If a
Secured Party receives a refund (including pursuant to a claim for refund made
pursuant to the preceding sentence) in respect of any Taxes or Other Taxes as to
which it has been indemnified by such Guarantor, or with respect to which such
Guarantor has paid Additional Amounts, pursuant to this Section 5, it shall
within 30 days from the date of such receipt pay over such refund to such
Guarantor (but only to the extent of indemnity payments made, or Additional
Amounts paid, by such Guarantor under this Section 5 with respect to the Taxes
or Other Taxes giving rise to such
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refund), net of all out-of-pocket expenses of such Secured Party and without
interest (other than interest paid by the relevant taxation authority with
respect to such refund); provided, however, that such Guarantor, upon the
request of such Secured Party, agrees to repay the amount paid over to such
Guarantor (plus penalties, interest or other charges, if any, imposed by the
relevant taxation authority in respect of such repayment) to such Secured Party
in the event such Secured Party is required to repay such refund to such
taxation authority.
(e) Within 30 days after the date of any payment of Taxes by or on behalf
of any Guarantor, such Guarantor shall use commercially reasonable efforts to
furnish to the Administrative Agent, at its address referred to in Section 9.02
of the Credit Agreement, the original or certified copy of a receipt evidencing
such payment.
(f) Upon the reasonable request in writing of any Guarantor, each Secured
Party organized under the laws of a jurisdiction outside the United States
shall, on or prior to the date of its execution and delivery of the Credit
Agreement in the case of each Initial Lender Party and on the date of the
Assignment and Acceptance or Secured Hedge Agreement pursuant to which it
becomes a Secured Party in the case of each other Secured Party, and on or
before the date, if any, it changes its Applicable Lending Office, and from time
to time thereafter as requested in writing by any Guarantor (but only so long
thereafter as such Secured Party remains lawfully able to do so), provide each
of the Administrative Agent and such Guarantor with two original Internal
Revenue Service Forms W-8BEN or W-8ECI (in the case of a Secured Party that
provides a Form W-8BEN other than by reason of the applicability of a tax
treaty, the Secured Party shall also provide a certificate representing that
such Secured Party is not a "bank" for purposes of Section 881(c) of the
Internal Revenue Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Internal Revenue Code) of any Guarantor and is not a
controlled foreign corporation related to any Guarantor (within the meaning of
Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or any
successor or other form prescribed by the Internal Revenue Service, properly
completed and duly executed by such Secured Party, certifying that such Secured
Party is exempt from or entitled to a reduced rate of United States withholding
tax on payments pursuant to this Agreement or the Notes and, in the case of a
Secured Party providing a Form W-8BEN, certifying that such Secured Party is a
foreign corporation, partnership, estate or trust. In addition, each such Lender
Party shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Lender Party. If the forms provided by a
Secured Party at the time such Secured Party first becomes a party to this
Agreement indicate or require a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes for purposes of this Section 5 unless and until such Secured Party
provides the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that if, at the effective
date of the Assignment and Acceptance pursuant to which a Secured Party becomes
a party to this Agreement (or the date, if any a Secured Party changes its
Applicable Lending Office), the Secured Party assignor (or such Secured Party)
was entitled to payments under subsection (a) of this Section 5 in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes, subject to the provisions of this subsection (f)) United States
withholding tax, if any, applicable with respect to the Secured Party assignee
(or such Secured Party) on such date.
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(g) For any period with respect to which a Secured Party has failed to
provide any Guarantor following such Guarantor's request therefor pursuant to
subsection (f) above with the appropriate form described in subsection (f) above
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (f) above), such Secured Party shall not be
entitled to indemnification under subsection (a) or (c) of this Section 5 with
respect to Taxes imposed by the United States by reason of such failure;
provided, however, that should a Secured Party become subject to Taxes because
of its failure to deliver a form required hereunder, such Guarantor shall take
such steps as such Secured Party shall reasonably request to assist such Secured
Party to recover such Taxes.
(h) Any Secured Party claiming any indemnity payment or Additional Amounts
payable pursuant to this Section 5 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document
reasonably requested in writing by such Guarantor or to change the jurisdiction
of its Applicable Lending Office following the reasonable request in writing of
such Guarantor if the making of such a filing or change would avoid the need for
or reduce the amount of any such indemnity payment or Additional Amounts that
may thereafter accrue and would not, in the sole determination of such Secured
Party, require the disclosure of information that such Secured Party reasonably
considers confidential, or be otherwise disadvantageous to such Secured Party.
