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EXHIBIT 10.3
Private and Confidential
DATED 30 MARCH 1998
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EAGLE GEOPHYSICAL INC (1)
AND
ENERGY RESEARCH INTERNATIONAL (2)
AND
BRITISH LINEN SHIPPING LIMITED (3)
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CORPORATE GUARANTEE
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XXXXXX XXXX
London
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CONTENTS
CLAUSE HEADING PAGE
1 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined expressions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Constructions of certain terms . . . . . . . . . . . . . . . . . . . . . . . . 2
2 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Covenant to pay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Guarantor as principal debtor; indemnity . . . . . . . . . . . . . . . . . . . 3
2.3 Certificates conclusive . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 No security taken by Guarantors . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6 Continuing security and other matters . . . . . . . . . . . . . . . . . . . . . 4
2.7 New accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.8 Liability unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Collateral Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.10 Waiver of Guarantors' rights . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.11 Suspense accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.12 Settlements conditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.13 Guarantor to deliver up certain property . . . . . . . . . . . . . . . . . . . 7
3 Payments and Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 No set-off or counterclaim . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 Grossing up for Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Currency indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4 Representations and warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.1 Continuing representations and warranties . . . . . . . . . . . . . . . . . . . 8
4.2 Initial representations and warranties . . . . . . . . . . . . . . . . . . . . 10
4.3 Repetition of representations and warranties . . . . . . . . . . . . . . . . . 11
5 Undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2 Negative undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6 Benefit of this Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Benefit and burden . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.2 Changes in constitution or reorganisation . . . . . . . . . . . . . . . . . . 14
6.3 No assignment by Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.4 Disclosure of information . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7 Notices and other matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.1 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.2 No implied waivers, remedies cumulative . . . . . . . . . . . . . . . . . . . . 16
7.3 English translations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.4 Other guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8 Guarantors' obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8.1 Guarantor's obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9 Law and Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.1 Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.2 Submission to jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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THIS GUARANTEE is dated 30 March,1998 and made BETWEEN:
(1) EAGLE GEOPHYSICAL INC a company incorporated in the state of Delaware,
United States of America whose principal place of business is situate
at 00 Xxxxx Xxxxxx Xxxx, 0xx Xxxxx, Xxxxxxx, Xxxxx 00000;
(2) ENERGY RESEARCH INTERNATIONAL a company incorporated in the Cayman
Islands whose registered office is situate at XX Xxx 0000, Xxxxxx
Xxxx, Xxxxx Xxxxxx, Xxxxxx Xxxxxxx (as "GUARANTORS"); and
(3) BRITISH LINEN SHIPPING LIMITED a company incorporated in Scotland
whose registered office is situate at 0 Xxxxxxxx Xxxxxx, Xxxxxxxxx XX0
0XX (the "OWNER").
WHEREAS:
(A) by a Hire Purchase Agreement dated 1998
(the "HIRE PURCHASE AGREEMENT") and made between Eagle Geophysical
Offshore Inc., (the "SURETY"), Horizon Exploration Limited (the
"HIRER") and the Owner, the Owner has agreed to let and the Hirer has
agreed to hire m.v. "LABRADOR HORIZON" (the "SHIP") registered under
Bahamian flag under Official Number 715224;
(B) the Surety has agreed to guarantee the obligations of the Hirer to the
Owner under the Hire Purchase Agreement; and
(B) the execution and delivery of this Guarantee is one of the conditions
precedent to the Owner letting the Ship to the Hirer pursuant to the
Hire Purchase Agreement.
IT IS AGREED as follows:
1 INTERPRETATION
1.1 Defined expressions
In this Guarantee, unless the context otherwise requires or unless
otherwise defined in this Guarantee, words and expressions defined in
the Hire Purchase Agreement and used in this Guarantee shall have the
same meaning where used in this Guarantee.