Section 6. Representations and Warranties. Each Guarantor hereby makes each
representation and warranty made in the Loan Documents by the Borrowers with
respect to such Guarantor and each Guarantor hereby further represents and
warrants as follows:
(a) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(b) Such Guarantor has, independently and without reliance upon any
Secured Party and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty and each other Loan Document to which it is or is to be a party,
and such Guarantor has established adequate means of obtaining from each
other Loan Party on a continuing basis information pertaining to, and is
now and on a continuing basis will be completely familiar with, the
business, condition (financial or otherwise), operations, performance,
properties and prospects of such other Loan Party.
Section 7. Covenants. Each Guarantor covenants and agrees that, so long as
any part of the Guaranteed Obligations shall remain unpaid, any Letter of Credit
shall be outstanding and not separately cash collateralized, any Lender Party
shall have any Commitment or any Secured Hedge Agreement shall be in effect,
such Guarantor will perform and observe, and cause each of its Subsidiaries to
perform and observe, all of the terms, covenants and agreements set forth in the
Loan Documents on its or their part to be performed or observed or that the
Borrower has agreed to cause such Guarantor or such Subsidiaries to perform or
observe.
Section 8. Amendments, Guaranty Supplements, Etc. (a) No amendment or
waiver of any provision of this Guaranty and no consent to any departure by any
Guarantor
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therefrom shall in any event be effective unless the same shall be in writing
and signed by the Administrative Agent and the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all of the Secured Parties
(other than any Lender that is, at such time, a Defaulting Lender), (a) reduce
or limit the obligations of any Guarantor hereunder, release any Guarantor
hereunder or otherwise limit any Guarantor's liability with respect to the
Obligations owing to the Secured Parties under or in respect of the Loan
Documents except as provided in the next succeeding sentence, (b) postpone any
date fixed for payment hereunder or (c) change the number of Secured Parties or
the percentage of (x) the Commitments, (y) the aggregate unpaid principal amount
of the Advances or (z) the aggregate Available Amount of outstanding Letters of
Credit that, in each case, shall be required for the Secured Parties or any of
them to take any action hereunder. Notwithstanding the foregoing, upon the sale
of a Guarantor to the extent permitted in accordance with the terms of the Loan
Documents, such Guarantor shall be automatically released from this Guaranty.
(b) Upon the execution and delivery by any Person of a guaranty supplement
in substantially the form of Exhibit A hereto (each, a "GUARANTY SUPPLEMENT"),
(i) such Person shall be referred to as an "ADDITIONAL GUARANTOR" and shall
become and be a Guarantor hereunder, and each reference in this Guaranty to a
"GUARANTOR" shall also mean and be a reference to such Additional Guarantor, and
each reference in any other Loan Document to a "SUBSIDIARY GUARANTOR" shall also
mean and be a reference to such Additional Guarantor, and (ii) each reference
herein to "THIS GUARANTY", "HEREUNDER", "HEREOF" or words of like import
referring to this Guaranty, and each reference in any other Loan Document to the
"SUBSIDIARY GUARANTY", "THEREUNDER", "THEREOF" or words of like import referring
to this Guaranty, shall mean and be a reference to this Guaranty as supplemented
by such Guaranty Supplement.
Section 9. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to it,
if to any Guarantor, addressed to it in care of MII at MII's address specified
in Section 9.02 of the Credit Agreement, if to any Agent or any Lender Party, at
its address specified in Section 9.02 of the Credit Agreement, if to any Hedge
Bank, at its address specified in the Secured Hedge Agreement to which it is a
party, or, as to any party, at such other address as shall be designated by such
party in a written notice to each other party. All such notices and other
communications shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by telegraph, telecopy or
telex, or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9 or in accordance with the
latest unrevoked direction from such party given in accordance with this Section
9. Delivery by telecopier of an executed counterpart of a signature page to any
amendment or waiver of any provision of this Guaranty or of any Guaranty
Supplement to be executed and delivered hereunder shall be effective as delivery
of an original executed counterpart thereof.