1.2 Definitions
In this Guarantee, unless the context otherwise requires:
"COLLATERAL INSTRUMENTS" means notes, bills of exchange, certificates
of deposit and other negotiable and non- negotiable instruments,
guarantees, indemnities and other assurances against financial loss
and any other documents or instruments which contain or evidence an
obligation (with or without security) to pay, discharge or be
responsible directly or indirectly for, any
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indebtedness or liabilities of the Hirer or any other person liable
and includes any documents or instruments creating or evidencing a
mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, assignment, trust arrangement or security interest
of any kind;
"GUARANTEE" includes each separate or independent stipulation or
agreement by the Guarantors or any of them contained in this
Guarantee;
"GUARANTEED LIABILITIES" means all moneys, obligations and liabilities
expressed to be guaranteed by the Guarantors in clause 2.1;
"INCAPACITY" means, in relation to a person, the death, bankruptcy,
unsoundness of mind, insolvency, liquidation, dissolution, winding-up,
administration, receivership, amalgamation, reconstruction or other
incapacity of that person whatsoever (and, in the case of a
partnership, includes the termination or change in the composition of
the partnership);
"RELEVANT JURISDICTION" means any jurisdiction in which or where the
Guarantors or any of them is incorporated, resident, domiciled, has a
permanent establishment, carries on, or has a place of business or is
otherwise effectively connected;
1.3 Headings
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Guarantee.
1.4 Constructions of certain terms
In this Guarantee, unless the context otherwise requires:
(a) references to clauses are to be construed as references to the
clauses of this Guarantee;
(b) references to (or to any specified provision of) this
Guarantee or any other document shall be construed as
references to this Guarantee, that provision or that document
as in force for the time being and as amended from time to time
in accordance with the terms thereof, or, as the case may be,
with the agreement of the relevant parties;
(c) words importing the plural shall include the singular and vice
versa;
(d) references to a time of day are to London time;
(e) references to a person shall be construed as including
references to an individual, firm, company, corporation,
unincorporated body of persons;
(f) references to a "guarantee" include references to an indemnity
or other assurance against financial loss including, without
limitation, an obligation to purchase assets or
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services as a consequence of a default by any other person to
pay any Indebtedness and "guaranteed" shall be construed
accordingly; and
(g) references to any enactment, amended or extended shall be
deemed to include reference to such enactment as re-enacted,
amended or extended.
2 GUARANTEE
2.1 Covenant to pay
In consideration of the Owner letting the Ship to the Hirer pursuant
to the Hire Purchase Agreement, the Guarantors hereby jointly and
severally guarantee to pay to the Owner, on demand by the Owner all
moneys and discharge all obligations and liabilities now or hereafter
due, owing or incurred by the Hirer and the Surety to the Owner under
or pursuant to the Hire Purchase Agreement and/or any of the other
Hirer's Documents when the same become due for payment or discharge
whether by acceleration or otherwise, and whether such
moneys, obligations or liabilities are express or implied, present,
future or contingent, joint or several, incurred as principal or
surety, originally owing to the Owner or purchased or
otherwise acquired by it, denominated in Dollars or in any other
currency, or incurred in any other manner whatsoever.
Such liabilities shall, without limitation, include interest (as well
after as before judgment) to date of payment at such rates and upon
such terms as may from time to time be agreed, commission, fees and
other charges and all legal and other costs, charges and expenses on a
full and unqualified indemnity basis which may be incurred by the Owner
in relation to any such moneys, obligations or liabilities or generally
in respect of the Hirer, the Surety, the Guarantors or any of them or
any Collateral Instrument.
2.2 Guarantor as principal debtor; indemnity
As a separate and independent stipulation, the Guarantors agree that if
any purported obligation or liability of the Hirer or of the Surety
which would have been the subject of this Guarantee had it been valid
and enforceable is not or ceases to be valid or enforceable against the
Hirer and/or the Surety on any ground whatsoever whether or not known
to the Owner (including, without limitation,, any irregular exercise or
absence of any corporate power or lack of authority of, or breach of
duty by, any person purporting to act on behalf of the Hirer or the
Surety or any legal or other limitation, whether under the Limitation
Acts or otherwise or any disability or Incapacity or any change in the
constitution of the Hirer or the Surety) the Guarantors shall
nevertheless be jointly and severally liable to the Owner in respect of
that purported obligation or liability as if the same were fully valid
and enforceable and the Guarantors were jointly and severally the
principal debtors in respect thereof. The Guarantors hereby agree to
keep the Owner fully indemnified on demand against all damages, losses,
costs and expenses arising from
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any failure of the Hirer and/or the Surety to perform or discharge any
such purported obligation or liability.
2.3 Certificates conclusive
Any certificate or determination of the Owner as to the Guaranteed
Liabilities shall, in the absence of manifest error, be binding and
conclusive on and against the Guarantors.
2.4 No security taken by Guarantors
The Guarantors warrant that they have not taken or received, and
undertake that until all the Guaranteed Liabilities of the Hirer and
the Surety have been paid or discharged in full, they will not take or
receive, the benefit of any security from the Hirer or the Surety or
any other person in respect of their obligations under this Guarantee.
2.5 Interest
The Guarantors agree jointly and severally to pay interest on each
amount demanded of them under this guarantee from the date of such
demand until payment (as well after as before judgment) at the Relevant
Rate of Interest calculated on a day to day basis by reference to a
year of 360 days. Such interest shall be compounded at the end of each
period determined for this purpose by the Owner in the event of it not
being paid when demanded but without prejudice to the Owner's right to
require payment of such interest.
2.6 Continuing security and other matters
This Guarantee shall:
(a) secure the ultimate balance from time to time owing to the
Owner by the Hirer or the Surety and shall be a continuing
security, notwithstanding any settlement of account or other
matter whatsoever;
(b) be in addition to any present or future Collateral Instrument,
right or remedy held by or available to the Owner; and
(c) not be in any way prejudiced or affected by the existence of
any such Collateral Instrument, rights or remedies or by the
same becoming wholly or in part void, voidable or unenforceable
on any ground whatsoever or by the Owner dealing with,
exchanging, varying or failing to perfect or enforce any of
the same or giving time for payment or indulgence or
compounding with any other person liable.
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2.7 New accounts
If this Guarantee ceases to be continuing for any reason whatsoever
the Owner may nevertheless continue any account of the Hirer and/or
the Surety or open one or more new accounts and the liability of the
Guarantors under this Guarantee shall not in any manner be reduced or
affected by any subsequent transactions or receipts or payments into
or out of any such account.
2.8 Liability unconditional
The liability of the Guarantors shall not be affected nor shall this
Guarantee be discharged or reduced by reason of:
(a) the Incapacity or any change in the name, style or
constitution of the Hirer or the Surety or any other person
liable;
(b) the Owner granting any time, indulgence or concession to, or
compounding with, discharging, releasing or varying the
liability of, the Hirer or the Surety or any other person
liable or renewing, determining, varying or increasing any
accommodation, facility or transaction or otherwise dealing
with the same in any manner whatsoever or concurring in,
accepting or varying any compromise, arrangement or settlement
or omitting to claim or enforce payment from the Hirer or the
Surety or any other person liable; or
(c) any act or omission which would not have discharged or
affected the liability of any Guarantor had it been a
principal debtor instead of a guarantor or by anything done
or omitted which but for this provision might operate to
exonerate the Guarantors or any of them.
2.9 Collateral Instruments
The Owner shall not be obliged to make any claim or demand on the
Hirer or the Surety or to resort to any Collateral Instrument or other
means of payment now or hereafter held by or available to it before
enforcing this Guarantee and no action taken or omitted by the Owner
in connection with any such Collateral Instrument or other means of
payment shall discharge, reduce, prejudice or affect the liability of
the Guarantors under this Guarantee nor shall the Owner be obliged to
apply any money or other property received or recovered in consequence
of any enforcement or realisation of any such Collateral Instrument or
other means of payment in reduction of the Guaranteed Liabilities.
2.10 Waiver of Guarantors' rights
Until all the Guaranteed Liabilities have been paid, discharged or
satisfied in full (and notwithstanding payment of a dividend in any
liquidation or under any compromise or
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arrangement) each of the Guarantors agrees that, without the prior
written consent of the Owner, it will not:
(a) exercise its rights of subrogation, reimbursement and
indemnity against the Hirer or the Surety or any other person
liable;
(b) except in normal course of business prior to the occurrence of
a Relevant Event demand or accept repayment in whole or in
part of any indebtedness now or hereafter due to the Guarantors
or either of them from the Hirer or the Surety or from any
other person liable or demand or accept any Collateral
Instrument in respect of the same or dispose of the same;
(c) take any step to enforce any right against the Hirer or the
Surety or any other person liable in respect of any Guaranteed
Liabilities; or
(d) claim any set-off or counterclaim against the Hirer or the
Surety or any other person liable or claim or prove in
competition with the Owner in the liquidation of the Hirer
or the Surety or any other person liable or have the benefit
of, or share in, any payment from or composition with, the
Hirer or the Surety or any other person liable or any other
Collateral Instrument now or hereafter held by the Owner for
any Guaranteed Liabilities or for the obligations or
liabilities of any other person liable but so that, if
so directed by the Owner, it will prove for the whole or any
part of its claim in the liquidation of the Hirer or the
Surety or any other person liable on terms that the benefit of
such proof and of all money received by it in respect thereof
shall be held on trust for the Owner and applied in or towards
discharge of the Guaranteed Liabilities in such manner as the
Agent shall deem appropriate.
2.11 Suspense accounts
Any money received in connection with this Guarantee (whether before
or after any Incapacity of the Hirer or the Surety or either of the
Guarantors) may be placed to the credit of a suspense account with a
view to preserving the rights of the Owner to prove for the whole of
its claims against the Hirer or the Surety or any other person liable
or may be applied in or towards satisfaction of such of the Guaranteed
Liabilities as the Owner may from time to time conclusively determine
in its absolute discretion.
2.12 Settlements conditional
Any release, discharge or settlement between the Guarantors or either
of them and the Owner shall be conditional upon no security,
disposition or payment to the Owner by the Hirer or the Surety or any
other person liable being void, set aside or ordered to be refunded
pursuant to any enactment or law relating to bankruptcy, liquidation,
administration or insolvency or for any other reason whatsoever and if
such condition shall not be fulfilled the Owner shall be entitled to
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enforce this Guarantee subsequently as if such release, discharge or
settlement had not occurred and any such payment had not been made.
2.13 Guarantor to deliver up certain property
If, contrary to clauses 2.4 or 2.10, either of the Guarantors takes or
receives the benefit of any security or receives or recovers any money
or other property, such security, money or other property shall be held
on trust for the Owner and shall be delivered to the Owner on demand.
3 PAYMENTS AND TAXES
3.1 No set-off or counterclaim
All payments to be made by the Guarantors under this Guarantee shall
be made in full, without any set-off or counterclaim whatsoever and,
subject as provided in clause 3.2, free and clear of any deductions or
withholdings, in Dollars on the due date to the account of the Owner
referred to in clause 9.1 of the Hire Purchase Agreement.
3.2 Grossing up for Taxes
If at any time either Guarantor is required to make any deduction or
withholding in respect of Taxes from any payment due under this
Guarantee for the account of the Owner (or if the Owner is required to
make any such deduction or withholding from a payment to Owner, the
sum due from the Guarantors in respect of such payment shall be
increased to the extent necessary to ensure that, after the making of
such deduction or withholding, the Owner receives on the due date for
such payment (and retains, free from any liability in respect of such
deduction or withholding) a net sum equal to the sum which it would
have received had no such deduction or withholding been required to be
made and the Guarantors shall jointly and severally indemnify the Owner
against any losses or costs incurred by it by reason of any failure of
either Guarantor to make any such deduction or withholding or by
reason of any increased payment not being made on the due date for such
payment. Each Guarantor shall promptly deliver to the Owner any
receipts, certificates or other proof evidencing the amounts (if any)
paid or payable in respect of any deduction or withholding as
aforesaid. Provided that, as a covenant only and not as a condition
precedent to the payment obligations of the Guarantors hereunder, the
Owner shall co-operate with the Guarantors in providing from time to
time, at the request of the Guarantors, a U.S. Internal Revenue
Service Form 1001 (or successor form) duly executed by the Owner or
such other factual statements and exemptive filings of the Owner as
the Guarantors may reasonably request to eliminate or reduce any
applicable U.S. Federal income tax withholding requirements.
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3.3 Currency indemnity
If any sum due from the Guarantors under this Guarantee or any order
or judgment given or made in relation hereto has to be converted from
the currency (the "first currency") in which the same is payable under
this Guarantee or under such order or judgment into another currency
(the "second currency") for the purpose of (a) making or filing a
claim or proof against the Guarantors or any of them, (b) obtaining an
order or judgment in any court or other tribunal or (c) enforcing any
order or judgment given or made in relation to this Guarantee, the
Guarantors shall jointly and severally indemnify and hold harmless the
Owner from and against any loss suffered as a result of any difference
between (i) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and
(ii) the rate or rates of exchange at which the Owner may in the
ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or
in part, of any such order, judgment, claim or proof. Any amount due
from the Guarantors under this clause 3.3 shall be due as a separate
debt and shall not be affected by judgment being obtained for any
other sums due under or in respect of this Guarantee and the term
"rate of exchange" includes any premium and costs of exchange payable
in connection with the purchase of the first currency with the second
currency.
4 REPRESENTATIONS AND WARRANTIES
4.1 Continuing representations and warranties
The Guarantors represent and warrant that:
(a) Due incorporation
Eagle Geophysical Inc. represents and warrants that it is duly
incorporated, validly existing and in good standing under the
laws of the State of Delaware in the United States of America
and has power to carry on its business as it is now being
conducted and to own its property and other assets and Energy
Research International represents and warrants that it is duly
incorporated and validly existing under the laws of the Cayman
Islands as a limited liability company and has power to carry
on its business as it is now being conducted and to own its
property and other assets.
(b) Corporate power to guarantee
each Guarantor has power to execute, deliver and perform its
obligations under this Guarantee; all necessary corporate,
shareholder and other action has been taken to authorise the
execution, delivery and performance of the same and no
limitation on the powers of any Guarantor to borrow or give
guarantees will be exceeded as a result of this Guarantee;
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(c) Binding obligations
this Guarantee constitutes valid and legally binding
obligations of each of the Guarantors enforceable in
accordance with its terms;
(d) No conflict with other obligations
the execution and delivery of, the performance of its
obligations under, and compliance with the provisions of, this
Guarantee by any Guarantor will not (i) contravene any existing
applicable law, statute, rule or regulation or any judgment,
decree or permit to which the Guarantor is subject, (ii)
conflict with, or result in any breach of any of the terms of,
or constitute a default under, any agreement or other
instrument to which any Guarantor is a party or is subject or
by which it or any of its property is bound, (iii) contravene
or conflict with any provision of any of the Guarantor's
Articles of Incorporation/By-laws/Statutes/Memorandum of
Association/Articles of Association or (iv) result in the
creation or imposition of or oblige any Guarantor to create
any Encumbrance on any of that Guarantor's undertaking,
assets, rights or revenues;
(e) Financial statements correct and complete
the unaudited financial statements of Eagle Geophysical Inc.
(in the form of a Form 10-Q filing) in respect of the fiscal
quarter ended on 30th September 1997 as delivered to the Owner
have been prepared in accordance with generally accepted
accounting principles and practices in the United States of
America which have been consistently applied and present fairly
and accurately the financial position of Eagle Geophysical
Inc. as at such date and the results of the operations of each
of Eagle Geophysical Inc. for the financial quarter period
ended on such date and, as at such date, Eagle Geophysical
Inc. had no significant liabilities (contingent or otherwise)
or any unrealised or anticipated losses which are not disclosed
by, or reserved against or provided for in, such financial
statements;
(f) No filings required
it is not necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this Guarantee
that it or any other instrument be notarised, filed,
recorded, registered or enrolled in any court, public office or
elsewhere in any Relevant Jurisdiction or that any stamp,
registration or similar tax or charge be paid in any Relevant
Jurisdiction on or in relation to this Guarantee and this
Guarantee is in proper form for its enforcement in the courts
of each Relevant Jurisdiction;
(g) Choice of law
the choice by the Guarantors of English law to govern this
Guarantee and the
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submission by the Guarantors to the non-exclusive jurisdiction
of the English courts is valid and binding on each Guarantor;
(h) No immunity
each Guarantor is subject to civil and commercial law with
respect to its obligations under this Guarantee and the
transactions contemplated thereby constitute private
and commercial acts done for private and commercial purposes
and neither the Guarantors nor any of their respective assets
are entitled to immunity on the grounds of sovereignty or
otherwise from any legal action or proceeding (which shall
include, without limitation, suit, attachment prior to
judgment, execution or other enforcement); and
(i) Consents obtained
every consent, authorisation, licence or approval of, or
registration with or declaration to, governmental or public
bodies or authorities or courts required by each of
the Guarantors to authorise, or required by each of the
Guarantors in connection with, the execution, delivery,
validity, enforceability or admissibility in evidence of
this Guarantee or the performance by either of the Guarantors
of its obligations under this Guarantee has been obtained or
made and is in full force and effect and there has been no
default in the observance of the conditions or restrictions
(if any) imposed in, or in connection with, any of the same;
(j) No default under other Indebtedness
none of the Guarantors is (or would with the giving of notice
or lapse of time or the satisfaction of any other condition or
any combination thereof be) in breach of or in default under
any agreement relating to Indebtedness (other than
Indebtedness of less than US$500,000) to which it is a party or
by which it may be bound.
4.2 Initial representations and warranties
The Guarantors further represent and warrant that:
(a) No material adverse change
there has been no material adverse change in the financial
position of Eagle Geophysical Inc from that set forth in the
financial statements referred to in clause 4.1(f);
(b) Pari passu
the obligations of the Guarantors under this Guarantee are
joint and several, direct, general and unconditional
obligations of the Guarantors and rank at least pari passu
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with all other present and future unsecured and unsubordinated
Indebtedness of the Guarantors with the exception of any
obligations which are mandatorily preferred by law and not by
contract;
(c) No default under other Indebtedness
none of the Guarantors is (nor would with the giving of notice
or lapse of time or the satisfaction of any other condition or
any combination thereof be) in breach of or in default under
any agreement relating to Indebtedness to which it is a party
or by which it may be bound;
(d) Information
the information, exhibits and reports furnished by the
Guarantors to the Owner in connection therewith or with the
negotiation and preparation of this Guarantee are true and
accurate in all material respects and not misleading, do not
omit material facts and all reasonable enquiries have been
made to verify the facts and statements contained therein;
there are no other facts the omission of which would make any
fact or statement therein misleading;
(e) No withholding Taxes
no Taxes are imposed by withholding or otherwise on any
payment to be made by either of the Guarantors under this
Guarantee or are imposed on or by virtue of the execution or
delivery by the Guarantors of this Guarantee or any document
or instrument to be executed or delivered under this
Guarantee; and
(f) Relevant Event
no Relevant Event has occurred and is continuing;
(g) No litigation
no litigation, arbitration or administrative proceeding is
taking place, pending or, to the knowledge of the officers of
the Guarantors, threatened against any Guarantor which in the
opinion of the Owner could reasonably be expected to have a
material adverse effect on the business, assets or financial
condition of that Guarantor.
4.3 Repetition of representations and warranties
On and as of each day from the date of this Guarantee until all moneys
due or owing by the Hirer and the Surety under the Hire Purchase
Agreement and the Hirer's Documents and/or by the Guarantors under this
Guarantee have been paid in full the Guarantors shall (a) be deemed to
repeat the representations and warranties in clause 4.1 (and so that
for this purpose the
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representation and warranty in clause 4.1(f) shall refer to the then
latest audited financial statements delivered to the Owner under
clause 5.1) as if made with reference to the facts and circumstances
existing on each such day and (b) be deemed to further represent and
warrant that the then latest audited financial statements delivered to
the Owner (if any) under clause 5.1 have been prepared in accordance
with generally accepted accounting principles and practices in the
United States of America which have been consistently applied and
present fairly and accurately the financial position of Eagle
Geophysical Inc as at the end of the financial period to which the
same relate and the results of the operations of Eagle Geophysical Inc
for the financial period to which the same relate and, as at the end of
such financial period, Eagle Geophysical Inc did not have any
significant liabilities (contingent or otherwise) any unrealised or
anticipated losses which are not disclosed by, or reserved against or
provided for in, such financial statements.
5 UNDERTAKINGS
5.1 General
The Guarantors undertake that, from the date of this Guarantee and so
long as any moneys are owing under this Guarantee, each of them will:
(a) Notice of default
promptly inform the Owner of any occurrence of which it
becomes aware which might adversely affect the ability of any
Guarantor to perform its obligations under this Guarantee and
of any Relevant Event forthwith upon becoming aware thereof
and will from time to time, if so requested by the Owner,
confirm to the Owner in writing that, save as otherwise stated
in such confirmation, no Relevant Event has occurred and is
continuing;
(b) Consents and licences
without prejudice to clause 4.1, obtain or cause to be
obtained, maintain in full force and effect and comply in all
material respects with the conditions and restrictions (if any)
imposed in, or in connection with, every consent,
authorisation, licence or approval of governmental or public
bodies or authorities or courts and do, or cause to be done,
all other acts and things which may from time to time be
necessary or desirable under applicable law for the continued
due performance of all its obligations under this Guarantee;
(c) Pari passu
ensure that its obligations under this Guarantee shall,
without prejudice to the provisions of clause 5.2, at all
times rank at least pari passu with all its other present and
future unsecured and unsubordinated Indebtedness;
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(d) Financial statements
prepare its financial statements in accordance with generally
accepted accounting principles and practices in the United
States of America (in the case of Eagle Geophysical Inc.)
consistently applied in respect of each financial year and
cause the same to be reported on by the auditors of Eagle
Geophysical Inc. and deliver sufficient copies of the same to
the Owner as soon as practicable but not later than 90 days
after the end of the financial period to which they relate;
(e) Delivery of reports
deliver to the Owner, as many copies as the Owner may
reasonably require of each of the following documents, in each
case at the time of issue thereof:
(i) every report, circular, notice or like document issued
to its shareholders or creditors generally; and
(ii) a certificate from its auditors stating that as at the
date of its latest audited financial statements it was
in compliance with the covenants and undertakings in
clause 5.2 (or if it was not in compliance indicating
the extent of the breach);
(f) Provision of other information
provide the Owner with such financial and other information
concerning it and its affairs as the Owner may from time to
time reasonably require provided that the Owner undertakes
subject to clause 6.4, to keep confidential and not disclose
any such information received in respect of Eagle Geophysical
Inc.
5.2 Negative undertakings
The Guarantors undertake that, from the date of this Guarantee and so
long as any moneys are owing under this Guarantee, neither of them
will, without the prior written consent of the Owner:
(a) No Merger
merge or consolidate with any other company or person; and.
(b) Disposals
allow any Group Company to, and each Guarantor agrees that it
will not itself sell, transfer, lend or otherwise dispose of
or cease to exercise direct control over any part (being either
alone or when aggregated with all other disposals falling to
be taken into
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account pursuant to this clause 5.2(c) material in the opinion
of the Owner in relation to the undertakings, assets, rights
and revenues of the relevant Guarantor and all Group
Companies taken as a whole) of its present or future
undertaking, assets, rights or revenues (otherwise than by (i)
transfers, sales or disposals for full consideration or (ii)
pledges in connection with bona fide lending transactions, in
each case in the ordinary course of trading) whether by one or
a series of transactions related or not.
6 BENEFIT OF THIS GUARANTEE
6.1 Benefit and burden
This Guarantee shall be binding upon each Guarantor and its successors
in title and shall enure for the benefit of the Owner, its Assignees
and Transferees. The Guarantors expressly acknowledge and accept the
provisions of clause 30 of the Hire Purchase Agreement and agree that
any person in favour of whom an assignment or a transfer is made in
accordance with such clause shall be entitled to the benefit of this
Guarantee.
6.2 Changes in constitution or reorganisation
For the avoidance of doubt and without prejudice to the provisions of
clause 7.1, this Guarantee shall remain binding on the Guarantors
notwithstanding any change in the constitution of the Owner or its
absorption in, or amalgamation with, or the acquisition of all or part
of its undertaking or assets by, any other person, or any
reconstruction or reorganisation of any kind, to the intent that this
Guarantee shall remain valid and effective in all respects in favour
of any assignee, transferee or other successor in title of the Owner
in the same manner as if such assignee, transferee or other successor
in title had been named in this Guarantee as a party instead of, or in
addition to the Owner.
6.3 No assignment by Guarantor
No Guarantor may assign or transfer any of their rights or obligations
under this Guarantee.
6.4 Disclosure of information
The Owner may (other than to a financial institution) with the prior
written consent of the Guarantors (not to be unreasonably withheld)
disclose to a prospective assignee or transferee or to any other person
who may propose entering into contractual relations with the Owner in
relation to the Hire Purchase Agreement such information about the
Guarantors or any of them as the Owner shall consider appropriate.
7 NOTICES AND OTHER MATTERS
7.1 Notice
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Every notice, request, demand or other communication under this
Guarantee shall:
(a) be in writing delivered personally or by prepaid first class
letter or facsimile transmission (confirmed in the case of a
facsimile transmission by prepaid first class letter sent
within 24 hours of despatch but so that the non-receipt of
such confirmation shall not affect in any way the validity of
the facsimile transmission in question);
(b) be deemed to have been received, subject as otherwise provided
in this Guarantee, in the case of a facsimile transmission, at
the time of despatch with confirmation that the communication
was well received (provided that, in the case of a facsimile
transmission, if the date of despatch is not a business day in
the country of the addressee it shall be deemed to have been
received at the opening of business on the next such business
day) and in the case of a letter, when delivered personally or
five (5) days after being put in the post;
(c) be sent:
(1) to the Owner to
0 Xxxxxxxx Xxxxxx
Xxxxxxxxx XX0 0XX
Xxxxxxxx
Fax: 0000 000 0000
(Attention: Managing Director/The Company Secretary)
(2) to Eagle Geophysical Inc to:
50 Briar Hollow Xxxx
0xx Xxxxx
Xxxxxxx
Xxxxx 00000
Xxxxxx Xxxxxx of America
Fax: 000 000 000 0000
(Attention: Chief Financial Officer)
(3) to Energy Research International to:
Horizon Exploration Limited
Horizon House
Suffolk Way
Sevenoaks
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00
Xxxx XX00 0XX
Xxxxxxx
Fax: 00000 000000
(Attention: Xxxx Xxxxxxxx)
or to such other address or facsimile number as is notified by
one party to the other under this Guarantee.
7.2 No implied waivers, remedies cumulative
No failure or delay on the part of the Owner to exercise any power,
right or remedy under this Guarantee shall operate as a waiver
thereof, nor shall any single or partial exercise by the Owner of any
power, right or remedy preclude any other or further exercise thereof
or the exercise of any other power, right or remedy. The remedies
provided in this Guarantee are cumulative and are not exclusive of any
remedies provided by law.
7.3 English translations
All certificates, instruments and other documents to be delivered
under or supplied in connection with this Guarantee shall be in the
English language or shall be accompanied by a certified English
translation upon which the Owner shall be entitled to rely.
7.4 Other guarantors
The Guarantors agree to be bound by this Guarantee notwithstanding
that any other person intended to execute or to be bound by any other
guarantee or assurance under or pursuant to the Agreement may not do so
or may not be effectually bound and notwithstanding that such other
guarantee or assurance may be determined or be or become invalid or
unenforceable against any other person, whether or not the deficiency
is known to the Owner.
7.5 Expenses
The Guarantors agree jointly and severally to reimburse the Owner on
demand for all legal and other costs, charges and expenses on a full
and unqualified indemnity basis which may be incurred by the Owner in
relation to the enforcement of this Guarantee against either or both
of the Guarantors.
8 GUARANTORS' OBLIGATIONS
8.1 Guarantor's obligations
Notwithstanding anything to the contrary contained in this Guarantee
or any of the Relevant Documents, the agreement, obligations and
liabilities of the Guarantors herein contained are
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joint and several and shall be construed accordingly. Each of the
Guarantors agrees and consents to be bound by this Guarantee
notwithstanding that the other Guarantors which is intended to sign or
to be bound may not do so or be effectually bound and notwithstanding
that this Guarantee may be invalid or unenforceable against the other
Guarantor, whether or not the deficiency is known to the Owner. The
Owner shall be at liberty to release either of the Guarantors from
this Guarantee and to compound with or otherwise vary and agree to
vary the liability or to grant time and indulgence to make other
arrangements with either of the Guarantors without prejudicing or
affecting the rights and remedies of the Owner against the other
Guarantor.
9 LAW AND JURISDICTION
9.1 Law
This Guarantee is governed by and shall be construed in accordance
with English law.
9.2 Submission to jurisdiction
Each of the Guarantors agrees for the benefit of the Owner that any
legal action or proceedings arising out of or in connection with this
Guarantee against the Guarantors or any of them or any of its assets
may be brought in the English courts, irrevocably and unconditionally
submit to the jurisdiction of such courts and irrevocably designates,
appoints and empowers Horizon Exploration Limited at present of Horizon
House, 0 Xxxxxxx Xxx, Xxxxxxxxx, Xxxx XX00 0XX to receive for it and
on its behalf, service of process issued out of the English courts in
any such legal action or proceedings. The submission to such
jurisdiction shall not (and shall not be construed so as to) limit the
right of the Owner to take proceedings against either or both of
the Guarantors in the courts of any other competent jurisdiction, nor
shall the taking of proceedings in any one or more jurisdictions
preclude the taking of proceedings in any other jurisdiction, whether
concurrently or not. The Guarantors further agree that only the
courts of England and not those of any other State shall have
jurisdiction to determine any claim which the Guarantor may have
against the Owner arising out of or in connection with this Guarantee.
IN WITNESS whereof the parties to this Guarantee have caused this Guarantee to
be duly executed as a deed on the date first above written.
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Signed, Sealed and Delivered as )
a DEED by EAGLE GEOPHYSICAL INC. )
acting by its duly authorised officers: )
/s/ X. X. XXXXXXXX
-----------------------------------
Authorised Officer
/s/ XXXXXX XXXXXX
-----------------------------------
Authorised Officer
Signed, Sealed and Delivered as )
a DEED by ENERGY RESEARCH )
INTERNATIONAL )
acting by its duly authorised officers: )
/s/ XXXX A.M. XXXXXXXX
-----------------------------------
Authorised Officer
/s/ X. X. XXXXXXXX
-----------------------------------
Authorised Officer
Signed, Sealed and Delivered as )
a DEED by Xxxx X. Xxxxxxx )
for and on behalf of BRITISH LINEN SHIPPING )
LIMITED acting by Xxxx X. Xxxxxxx its duly )
appointed Attorney pursuant to a power of ) /s/ XXXX XXXXXXX
attorney dated 30 March 1998 in the )
presence of: ) Attorney-in-Fact
/s/ X. XXXX
-----------------------------------
Witness
Name: Xxxxxx Xxxx
Address: Xxxxxx Xxxx, London
Occupation: Solicitor