Section 10. No Waiver; Remedies. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise
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thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 11. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Agent and each Lender Party and
each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Agent, such
Lender Party or such Affiliate to or for the credit or the account of any
Guarantor against any and all of the Obligations of such Guarantor now or
hereafter existing under the Loan Documents, irrespective of whether such Agent
or such Lender Party shall have made any demand under this Guaranty or any other
Loan Document and although such Obligations may be unmatured. Each Agent and
each Lender Party agrees promptly to notify such Guarantor after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Agent and each Lender Party and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.
Section 12. Indemnification. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Secured Parties under this
Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party in
connection with or as a result of any failure of any Guaranteed Obligations to
be the legal, valid and binding obligations of any Loan Party enforceable
against such Loan Party in accordance with their terms.
(b) Each Guarantor hereby also agrees that none of the Indemnified Parties
shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to any of the Guarantors or any of their respective Affiliates or any
of their respective officers, directors, employees, agents and advisors, and
each Guarantor hereby agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Facilities, the
actual or proposed use of the proceeds of the Advances or the Letters of Credit,
the Loan Documents or any of the transactions contemplated by the Loan
Documents.
(c) Without prejudice to the survival of any of the other agreements of any
Guarantor under this Guaranty or any of the other Loan Documents, the agreements
and obligations of each Guarantor contained in Section 1(a) (with respect to
enforcement expenses), the last sentence of Section 2, Section 5 and this
Section 12 shall survive the payment in full of the Guaranteed Obligations and
all of the other amounts payable under this Guaranty.
10
Section 13. Subordination Each Guarantor hereby subordinates any and all
debts, liabilities and other Obligations owed to such Guarantor by each other
Loan Party (the "SUBORDINATED OBLIGATIONS") to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section 13:
(a) Prohibited Payments, Etc. Except during the continuance of an
Event of Default, each Guarantor may receive regularly scheduled payments
from any other Loan Party on account of Debt owed to it by such Loan Party
and permitted under Section 5.02(b) of the Credit Agreement. After the
occurrence and during the continuance of any Event of Default, however,
unless the Administrative Agent otherwise agrees, no Guarantor shall
demand, accept or take any action to collect any payment on account of Debt
owed to it by any other Loan Party.
(b) Prior Payment of Guaranteed Obligations. In any proceeding under
any Bankruptcy Law, each Guarantor agrees that the Secured Parties shall be
entitled to receive payment in full in cash of all Guaranteed Obligations
(including all interest and expenses accruing after the commencement of a
proceeding under any Bankruptcy Law, whether or not constituting an allowed
claim in such proceeding ("POST PETITION INTEREST")) before such Guarantor
receives payment of any Debt owed to it by any other Loan Party.
(c) Turn-Over. After the occurrence and during the continuance of any
Event of Default, each Guarantor shall, if the Administrative Agent so
requests, use commercially reasonable efforts to collect, enforce and
receive payments on account of Debt owed to it by any Loan Parties as
trustee for the Secured Parties and deliver such payments to the
Administrative Agent on account of the Guaranteed Obligations (including
all Post Petition Interest), together with any necessary endorsements or
other instruments of transfer, but without reducing or affecting in any
manner the liability of such Guarantor under the other provisions of this
Guaranty.
(d) Administrative Agent Authorization. After the occurrence and
during the continuance of any Event of Default, the Administrative Agent is
authorized and empowered (but without any obligation to so do), in its
discretion, (i) in the name of each Guarantor, to collect and enforce, and
to submit claims in respect of, Subordinated Obligations and to apply any
amounts received thereon to the Guaranteed Obligations (including any and
all Post Petition Interest), and (ii) to require each Guarantor (A) to use
commercially reasonable efforts to collect and enforce, and to submit
claims in respect of, Debt owed to it by any Loan Party and (B) to pay any
amounts received on such obligations to the Administrative Agent for
application to the Guaranteed Obligations (including any and all Post
Petition Interest).
Section 14. Continuing Guaranty; Assignments under the Credit Agreement.
This Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the latest of (i) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (ii) the
Termination Date and (iii) the latest date of expiration or termination of all
Letters of Credit and all Secured Hedge Agreements or, in the case of the
Letters of Credit, the cash collateralization of such Letters of Credit as
provided for in the Credit Agreement,
11
(b) be binding upon the Guarantor, its successors and assigns and (c) inure to
the benefit of and be enforceable by the Secured Parties and their successors
and permitted assigns. Without limiting the generality of clause (c) of the
immediately preceding sentence, any Secured Party may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitments,
the Advances owing to it and the Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Secured Party herein or otherwise, in each case
as and to the extent provided in Section 9.07 of the Credit Agreement. No
Guarantor shall have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Secured Parties.
Section 15. Execution in Counterparts. This Guaranty and each amendment,
waiver and consent with respect hereto may be executed in any number of
counterparts and by different 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. Delivery of an executed
counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.
Section 16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a)
This Guaranty shall be governed by, and construed in accordance with, the laws
of the State of New York.
(b) Each Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Guaranty or any of the other Loan Documents to which
it is or is to be a party, or for recognition or enforcement of any judgment,
and each Guarantor hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the extent permitted by law, in such federal
court. Each Guarantor agrees that a final and non-appealable judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Guaranty or any other Loan Document shall affect any right that
any party may otherwise have to bring any action or proceeding relating to this
Guaranty or any other Loan Document in the courts of any jurisdiction.
(c) Each Guarantor irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty or any of the other Loan Documents to which
it is or is to be a party in any New York State or federal court. Each Guarantor
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such suit, action or proceeding
in any such court.
(d) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR
12
RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY
SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT
THEREOF.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
J. RAY McDERMOTT INTERNATIONAL
VESSELS, LTD.
By
------------------------------
Title: James R. Easter
Treasurer
HYDRO MARINE SERVICES, INC.
By
------------------------------
Title: James R. Easter
Treasurer
J. RAY McDERMOTT UNDERWATER
SERVICES, INC.
By
------------------------------
Title: James R. Easter
Treasurer
MENTOR SUBSEA TECHNOLOGY
SERVICES, INC.
By
------------------------------
Title: James R. Easter
Treasurer
McDERMOTT TRADE CORPORATION
By
------------------------------
Title: James R. Easter
Treasurer
J. RAY McDERMOTT TECHNOLOGY, INC.
By
------------------------------
Title: James R. Easter
Treasurer
OPI VESSELS, INC.
By
------------------------------
Title: James R. Easter
Treasurer
J. RAY McDERMOTT ENGINEERING
HOLDINGS, INC.
By
------------------------------
Title: James R. Easter
Treasurer
SABINE RIVER REALTY, INC.
By
------------------------------
Title: James R. Easter
Treasurer
SPARTEC, INC.
By
------------------------------
Title: James R. Easter
Treasurer
J. RAY McDERMOTT WEST AFRICA
HOLDINGS, INC.
By
------------------------------
Title: James R. Easter
Treasurer
J. RAY McDERMOTT ENGINEERING, LLC
By
------------------------------
Title: James R. Easter
Treasurer
J. RAY McDERMOTT WEST AFRICA, INC.
By
------------------------------
Title: James R. Easter
Treasurer
EXHIBIT A
TO THE
SUBSIDIARY GUARANTY
SUBSIDIARY GUARANTY SUPPLEMENT
_________ __, ____
Citicorp USA, Inc., as Administrative Agent
[1200 Smith Street, Suite 200
Houston, TX 77002]
Attention: _________
Credit Agreement dated as of February __, 2003 among
McDermott International, Inc., a Panamanian corporation ("MII"),
J. Ray McDermott, S.A., a Panamanian corporation ("JRMSA"),
J. Ray McDermott Holdings, Inc., a Delaware corporation ("JRMHI"),
J. Ray McDermott, Inc., a Delaware corporation ("JRMI"),
and BWX Technologies, Inc., a Delaware corporation ("BWXT",
and together with JRMSA, JRMHI and JRMI, the "BORROWERS" and
each, a "BORROWER"), the banks, financial institutions and other
institutional lenders listed on the signature pages thereof as the
Initial Lender Parties, Citicorp USA, Inc. as Collateral Agent
and Administrative Agent for the Lender Parties, Salomon Smith Barney,
as lead arranger and book runner, [NAME OF INSTITUTION],
as documentation agent, and [NAME OF INSTITUTION], as syndication agent.
Ladies and Gentlemen:
Reference is made to the above-captioned Credit Agreement and to the
Subsidiary Guaranty referred to therein (such Subsidiary Guaranty, as in effect
on the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, together with this Guaranty Supplement, being the
"SUBSIDIARY GUARANTY"). The capitalized terms defined in the Subsidiary Guaranty
or in the Credit Agreement and not otherwise defined herein are used herein as
therein defined.
Section 1. Guaranty; Limitation of Liability. (a) The undersigned hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise pursuant to the terms of this Agreement, of
all Obligations of each other Loan Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premium, fees, indemnities or otherwise (such
Obligations being the "GUARANTEED OBLIGATIONS"), and agrees to pay any and all
expenses (including, without limitation, reasonable fees and expenses of
counsel) incurred by the Agents or any other Secured
2
Party in enforcing any rights under this Guaranty Supplement, the Subsidiary
Guaranty or any other Loan Documents. Without limiting the generality of the
foregoing, the undersigned's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Borrower to any Secured Party under or in respect of the Loan Documents but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such other Borrower.
(b) The undersigned, and by its acceptance of this Guaranty Supplement, the
Agents and each other Secured Party, hereby confirms that it is the intention of
all such Persons that this Guaranty Supplement, the Subsidiary Guaranty and the
Obligations of the undersigned hereunder and thereunder not constitute a
fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal or state law to the extent applicable to this Guaranty
Supplement, the Subsidiary Guaranty and the Obligations of the undersigned
hereunder and thereunder. To effectuate the foregoing intention, the Agents, the
other Secured Parties and the undersigned hereby irrevocably agree that the
Obligations of the undersigned under this Guaranty Supplement and the Subsidiary
Guaranty at any time shall be limited to the maximum amount as will result in
the Obligations of the undersigned under this Guaranty Supplement and the
Subsidiary Guaranty not constituting a fraudulent transfer or conveyance.
(c) The undersigned hereby unconditionally and irrevocably agrees that in
the event any payment shall be required to be made to any Secured Party under
this Guaranty Supplement, the Subsidiary Guaranty, the Parent Guaranty or any
other guaranty, the undersigned will contribute, to the maximum extent permitted
by applicable law, such amounts to each other Guarantor and each other guarantor
so as to maximize the aggregate amount paid to the Secured Parties (up to the
amount of the payment so required to be made) under or in respect of the Loan
Documents.
Section 2. Obligations Under the Guaranty. The undersigned hereby agrees,
as of the date first above written, to be bound as a Guarantor by all of the
terms and conditions of the Subsidiary Guaranty to the same extent as each of
the other Guarantors thereunder. The undersigned further agrees, as of the date
first above written, that each reference in the Subsidiary Guaranty to an
"ADDITIONAL GUARANTOR" or a "GUARANTOR" shall also mean and be a reference to
the undersigned, and each reference in any other Loan Document to a "SUBSIDIARY
GUARANTOR" or a "LOAN PARTY" shall also mean and be a reference to the
undersigned.
Section 3. Representations and Warranties. The undersigned hereby makes
each representation and warranty set forth in Section 6 of the Subsidiary
Guaranty to the same extent as each other Guarantor.
Section 4. Delivery by Telecopier. Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by telecopier shall be effective as
delivery of an original executed counterpart of this Guaranty Supplement.
Section 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a) This
Guaranty Supplement shall be governed by, and construed in accordance with, the
laws of the State of New York.
3
(b) The undersigned hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or any federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty Supplement, the Subsidiary Guaranty
or any of the other Loan Documents to which it is or is to be a party, or for
recognition or enforcement of any judgment, and the undersigned hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. The undersigned
agrees that a final and non-appealable judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Guaranty
Supplement or the Subsidiary Guaranty or any other Loan Document shall affect
any right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty Supplement, the Subsidiary Guaranty or any of the
other Loan Documents to which it is or is to be a party in the courts of any
other jurisdiction.
(c) The undersigned irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty Supplement, the Subsidiary Guaranty or any
of the other Loan Documents to which it is or is to be a party in any New York
State or federal court. The undersigned hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.
(d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES
OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
Very truly yours,
[NAME OF ADDITIONAL GUARANTOR]
By
------------------------------
Title: