EXHIBIT 10.13
AGREEMENT
DATED 30 March, 2001
$23,000,000
REVOLVING CREDIT FACILITY
FOR
MADISON OIL COMPANY EUROPE
MADISON OIL FRANCE S.A.
and
MADISON/CHART ENERGY SCS
ARRANGED BY
BARCLAYS CAPITAL
[XXXXX & XXXXX LETTERHEAD]
London
INDEX
CLAUSE PAGE
1. Interpretation.......................................................1
2. The Facility........................................................21
3. Purpose.............................................................23
4. Conditions Precedent................................................24
5. Drawdown............................................................24
6. Repayment...........................................................25
7. Prepayment, Cancellation and Mitigation.............................26
8. Interest Periods....................................................29
9. Interest............................................................30
10. Payments............................................................31
11. Taxes...............................................................33
12. Market Disruption...................................................35
13. Increased Costs.....................................................36
14. Illegality..........................................................38
15. Guarantee...........................................................38
16. Forecasts...........................................................41
17. Control Accounts....................................................43
18. Representations and Warranties......................................46
19. Undertakings........................................................54
20. Default.............................................................65
21. The Agents and the Arranger.........................................72
22. Fees................................................................78
23. Expenses............................................................78
24. Stamp Duties........................................................79
25. Indemnities.........................................................79
26. Evidence and Calculations...........................................80
27. Amendments and Waivers..............................................81
28. Changes to the Parties..............................................82
29. Disclosure of Information...........................................85
30. Set-Off.............................................................86
31. Pro Rata Sharing....................................................87
32. Severability........................................................88
33. Counterparts........................................................88
34. Notices.............................................................88
35. Jurisdiction........................................................90
36. Governing Law.......................................................91
SCHEDULES
1. Parties.............................................................92
Part I - Borrowers..................................................92
Part II - Guarantors................................................93
Part III - Banks and Commitments....................................94
2. Conditions Precedent Documents......................................95
Part I - Documentary Conditions Precedent...........................95
Part II - Additional Guarantors.....................................99
3. Calculation of the Mandatory Cost..................................100
4. Form of Request....................................................102
5. Charges to the Parties.............................................103
Part I - Form of Novation Certificate..............................103
Part II - Guarantor Accession
Agreement............................104
6. Total Commitments Reduction Schedule...............................105
SIGNATORIES.................................................................106
THIS
AGREEMENT is dated 30 March, 2001 between:
(1) THE COMPANIES listed in Part I of Schedule 1 as borrowers (each a
"BORROWER");
(2) THE COMPANIES listed in Part II of Schedule 1 as the original
guarantors (each an "ORIGINAL GUARANTOR");
(3) MADISON/CHART ENERGY SCS a French Societe en Commandite simple,
registered with the Commercial and Company Registry of Paris under
number 391 727 450) as the Borrowers' agent (the "BORROWERS' AGENT");
(4) BARCLAYS CAPITAL as arranger (in this capacity the "ARRANGER");
(5) THE FINANCIAL INSTITUTIONS listed in Part III of Schedule 1 as banks
(each a "BANK");
(6) BARCLAYS BANK PLC as facility agent (in this capacity the "FACILITY
AGENT");
(7) BARCLAYS BANK PLC as technical agent (in this capacity the "TECHNICAL
AGENT");
(8) BARCLAYS BANK PLC as the ancillary bank (in this capacity the
"ANCILLARY BANK"); and
(9) BARCLAYS BANK PLC, NEW YORK BRANCH as security agent in respect of
certain of the Security Documents (the "US SECURITY TRUSTEE").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this
Agreement:
"ACCOUNT BANK"
means Barclays Bank PLC or such other Bank as the Banks may from time
to time agree.
"ADDITIONAL GUARANTOR"
means a member of the Group which becomes a Guarantor in accordance
with Clause 28.4 (Additional Guarantors).
"AFFILIATE"
means in respect of a person, any person that is its Subsidiary or
holding company or any other Subsidiary of any such holding company
(and for this purpose a person is a "HOLDING COMPANY" of another person
if that other person is its Subsidiary).
1
"AGENT"
means the Facility Agent, the Technical Agent or the US Security
Trustee.
"AGENT'S SPOT RATE OF EXCHANGE"
means, for any particular day, the Facility Agent's spot rate of
exchange for the purchase of the relevant currency in the London
foreign exchange market with Dollars at or about 11.00 a.m. on that
day.
"ANCILLARY FACILITY"
means any facility made available under an Ancillary Facility Letter.
"ANCILLARY FACILITY LETTER"
means any document relating to any credit or banking facility (other
than the Facility) made, or to be made, available to MCE by the
Ancillary bank at any time and including, without limitation:
(a) the facility letter of the same date as this
Agreement in
relation to a letter of credit line of $1,000,000;
(b) the facility letter of the same date as this
Agreement in
relation to a spot, forward exchange transaction facility of
$2,000,000;
(c) the general indemnity of the same date as this
Agreement in
relation to bonds, indemnification and guarantees; and
(d) any supplement, amendment, extension or replacement of any of
the above.
"ASSUMPTIONS"
means all assumptions used or to be used to prepare a Forecast as
determined in accordance with Clause 16.2 (Preparation and approval of
Forecasts).
"AVAILABLE NCF"
means, for any period, the amount (if any) by which the aggregate
amount of Gross Revenues received by MCE during that period exceeds the
aggregate amount of:
(a) all Permitted Payments paid by MCE during that period; and
(b) the aggregate amount of interest that is payable on Loans
during that period,
as notified by the Borrowers' Agent to the Facility Agent within 2
Business Days after the end of that period and approved by the Majority
Banks or, if it is not so notified or approved, as determined by the
Technical Agent and approved by the Majority Banks.
2
"BANK OF SCOTLAND CREDIT
AGREEMENT"
means the credit
agreement dated 30th June, 1998 between (among others)
MCE and The Governor and Company of The Bank of Scotland.
"B/C DISCHARGE DATE"
means the first date after the borrowing of any Loan under Tranche B or
Tranche C on which no Loan is outstanding under Tranche B or under
Tranche C.
"BORROWING BASE AMOUNT"
means, at any time, the amount determined by dividing the Relevant NPV
by 1.5.
"BORROWING BASE ASSET"
means, subject to Clause 16.3 (Additional Borrowing Base Assets), the
following oil fields in France:
(a) Charmottes;
(b) Courteney;
(c) Chuelles;
(d) St. Xxxxxx; and
(e) Chateau Renard.
"BORROWING BASE INTEREST"
means all of MCE's present and future interest in a Borrowing Base
Asset and all Project Documents, Facilities and Insurances relative to
a Borrowing Base Asset.
"BORROWING BASE PETROLEUM"
means, in respect of a Borrowing Base Asset, all petroleum won and
saved from that Borrowing Base Asset that accrues to the Borrowing Base
Interest in that Borrowing Base Asset (including, without limitation,
any such petroleum that is royalty petroleum).
"BRIDGE FACILITY LETTER"
means the facility letter from Barclays Bank PLC to Madison Oil Company
Europe for a $2,500,000 term loan facility, dated 16th February, 2001.
3
"BUSINESS DAY"
means a day (other than a Saturday or a Sunday) on which banks are open
for business in London and New York.
"CALCULATION DATE"
means each 30th June and 31st December.
"COMMITMENT"
means:
(a) in relation to a Bank which is a Bank on the date of this
Agreement, the amount in Dollars set opposite its name in Part
III of Schedule 1 and the amount of any other Bank's
Commitment acquired by it under Clause 28 (Changes to the
Parties); and
(b) in relation to a Bank which becomes a Bank after the date of
this Agreement, the amount of any other Bank's Commitment
acquired by it under Clause 28 (Changes to the Parties),
to the extent not cancelled, transferred or reduced under this
Agreement.
"COMMITMENT PERIOD"
means the period from the date of this Agreement up to (and including)
the date falling one month before the Final Repayment Date.
"COMPENSATION"
means:
(a) any proceeds payable or paid to MCE under or in respect of any
Insurances (other than Insurances in respect of delay in
start-up, business interruption, liabilities to third-parties,
seepage, pollution or the cost of control of xxxxx);
(b) any compensation or similar payment in respect of:
(i) the nationalisation, expropriation, requisitioning or
compulsory acquisition or disposal of all or any part
of any Borrowing Base Asset or Borrowing Base
Interest;
(ii) the refusal, revocation, suspension or modification
by any governmental or similar authority of any
Project Document; and
(c) any amount payable or paid to MCE in respect of any disposal
of all or part of any Borrowing Base Interest.
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"COMPENSATION ACCOUNT"
means the account to be maintained by MCE under Clause 17.3
(Compensation Account).
"COMPUTER MODEL"
means the computer model used to produce the Forecast delivered under
paragraph 6(a) of Part I of Schedule 2 (as amended from time to time
with the Technical Agent's consent).
"CONTROL ACCOUNT"
means a Revenue Account or Compensation Account.
"DANGEROUS SUBSTANCE"
means any radioactive emissions and any natural or artificial substance
(whether in solid or liquid form or in the form of a gas or vapour and
whether alone or in combination with any other substance) capable of
causing harm to man or any other living organism or damaging the
environment.
"DEFAULT"
means an Event of Default or an event which, with the giving of notice,
lapse of time, determination of materiality or fulfilment of any other
applicable condition (or any combination of the foregoing), would
constitute an Event of Default.
"DISTRIBUTION"
means:
(a) any payment by MCE other than a Permitted Payment or payment
of an amount payable under the Finance Documents (and
including, without limitation, any dividend or other
distribution (whether in cash or kind) in respect of MCE's
share capital); and
(b) any payment by MOF or MOCE of any dividend or other
distribution (whether in cash or kind) in respect of any of
its share capital or stock and any payment by any such Obligor
of or in respect of any Financial Indebtedness (other than
Financial Indebtedness arising under the Finance Documents).
"DOLLARS" and "$"
means the lawful currency for the time being of the United States of
America.
"DOLLAR REVENUE ACCOUNT"
means the Revenue Account to be maintained by MCE in Dollars under
Clause 17.2 (Revenue Accounts).
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"DRAWDOWN DATE"
means the date of the advance of a Loan.
"ELF OIL HEDGE"
means the oil swap (Contract No AOAOP4204774/72) entered into between
Elf Trading SA and MCE on 15 June, 2000.
"ENVIRONMENTAL CLAIM"
means any claim by any person as a result of or in connection with any
violation of Environmental Law or any Environmental Contamination which
could give rise to any remedy or penalty (whether interim or final) or
liability for any Obligor or any Finance Party.
"ENVIRONMENTAL CONTAMINATION"
means each of the following and their consequences:
(a) any release, emission, leakage or spillage of any Dangerous
Substance at or from a Borrowing Base Asset; or
(b) any accident, fire, explosion or sudden event at a Borrowing
Base Asset which is directly or indirectly caused by or
attributable to any Dangerous Substance; or
(c) any other pollution of the environment arising from a
Borrowing Base Asset.
"ENVIRONMENTAL LAW"
means any law or regulation concerning the protection of human health
or the environment or the conditions of the work place or the
generation, transportation, storage, treatment or disposal of Dangerous
Substances.
"ENVIRONMENTAL LICENCE"
means any authorisation required by any Environmental Law.
"ERISA"
means the United States Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE"
means each trade or business, whether or not incorporated, that would
be treated as a single employer with any Obligor under section 414 of
the United States Internal Revenue Code of 1986, as amended. When any
provision of this Agreement relates to a past event, the term "ERISA
AFFILIATE" includes any person that was an ERISA Affiliate of an
Obligor at the time of that past event.
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"EVENT OF DEFAULT"
means an event specified as such in Clause 20.1 (Events of Default).
"EXCLUDED SUBSIDIARY"
means Trinidad Exploration & Development Ltd UK, Trinidad Exploration &
Development Ltd Trinidad or Karak Petroleum Pakistan Ltd.
"FACILITY"
means the facility referred to in Clause 2.1 (Facility).
"FACILITY OFFICE"
means the office(s) notified by a Bank to the Facility Agent:
(a) on or before the date it becomes a Bank; or
(b) by not less than five Business Days' notice,
as the office(s) through which it will perform all or any of its
obligations under this Agreement.
"FEE LETTER"
means any letter of the same date as this Agreement between MCE or MOCE
and the Arranger, the Facility Agent, or the Technical Agent that is
stated on its face to be a Fee Letter.
"FINAL REPAYMENT DATE"
means the earlier of 7th January, 2006 and the Reserve Tail Date.
"FINANCE DOCUMENT"
means this Agreement, the Ancillary Facility Letters, a Hedging
Agreement, a Security Document, a Subordination Agreement, a Fee
Letter, a Novation Certificate, a Guarantor Accession Agreement or any
other document designated as such by the Facility Agent and the
Borrowers' Agent.
"FINANCE PARTY"
means the Arranger, a Bank, the Ancillary Bank, a Hedging Bank or an
Agent.
"FINANCIAL INDEBTEDNESS"
means any indebtedness (whether actual or contingent) in respect of:
7
(a) moneys borrowed or any debit balance at bank;
(b) any debenture, bond, note, loan stock or other security;
(c) any acceptance or documentary credit;
(d) receivables sold or discounted (otherwise than on a
non-recourse basis);
(e) the acquisition cost of any asset to the extent payable more
than 90 days before or after the time of acquisition or
possession by the party liable where the advance or deferred
payment is arranged primarily as a method of raising finance
or financing the acquisition of that asset;
(f) any lease entered into primarily as a method of raising
finance or financing the acquisition of the asset leased;
(g) any currency, interest or commodity (including, without
limitation, petroleum) swap, cap, collar or hedging
arrangement or any other derivative instrument;
(h) any amount raised under any other transaction having the
commercial effect of a borrowing or raising of money (other
than an issue of preference shares that are not redeemable in
any circumstances); or
(i) any guarantee in respect of any other Financial Indebtedness
of any person.
"FORECAST"
means a cashflow projection prepared in accordance with Clause 16
(Forecasts).
"FRANC COMPENSATION ACCOUNT"
means the Compensation Account to be maintained by MCE in French
Francs/Euros under Clause 17.3 (Compensation Account).
"FRANC REVENUE ACCOUNT"
means the Revenue Account to be maintained by MCE in French
Francs/Euros under Clause 7.2 (Revenue Account).
"FRENCH FRANCS/EUROS"
means the lawful currency for the time being of France.
"FRENCH GUARANTOR"
means any Guarantor which is a legal entity created or organised in or
under the laws of France (and "FRENCH ADDITIONAL Guarantor" shall be
construed accordingly).
8
"GROSS REVENUES"
means (without duplication):
(a) the gross proceeds (without any deductions whatsoever) of any
disposal of Borrowing Base Petroleum;
(b) any gross tariffs (without any deductions whatsoever) in
respect of use or reservation of capacity of any pipeline
forming part of, or relating to, any Borrowing Base Asset;
(c) any tax refunds payable to MCE;
(d) (except for the purposes of any Forecast or calculating the
Relevant NPV) interest credited to any of the Control
Accounts;
(e) any net amount payable to the Borrower under any Hedging
Arrangement;
(f) any sales taxes payable on any Gross Revenues;
(g) any payment into the Revenue Account from the Compensation
Account pursuant to Clause 17.3(c) (Compensation Account);
(h) any other amount payable to MCE in respect of any Borrowing
Base Petroleum, Borrowing Base Interest or Borrowing Base
Asset except to the extent that it constitutes Compensation or
is payable under insurances in respect of liabilities to
third-parties, seepage, pollution or the cost of control of
xxxxx.
"GROUP"
means, at any time MOC and all of its Subsidiaries for the time being.
"GUARANTOR"
means an Original Guarantor or an Additional Guarantor.
"GUARANTOR ACCESSION AGREEMENT"
means a deed in the form of Part II of Schedule 5 with such amendments
as the Facility Agent may approve or reasonably require.
"HEDGING AGREEMENT"
means:
(a) any transaction entered into with Barclays Bank PLC on the
date of this Agreement under the 1992 ISDA Master Agreement of
the same date between MCE and Barclays Bank PLC; or
9
(b) any other interest, currency or commodity swap, cap or collar
arrangement entered into by a Borrower which the Borrowers'
Agent, the Facility Agent (acting on the instructions of the
Majority Banks) and the relevant Hedging Bank have, at any
time by notice to each other Party, designated as a Hedging
Agreement.
"HEDGING BANK"
means a Bank that is party to a Hedging Agreement (in its capacity as
such).
"HEDGING COSTS"
means any amount falling due from a Borrower under a Hedging Agreement
except for any Hedging Termination Payment.
"HEDGING LIABILITY"
means any Hedging Costs or Hedging Termination Payment.
"HEDGING TERMINATION PAYMENT"
means any amount falling due from a Borrower under a Hedging Agreement
as a direct or indirect result of the termination of that Hedging
Agreement, other than interest accruing on any amount not paid when
due.
"INFORMATION PACKAGE"
means the information listed or referred to as such in the letter of
the same date as this Agreement from MCE to the Arranger.
"INSURANCE PLEDGE AGREEMENT"
means the insurance pledge agreement (contrat de nantissement de
creance d'assurance) dated on or about the date of this Agreement
between MCE and the Facility Agent as agent for itself and for the
Finance Parties.
"INSURANCES"
means any insurances maintained by MCE (or in which MCE has an
interest) that extend cover in respect of any Borrowing Base Asset or
Borrowing Base Petroleum.
"INTEREST PERIOD"
means a period, determined in accordance with Clause 8 (Interest
Periods), by reference to which interest on a Loan is to be calculated.
"LIBOR"
means, in respect of a Loan and an Interest Period:
10
(a) the rate per annum which appears on page 3750 on the Telerate
Screen; or
(b) if no such rate appears, the arithmetic mean (rounded upward
to the nearest four decimal places) of the relevant offered
rates which appear on the relevant page (if any) on the
Reuters Screen; or
(c) if no such rate appears on the Telerate Screen and one only or
no offered rate appears on the relevant page of the Reuters
Screen or there is no relevant page on the Reuters Screen, the
arithmetic mean (rounded upward to four decimal places) of the
rates, as supplied to the Facility Agent at its request,
quoted by the Reference Banks to leading banks in the London
interbank market,
at or about 11.00 a.m. on the Rate-Fixing Day for that Interest Period
for the offering of deposits in United States dollars for a period
comparable to that Interest Period.
"LOAN"
means, subject to Clause 8.3 (Consolidation), the principal amount of
each borrowing by a Borrower under this Agreement or the principal
amount outstanding of that borrowing.
"MADISON TURKEY"
means Madison (Turkey) Inc, a corporation incorporated under the laws
of the State of Delaware with corporate number 100 82895.
"MAJORITY BANKS"
means, at any time, Banks whose respective Exposures then aggregate
two-thirds or more of the aggregate Exposures of all of the Banks, and
for these purposes a Bank's "EXPOSURE" at any time is:
(a) the aggregate amount of its participations in all Loans then
outstanding; or
(b) if there are no Loans then outstanding, the amount of its
Commitment at that time; or
(c) if there are no Loans then outstanding and the Total
Commitments have been reduced to zero, the amount of its
Commitment immediately before the reduction,
PLUS, in the case of a Bank that is also a Hedging Bank, the aggregate
amount of all Hedging Termination Payments (if any) then due to it but
unpaid.
"MANAGEMENT AGREEMENT"
means:
(a) the Services Agreement dated as at 30th June, 1996 between MOF
and MCE; or
11
(b) the Services Agreement dated 31st January, 2000 between MPI
(formerly called Madison Oil Company) and MCE.
"MANDATORY COST"
means the cost imputed to a Bank of compliance with:
(a) the mandatory liquid assets requirements of the Bank of
England and/or the banking supervision or other costs imposed
by the Financial Services Authority, as determined in
accordance with Schedule 3; and
(b) any other applicable regulatory or central bank requirement
relating to any Loan made through a branch in the jurisdiction
of the currency of the Loan.
"MARGIN"
means:
(a) in respect of a Loan outstanding under Tranche A, 2.5% per
annum; or
(b) in respect of a Loan outstanding under Tranche B or Tranche C,
3% per annum.
"MCE"
means Madison/Chart Energy SCS a French Societe en Commandite,
registered with the Commercial and Company Registry of Paris under
number 391 727 450.
"MCE SHARES PLEDGE"
means the shares pledge agreement (nantissement de parts sociales)
entered into or to be entered into between MOF and MOCE as Pledgors,
and the Facility Agent as agent for itself and the Finance Parties.
"MOC"
means Madison Oil Company, a corporation incorporated under the laws of
the State of Delaware with corporate number 325 8221.
"MOCE"
means Madison Oil Company Europe, a corporation incorporated under the
laws of the State of Delaware with corporate number 234 1168.
"MOF"
means Madison Oil France S.A., (a French Societe Anonyme, registered
with the Commercial and Company Registry of Paris under number 408 559
136.
12
"MOF SHARES PLEDGE AGREEMENT"
means the shares account pledge agreement (acte de nantissement de
compte d'instruments financiers) entered into or to be entered into
between MOCE as pledgor, MOF and the Facility Agent as agent for itself
and the Finance Parties.
"MOTI"
means Madison Oil Turkey Inc (formerly known as ARCO Turkey Inc), a
company incorporated under the laws of the Republic of Liberia and the
Articles of Incorporation of which were filed with the Ministry of
Foreign Affairs of the Republic of Liberia on 13th February, 1985.
"MPI"
means Madison Petroleum Inc a corporation incorporated under the laws
of the State of Delaware with corporate number 234 1166.
"NOVATION CERTIFICATE"
has the meaning given to it in Clause 28.3 (Procedure for novations).
"OBLIGOR"
means a Borrower or Guarantor (in whatever capacity it may be party to
the Finance Documents, including without limitation MCE in its capacity
as the Borrowers' Agent).
"PARTY"
means a party to this Agreement.
"PERMITTED PAYMENT"
means:
(a) each of the following to the extent payable by MCE on or for
its own account in respect of any Borrowing Base Interest or
Borrowing Base Petroleum:
(i) all costs of producing, treating, processing,
storing, selling, transporting or insuring Borrowing
Base Petroleum or operating, maintaining or insuring
the facilities required for the exploitation of any
Borrowing Base Asset but (except for the purposes of
any Forecast or calculating the Borrowing Base
Amount, when all such cash calls shall be included)
only to the extent incurred and paid in the ordinary
course of day-to-day operations; and
13
(ii) to the extent not covered by paragraph (i) above:
(A) all costs of reinstating any of the
facilities relative to any Borrowing Base
Asset which are damaged to the extent
permitted or required by this Agreement;
(B) the costs of satisfying any liability in
respect of seepage, pollution and well
control;
(C) any payments to make provision for
abandonment costs in accordance with all
relevant Project Documents (including,
without limitation, contributions to a
sinking fund and fees for, and any deposit
at a bank securing obligations of MCE in
respect of, any letter of credit issued by a
bank or financial institution in respect of
MCE's obligations under a Project Document
in respect of the abandonment of any
Borrowing Base Asset);
(D) any royalties payable under any petroleum
production licence; and
(b) any taxes payable by MCE;
(c) any:
(i) exploration and appraisal expenditure;
(ii) general and administrative expenditure; or
(iii) capital expenditure not falling within paragraph (a)
above,
payable by MCE to the extent the Majority Banks expressly
agree or require in writing (but not further or otherwise);
(d) any amount payable by MCE under either of the Management
Agreements (as in force at the date of this Agreement) but
(except for the purposes of any Forecast or calculating the
Relevant NPV) only up to $500,000 in aggregate (for both
Management Agreements together) in any 6-month period ending
on a Calculation Date;
(e) any amount payable under the Elf Oil Hedge (other than any
amount payable as a result of or following termination of that
document) or any transaction entered into under it or
evidenced by it;
(f) the repayment of amounts of Financial Indebtedness owing to
Elf Aquitaine Exploration Production S.A. as at the date of
this Agreement, together with accrued interest;
(g) (for the purposes of any Forecast or calculating the Relevant
NPV, but not otherwise) any other liability or expenditure of
MCE except to the extent that the Borrowers' Agent has
demonstrated to the satisfaction of the Majority Banks that it
will be met from sources other than Gross Revenues and
Compensation; and
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(h) any other expenditure that the Majority Banks agree may be a
Permitted Payment.
"PLAN"
means an "employee benefit plan" within the meaning of section 3(3) of
ERISA maintained by the Borrower or any ERISA Affiliate currently or at
any time within the last five years, or to which the Borrower or any
ERISA Affiliate is required to make payments or contributions or has
made payments or contributions within the past five years.
"PROJECT DOCUMENT"
means:
(a) any material agreement to which MCE is party and which relates
to a Borrowing Base Asset or Borrowing Base Petroleum,
including (without limitation) any joint operating agreement,
any unitisation or unit operating agreement, any
transportation, tariffing or pipeline agreement and any
agreement for the processing, storage or sale of Borrowing
Base Petroleum;
(b) any authorisation required for the lawful exploitation,
development or operation of any Borrowing Base Asset or the
production, transportation or sale of Borrowing Base Petroleum
(and including, without limitation, any concession or
petroleum production licence); and
(c) any development plan approved by any relevant operating
committee and/or any appropriate governmental or other
regulatory authority.
"QUALIFYING BANK"
means a bank as defined in section 840A of the Income and Corporation
Taxes Act 1988 and which is within the charge to United Kingdom
corporation tax as regards any interest received by it under this
Agreement.
"RATE-FIXING DAY"
means, in respect of an Interest Period, the first day of that Interest
Period.
"RECEIVABLES ASSIGNMENT AGREEMENT"
means the receivables assignment agreement (contrat de cession de
creances a titre de garantie) dated the date of this Agreement and made
between MCE and the Facility Agency as agent for itself and the Finance
Parties.
15
"REFERENCE BANKS"
means, subject to Clause 28.5 (Reference Banks), the Facility Agent and
(unless there is only one Bank) such other bank(s) or financial
institution(s) as the Facility Agent may from time to time specify
after consultation with the Borrowers' Agent.
"RELEVANT NPV"
means, at any time, the net present value of MCE's projected net
cashflow (being the difference between projected Gross Receipts and
projected Permitted Payments), all as projected and calculated in
accordance with Clause 16 (Forecasts) and shown as a Forecast.
"REPAYMENT DATE"
means each 7th July and 7th January from 7th July, 2001 to the Final
Repayment Date (both dates inclusive).
"REQUEST"
means a request made by the Borrowers' Agent (on behalf of a Borrower)
for a Loan, substantially in the form of Schedule 4.
"RESERVE TAIL DATE"
means, at any time, the last Repayment Date as of which the amount of
reserves that is projected to be recovered from the Borrowing Base
Assets between that Repayment Date and 1st January, 2009 exceeds 25% of
the total amount of reserves that is projected to be recovered from the
Borrowing Base Assets between 31st March, 2001 and 1st January, 2009,
all as shown in the then applicable Forecast (and, for the avoidance of
doubt, that total amount of reserves, which is 5,744,838 barrels at the
date of this Agreement, shall be adjusted in accordance with Clause
16.2 (Preparation and approval of Forecasts) to take account of any
subsequent upgrade or downgrade in the level of original reserves of
the Borrowing Base Assets).
"REVENUE ACCOUNT"
means the Dollar Revenue Account or the Franc Revenue Account.
"SALE AND PURCHASE AGREEMENT"
means the sale and purchase agreement dated 1st March, 2001 between
MOF, MOC, MPI, Chart Energy Holdings BV, Chart Capital Partners
Limited, The Chart Group LP, The Limited Partners and MCE.
"SECURITY DOCUMENT"
means:
16
(a) a security agreement referred to in paragraphs 3(a)-(f)
(inclusive) of Part I of Schedule 2; or
(b) any other document evidencing or creating a Security Interest
over any asset of an Obligor to secure any obligation(s) of
any Obligor to a Finance Party under or in respect of the
Finance Documents.
"SECURITY INTEREST"
means any hypotheque, privilege, cession de creance fiduciarire par
bordereau Dailly, gageespeces mortgage, pledge, lien, charge,
assignment by way of security (whether or not expressed to be
absolute), hypothecation or security interest or any other surete
reelle, driot de retention agreement or arrangement that has a
commercial effect analogous to the conferring of security (including,
without limitation, any blocked account or "flawed asset" arrangement).
"SUBORDINATION AGREEMENT"
means:
(a) a subordination agreement referred to in paragraphs 3(g) and
(h) of Part I of Schedule 2; or
(b) any other document specifically designated as such by the
Facility Agent.
"SUBSIDIARY"
means:
(a) a subsidiary within the meaning of Section 736 of the
Companies Xxx 0000; and
(b) unless the context otherwise requires, a subsidiary
undertaking within the meaning of Section 258 of the Companies
Xxx 0000.
"TOTAL COMMITMENTS"
means the aggregate for the time being of the Commitments, being
$23,000,000 at the date of this Agreement.
"TOTAL INDEBTEDNESS"
means, at any time, the aggregate amount of:
(a) the aggregate principal amount of all Loans outstanding at
that time;
(b) the aggregate principal amount of all other Financial
Indebtedness of any of the Obligors which is outstanding at
that time, including without limitation (but without double
counting):
17
(i) Financial Indebtedness owing to any other member of
the Group; and
(ii) any guarantee given by any Obligor in respect of the
Financial Indebtedness of any person,
but excluding:
(A) any Financial Indebtedness that is subordinated to the
relevant Obligor's obligations under the Finance Documents on
terms expressly approved by the Facility Agent specifically in
relation to that Financial Indebtedness;
(B) the Financial Indebtedness specified in Clause 19.13(c) and
(d) (Other Financial Indebtedness); and
(C) any Financial Indebtedness outstanding under the Ancillary
Facility or any Hedging Agreement,
and for the purposes of the above:
(I) any Financial Indebtedness denominated in a currency other
than Dollars shall be translated into Dollars at the Agent's
Spot Rate of Exchange for the day on or as of which the
determination of the amount of Total Indebtedness is being
made; and
(II) the outstanding principal amount of any Financial Indebtedness
falling within any of paragraphs (b) - (i) (inclusive) of the
definition of that term shall, where applicable, be the amount
attributed to that Financial Indebtedness in the then
applicable Forecast or shall otherwise be determined on such
basis as the Technical Agent (acting reasonably and after
consultation with the Borrowers' Agent) may specify from time
to time.
"TRANCHE"
means Tranche A, Tranche B or Tranche C.
"TRANCHE A"
means the part of the Facility referred to in Clause 2.1(a)(i) (The
Facility).
"TRANCHE B"
means the part of the Facility referred to in Clause 2.1(a)(ii) (The
Facility).
"TRANCHE C"
means the part of the Facility referred to in Clause 2.1(a)(iii) (The
Facility).
"TRANSACTION DOCUMENT"
means a Finance Document or a Project Document.
18
"US GUARANTOR"
means MOC, MPI, MOCE or Madison Turkey.
1.2 CONSTRUCTION
(a) In this Agreement, unless the contrary intention appears, a reference
to:
(i) the "ACQUISITION" or "DISPOSAL" of any asset includes the
acquisition or receipt, or (as appropriate) the disposal,
transfer, grant or creation, of any interest of any kind in
that asset and any "farm-in" or "farm-out" to, of or in
respect of that asset, in each case whether or not for
consideration (and the verbs to "ACQUIRE" and "DISPOSE OF"
shall be construed accordingly);
"AGREED FORM" means the form agreed between the Borrowers'
Agent and the Facility Agent and signed or initialled for
identification purposes by the Borrowers' Agent and the
Facility Agent;
an "AMENDMENT" includes a supplement, novation or re-enactment
and "AMENDED" is to be construed accordingly;
"ASSETS" includes present and future properties, revenues and
rights of every description;
an "AUTHORISATION" includes an authorisation, consent,
approval, resolution, licence, exemption, filing, registration
and notarisation;
a "GUARANTEE" includes any form of indemnity or other
assurance against financial loss (including, without
limitation, any obligation to pay, purchase or provide funds
for the purchase of any liability) and any suretyship
arrangement, and the verb to "GUARANTEE" shall be construed
accordingly;
a "MATERIAL ADVERSE EFFECT" means a material adverse effect
on:
(A) the business or financial condition of any Obligor or
the Group as a whole;
(B) the ability of any Obligor to perform any of its
obligations under any of the Finance Documents; or
(C) the validity or enforceability of any provision of
any of the Finance Documents or of any Security
Interest purported to be created by any Security
Document; or
(D) any Borrowing Base Asset or its implementation or
exploitation, or any Borrowing Base Interest;
a period of one or more "MONTH(S)" is a reference to a period
starting on one day in a calendar month and ending on the
numerically corresponding day in the relevant later calendar
month, except that:
19
(A) if there is no numerically corresponding day in the
month in which that period ends, that period shall
end on the last Business Day in that calendar month;
or
(B) if an Interest Period commences on the last Business
Day of a calendar month, that Interest Period shall
end on the last Business Day in the calendar month in
which it is to end;
any "OBLIGATION(s)" of any Obligor under or in respect of any
Finance Document(s) is a reference to the obligations
expressed to be assumed by the relevant Obligor under the
relevant Finance Document(s), regardless of any invalidity,
unenforceability or other similar defect in respect of any
such obligations;
a "PERSON" includes any person, company, partnership,
association, government, state, agency or other entity;
"PETROLEUM" includes oil, gas and condensates;
a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law) of any governmental, inter-governmental or
supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation; and
a "SCREEN" or "PAGE" on a Screen in the definition of "LIBOR"
includes any replacement screen or page nominated by the
British Bankers Association as the information vendor for the
purpose of displaying British Bankers Association Interest
Settlement Rates for deposits in various currencies.
(ii) a provision of a law is a reference to that provision as
amended or re-enacted;
(iii) a Clause or a Schedule is a reference to a clause of or a
schedule to this Agreement;
(iv) a person includes its successors and assigns;
(v) a Transaction Document or other document is a reference to
that Transaction Document or other document as from time to
time amended, supplemented, novated or replaced;
(vi) a time of day is a reference to London time; and
(vii) "BARCLAYS CAPITAL" is a reference to Barclays Capital, the
investment banking division of Barclays Bank PLC.
(b) Unless the contrary intention appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in
this Agreement.
(c) The index to and the headings in this Agreement are for convenience
only and are to be ignored in construing this Agreement.
20
2. THE FACILITY
2.1 FACILITY
(a) Subject to the terms of this Agreement, the Xxxxx xxxxx to the
Borrowers a Dollar loan facility comprising three separate tranches,
namely:
(i) Tranche A, a revolving tranche under which each Bank shall
make Loans to MCE for the purposes set out in Clause 3.1
(Tranche A purpose);
(ii) Tranche B, a term loan tranche under which each Bank shall
make a Loan to MOF for the purposes set out in Clause 3.2
(Tranche B purpose); and
(iii) Tranche C, a term loan tranche under which each Bank shall
make a Loan to MOCE for the purposes set out in Clause 3.3
(Tranche C purpose),
in each case, when so requested by the Borrowers' Agent during the
Commitment Period and subject to the limits set out in Clause 2.2
(Facility and Tranche limits).
2.2 FACILITY AND TRANCHE LIMITS
Notwithstanding any other provision of this Agreement:
(a) the aggregate principal amount of all Loans shall not at any
time exceed the Total Commitments for the time being;
(b) the aggregate principal amount of the Loan outstanding under
Tranche B and the Loan outstanding under Tranche C shall not
at any time exceed $6,200,000; and
(c) no Bank shall be obliged to participate in any Loan to the
extent that doing so would cause:
(i) the aggregate principal amount of its participations
in all outstanding Loans to exceed its Commitment for
the time being; or
(ii) the aggregate principal amount of its participations
in all Loans outstanding under Tranche B and all
Loans outstanding under Tranche C to exceed the
amount that bears the same proportion to $6,200,000
as that Bank's Commitment bears to the Total
Commitments for the time being,
and the Borrower shall repay and/or prepay Loans whenever necessary so
as to ensure that the limits set out in paragraphs (a) and (b) above
are complied with at all times.
2.3 NATURE OF A FINANCE PARTY'S RIGHTS AND OBLIGATIONS
(a) The obligations of a Finance Party under the Finance Documents are
several. Failure of a Finance Party to carry out those obligations does
not relieve any other Party of its obligations
21
under the Finance Documents. No Finance Party is responsible for the
obligations of any other Finance Party under the Finance Documents.
(b) The rights of a Finance Party under the Finance Documents are divided
rights. A Finance Party may separately enforce those rights except as
otherwise stated in the Finance Documents (and subject in any event to
Clause 20.26 (No independent action)) and Clause 20.27 (Action by
Hedging Bank)).
2.4 CHANGE OF CURRENCY
(a) If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful currency of
that country, then:
(i) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency or
currency unit of that country as designated by the Facility
Agent for this purpose; and
(ii) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency
unit into the other, rounded up or down by the Facility Agent
acting reasonably.
(b) If a change in any currency of a country occurs, this Agreement will be
amended to the extent the Facility Agent specifies to be necessary to
reflect the change in currency and to put the Finance Parties in the
same position, so far as possible, as they would have been in if no
change in currency had occurred.
2.5 APPOINTMENT OF BORROWERS' AGENT
Each Borrower hereby appoints the Borrowers' Agent as its agent with
authority to deliver or accept a Request on its behalf and otherwise
exercise the rights, powers and discretions expressed to be exercisable
by the Borrowers' Agent. Each Borrower shall be bound by a Request
delivered or the exercise of a right, power or discretion on its behalf
even if done without its consent or without reference to it. The
identity of the Borrowers' Agent may be changed (with the Facility
Agent's consent, which may not be unreasonably withheld) by the
execution of such documentation as the Facility Agent may reasonably
require.
2.6 HEDGING BANKS
Each Party acknowledges and agrees that each Bank that is party to a
Hedging Agreement shall, by virtue of that fact, automatically be a
Hedging Bank and accordingly have all of the rights and obligations of
a Hedging Bank under and in respect of the Finance Documents.
2.7 ANCILLARY FACILITY
The Parties acknowledge and agree that:
22
(a) the Ancillary Bank proposes to continue to make available to
MCE an Ancillary Facility under which the facility limit shall
not at any time exceed $3,000,000;
(b) the terms and conditions applicable to the Ancillary Facility
shall be set out in the Ancillary Facility Letters and (to the
extent not inconsistent with the Ancillary Facility Letters as
in force at the first Drawdown Date) the other Finance
Documents; and
(c) nothing in this Agreement or any of the other Finance
Documents shall in any way limit or affect any of the
Ancillary Bank's rights under or in respect of the Ancillary
Facility or the Ancillary Facility Letters (including, without
limitation, the right to amend, waive, extend, cancel and/or
renew any of them) except to the extent expressly stated in
this Agreement or any of the other Finance Documents
(including, for the avoidance of doubt, by virtue of the
inclusion of the Ancillary Bank as a Finance Party and the
Ancillary Facility Letters as a Finance Document).
3. PURPOSE
3.1 TRANCHE A PURPOSE
MCE shall use the proceeds of Loans made under Tranche A only to:
(a) repay and pay all amounts outstanding, accrued or owing under
the Bank of Scotland Credit Agreement;
(b) discharge indebtedness of up to US$16,780,000 in aggregate
owing by MCE to MOF and Chart Capital Partners Ltd and/or the
Vendors (as defined in the Sale and Purchase Agreement); and
(c) pay drilling costs and other capital expenditure approved by
the Banks from time to time; and
(d) up to (but not after) the B/C Discharge Date, pay Permitted
Payments that have fallen due or will fall due within 30 days
after the relevant Drawdown Date, but only to the extent that
MCE (acting reasonably) is satisfied that it will be able to
pay when due all of its drilling costs and other capital
expenditure even if the proceeds of a Loan are so applied.
3.2 TRANCHE B PURPOSE
MOF shall only use the proceeds of Loans made under Tranche B to pay
the Purchase Price under (and as defined in) the Sale and Purchase
Agreement.
3.3 TRANCHE C PURPOSE
MOCE shall only use the proceeds of Loans made under Tranche C to repay
and pay all amounts outstanding, accrued or owing under the Bridge
Facility Letter.
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3.4 GENERAL RESTRICTION
Without limiting or affecting any other provision of this Agreement, no
Borrower shall apply the proceeds of any loan in any way that would
constitute the provision of financial assistance as defined by article
217-9 of French law no 66-537 of 24th July, 1966, for the subscription,
or the acquisition of the refinancing of the acquisition of its own
shares, or would otherwise contravene any other relevant law or
regulation.
4. CONDITIONS PRECEDENT
4.1 DOCUMENTARY CONDITIONS PRECEDENT
The Borrowers' Agent may not deliver the first Request until the
Facility Agent has notified the Borrowers' Agent and the Banks that it
has received all of the documents set out in Part I of Schedule 2 in
form and substance satisfactory to the Facility Agent. The Facility
Agent undertakes to give such a notification promptly upon becoming so
satisfied.
4.2 FURTHER CONDITIONS PRECEDENT
The obligations of each Bank to participate in a Loan are subject to
the further conditions precedent that:
(a) on both the date of the Request and the Drawdown Date:
(i) the representations and warranties in Clause 18
(Representations and warranties) to be repeated on
those dates are correct and will be correct
immediately after the Loan is made; and
(ii) no Default is subsisting or would result from the
Loan;
(b) the making of the Loan would not cause Clause 2.2 (Facility
and Tranche limits) to be contravened; and
(c) immediately following the making of the Loan, the aggregate
principal amount of all outstanding Loans would not exceed the
Borrowing Base Amount.
5. DRAWDOWN
5.1 COMMITMENT PERIOD
(a) Subject to paragraph (b) below, a Borrower may borrow a Loan during the
Commitment Period if the Facility Agent receives a duly completed
Request not later than 11.00 a.m. five Business Days before the
proposed Drawdown Date (or such later time as the Facility Agent may
accept). Each Request is irrevocable.
(b) Only one Loan may be borrowed under each of Tranche B and Tranche C.
24
5.2 COMPLETION OF REQUESTS
A Request will not be regarded as having been duly completed unless:
(a) it specifies the Tranche under which the Loan is to be
borrowed and the Borrower that is to borrow the Loan, which
must be MCE in the case of a Loan under Tranche A, MOF in the
case of a Loan under Tranche B or MOCE in the case of a Loan
under Tranche C;
(b) the Drawdown Date is a Business Day falling during the
Commitment Period;
(c) the amount of the Loan is:
(i) a minimum of $2,500,000 and (in the case of a Loan
under Tranche A) an integral multiple of $500,000;
(ii) the undrawn balance of the Total Commitments or, if
less, the undrawn balance of the Borrowing Base
Amount; or
(iii) such other amount as the Facility Agent may agree;
(d) the first Interest Period selected complies with Clause 8
(Interest Periods); and
(e) the payment instructions comply with Clause 10 (Payments).
Each Request must specify one Loan only, but the Borrowers' Agent may,
subject to the other terms of this Agreement, deliver more than one
Request on any one day. Unless otherwise agreed by the Facility Agent,
no more than six Loans may be outstanding at any time.
5.3 ADVANCE OF LOAN
(a) The Facility Agent shall promptly notify each Bank of the details of
the requested Loan and the amount of its participation in the Loan.
(b) Subject to the terms of this Agreement, each Bank shall make its
participation in the Loan available to the Facility Agent for the
relevant Borrower on the relevant Drawdown Date.
(c) The amount of each Bank's participation in the Loan will be the
proportion of the Loan which its Commitment bears to the Total
Commitments at opening of business four Business Days before the
proposed Drawdown Date.
6. REPAYMENT
6.1 REPAYMENT
(a) The Borrowers shall, on each Repayment Date, repay Loans in an
aggregate principal amount equal to the greater of:
25
(i) the amount (if any) required to ensure that the aggregate
principal amount of all outstanding Loans does not exceed the
Total Commitments (after any reductions to be made on that
Repayment Date); and
(ii) the lesser of:
(A) the amount (if any) required to ensure that Total
Indebtedness does not exceed the Borrowing Base
Amount for the time being; and
(B) Available NCF for the 6-months' period ending on the
last Calculation date before that Repayment Date.
Each such repayment shall be made to the Facility Agent for the Banks.
(b) Notwithstanding paragraph (a) above, MCE may not repay any Loan
outstanding under Tranche A at any time whilst any Loan is outstanding
under Tranche B or Tranche C.
(c) MOF and MOCE shall in any event repay in full all Loans outstanding
under Tranche B and all Loans outstanding under Tranche C
(respectively) on 7th July, 2002 (to the extent they have not already
been repaid before that date).
6.2 RE-BORROWING
No amount repaid under Tranche B or Tranche C may subsequently be
re-borrowed, but any amount repaid under Tranche A may subsequently be
reborrowed on and subject to the provisions of this Agreement.
7. PREPAYMENT, CANCELLATION AND MITIGATION
7.1 VOLUNTARY PREPAYMENT
(a) Subject to paragraph (b) below, a Borrower may, after giving not less
than 10 Business Days' prior notice to the Facility Agent, prepay any
Loan made to it on the last day of an Interest Period for that Loan in
whole or in part (but, if in part, in minimum amounts of $1,000,000 and
integral multiples of $500,000).
(b) MCE may not prepay any Loan outstanding under Tranche A at any time
whilst any Loan is outstanding under Tranche B or Tranche C.
7.2 MANDATORY PREPAYMENT
(a) Subject to paragraph (b) below, if MCE at any time receives any
Compensation, the Borrowers shall, on the last day of the first
Interest Period to end after such receipt, prepay Loans in an aggregate
principal amount equal to the amount of that Compensation (having
promptly converted it into Dollars if received in any other currency or
in non-cash form). Any such prepayment shall be applied against such
Loans as the Facility Agent may designate.
26
(b) Paragraph (a) above shall not apply to any Compensation constituted by
proceeds of insurance in respect of physical damage which are to be
applied in reinstatement of the Borrowing Base Asset in respect of
which they were received (or in reimbursing MCE for expenditure already
made by it, in accordance with the terms of the Project Documents and
the Finance Documents, for the purposes of such reinstatement) provided
that no Default is subsisting. MCE shall notify the Facility Agent of
the relevant incident promptly upon becoming aware of it and its
proposal for reinstatement.
(c) Subject to paragraph (d) below, if, at any time before the B/C
Discharge Date, MOCE receives any proceeds of any dividend or other
distribution, or of any payment or repayment of borrowings, paid by
Madison Turkey or MOTI, the Borrowers shall, on the last day of the
first Interest Period to end after such receipt, prepay Loans
outstanding under Tranche B and/or C in an aggregate principal amount
equal to the amount of that receipt (having promptly converted it into
Dollars if received in any other currency).
(d) Paragraph (c) above shall not apply in respect of any particular
proceeds to the extent that MOCE demonstrates to the satisfaction of
the Majority Banks, before the proceeds in question are received by it,
that:
(i) immediately upon such receipt, it will declare and pay a
dividend of an amount equal to those proceeds;
(ii) the proceeds of that dividend are required by MPI in order to
meet overheads of the Group incurred in the ordinary course of
business; and
(iii) the aggregate amount of all such dividends declared and/or
paid during the 6 months' period ending on the next
Calculation Date, when aggregated with all amounts payable
under the Management Agreement during that period, does not
exceed $1,000,000.
7.3 AUTOMATIC REDUCTION OF TOTAL COMMITMENTS
The Total Commitments shall, on each Repayment Date, be automatically
reduced to the amount specified opposite the relevant Repayment Date in
Schedule 6 (if they are greater than that specified amount). Each such
cancellation shall take effect at opening of business in London on the
relevant Repayment Date and shall be applied pro rata against the
respective Commitments of each of the Banks.
7.4 VOLUNTARY CANCELLATION
The Borrowers' Agent may, by giving the Facility Agent not less than 10
Business Days' prior notice (or such shorter period as the Majority
Banks may agree), cancel the unutilised portion of the Total
Commitments in whole or in part (but, if in part, in a minimum of
$1,000,000 and integral multiples of $500,000). Any cancellation in
part shall be applied pro rata against the respective Commitments of
each of the Banks.
27
7.5 AUTOMATIC CANCELLATION
Any undrawn amount of the Total Commitments shall be automatically
cancelled at the end of the Commitment Period.
7.6 ADDITIONAL RIGHT OF PREPAYMENT AND CANCELLATION
If:
(a) any Obligor is required to pay to a Bank any additional
amounts under Clause 11 (Taxes);
(b) any Obligor is required to pay to a Bank any amount under
Clause 13 (Increased costs); or
(c) interest on a Bank's participation in a Loan is being
calculated in accordance with Clause 12.4(c) (Alternative
basis),
then, without prejudice to the obligations of any Obligor under those
Clauses, the Borrowers' Agent may, whilst the circumstances continue,
serve a notice of prepayment and cancellation on that Bank through the
Facility Agent. If the Borrowers' Agent serves such a notice on a Bank:
(i) that Bank's Commitment shall be automatically cancelled in
full on the service of the notice; and
(ii) each Borrower shall prepay that Bank's participation in all
outstanding Loans made to it on (or before) the date falling
five Business Days after service of the notice.
7.7 MISCELLANEOUS PROVISIONS
(a) Any notice of prepayment and/or cancellation under this Agreement is
irrevocable. The Facility Agent shall notify the Banks promptly of
receipt of any such notice.
(b) All prepayments under this Agreement shall be made together with
accrued interest.
(c) Any amount prepaid under Tranche A may subsequently be re-borrowed on
and subject to the provisions of this Agreement but no amount prepaid
under Tranche B or Tranche C may be subsequently reborrowed.
(d) No amount of the Total Commitments cancelled under this Agreement may
subsequently be reinstated.
(e) No prepayment or cancellation may be made except in accordance with the
express terms of this Agreement.
7.8 MITIGATION
If circumstances arise which would, or would upon the giving of notice,
result in any Borrower being obliged to repay the Loans under Clause 14
(Illegality) or to pay additional amounts under
28
Clause 11 (Taxes) or Clause 13 (Increased costs) then, without in any
way limiting, reducing or otherwise qualifying the relevant Borrower's
obligations under those Clauses, each relevant Finance Party shall,
upon written request from the Borrowers' Agent, take such reasonable
steps as may be open to it within the period of thirty days of receipt
of such request to mitigate the effects of such circumstances including
the transfer of its Facility Office to another jurisdiction or the
assignment and transfer of its rights and obligations under this
Agreement to another bank or financial institution acceptable to the
Borrowers' Agent. However, notwithstanding the above, no Finance Party
shall be under any obligation to take any such step(s) if, in the
Finance Party's opinion, it would or might have an adverse effect upon
its business, operations or financial condition or the management of
its tax affairs or its return in relation to a Loan.
8. INTEREST PERIODS
8.1 SELECTION
(a) The Borrowers' Agent may select an Interest Period for a Loan in either
the relevant Request or, if the Loan has been borrowed, a notice
received by the Facility Agent not later than five Business Days before
the first day of that Interest Period. Each Interest Period for a Loan
will begin on its Drawdown Date or the expiry of its preceding Interest
Period.
(b) Subject to the following provisions of this Clause 8 (Interest
Periods), each Interest Period shall be of one, three or six months'
duration or any other period agreed by the Borrowers' Agent and the
Banks.
(c) If the Borrowers' Agent fails to select an Interest Period for an
outstanding Loan in accordance with paragraph (a) above, that Interest
Period will, subject to the other provisions of this Clause 8 (Interest
Periods), be of three months' duration.
8.2 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall instead end on the next
Business Day in that calendar month (if there is one) or the preceding
Business Day (if there is not).
8.3 CONSOLIDATION
If the respective Interest Periods for any two or more Loans made under
the same Tranche end on the same day all of those Loans shall be
consolidated and treated as a single Loan on and as from that day.
However, the Borrowers' Agent may, subject to any other applicable
provision of this Agreement, split any Loan into two or more separate
Loans (whether or not that Loan was previously consolidated) by notice
to the Facility Agent provided that:
(a) no more than six Loans may be outstanding under Tranche A at
any time and no more than one Loan may be outstanding under
each of Tranche B and Tranche C at any time;
(b) the principal amount of each Loan is not less than $1,000,000;
and
29
(c) the splitting occurs at the beginning of an Interest Period
for the Loan to be split and the Borrowers' Agent's notice
(containing all necessary details) is received not later than
five Business Days before the first day of that Interest
Period.
8.4 COINCIDENCE WITH REPAYMENT DATES
If an Interest Period would otherwise overrun any Repayment Date, it
shall be shortened so that it ends on that Repayment Date.
8.5 OTHER ADJUSTMENTS
The Facility Agent and the Borrowers' Agent may enter into such other
arrangements as they may agree for the adjustment of Interest Periods
and the consolidation and/or splitting of Loans.
8.6 NOTIFICATION
The Facility Agent shall notify the Borrowers' Agent and the Banks of
the duration of each Interest Period promptly after ascertaining its
duration.
9. INTEREST
9.1 INTEREST RATE
The rate of interest on each Loan for each of its Interest Periods is
the rate per annum determined by the Facility Agent to be the aggregate
of the applicable:
(a) Margin;
(b) LIBOR; and
(c) Mandatory Cost.
9.2 DUE DATES
Except as otherwise provided in this Agreement, accrued interest on
each Loan is payable by the Borrower to which the Loan was made on the
last day of each of its Interest Periods and also, in the case of any
Interest Period longer than six months, on the dates falling at six
monthly intervals after the first day of that Interest Period.
9.3 DEFAULT INTEREST
(a) If an Obligor fails to pay any amount payable by it under the Finance
Documents, it shall immediately on demand by the Facility Agent pay
interest on the overdue amount from the due date up to the date of
actual payment, as well after as before judgment, at a rate (the
"DEFAULT RATE") determined by the Facility Agent to be 1% per annum
above the higher of:
(i) the rate on the overdue amount under Clause 9.1 (Interest
rate) immediately before the due date (if of principal) and
only until the end of the Interest Period current on the due
date; and
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(ii) the rate which would have been payable if the overdue amount
had, during the period of non-payment, constituted a Loan
under Tranche A for such successive Interest Periods of such
duration as the Facility Agent may determine (each a
"DESIGNATED INTEREST PERIOD").
(b) The default rate will be determined by the Facility Agent on each
Business Day or the first day of, or two Business Days before the first
day of, the relevant Designated Interest Period, as appropriate.
(c) If the Facility Agent determines that deposits in the currency of the
overdue amount are not at the relevant time being made available by the
Reference Banks to leading banks in the London interbank market, the
default rate will be determined by reference to the cost of funds to
the Facility Agent from whatever sources it selects.
(d) Default interest will be compounded at the end of each Designated
Interest Period.
9.4 NOTIFICATION OF RATES OF INTEREST
The Facility Agent shall promptly notify each relevant Party of the
determination of a rate of interest under this Agreement.
9.5 TEG LETTER
In order to comply with the provisions of Articles L313-1 and L313-2 of
the French Consumer Code (Code de la Consommation), the effective
global rate ("taux effectif global") calculated in accordance with the
articles referred to above shall be as set out in the letter of the
same date as this Agreement from the Facility Agent to the Borrowers'
Agent.
10. PAYMENTS
10.1 PLACE
(a) All payments by an Obligor or a Bank under the Finance Documents shall
be made to the Facility Agent to its account at such office or bank in
the principal financial centre of the country of the relevant currency
as it may notify to the Borrowers' Agent or Bank for this purpose.
(b) All payments by any Obligor under or in respect of the Ancillary
Facility Letter and any Hedging Agreement shall be made directly to the
Ancillary Bank or relevant Hedging Bank (and not through the Facility
Agent as required by paragraph (a) above) unless and until the Facility
Agent exercises its rights under Clause 20.28 (Ancillary Facility and
hedging payments after an Event of Default), whereupon all such
payments shall be made in accordance with (and subject to) paragraph
(a) above and the other provisions of this Clause 10 (Payments).
10.2 FUNDS
Payments under the Finance Documents to the Facility Agent shall be
made for value on the due date at such times and in such funds as the
Facility Agent may specify to the Party concerned as
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being customary at the time for the settlement of transactions in the
relevant currency in the place for payment.
10.3 DISTRIBUTION
(a) Each payment received by the Facility Agent under the Finance Documents
for another Party shall, subject to paragraphs (b) and (c) below, be
made available by the Facility Agent to that Party by payment (on the
date and in the currency and funds of receipt) to its account with such
bank in the principal financial centre of the country of the relevant
currency as it may notify to the Facility Agent for this purpose by not
less than five Business Days' prior notice.
(b) The Facility Agent may apply any amount received by it for an Obligor
in or towards payment (on the date and in the currency and funds of
receipt) of any amount due from an Obligor under this Agreement or in
or towards the purchase of any amount of any currency to be so applied.
(c) Where a sum is to be paid under the Finance Documents to the Facility
Agent for the account of another Party, the Facility Agent is not
obliged to pay that sum to that Party until it has established that it
has actually received that sum. The Facility Agent may, however, assume
that the sum has been paid to it in accordance with the Finance
Documents and, in reliance on that assumption, make available to that
Party a corresponding amount. If the sum has not been made available
but the Facility Agent has paid a corresponding amount to another
Party, that Party shall immediately on demand refund the corresponding
amount to the Facility Agent together with interest on that amount from
the date of payment to the date of receipt, calculated at a rate
determined by the Facility Agent to reflect its cost of funds.
(d) Payment by a Borrower to the Facility Agent of a sum due to a Bank
shall satisfy in full the Borrower's obligation to make that payment.
10.4 CURRENCY
(a) A repayment or prepayment of a Loan or any part of a Loan is payable in
Dollars.
(b) Interest is payable in the currency in which the relevant amount in
respect of which it is payable is denominated.
(c) Amounts payable in respect of costs, expenses, taxes and the like are
payable in the currency in which they are incurred.
(d) Any other amount payable under the Finance Documents is, except as
otherwise provided in the Finance Document in question, payable in
Dollars.
10.5 SET-OFF AND COUNTERCLAIM
All payments made by an Obligor under the Finance Documents shall be
made without set-off or counterclaim.
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10.6 NON-BUSINESS DAYS
(a) If a payment under the Finance Documents is due on a day which is not a
Business Day, the due date for that payment shall instead be the next
Business Day in the same calendar month (if there is one) or the
preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any principal under
this Agreement interest is payable on the principal at the rate payable
on the original due date.
10.7 PARTIAL PAYMENTS
(a) If the Facility Agent receives a payment insufficient to discharge all
the amounts then due and payable by the Obligors under the Finance
Documents, the Facility Agent shall apply that payment towards the
obligations of the Obligors under the Finance Documents in the
following order:
(i) FIRST, in or towards payment pro rata of any unpaid fees,
costs and expenses of either of the Agents under the Finance
Documents (other than amounts payable to the Technical Agent
under Clause 22.1 (Arrangement and agency fees);
(ii) SECONDLY, in or towards payment pro rata of any accrued
interest due but unpaid under this Agreement and any Hedging
Costs due but unpaid;
(iii) THIRDLY, in or towards payment pro rata of any principal due
but unpaid under this Agreement and any Hedging Termination
Payments due but unpaid;
(iv) FOURTHLY, in or towards payment pro rata of any amounts
payable to the Arranger or the Technical Agent under Clause
22.1 (Arrangement and agency fees); and
(v) FIFTHLY, in or towards payment pro rata of any other sum due
but unpaid under the Finance Documents.
(b) The Facility Agent shall, if so directed by all the Banks, vary the
order set out in paragraphs (a)(ii)-(iv)(inclusive) above.
(c) Paragraphs (a) and (b) above shall override any appropriation made by
an Obligor.
11. TAXES
11.1 GROSS-UP
All payments by an Obligor under the Finance Documents shall be made
without any deduction and free and clear of and without any deduction
for or on account of any taxes, except to the extent that the Obligor
is required by law to make payment subject to any taxes. If any tax or
amounts in respect of tax must be deducted, or any other deductions
must be made, from any amounts payable or paid by an Obligor, or paid
or payable by the Facility Agent to a Bank, under the Finance Documents
(other than a Hedging Agreement), the Obligor shall pay such additional
amounts as may be necessary to ensure that the relevant Bank receives a
net amount equal to the
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full amount which it would have received had payment not been made
subject to tax or any other deduction. For the avoidance of doubt,
nothing in this Clause 11.1 (Gross-up) obliges an Obligor to pay any
such additional amounts:
(a) in respect of any tax on the overall net income, profits or
gains of a Bank (or the overall net income, profits or gains
of a division or branch of a Bank) except to the extent that
any deduction is (or is required to be) made from any payment
to be made under the Finance Documents for or on account of
any such tax; or
(b) in respect of any interest or penalty which is imposed upon
any Finance Party for its failure to make a payment in respect
of any such tax or other amount due from it in circumstances
when it ought reasonably to have been aware of its obligations
to make such payment.
11.2 TAX RECEIPTS
All taxes required by law to be deducted or withheld by an Obligor from
any amounts paid or payable under the Finance Documents shall be paid
by the relevant Obligor when due and the Obligor shall, within 15 days
of the payment being made, deliver to the Facility Agent for the
relevant Bank evidence satisfactory to that Bank (including all
relevant tax receipts) that the payment has been duly remitted to the
appropriate authority.
11.3 QUALIFYING BANKS
(a) Subject to paragraph (b) below, if a Bank is not or ceases to be a
Qualifying Bank, no Obligor will be liable to pay to that Bank under
Clause 11.1 (Gross-up) any amount in respect of taxes levied or imposed
by the United Kingdom or any taxing authority of or in the United
Kingdom in excess of the amount it would have been obliged to pay if
that Bank had been or had not ceased to be a Qualifying Bank.
(b) Paragraph (a) above does not apply if a Bank ceases to be a Qualifying
Bank as a result of the introduction of, change in, or any change in
the interpretation, administration or application of, any law or
regulation or any practice or concession of the United Kingdom Inland
Revenue occurring after the date of this Agreement.
11.4 TAX CREDITS
If a Bank receives the benefit of a tax credit, repayment or an
allowance resulting from a payment which includes an additional amount
paid by an Obligor under Clause 11.1 (Gross-up), it shall (if it can do
so without prejudice to the retention of such benefit) pay to that
Obligor such part of that benefit as in the sole opinion of that Bank
will leave it (after such payment) in no more and no less favourable a
position than it would have been if no additional amount had been
required to be paid but so that:
(a) that Bank shall be the sole judge of the amount of any such
benefit, of the extent to which it is attributed to the amount
paid by that Obligor under Clause 11.1 (Gross-up) and of the
date on which it is received;
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(b) that Bank shall have absolute discretion as to whether or not
and as to the order and manner in which it employs or claims
tax credits and allowances available to it; and
(c) that Bank shall not be obliged to disclose to any Obligor any
information regarding its tax affairs or tax computations.
12. MARKET DISRUPTION
12.1 ABSENCE OF QUOTATIONS
If LIBOR is to be determined by reference to the Reference Banks but a
Reference Bank does not supply an offered rate by 11.30 a.m. on the
Rate-Fixing Day, the applicable LIBOR shall, subject to Clause 12.2
(Market disruption), be determined on the basis of the quotations of
the remaining Reference Banks.
12.2 MARKET DISRUPTION
If:
(a) LIBOR is to be determined by reference to the Reference Banks
but no, or only one, Reference Bank supplies a rate by 11.30
a.m. on the Rate-Fixing Day or the Facility Agent otherwise
determines that adequate and fair means do not exist for
ascertaining LIBOR; or
(b) the Facility Agent receives notification from Banks whose
participations in a Loan exceed 30% of that Loan that, in
their opinion:
(i) matching deposits may not be available to them in the
London interbank market in the ordinary course of
business to fund their participations in that Loan
for the relevant Interest Period; or
(ii) the cost to them of matching deposits in the London
interbank market would be in excess of LIBOR for the
relevant Interest Period,
the Facility Agent shall promptly notify the Borrowers' Agent and the
relevant Banks of the fact and that this Clause 12 is in operation.
12.3 SUBSTITUTE BASIS
If notification is given under Clause 12.2 (Market disruption) in
respect of a Loan that has not yet been made, then that Loan shall not
be made. However, within five Business Days after receipt of the
notification, the Borrowers' Agent and the Facility Agent shall enter
into negotiations for a period of not more than 30 days with a view to
agreeing a substitute basis for determining the rate of interest and/or
funding applicable to that and (to the extent required) any future
Loan. Any substitute basis agreed shall be, with the prior consent of
all the Banks, binding on all the Parties.
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12.4 ALTERNATIVE BASIS
If a notification under Clause 12.2 (Market disruption) applies to a
Loan which is outstanding, then, for the purpose of calculating the
rate of interest on that Loan pursuant to Clause 9.1 (Interest rate):
(a) within five Business Days of receipt of the notification, the
Borrowers' Agent and the Facility Agent shall enter into
negotiations for a period of not more than 30 days with a view
to agreeing an alternative basis for determining the rate of
interest and/or funding applicable to that Loan and/or any
other Loans;
(b) any alternative basis agreed under paragraph (a) above shall
be, with the prior consent of all the Banks, binding on all
the Parties;
(c) if no alternative basis is agreed, each Bank shall (through
the Facility Agent) certify on or before the last day of the
Interest Period to which the notification relates an
alternative basis for maintaining its participation in that
Loan;
(d) any such alternative basis may include an alternative method
of fixing the interest rate, alternative Interest Periods or
alternative currencies but it must reflect the cost to the
Bank of funding its participation in the Loan from whatever
sources it may select plus the Margin plus any Mandatory Cost;
and
(e) each alternative basis so certified shall be binding on the
Obligors and the certifying Bank and treated as part of this
Agreement.
12.5 MITIGATION
If interest falls to be determined pursuant to Clause 12.4 (Alternative
basis), each Bank shall endeavour (without being under any legal
obligation to do so) to take such reasonable steps as may be open to it
to minimise its funding costs without itself bearing any additional
cost or other requirement not recoverable from a Borrower pursuant to
this Clause 12.2 (Market disruption) unless to do so might (in the
opinion of the Bank) be prejudicial to such Bank.
13. INCREASED COSTS
13.1 INCREASED COSTS
(a) Subject to Clause 13.2 (Exceptions), the Borrowers shall immediately on
demand by a Finance Party pay that Finance Party the amount of any
increased cost incurred by it or any of its Affiliates as a result of:
(i) the introduction of, or any change in, or any change in the
interpretation or application of, any law or regulation after
the date of this Agreement; or
(ii) compliance with any regulation made after the date of this
Agreement,
36
(including any law or regulation relating to taxation, change in
currency of a country, or reserve asset, special deposit, cash ratio,
liquidity or capital adequacy requirements or any other form of banking
or monetary control).
(b) In this Agreement "INCREASED COST" means:
(i) an additional cost incurred by a Finance Party or any of its
Affiliates as a result of it having entered into, or
performing, maintaining or funding its obligations under, any
Finance Document;
(ii) that portion of an additional cost incurred by a Finance Party
in making, funding or maintaining all or any advances
comprised in a class of advances formed by or including that
Finance Party's participations in the Loans made or to be made
under this Agreement as is attributable to that Finance Party
making, funding or maintaining those participations;
(iii) a reduction in any amount payable to a Finance Party or any of
its Affiliates or the effective return to a Finance Party or
any of its Affiliates under this Agreement or (to the extent
that it is attributable to this Agreement) on its capital;
(iv) the amount of any payment made by a Finance Party or any of
its Affiliates, or the amount of interest or other return
foregone by a Finance Party or any of its Affiliates,
calculated by reference to any amount received or receivable
by a Finance Party or any of its Affiliates from any other
Party under this Agreement; or
(v) any increased costs or reduced income arising from any changes
in the reserve requirements or capital adequacy regulations
introduced by any central bank or other competent authority or
from European monetary and economic union being implemented by
any EU member state.
13.2 EXCEPTIONS
Clause 13.1 (Increased costs) does not apply to any increased cost:
(a) compensated for by the payment of the Mandatory Cost;
(b) attributable to any change in the rate of, or change in the
basis of calculating, tax on the overall net income of a Bank
(or the overall net income of a division or branch of the
Bank) imposed in the jurisdiction in which its principal
office or Facility Office is situated;
(c) compensated for by the operation of Clause 11 (Taxes) (or
which would have been so compensated for but for any proviso
or exception limiting or qualifying the circumstances in which
that compensation may be payable);
(d) attributable to the gross negligence or wilful misconduct of a
Finance Party; or
37
(e) resulting from the implementation by the applicable
authorities having jurisdiction over such Finance Party and/or
its Facility Office of the matters set out in the statement of
the Basle Committee on Banking Regulation and Supervisory
Practices dated July, 1998 and entitled "International
Convergence of Capital Measurement and Capital Standards" (as
in force at the date of this Agreement), to the extent, at the
rates and according to the timetable provided for therein.
14. ILLEGALITY
If it is or becomes unlawful in any jurisdiction for a Bank to give
effect to any of its obligations as contemplated by this Agreement or
to fund or maintain its participation in any Loan, the Bank may notify
the Borrowers' Agent through the Facility Agent accordingly. If a Bank
gives such a notification:
(a) each Borrower shall immediately prepay that Bank's
participations in all outstanding Loans made to it; and
(b) that Bank's Commitment shall automatically be cancelled in
full on the giving of the notification.
15. GUARANTEE
15.1 GUARANTEE
(a) Each Guarantor, subject to paragraphs (b)-(d) (inclusive) below but
otherwise irrevocably and unconditionally:
(i) as principal obligor, guarantees to each Finance Party prompt
performance by each other Obligor of all its obligations under
the Finance Documents;
(ii) undertakes with each Finance Party that whenever any other
Obligor does not pay any amount when due under or in
connection with any Finance Document, that Guarantor shall
immediately on demand by the Facility Agent pay that amount as
if that Guarantor instead of that other Obligor were expressed
to be the principal obligor; and
(iii) indemnifies each Finance Party on demand against any loss or
liability suffered by it if any obligation guaranteed by that
Guarantor is or becomes unenforceable, invalid or illegal.
(b) MCE shall not guarantee, or have any liability in respect of, any Loan
outstanding under Tranche B (or any interest on or other amount payable
in respect of any such Loan).
(c) Without prejudice to paragraph (b) above, the obligations of any French
Guarantor under this Clause 15 shall not include any obligation which
if incurred would constitute the provision of financial assistance as
defined by article 217-9 of French law no. 66-537 of 24th July, 1966,
for the subscription, or the acquisition or the refinancing of the
acquisition of its own shares.
38
(d) The liability of each French Guarantor under this Clause 15 shall be
limited, at any time, to an aggregate amount not exceeding 85% of the
aggregate of:
(i) that Guarantor's capitaux propres (as defined in article 22 of
the French decree no. 83-1020 of 29th November, 1983) as at
the date it becomes a party to this Agreement; and
(ii) that Guarantor's capitaux propres (as defined in article 2 of
the French decree no. 83-1020 of 29th November, 1983) as
reflected in its then most recent annual accounts.
15.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the
ultimate balance of all sums payable by the Obligors under the Finance
Documents, regardless of any intermediate payment or discharge in whole
or in part.
15.3 REINSTATEMENT
(a) Where any discharge (whether in respect of the obligations of an
Obligor or any security for those obligations or otherwise) is made in
whole or in part or any arrangement is made on the faith of any
payment, security or other disposition which is avoided or must be
restored on insolvency, liquidation or otherwise without limitation,
the liability of each Guarantor under this Clause 15 shall continue as
if the discharge or arrangement had not occurred.
(b) Each Finance Party may concede or compromise any claim that any
payment, security or other disposition is liable to avoidance or
restoration.
15.4 WAIVER OF DEFENCES
The obligations of each Guarantor under this Clause 15 will not be
affected by any act, omission, matter or thing which, but for this
provision, would reduce, release or prejudice any of its obligations
under this Clause 15 or prejudice or diminish those obligations in
whole or in part, including (without limitation and whether or not
known to it or any Finance Party):
(a) any time or waiver granted to, or composition with, any
Obligor or other person;
(b) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, any
Obligor or other person or any non-presentation or
non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full
value of any security;
(c) any incapacity or lack of powers, authority or legal
personality of or dissolution or change in the members or
status of any Obligor or other person;
(d) any variation (however fundamental) or replacement of a
Finance Document or any other document or security so that
references to that Finance Document in this Clause 15 shall
include each variation or replacement;
39
(e) any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document or any
other document or security, to the intent that each
Guarantor's obligations under this Clause 15 shall remain in
full force and its guarantee be construed accordingly, as if
there were no unenforceability, illegality or invalidity; and
(f) any postponement, discharge, reduction, non-provability or
other similar circumstance affecting any obligation of any
Obligor under a Finance Document resulting from any
insolvency, liquidation or dissolution proceedings or from any
law, regulation or order so that each such obligation shall,
for the purposes of each Guarantor's obligations under this
Clause 15, be construed as if there were no such circumstance.
15.5 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring any
Finance Party (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment from
any person before claiming from that Guarantor under this Clause 15.
15.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full, each Finance Party (or any trustee or agent on its behalf)
may:
(a) refrain from applying or enforcing any other moneys, security
or rights held or received by that Finance Party (or any
trustee or agent on its behalf) in respect of those amounts,
or apply and enforce the same in such manner and order as it
sees fit (whether against those amounts or otherwise) and
neither Guarantor shall be entitled to the benefit of the
same; and
(b) hold in a suspense account (bearing interest at the relevant
Finance Party's normal rates for comparable accounts) any
moneys received from either Guarantor or on account of either
Guarantor's liability under this Clause 15.
15.7 NON-COMPETITION
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full, no Guarantor shall, after a claim has been made or by virtue
of any payment or performance by it under this Clause 15:
(a) be subrogated to any rights, security or moneys held, received
or receivable by any Finance Party (or any trustee or agent on
its behalf) or be entitled to any right of contribution or
indemnity in respect of any payment made or moneys received on
account of that Guarantor's liability under this Clause 15;
(b) claim, rank, prove or vote as a creditor of any other Obligor
or its estate in competition with any Finance Party (or any
trustee or agent on its behalf); or
40
(c) receive, claim or have the benefit of any payment,
distribution or security from or on account of any other
Obligor, or exercise any right of set-off as against any other
Obligor,
unless the Facility Agent otherwise directs. Each Guarantor shall hold
in trust for and immediately pay or transfer to the Facility Agent for
the Finance Parties (or as directed by the Facility Agent) any payment
or distribution or benefit of security received by it contrary to this
Clause 15.7.
15.8 CONSIDERATION AND ENFORCEABILITY
(a) Each US Guarantor represents, warrants and agrees that (i) it will
receive valuable direct and indirect benefits as a result of the
transactions financed by the Loans and (ii) these benefits will
constitute "reasonably equivalent value" and "fair consideration" as
those terms are used in the fraudulent transfer laws.
(b) Each US Guarantor acknowledges and agrees that each of the Finance
Parties has acted in good faith in connection with the guarantee
granted under this Clause 15.8 and the transactions contemplated by
this Agreement.
(c) This Clause 15.8 shall be enforceable against each US Guarantor to the
maximum extent permitted by the fraudulent transfer laws.
(d) The US Guarantor's liability under this Clause 15.8 shall be limited so
that no obligation of, or transfer by, any US Guarantor under this
Clause 15.8 is subject to avoidance and turnover under the fraudulent
transfer laws.
(e) For purposes of this Clause, "FRAUDULENT TRANSFER LAWS" mean applicable
United States bankruptcy and State fraudulent transfer and conveyance
statutes and the related case law.
15.9 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by
any other security now or in the future held by any Finance Party.
16. FORECASTS
16.1 GENERAL
(a) The Relevant NPV shall be calculated using the Computer Model or such
other model as may from time to time be agreed in writing between the
Borrowers' Agent and the Banks. In the case of a conflict in the manner
of calculating the Relevant NPV between the Computer Model and the
provisions of this Agreement, the Computer Model will prevail and the
parties shall seek to amend the provisions of this Agreement
accordingly.
(b) The Relevant NPV shall be calculated in Dollars and for these purposes
any cashflow denominated in another currency shall first be aggregated
in that currency and converted into Dollars before being discounted.
41
(c) In preparing a Forecast and determining the Relevant NPV, account shall
be taken of all projected Gross Revenues and Permitted Payments in
respect of each Borrowing Base Asset throughout the period from the
relevant Redetermination Date to 31st December, 2008.
(d) The initial Relevant NPV shall be taken from the initial Forecast
provided under paragraph 6(a) of Part I of Schedule 2. Subsequently,
the Relevant NPV shall be calculated as of:
(i) each Calculation Date; and
(ii) any date in respect of which either Agent or the Borrowers'
Agent gives the others not less than 30 days' notice in
writing that such a calculation is required.
(c) Each such date specified in paragraphs (i) and (ii) above is a
"REDETERMINATION DATE". The Borrowers' Agent may only give one notice
under paragraph (ii) above during any period of 6 months ending on a
Calculation Date.
16.2 PREPARATION AND APPROVAL OF FORECASTS
(a) The Borrower's Agent and the Banks shall discuss the Assumptions to be
used in each Forecast from at least the date falling 45 days before the
Redetermination Date for that Forecast.
(b) The Technical Bank (acting on the instructions of the Majority Banks)
shall notify the Borrowers' Agent, not later than 28 days before each
Redetermination Date, of the Assumptions that are to be used in the
preparation of the Forecast to be prepared as of that Redetermination
Date. In determining these Assumptions, each Bank will act in good
faith in:
(i) having such regard as it considers appropriate to the
Borrowers' views expressed in the discussions contemplated by
paragraph (a) above; and
(ii) not requiring the use of Assumptions which, taken as a whole,
are more conservative than those that it generally applies in
its base case analysis of facilities and proposals which it
regards as comparable to the Facility.
However, notwithstanding the above, each Obligor acknowledges and
agrees that:
(A) all of the Assumptions used in the preparation of a Forecast,
taken as a whole, must be acceptable to the Majority Banks
(acting in good faith);
(B) a certificate by a Bank that it has acted in good faith as
contemplated by paragraphs (i) and (ii) above in any
particular case shall be conclusive evidence that it has done
so unless the Borrowers' Agent demonstrates that the
certificate has been given in bad faith.
(c) The Borrower's Agent shall prepare a draft Forecast using the
Assumptions notified by the Technical Bank under paragraph (b) above,
and shall deliver it to the Technical Agent (in sufficient copies for
all of the Banks) not later than 7 days after the notification. That
draft Forecast shall automatically become the applicable Forecast (on
and with effect from the relevant Redetermination Date) unless the
Technical Agent or any Bank notifies the Borrowers' Agent
42
and each of the other Finance Parties, within 7 days after receipt of
the draft Forecast, that in its view the draft Forecast has not been
prepared in accordance with this Agreement. If the Technical Agent or
any Bank gives such a notification, the Technical Agent shall request
each Bank to confirm whether or not they are satisfied that the draft
Forecast has been prepared in accordance with this Agreement (and, in
particular, that the Assumptions, taken as a whole, are acceptable to
it). If (but only if) the Majority Banks confirm that they are
satisfied as to those matters, the draft Forecast shall automatically
become the applicable Forecast on and with effect from the relevant
Redetermination Date.
(d) The Relevant NPV and other figures specified in a Forecast approved by
the Majority Banks in accordance with this Clause 16 shall be
conclusive in the absence of manifest error and that Relevant NPV and
those figures shall apply on and as from the relevant Redetermination
Date until next redetermined in accordance with this Clause 16 (and
"APPLICABLE" in this context shall be construed accordingly).
16.3 ADDITIONAL BORROWING BASE ASSETS
(a) The Borrowers' Agent may, at any time, give the Technical Agent a
written notice requesting all Banks to consider whether or not, in
their absolute discretion, any other interest (or prospective interest)
of MCE in a petroleum field may become a Borrowing Base Asset. If the
Borrowers' Agent makes such a request, the relevant asset shall become
a Borrowing Base Asset if (but only if) all Banks so agree and subject
to such conditions (if any) as all Banks may specify.
(b) Without limiting the Banks' discretion under paragraph (a) above, it is
acknowledged that the Banks are unlikely to agree to an interest in a
petroleum field becoming a Borrowing Base Asset unless they are
satisfied that:
(i) all necessary governmental consent for the development of that
field have been obtained and are in full force and effect;
(ii) satisfactory reservoir and technical information in relation
to that field has been provided;
(iii) in the case of any gas field, satisfactory sales contracts (or
other sales arrangement) are in full force and effect; and
(iv) Total Indebtedness will not exceed the Borrowing Base Amount
if the interest becomes a Borrowing Base Asset.
17. CONTROL ACCOUNTS
17.1 GENERAL
(a) The provisions of this Clause 17 (Control Accounts) shall apply from
the date of this Agreement for so long as any amount is or may be
outstanding under this Agreement or any Commitment is in force.
43
(b) MCE shall maintain:
(i) a Dollar Revenue Account and a Franc Revenue Account in
accordance with Clause 17.2 (Revenue Accounts); and
(ii) a Dollar Compensation Account and a Franc Compensation Account
in accordance with Clause 17.3 (Compensation Account),
with the Account Bank in London, and shall enter into such documents,
and give such notices, as the Facility Agent may require in connection
with the perfection or protection of the Finance Parties' security over
those accounts or for the purpose of giving effect to the provisions of
this Clause 17 (Control Accounts).
(c) The Dollar Revenue Account and the Dollar Compensation Account shall be
maintained in Dollars and the Franc Revenue Account and the Franc
Compensation Account shall be maintained in Francs/Euros. MCE shall
procure that any moneys that are to be credited to any Control Account
in accordance with the provisions of this Agreement and are received in
a currency other than the currency in which the relevant Control
Account is denominated are immediately converted into that latter
currency and credited to the relevant Control Account.
(d) MCE shall procure that no Control Account goes into overdraft.
(e) MCE shall give the Facility Agent at least 7 days' notice (in such
form, and with such detail, as the Facility Agent may reasonably
require) of each withdrawal (or proposed withdrawal) from a Control
Account maintained by it other than in respect of withdrawals applied
in paying any amount due under any Finance Document.
(f) MCE may not make any withdrawal from a Control Account at any time
whilst a Default is subsisting (or if a Default would result from the
withdrawal) except:
(i) to pay a Permitted Payment (other than any amount payable to
another member of the Group) in accordance with all other
applicable provisions of this Agreement; or
(ii) with the Facility Agent's specific written consent.
(g) MCE may not withdraw any amount from any Control Account except in
accordance with the express provisions of this Agreement.
(h) The Account Bank (in its capacity as such) does not have any
obligations under this Agreement to any other Party, even if it is
party to this Agreement as a Finance Party.
(i) If MCE so requests by written notice to the Account Bank, any moneys
that are credited to a Control Account may be held in that account on
interest-bearing time deposit.
17.2 REVENUE ACCOUNTS
(a) MCE shall procure that all Gross Revenues received by it (or to its
order) are paid directly to the Dollar Revenue Account unless they are
actually received in French Francs/Euros, in which case
44
MCE shall procure that they are paid directly to the Franc Revenue
Account.
(b) If any amount is paid into the Franc Revenue Account at any time, MCE
may retain in the Franc Revenue Account such amount as is required to
ensure that the balance on the Franc Revenue Account is equal to the
aggregate amount of all Permitted Payments that are expected to fall
due and be payable in French Francs/Euros during the period of 30 days
beginning on the date of receipt of the relevant amount. MCE shall
procure that any amount in excess of the amount is entitled to retain
in the Franc Revenue Account in accordance with this paragraph (b) is,
immediately upon receipt, converted into Dollars and paid directly from
the Franc Revenue Account to the Dollar Revenue Account.
(c) MCE may only withdraw amounts from the Dollar Revenue Account for the
following purposes (and subject always to Clause 17.1 (General)):
(i) to pay Permitted Payments that have fallen due or will fall
due within 30 days (and not more than two such withdrawals may
be made in any calendar month);
(ii) to pay amounts due under the Finance Documents; and
(iii) to pay Distributions if, when and to the extent permitted by
all other applicable provisions of the Finance Documents.
Any such withdrawals may only be made in the order of priority set out
above, so that no withdrawal may be made for a purpose set out in
paragraph (ii), or (iii) above if any amount of a kind referred to in a
preceding paragraph is due but unpaid.
(d) MCE may only withdraw amounts from the Franc Revenue Account (subject
always to Clause 17.1 (General)):
(i) to pay Permitted Payments that have fallen due in French
Francs/Euros or will fall due within 30 days;
(ii) to transfer amounts directly to a French Franc bank account of
MCE with Barclays Bank PLC Paris (or such other bank as the
Agent may agree) from which withdrawals may only be made to
meet Permitted Payments that have fallen due in French
Francs/Euros; and
(iii) to transfer amounts directly to the Dollar Revenue Account
(after converting them into Dollars).
17.3 COMPENSATION ACCOUNT
(a) MCE shall procure that all Compensation received by it (or to its
order) is paid directly to the Dollar Compensation Account (having been
promptly converted into Dollars if received in any currency other than
Dollars and Francs/Euros or in any non-cash form), unless it is
actually received in French Francs/Euros, in which case MCE shall
procure that it is paid directly to the Franc Compensation Account.
45
(b) If any amount is paid into the Franc Compensation Account at any time,
MCE may retain in the Franc Compensation Account such amount as MCE
demonstrates (to the Banks' satisfaction) is required in order to meet
reinstatement costs denominated in French Francs/Euros against which
that amount may be applied in accordance with this Agreement. MCE shall
procure that any amount in excess of the amount it is entitled to
retain in the Franc Compensation Account in accordance with this
paragraph (b) is, immediately upon receipt, converted into Dollars and
paid directly from the Franc Compensation Account to the Dollar
Compensation Account.
(c) MCE may only withdraw amounts from the Dollar Compensation Account or
the Franc Compensation Account (subject always to Clause 17.1
(General)) if:
(i) no Default is subsisting at the time of the withdrawal; and
(ii) the whole amount withdrawn is promptly applied in or towards:
(A) in the case only of an amount constituted by the
proceeds of any physical damage insurances, meeting
MCE's share of the cost of reinstating the destroyed
or damaged facilities in respect of which those
proceeds were paid; or
(B) making any prepayment required by Clause 7.2
(Mandatory prepayment).
(d) If MCE establishes to the reasonable satisfaction of the Facility Agent
that the loss or damage giving rise to any insurance claim referred to
in paragraph (b) above has been repaired out of moneys withdrawn from
the Revenue Account in accordance with the provisions of this
Agreement, MCE may transfer moneys representing the proceeds of the
claim to the Revenue Account.
18. REPRESENTATIONS AND WARRANTIES
18.1 REPRESENTATIONS AND WARRANTIES
Each Obligor makes the representations and warranties set out in this
Clause 18 to each Finance Party.
18.2 STATUS
(a) It is duly registered and incorporated as a limited liability company
except in the case of MCE which represents and warrants that it is a
partially unlimited liability partnership and in the case of MOTI duly
incorporated as a corporation, and validly existing, under the laws of
its jurisdiction of incorporation (as set out in Schedule 1); and
(b) each member of the Group has the power to own its assets and carry on
its business as it is being, and is proposed to be, conducted.
46
18.3 POWERS AND AUTHORITY
It has the power to enter into and perform, and has taken all necessary
action to authorise the entry into, performance and delivery of, each
Transaction Document to which it is or will be a party and the
transactions contemplated by those Transaction Documents.
18.4 LEGAL VALIDITY
Each Transaction Document to which it is, or will be, expressed to be a
party constitutes, or when executed in accordance with its terms will
constitute, its legal, valid and binding obligation enforceable in
accordance with its terms.
18.5 PARI PASSU RANKING
Its obligations under this Agreement rank and will rank at least pari
passu with all its other present and future unsecured and
unsubordinated obligations.
18.6 NON-CONFLICT
The entry into and performance by it of, and the transactions
contemplated by, each Transaction Document to which it is, or will be,
expressed to be a party do not and will not:
(a) conflict with any applicable law or regulation or judicial or
official order;
(b) conflict with the constitutional documents of any member of
the Group;
(c) conflict with any document which is binding upon any member of
the Group or any asset of any member of the Group; or
(d) give rise to a right for any other party to any Project
Document to terminate that Project Document.
18.7 NO DEFAULT
(a) No Default is outstanding or would be likely to result from the making
of any Loan;
(b) no other event is outstanding which constitutes (or, with the giving of
notice, lapse of time, determination of materiality or the fulfilment
of any other applicable condition or any combination of the foregoing,
would constitute) a default under (or entitles any other party to
terminate, whether for default or otherwise) any document which is
binding on any member of the Group or any asset of any member of the
Group to an extent or in a manner which would be likely to have a
material adverse effect; and
(c) it is not in default in the performance of any material covenant or
obligation relating to any Borrowing Base Asset.
47
18.8 AUTHORISATIONS
(a) All authorisations required in connection with the entry into,
performance, validity and enforceability of, and the transactions
contemplated by, the Finance Documents have been obtained or effected
(as appropriate) and are in full force and effect; and
(b) all authorisations required in connection with:
(i) the entry into, performance, validity and enforceability of,
and the transactions contemplated by, each of the Project
Documents; or
(ii) the exploitation of each of the Borrowing Base Assets as
contemplated by the Transaction Documents and each Forecast,
have been obtained or effected (as appropriate) and are in full force
and effect except:
(A) to the extent it is impractical or inappropriate for them to
have been obtained or effected by the time this representation
and warranty is made or deemed to be repeated and failure ever
to obtain or effect them could not have a material adverse
effect; and
(B) for any consents from third parties that may be required to
sell any of the rights under the Project Documents on
enforcement of any of the Security Interests created by any of
the Finance Documents.
18.9 ACCOUNTS
Its audited accounts (if any) most recently delivered to the Facility
Agent:
(a) have been prepared in accordance with accounting principles
and practices generally accepted in the jurisdiction of its
incorporation consistently applied; and
(b) give a true and fair view of its financial condition as at the
date to which they were drawn up,
and there has been no material adverse change in its financial
condition since the date to which those accounts were drawn up.
18.10 LITIGATION
No litigation, arbitration or administrative proceedings are current
or, to its knowledge, pending or threatened, which might, if adversely
determined, have a material adverse effect.
18.11 INFORMATION PACKAGE
(a) All factual information contained in the Information Package was true
in all material respects as at its date;
48
(b) all estimates, forecasts and expressions of opinion of any Obligor
contained in the Information Package were made in good faith, with due
care and on assumptions which the Obligors consider to be reasonable,
and the arithmetic of all calculations contained in the Information
Package is correct;
(c) so far as it is aware, there are no facts or circumstances which if
disclosed might reasonably be expected to alter any person's estimate
forecast or expression of opinion contained in the Information Package
such that the altered estimate, forecast or expression of opinion might
reasonably be expected to adversely affect the decision of a person
considering whether to enter into this Agreement;
(d) so far as it is or ought to be aware having made reasonable and due
enquiry, the Information Package did not omit as at its date any
information which, if disclosed, might reasonably be expected to
adversely affect the decision of a person considering whether to enter
into this Agreement; and
(e) so far as it is or ought to be aware having made reasonable and due
enquiry, as at the date of this Agreement, nothing has occurred since
the date of the Information Package which renders any of the
information contained in it untrue or misleading in any material
respect and which, if disclosed, might reasonably be expected to
adversely affect the decision of a person considering whether to enter
into this Agreement.
18.12 SECURITY
(a) Each Security Document confers the Security Interests of the type it
purports to create over the assets over which a Security Interest is
purported to be given by that Security Document and each such Security
Interest is first ranking; and
(b) each Security Document is:
(i) valid and enforceable against the Obligor party to it, its
liquidator, administrator (including any administrateur
judiciaire, provisiore, mandataire ad hoc, conciliateur or
mandataire liquidateur) and creditors; and
(ii) not capable of being avoided or set aside, whether in the
winding up, administration or dissolution (including the
dissolution, liquidation or rederessment judiciaire) of the
relevant Obligor or otherwise.
18.13 ENVIRONMENTAL MATTERS
(a) MCE has obtained all Environmental Licences required in connection with
each of the Borrowing Base Assets and their exploitation and has at all
times complied in all material respects with all those Environmental
Licences and all other applicable Environmental Laws except to the
extent it is impractical or inappropriate for them to have been
obtained or effected by the time this representation and warranty is
made or deemed to be repeated and failure ever to obtain or effect them
could not have a material adverse effect;
49
(b) so far as each Obligor is aware, no steps have been taken for the
revocation variation or refusal of any material licence or consent;
(c) so far as each Obligor is aware, there is no Environmental
Contamination on any site connected with any Borrowing Base Asset which
is likely to materially affect the value of MCE's interest in that
Borrowing Base Asset or the worth of the Finance Parties' security over
it or otherwise have a material adverse effect; and
(d) so far as each Obligor is aware, there are no circumstances that may at
any time prevent or interfere with continued compliance by it with all
applicable Environmental Laws and Environmental Licenses. No
Environmental Claim is pending or, to the best of its knowledge,
threatened against it or any of its properties.
18.14 ERISA
No Obligor or ERISA Affiliate sponsors, maintains, administers,
contributes to, participates in, or has any obligation to contribute to
or any liability under, any Plan, or in the past five years has
sponsored, maintained, administered, contributed to, participated in,
or had any obligation to or liability under, any Plan.
18.15 FORECASTS
Each Forecast:
(a) is based on reasonable assumptions;
(b) is consistent with the provisions of the Transaction Documents
in all material respects;
(c) has been prepared in good faith and with due care; and
(d) fairly represents the Obligors' expectations as at the date
the Forecast is produced,
except, in the case of paragraphs (a) and (d) above, to the extent that
the Borrower's Agent has notified the Technical Agent of the respects
in which its assumptions and expectations differ from those of the
Banks.
18.16 BORROWING BASE ASSETS
(a) Subject only to the provisions of the Project Documents, MCE owns, or
has unfettered access to and the right to use, all assets necessary for
the exploitation of each of the Borrowing Base Assets as contemplated
by the Transaction Documents and each Forecast;
(b) MCE is the absolute legal and beneficial owner of each of the Borrowing
Base Interests free from any Security Interest or other interest of any
kind, and MCE is not under any obligation to create any Security
Interest over any Borrowing Base Interest (except by virtue of any
Security Document); and
50
(c) so far as MCE is aware, no event or circumstance exists which entitles
any person to terminate or suspend any authorisation of a kind referred
to in Clause 18.8 (Authorisations).
18.17 COPIES OF PROJECT DOCUMENTS
Each copy of a Project Document delivered to the Facility Agent is, at
the time it is delivered, a correct and complete copy of the relevant
document as in force at that time.
18.18 COMPLIANCE WITH LAWS
It has at all times complied with all laws and regulations in all
material respects.
18.19 TAXES
Each Obligor has:
(a) filed, or procured the filing of, all tax and informational
returns that are required to have been filed by it any
jurisdiction;
(b) paid or discharged all taxes due and payable from it or
against its assets (other than any taxes that it is contesting
in good faith and by appropriate proceedings, in respect of
which a reasonably adequate reserve has been established); and
(c) to the extent taxes are not due, has established reserves that
are adequate for the payment of those taxes and are required
by generally accepted accounting principles in England and
France),
in each case where not doing so could have a material adverse effect.
18.20 IMMUNITY
(a) The execution by it of each Finance Document to which it is party
constitutes, and its exercise of its rights and performance of its
obligations under this Agreement will constitute, private and
commercial acts done and performed for private and commercial purposes;
and
(b) it will not be entitled to claim immunity from suit, execution,
attachment or other legal process in any proceedings taken in England,
France or the State or Federal courts of New York in relation to any
Finance Document to which it is party.
18.21 JURISDICTION/GOVERNING LAW
Under the laws of its jurisdiction of incorporation, the choice of the
laws of England as the governing law of this Agreement is valid and
binding and its consent to the jurisdiction of the courts by it
provided for in Clause 35 is valid and binding.
51
18.23 STAMP DUTIES
All stamp or registration duty or similar taxes or charges payable in
France, Turkey and the United States of America in respect of any
Transaction Document have been paid other than such duty, taxes or
charges payable in respect of:
(a) any Security Document creating any security over any assets in
France;
(b) any document referred to in the definition of "Project
Document" in Clause 1.1 (Definitions) which does not exist at
the date of this Agreement.
18.24 NO ADVERSE CONSEQUENCES
(a) It is not necessary under the laws of France, Turkey, the Republic of
Liberia or the United States of America:
(i) in order to enable any Finance Party to enforce its rights
under any Finance Document; or
(ii) by reason of the execution of any Finance Document or the
performance by it of its obligations under the Finance
Document,
that any Finance Party should be licensed, qualified or otherwise
entitled to carry on business in France, Turkey, the Republic of
Liberia or the United States of America.
(b) No Finance Party with any Commitment hereunder is or will be deemed to
be resident, domiciled or carrying on business in France, Turkey, the
Republic of Liberia or the United States of America.
18.25 SUBSIDIARIES
MOC does not have any Subsidiaries other than the Obligors and the
Excluded Subsidiaries.
18.26 INVESTMENT COMPANY ACT
No Obligor is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the United States
Investment Company Act of 1940, as amended.
18.27 OTHER REGULATION
No Obligor is subject to regulation under any United States Federal or
State statute or regulation that limits its ability to incur or
guarantee indebtedness.
18.28 MARGIN STOCK
(a) The proceeds of the Loans have been and will be used only for the
purposes described in Clause 3 (Purpose).
52
(b) No Obligor is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of
Regulations U and X of the Board of Governors of the United States
Federal Reserve System), and no portion of any Loan has been or will be
used, directly or indirectly, to purchase or carry margin stock or to
extend credit to others for the purpose of purchasing or carrying
margin stock.
(c) No portion of any Loan will be used to acquire any security in a
transaction that is subject to Section 13 or 14 of the United States
Securities Exchange Act of 1934, as amended.
18.29 SOLVENCY
(a) The sum of each US Guarantor's debts (including its obligations under
this Agreement) is less than the value of its property (calculated at
the lesser of fair valuation and present fair saleable value).
(b) The capital of each US Guarantor is not unreasonably small to conduct
its business as currently conducted or as proposed to be conducted.
(c) No US Guarantor has incurred or intends to incur or believes it will
incur debts beyond its ability to pay as they mature.
(d) No US Guarantor has made a transfer or incurred an obligation under
this Agreement with the intent to hinder, delay or defraud any of its
present or future creditors.
(e) For purposes of this Clause 18.29 (Solvency):
(i) "DEBT" means any liability on a claim;
(ii) "CLAIM" means (A) any right to payment, whether or not that
right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured or unsecured, or (B) any right to an
equitable remedy for breach of performance if that breach
gives rise to payment, whether or not the right to an
equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or
unsecured; and
(iii) terms used in this Clause 18.29 (Solvency) shall be construed
in accordance with the applicable United States bankruptcy and
New York fraudulent conveyance statutes and the related case
law.
18.30 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES
The representations and warranties set out in this Clause 18:
(a) are made on the date of this Agreement; and
(b) (with the exception of Clauses 18.10 (Litigation), 18.11
(Information Package), 18.13(b) (Environmental matters) and
18.15(c) (Borrowing Base Assets)) are deemed to be repeated by
each Obligor on the date of each Request, each Drawdown Date
and the first
53
day of each Interest Period, in each case with reference to
the facts and circumstances then existing.
19. UNDERTAKINGS
19.1 DURATION
The undertakings in this Clause 19 remain in force from the date of
this Agreement for so long as any amount is or may be outstanding under
this Agreement or any Commitment is in force.
19.2 FINANCIAL AND MISCELLANEOUS INFORMATION
Each Obligor shall supply to the Facility Agent (in sufficient copies
for all the Banks unless the Facility Agent agrees otherwise):
(a) as soon as they are available (and in any event within 180
days of the end of the relevant financial year):
(i) in the case only of MOC, the audited consolidated
accounts of the Group for each of its financial
years; and
(ii) in the case of MCE and each other member of the Group
that prepares such accounts, its audited
unconsolidated accounts for each of its financial
years;
(b) as soon as they are available (and in any event within 120
days of the end of the first half-year of each of the relevant
financial year), its unaudited accounts for that half-year;
(c) all formal documents (such as notices of general meetings and
written resolutions) despatched by it to its shareholders (or
any class of them) or its creditors (or any class of them) at
the same time as they are despatched;
(d) promptly upon becoming aware of them, details of any
litigation, arbitration or administrative proceedings which
are current, threatened or pending and which might, if
adversely determined, have a material adverse effect;
(e) promptly, such further information in the possession or
control of any member of the Group regarding its financial
condition and operations (including, without limitation, as to
any Borrowing Base Asset) as any Finance Party may reasonably
request; and
(f) details of the adoption of, participation in or contribution
to any Plan by the Obligor or any ERISA Affiliate, or any
action by any of these to adopt, participate in or contribute
to any Plan, or the incurrence by any of them of any liability
or obligation to any Plan.
19.3 BORROWING BASE ASSET AND SIMILAR INFORMATION
The Borrowers' Agent shall supply to the Facility Agent (in sufficient
copies for all of the Banks unless the Facility Agent agrees
otherwise):
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(a) promptly upon receipt by an Obligor, a copy of:
(i) any budget approved by the operating committee (or
similar body) in relation to any Borrowing Base Asset
(or any area covered by a petroleum production
licence for a Borrowing Base Asset);
(ii) each monthly report prepared by or for an operator in
respect of a Borrowing Base Asset;
(iii) any report or production data produced by any
operator of a Borrowing Base Asset, or by any
reservoir engineer or similar expert, in relation to
any Borrowing Base Asset (other than routine
day-to-day field information); and
(iv) any other information relating to a Borrowing Base
Asset that could change any Assumption in the current
Forecast or impose any additional material liability
on MCE;
(b) promptly upon request by either Agent, a copy of any Project
Document;
(c) not less than 14 days before MCE enters into any new Project
Document or any amendment to any existing Project Document (in
each case, otherwise than in the ordinary course of MCE's
trading), details of that Project Document or amendment;
(d) within 30 days after request by either Agent, a report in
relation to the Group's activities, assets and operations in
Turkey, of such scope as the relevant Agent may require and
(e) by the 31st March each year, an independent engineer's report
(of a scope, in a form and prepared in the preceding year by
an engineer all acceptable to the Technical Agent) in respect
of each Borrowing Base Asset, as of 31st December.
19.4 NOTIFICATION OF DEFAULT
Each Obligor shall notify the Facility Agent of any Default (and the
steps, if any, being taken to remedy it) promptly upon its occurrence.
19.5 COMPLIANCE CERTIFICATES
Each Obligor shall supply to the Facility Agent:
(a) between 5 and 3 Business Days before each Calculation Date;
and
(b) promptly at any other time, if the Facility Agent so requests,
a certificate signed by two of its directors on its behalf certifying
that no Default is outstanding or, if a Default is outstanding,
specifying the Default and the steps, if any, being taken to remedy it.
55
19.6 AUTHORISATIONS
Each Obligor shall promptly obtain, maintain and comply with the terms
of, and promptly supply certified copies to the Facility Agent of, any
authorisation required under any law or regulation:
(a) to enable it to perform its obligations under, or for the
validity or enforceability of, any Finance Document; or
(b) in the case of MCE, to enable it to perform its obligations
under, or for the validity or enforceability of, any other
Transaction Document to which it is party or for the
exploitation and/or operation of any Borrowing Base Asset as
contemplated by the Transaction Documents and the current
Forecast.
19.7 PARI PASSU RANKING
Each Obligor shall procure that its obligations under the Finance
Documents do and will rank at least pari passu with all its other
present and future unsecured obligations, except for obligations
mandatorily preferred by law applying to companies generally.
19.8 NEGATIVE PLEDGE
(a) No Obligor shall, and MOC shall procure that no other member of the
Group will, create or permit to subsist any Security Interest on any of
its assets.
(b) Paragraph (a) does not apply to any Security Interest:
(i) to the extent it is a lien arising by operation of law in the
ordinary course of trading of the relevant Obligor or member
of the Group and does not secure any amount more than 30 days
overdue;
(ii) in favour of a Finance Party under a Finance Document;
(iii) that arises under a Project Document and does not secure any
Financial Indebtedness;
(iv) in the case only of Madison Turkey and MOTI, that does not
secure Financial Indebtedness and arises under a document that
would be a Project Document if it related to a Borrowing Base
Asset and were entered into by MCE.
19.9 TRANSACTIONS SIMILAR TO SECURITY
No Obligor shall:
(a) dispose of any of its assets on terms whereby it is or may be
leased to or re-acquired or acquired by a member of the Group
or any of its related entities; or
(b) dispose of any of its receivables on recourse terms, except
for the discounting of bills or notes in the ordinary course
of trading,
56
in circumstances where the transaction is entered into primarily as a
method of raising finance or of financing the acquisition of an asset.
19.10 DISPOSALS
(a) No Obligor shall, either in a single transaction or in a series of
transactions, whether related or not and whether voluntarily or
involuntarily, dispose of:
(i) all or any part of any Borrowing Base Interest or any
Borrowing Base Petroleum or any shares in any other Obligor;
or
(ii) all or any part of its other assets.
(b) Paragraph (a)(i) above does not apply to:
(i) sales of Borrowing Base Petroleum under any Project Document
(as in force at the date of this Agreement) or otherwise on
arms'-length terms for cash-only consideration;
(ii) disposals arising solely by virtue of a unitisation or
redetermination of a Borrowing Base Asset; or
(ii) the creation of Security Interests under the Security
Documents.
(c) Paragraph (a)(ii) above does not apply to:
(i) disposals made in the ordinary course of business of the
disposing entity if (but only if) the aggregate value (or if
greater disposal price) of all assets so disposed of by all
members of the Group in any calendar year (other than
petroleum) does not exceed $500,000;
(ii) disposals of assets in exchange for other assets comparable or
superior as to type, value and quality;
(iii) the payment of cash as consideration for the acquisition (in
accordance with all applicable provisions of the Finance
Documents) of any asset at arms' length and on normal
commercial terms;
(iv) the creation of Security Interests under the Security
Documents; or
(v) the disposal by Madison Turkey to MOTI of all its business,
assets and undertaking.
19.11 CHANGE OF BUSINESS
(a) Each Obligor shall procure that no substantial change is made to the
general nature or scope of the business of any Obligor or the Group
from that carried on at the date of this Agreement.
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(b) MCE shall not:
(i) carry on any business other than the ownership and
exploitation of interests in the Borrowing Base Assets and the
exploration for, and production and disposal of petroleum
from, the areas covered (as at the date of this Agreement) by
the petroleum production licences for the Borrowing Base
Assets and activities associated with those activities (but
excluding, for the avoidance of doubt, petroleum trading); or
(ii) own any assets or incur any liabilities except for the
purposes of carrying on that business.
19.12 MERGERS AND ACQUISITIONS
(a) No Obligor shall enter into any amalgamation, demerger, merger or
reconstruction.
(b) No Obligor shall acquire any asset(s) or business, or make any
investment(s), except for:
(i) the acquisition of assets, and the making of investments, in
the ordinary course of trading; and
(ii) other acquisitions and investments provided that the aggregate
value of all consideration (including all non-cash
consideration) given by any member(s) of the Group during any
calendar year for or in respect of all such acquisitions and
investments does not at any time exceed $500,000 (translating
any consideration paid in a currency other than Dollars into
Dollars at the Agent's Spot Rate of Exchange at the time it is
paid).
19.13 OTHER FINANCIAL INDEBTEDNESS
No Obligor shall at any time incur or have outstanding any Financial
Indebtedness except for:
(a) Financial Indebtedness arising under the Finance Documents;
(b) Financial Indebtedness of an Obligor that is subordinated to
the relevant Obligor's obligations under the Finance Documents
on terms approved by the Facility Agent specifically in
relation to the Financial Indebtedness in question; and
(c) Financial Indebtedness constituted by the Elf Oil Swap (as in
force at the date of this Agreement);
(d) Financial Indebtedness of up to $600,170 (or its equivalent)
in aggregate owing to Elf Aquitaine Exploration Production
S.A. as at the date of this Agreement (but not any greater or
other Financial Indebtedness owing to that unity at any time).
19.14 LOANS
No Obligor shall make any loan or extend any other form of credit or
financial accommodation, or give any guarantee of any person's
Financial Indebtedness, to any person, or otherwise be a creditor in
respect of any Financial Indebtedness of any person, except:
58
(a) to the extent required to do so by any Project Document;
(b) for trade credit on usual commercial terms; and
(c) for loans lawfully advanced:
(i) by MOCE to MCE or MOF;
(ii) by MOF to MCE or MOCE; or
(iii) by MOTI or Madison Turkey to MOCE.
19.15 DISTRIBUTIONS ETC
(a) MCE shall not declare, make or pay any Distribution at any time after
the B/C Discharge Date, and shall not do so at any time on or before
the B/C Discharge Date unless:
(i) the Distribution is solely a lawful dividend and is paid
directly from the Revenue Account in accordance with all
relevant provisions of the Finance Documents;
(ii) no default is subsisting, and Total Indebtedness does not
exceed the Borrowing Base Amount, at the time the Distribution
is declared and at the time it is paid; and
(iii) the whole of the proceeds of the Distribution are immediately
and directly applied in repaying or prepaying Loans
outstanding under Tranche B or Tranche C.
(b) MOF shall not declare, make or pay any Distribution at any time on or
before the B/C Discharge Date unless the whole of the proceeds of the
distribution are immediately and directly applied in repaying or
prepaying Loans outstanding under Tranche C.
(c) MOCE shall not declare, make or pay any Distribution at any time on or
before the B/C Discharge Date.
(d) Without limiting paragraph (a) above, MOCE, MOF and MCE shall each do
everything within their respective powers to ensure that MCE declares
and pays dividends or other distributions whenever it is lawfully and
prudently able to do so until the B/C Discharge Date.
(e) MCE shall not:
(i) enter into any agreement, or take any other action, that could
result in the aggregate amount falling payable by it under the
Management Agreements during any 6 month period ending on a
Calculation Day exceeding $500,000;
(ii) amend either Management Agreement in any material respect; or
(iii) enter into any other management, services, supply or other
contract with any other member of the Group under which
amounts may become payable to that other member of the Group.
59
(f) No Obligor shall be entitled to claim, receive or retain any amount
paid or paid under any contract entered into in contravention of
paragraph (e) above.
19.16 INSURANCE
(a) MCE shall insure for its individual account, and keep so insured, each
of its Borrowing Base Interests and all of its Borrowing Base Petroleum
against:
(i) all risks normally insured against by prudent owners of
comparable assets in France; and
(ii) any other risks which the Technical Agent may reasonably
require as a result of any change(s) in circumstances, risks
or the Majority Banks' perception of risk.
Any such insurance must be maintained:
(A) with an insurance company or underwriters acceptable to the
Facility Agent; and
(B) otherwise on terms consistent with the good practice of
prudent owners of comparable assets in France.
(b) MCE shall procure that all moneys received or receivable under any such
insurances are applied:
(i) in replacing, restoring or reinstating the property or assets
destroyed or damaged or in any other manner which the Facility
Agent may agree; or
(ii) after a Default has occurred, if the Facility Agent so directs
and the terms of the relevant insurances so permit, in or
towards satisfaction of amounts owing or outstanding under the
Finance Documents.
(c) In respect of any insurance maintained by MCE or any person on its
behalf in accordance with paragraph (a) above, MCE shall:
(i) not do, or permit anything to be done, which may make it void
or voidable;
(ii) promptly pay all premiums and do all other things necessary to
keep it maintained in full force; and
(iii) on demand by the Facility Agent, produce to the Facility Agent
the policy, certificate or cover note relating to it and the
receipt for the payment of any premium for it as the Facility
Agent may request.
(d) MCE shall take out such insurances (if any) in relation to
environmental matters and risks as the Technical Agent may from time to
time require.
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19.17 COMPLIANCE WITH LAWS
Each Obligor shall comply in all material respects with all laws and
regulations applicable to it or its assets or activities for the time
being.
19.18 PROJECT DOCUMENTS
MCE shall:
(a) ensure that none of its rights under or in respect of any of
the Project Documents are at any time terminated, suspended or
limited in any way;
(b) not agree to any waiver, amendment, termination or
cancellation of any Project Document other than in a manner
that can only be regarded as immaterial;
(c) duly and properly perform its obligations under the Project
Documents (except to the extent, if any, they are inconsistent
with its obligations under the Finance Documents);
(d) exercise its rights, and (so far as within its power) ensure
that others exercise their respective rights, under and in
respect of the Project Documents consistently with its
obligations under the Finance Documents; and
(e) not enter into any Project Document except for one, the entry
into, performance, termination or breach of which can only be
regarded as immaterial.
19.19 BORROWING BASE ASSETS
MCE shall:
(a) ensure (so far as it is able) that each Borrowing Base Asset
is at all times exploited and operated in a reasonable and
prudent manner and in accordance with good industry practice,
all applicable laws and regulations and the provisions of the
Project Documents;
(b) not abandon all or any material part of any Borrowing Base
Asset;
(c) not act in any manner that would be materially prejudicial to
the interests of any Finance Party under the Finance
Documents; and
(d) maintain full and proper technical and financial records in
relation to each of the Borrowing Base Assets and all
Borrowing Base Petroleum, and ensure (so far as it is able)
that the Agents (and/or any person nominated by either of
them) are afforded reasonable access to each of its Borrowing
Base Assets and all such records during normal business hours
on reasonable notice.
19.20 TAXES
Each Obligor shall:
61
(a) maintain its tax residence in its jurisdiction of
incorporation;
(b) procure that all taxes payable by, or assessed upon, it are
paid when due;
(c) to the fullest extent it is able to do so, apply any and all
tax credits, losses, reliefs or allowances taken into account
in any Forecast at any time in the manner, at the time and to
the extent that they were so taken into account; and
(d) not surrender or dispose of any tax credit, loss, relief or
allowance to any person.
19.21 ENVIRONMENTAL MATTERS
Each Obligor shall:
(a) comply in all material respects with all applicable
Environmental Laws and Environmental Licences;
(b) notify the Facility Agent immediately it becomes aware of any
actual or suspected Environmental Contamination that might
give rise to a material liability;
(c) give the Agent prompt notice if there is non-compliance with
any Environmental Law or Environmental License of which it is
aware; and
(d) give the Agent prompt notice of any Environmental Claim or any
other claim, notice or other communication served on it in
respect of any alleged breach of any Environmental Law or
Environmental Licence.
19.22 CAPITAL EXPENDITURE, ETC
MCE shall:
(i) not make or incur, or incur any obligation or liability for or
in respect of, any capital expenditure except for capital
expenditure taken into account as a Permitted Payment in the
current Forecast; and
(ii) in any event, not make or incur, or incur any obligation or
liability for or in respect of, any capital expenditure,
exploration and appraisal expenditure or general
administrative expenditure at any time whilst a Default is
subsisting.
19.23 HEDGING
(a) MCE shall from time to time promptly enter into such hedging
arrangement(s) (whether in respect of petroleum prices or interest or
exchange rates) as the Technical Agent may from time to time require.
(b) Without limiting or affecting Clause 19.13 (Other Financial
Indebtedness), no Obligor shall at any time enter into any hedging
arrangements(s) with any person that is not a Bank.
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19.24 INTRA-GROUP TRANSACTIONS
No Obligor shall enter into any transaction or arrangement with any
other members of the Group otherwise than on arms'-length terms.
19.25 TURKISH BUSINESSES
(a) MOCE shall procure that each of Madison Turkey and MOTI:
(i) converts all amounts received by it in a currency other than
Dollars into Dollars as soon as it is lawfully able to do so
(except to the extent it needs to keep the relevant funds in
the currency in which they were received in order to be able
to meet operating expenditure denominated in that currency);
(ii) following such conversion, holds all such funds in Dollars and
makes no payments from them except for:
(A) payment of its normal operating expenditure in the
ordinary course of trading; and
(B) the payment of dividends or other distributions to
MOCE, or the payment or repayment of borrowings owing
to MOCE; and
(iii) in any event, does not make any payment to any other member of
the Group except for payments of the kind contemplated by
paragraph (ii)(B) above and payments to MOCE for overheads and
corporate services up to an aggregate amount (for Madison
Trading and MOTI together) which, when aggregated with all
amounts paid under the Management Agreements, does not exceed
$1,000,000 in any 6-month period ending on a Calculation Date;
and
(iv) makes payments of the kind contemplated by paragraph (ii)(B)
above whenever it is lawfully and prudently able to do so, and
in any event does so not less than once in each half of each
of its financial years.
(b) MOCE shall procure that, by not later than 31st August, 2001:
(i) Madison Turkey shall have transferred all of its assets,
liabilities, business and undertaking to MOTI and shall have
been wound up and dissolved; and
(ii) MOTI shall have discharged in full all of the consideration
for that transfer.
(c) No Obligor shall amend, waive or terminate either Management Agreement
or any other management, services or supply agreement between itself
and any other member of the Group.
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19.26 INVESTMENT COMPANY ACT
No Obligor will, either by act or omission, become, or permit any other
Obligor to become, an "investment company" or a company "controlled" by
an "investment company", within the meaning of the United States
Investment Company Act of 1940, as amended.
19.27 MARGIN STOCK
The Obligors will use the proceeds of the Loans only for the purpose
described in Clause 3 (Purpose). No Obligor will engage in the business
of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations U and X issued by the Board of
Governors of the United States Federal Reserve System), and no portion
of any Loan will be used, directly or indirectly, to purchase or carry
margin stock or to extend credit to others for the purpose of
purchasing or carrying margin stock. No portion of any Loan will be
used to acquire any security in a transaction that is subject to
Section 13 or 14 of the United States Securities Exchange Act of 1934,
as amended.
19.28 SOLVENCY
Each US Guarantor will, at all times, maintain sufficient capital to
conduct its current and proposed business and operations, maintain its
ability to pay its debts as they become due, and continue to own
property having a value - both at fair valuation and at present fair
saleable value - greater than the total amount of the probable
liability of such US Guarantor on its debts and obligations (including
this Agreement).
19.29 SECURITY MATTERS
The Borrowers shall procure that:
(a) the MCE Share Pledge and the MOF Share Pledge are to be
validly granted (in a form acceptable to the Facility Agent),
and all such formalities as the Facility Agent may require in
relation to those documents are completed, by 7th June, 2001;
and
(b) an audit of the Computer Model (satisfactory to the Technical
Agent) is provided to the Agents by 31st May, 2001; and
(c) certified English translations of the following documents are
provided to the Agents by 30th April, 2001:
(i) Oil Sales Agreement with Elf Antar;
(ii) Strategic Reserve Rights Sales Agreement with SIPLEC;
and
(iii) Neocomian Purchase and Sale Agreement with Elf
Aquitaine Exploration Production S.A.; and
64
(d) evidence (satisfactory to the Technical Agent) that insurances
acceptable to the Technical Agent are in force in respect of
the Borrowing Base Assets is supplied to the Agents not later
than 14th April, 2001.
20. DEFAULT
20.1 EVENTS OF DEFAULT
Each of the events set out in this Clause is an Event of Default
(whether or not caused by any reason whatsoever outside the control of
an Obligor or any other person).
20.2 NON-PAYMENT
An Obligor does not pay on the due date any amount payable by it under
the Finance Documents at the place at and in the currency in which it
is expressed to be payable (including, without limitation, any amount
payable by the Borrowers under Clause 6 (Repayment) or Clause 7
(Prepayment, cancellation and mitigation)) unless the Borrowers' Agent
demonstrates that the failure is due solely to technical or
administrative reasons and the relevant amount is paid in full within 3
Business Days after the due date.
20.3 BREACH OF OTHER OBLIGATIONS
An Obligor does not comply with any provision of the Finance Documents
(other than those referred to in Clause 20.2 (Non-payment)) unless that
non-compliance is, in the opinion of the Majority Banks, capable of
remedy within the relevant grace period and is in fact remedied within
the relevant grace period after any of the Obligors first becomes aware
of it, and for these purposes the "RELEVANT GRACE PERIOD" is 14 days
except in the case of non-compliance only with any of Clauses 19.2
(Financial and miscellaneous information), 19.20 (Taxes), 19.21
(Environmental matters) and 19.25 (Turkish businesses), in which case
it is 21 days.
20.4 MISREPRESENTATION
A representation, warranty or statement in writing made or repeated in
or in connection with any Finance Document or in any document delivered
by or on behalf of an Obligor under or in connection with any Finance
Document is incorrect in any material respect when made or deemed to be
made or repeated and if the cause(s) and consequence(s) of that
incorrectness are, in the opinion of the Majority Banks capable of
being remedied within 14 days, it/they is/are not remedied within 14
days after any of the Obligors first becomes aware of it.
20.5 CROSS-DEFAULT
(a) Any Financial Indebtedness of a member of the Group (other than an
Excluded Subsidiary) is not paid when due; or
(b) an event of default howsoever described occurs under any document
relating to Financial Indebtedness of a member of the Group (other than
an Excluded Subsidiary); or
65
(c) any Financial Indebtedness of a member of the Group (other than an
Excluded Subsidiary) becomes prematurely due and payable or is placed
on demand as a result of an event of default (howsoever described)
under the document relating to that Financial Indebtedness; or
(d) any commitment for, or underwriting of, any Financial Indebtedness of a
member of the Group (other than an Excluded Subsidiary) is cancelled or
suspended as a result of an event of default (howsoever described)
under the document relating to that Financial Indebtedness; or
(e) any Security Interest securing Financial Indebtedness over any asset of
a member of the Group (other than an Excluded Subsidiary) becomes
enforceable,
in each case where the Financial Indebtedness in question is greater
than or equal to $50,000 or its equivalent in other currencies.
20.6 INSOLVENCY
(a) A member of the Group (other than an Excluded Subsidiary) is, or is
deemed for the purposes of any law to be, unable to pay its debts as
they fall due or to be insolvent (including, without limitation "en
etat de cession de paiements"), or admits inability to pay its debts as
they fall due; or
(b) a member of the Group (other than an Excluded Subsidiary) suspends
making payments on all or any class of its debts or announces an
intention to do so, or a moratorium is declared in respect of any of
its indebtedness; or
(c) a member of the Group (other than an Excluded Subsidiary) by reason of
financial difficulties, begins negotiations with one or more of its
creditors with a view to the readjustment or rescheduling of any of its
indebtedness (including without limitation by way of "reglement
amiable").
20.7 INSOLVENCY PROCEEDINGS
(a) Any step (including petition, proposal or convening a meeting) is taken
with a view to a composition, assignment or arrangement with any
creditors of any member of the Group (other than an Excluded
Subsidiary); or
(b) a meeting of any member of the Group (other than an Excluded
Subsidiary) is convened for the purpose of considering any resolution
for (or to petition for) its winding-up or for its administration,
dissolution, liquidation, or redressement judiciaire, or any such
resolution is passed; or
(c) any person presents a petition for the winding-up or for the
administration of any member of the Group (other than an Excluded
Subsidiary) unless, in the case of a winding-up petition but not an
administration petition, it is patently frivolous, vexatious or an
abuse of process and is unconditionally dismissed within 21 days after
being presented; or
(d) any order for the winding-up or administration dissolution,
liquidation, or redressement judiciaire, of any member of the Group
(other than an Excluded Subsidiary) is made; or
66
(e) any other step analogous to any of the above (including petition,
proposal or convening a meeting) is taken with a view to the
rehabilitation, administration, custodianship, liquidation, winding-up
or dissolution of any member of the Group (other than an Excluded
Subsidiary) or any other insolvency proceedings involving any member of
the Group (other than an Excluded Subsidiary).
20.8 APPOINTMENT OF RECEIVERS AND MANAGERS
(a) Any liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or the like
(including any administrateur judiciaire, provisiore, mandataire ad
hoc, conciliateur or mandataire liquidateur) is appointed in respect of
any member of the Group (other than an Excluded Subsidiary) or any part
of its assets; or
(b) the directors, shareholders or creditors of a member of the Group
(other than an Excluded Subsidiary) requests the appointment of a
liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or the like
(including any administrateur judiciaire, provisiore, mandataire ad
hoc, conciliateur or mandataire liquidateur); or
(c) any other steps are taken to enforce any Security Interest over any
part of the assets of any member of the Group (other than an Excluded
Subsidiary).
20.9 CREDITORS' PROCESS
Any attachment, sequestration, distress or execution affects any asset
of a member of the Group (other than an Excluded Subsidiary) unless it
is discharged within 14 days.
20.10 ANALOGOUS PROCEEDINGS
There occurs, in relation to a member of the Group (other than an
Excluded Subsidiary), any event anywhere which, in the opinion of the
Majority Banks, corresponds with any of those mentioned in Clauses 20.6
(Insolvency)-20.9 (Creditors' process) (inclusive).
20.11 CESSATION OF BUSINESS
A member of the Group (other than Madison Turkey and any Excluded
Subsidiary) ceases, or threatens to cease, to carry on all or a
substantial part of its business.
20.12 UNLAWFULNESS
It is or becomes unlawful for an Obligor to perform any of its
obligations under any Transaction Document.
20.13 EFFECTIVENESS OF SECURITY
The guarantee of a Guarantor or any Security Document (or any Security
Interest purported to be created or evidenced by any Security Document)
is not valid, binding and enforceable or is alleged by an Obligor not
to be valid, binding or enforceable for any reason.
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20.14 COVER RATIOS
(a) The ratio of Relevant NPV to Total Indebtedness is at any time less
than 1.25:1; or
(b) the Majority Banks are at any time of the view that the applicable
Forecast for the time being does not demonstrate that MCE will be able
to meet all of its obligations in full as they fall due at all times
until the Final Repayment Date; or
(c) a Redetermination Date occurs and no Forecast prepared as of that
Redetermination Date has been approved by the Majority Banks
20.15 PROJECT DOCUMENTS
(a) Any Project Document is not, or ceases to be, a legal, valid and
binding obligation of any person expressed to be party to it; or
(b) any party to any Project Document defaults under that Project Document;
or
(c) any Project Document is or becomes capable of being suspended,
terminated or revoked by any party to it, or is suspended, terminated
or revoked,
in circumstances where the event referred to in paragraph
(a)-(c)(inclusive) above (or its possible consequences, such as
termination of the relevant Project Document) would be likely, in the
reasonable opinion of the Majority Banks, to have a material adverse
effect, unless the event in question is, within 30 days of notification
to any Obligor, remedied in a manner satisfactory to the Majority Banks
and the Majority Banks are satisfied that, in all the circumstances,
there is no materially increased risk during that 30 days' period.
20.16 BORROWING BASE ASSETS
(a) A decision is taken to abandon a Borrowing Base Asset; or
(b) all or any part of any Borrowing Base Interest (or any petroleum or
revenues or other moneys arising in respect of any Borrowing Base
Interest) is nationalised, expropriated, compulsorily acquired or
seized by any government or any governmental or public sector agency,
or any such government or agency takes, or officially announces that it
will take, any step with a view to any of the above.
20.17 LITIGATION
Any litigation, arbitration or administrative proceedings are
instituted or current in respect of any member of the Group which would
be likely, if adversely determined, to have a material adverse effect.
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20.18 AUTHORISATIONS
Any person is or becomes entitled to terminate or suspend any
authorisation of any kind referred to in Clause 18.8(b)
(Authorisations) and any such entitlement, termination or suspension
would be likely to have a material adverse effect.
20.19 INSURANCE
Any insurance required under the Finance Documents is not or ceases to
be in full force and effect.
20.20 CHANGE OF CONTROL
(a) Any Obligor (other than MOC) is not, or ceases to be, a wholly-owned
subsidiary of MOC; or
(b) MCE is not, or ceases to be, a wholly-owned subsidiary of MOF; or
(c) MOF is not, or ceases to be, a wholly-owned subsidiary of MOCE; or
(d) any single person, or group of persons acting in concert (as defined in
the City Code on Takeovers and Mergers) acquires control (as defined in
Section 416 of the Income and Corporation Taxes Act 1988) of MOC.
20.21 MATERIAL ADVERSE CHANGE
Any event or series of events occurs which, in the reasonable opinion
of the Majority Banks, would be likely to have a material adverse
effect.
20.22 U.S. BANKRUPTCY LAWS
(a) Any Obligor makes a general assignment for the benefit of creditors; or
(b) any Obligor commences a voluntary case or proceeding under the United
States Bankruptcy Code of 1978, as amended, or under any other United
States Federal or State bankruptcy, insolvency or other similar law
(collectively "U.S. BANKRUPTCY LAWS"); or
(c) an involuntary case under any U.S. Bankruptcy Law is commenced against
any Obligor and the petition is not controverted within 30 days and is
not dismissed or stayed within 90 days after commencement of the case;
or
(d) a custodian, conservator, receiver, liquidator, assignee, trustee,
sequestrator or other similar official is appointed under any U.S.
Bankruptcy Law for or takes charge of, all or substantial part of the
property of any Obligor.
20.23 ERISA
(a) Any event or condition that presents a material risk that any Obligor
or any ERISA Affiliate may incur a material liability to a Plan or to
the United States Internal Revenue Service or to the United States
Pension Benefit Guaranty Corporation; or
69
(b) an "accumulated funding deficiency" (as that term is defined in section
412 of the United States Internal Revenue Code of 1986, as amended, or
section 302 of ERISA), whether or not waived, by reason of the failure
of any Obligor or any ERISA Affiliate to make a contribution to a Plan.
20.24 ACCELERATION
(a) At any time whilst an Event of Default is subsisting, the Facility
Agent may, and shall if so directed by the Majority Banks, by notice to
the Borrowers' Agent:
(i) cancel the Total Commitments in full or in part; and/or
(ii) demand that all or part of the Loans, together with accrued
interest, and any or all other amounts accrued under the
Finance Documents be immediately due and payable, whereupon
they shall become immediately due and payable; and/or
(iii) demand that all or part of the Loans be payable on demand,
whereupon they shall immediately become payable on demand by
the Facility Agent acting on the instructions of the Majority
Banks.
(b) Upon the occurrence of an Event of Default set out in Clause 20.22
(U.S. Bankruptcy Laws):
(i) the Total Commitments shall automatically and immediately be
cancelled in full; and
(ii) all of the Loans, together with accrued interest, and all
other amounts accrued under the Finance Documents, shall
automatically be immediately due and payable.
20.25 CONTROL ACCOUNTS
At any time whilst an Event of Default is subsisting, the Facility
Agent may, and shall if so directed by the Majority Banks, without
notice to, or the consent of, any Obligor:
(a) give notice to the Account Bank that it is to be the sole
signatory on any or all of the Control Accounts; and/or
(b) give notice to the Account Bank that no withdrawal may be made
from any or all of the Control Accounts or that no payment be
made to any specified person(s) from any or all of the Control
Accounts) except with the specific prior written consent of
the Facility Agent; and/or
(c) apply all amounts in the Control Accounts in or towards
payment or repayment of amounts outstanding or payable by any
Obligor under the Finance Documents and such other amounts
payable by any Obligor (including, without limitation,
Permitted Payments) as the Majority Banks may agree, all in
such order as the Facility Agent thinks fit (but subject, as
between the Finance Parties and without conferring any rights
on any Obligor, to Clause 10.7 (Partial payments)).
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Any such notice shall take effect in accordance with its terms. The
Finance Parties acknowledge that they may not, under this Clause, apply
any amount in such a way as to contravene French law no 66-537 of 24th
July, 1966.
20.26 NO INDEPENDENT ACTION
No Finance Party may, except with the prior consent of the Majority
Banks:
(a) enforce any Security Interest created or evidenced by any
Security Document or require the Facility Agent to enforce any
such Security Interest;
(b) xxx for or institute any creditor's process (including a
Mareva injunction, garnishment, execution or levy, whether
before or after judgment) in respect of any obligation
(whether or not for the payment of money) owing to it under or
in respect of any Finance Document;
(c) take any step (including petition, application, notice of
meeting or proposal to creditors) for the liquidation,
winding-up or administration of, or any insolvency proceeding
in relation to, an Obligor, or for a voluntary arrangement or
scheme of arrangement in relation to an Obligor;
(d) apply for any order for an injunction or specific performance
in respect of an Obligor in relation to any of the Finance
Documents.
20.27 ACTION BY HEDGING BANK
Except as the Majority Banks have previously consented in writing, the
Hedging Bank will not:
(a) demand (other than as may be necessary in order to exercise
any right to terminate or close out any hedging transactions)
or receive payment of, or any distribution in respect of (or
on account of) any Hedging Liability in cash or kind, or apply
any money or assets in or towards the discharge of any Hedging
Liability except for:
(i) scheduled payments arising under the original terms
of the relevant Hedging Agreement (without regard to
any amendments made after the date of that Hedging
Agreement); and
(ii) the proceeds of enforcement of the Security Documents
received and applied as permitted by this Agreement;
(b) discharge any Hedging Liability by set-off or any right of
combination of accounts or otherwise except if and to the
extent that the Hedging Liability in question is permitted to
be paid under paragraph (a) above and no Event of Default is
subsisting; or
(c) permit to subsist or receive any Security Interest or any
guarantee or other assurance against financial loss for, or in
respect of, any Hedging Liability other than under the
Security Documents specified in paragraph (a) of the
definition of that term or any other Security Interest or
guarantee granted for the joint benefit of the Banks; or
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(d) exercise any right to terminate or close out of any hedging
transaction other than by reason of a payment event of default
by the relevant Obligor under the relevant Hedging Agreement,
or if the Facility Agent has notified the Hedging Bank that it
has exercised any of its rights under Clause 20.24
(Acceleration) or if Clause 20.24 (b) applies.
20.28 ANCILLARY FACILITY AND HEDGING PAYMENTS AFTER AN EVENT OF DEFAULT
The Facility Agent may, and shall if so instructed by the Majority
Banks, at any time whilst Default is subsisting, by notice to the
Borrower's Agent and the Ancillary Bank or Hedging Bank (as
appropriate) require all payments by MCE under or in respect of
Ancillary Facility Letter or any Hedging Agreement to be made to it
(for the account of the Ancillary Bank or the relevant Hedging Bank) in
accordance with Clause 10 (Payments). MCE and the Ancillary Bank or the
relevant Hedging Bank shall comply with any such notice in accordance
with its terms.
21. THE AGENTS AND THE ARRANGER
21.1 APPOINTMENT AND DUTIES OF THE AGENTS
(a) Each Finance Party (other than the Agents) irrevocably appoints each
Agent to act as its agent under and in connection with the Finance
Documents.
(b) Each Party appointing the Agents irrevocably authorises each Agent on
its behalf to:
(i) perform the duties and to exercise the rights, powers and
discretions that are specifically delegated to the relevant
Agent under or in connection with the Finance Documents,
together with any other incidental rights, powers and
discretions; and
(ii) execute each Finance Document expressed to be executed by the
relevant Agent on that Party's behalf.
(c) Each Agent shall have only those duties which are expressly specified
in the Finance Documents. Those duties are solely of a mechanical and
administrative nature.
21.2 ROLE OF THE ARRANGER
Except as otherwise provided in the Finance Documents, the Arranger has
no obligations of any kind to any other Party under or in connection
with any Finance Document.
21.3 RELATIONSHIP
The relationship between the Agents and the other Finance Parties is
that of agent and principal only. Nothing in this Agreement constitutes
any Agent as trustee or fiduciary for any other Party or any other
person and neither Agent need hold in trust any moneys paid to it for a
Party or be liable to account for interest on those moneys.
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21.4 MAJORITY BANKS' INSTRUCTIONS
(a) Each Agent will be fully protected if it acts in accordance with the
instructions of the Majority Banks in connection with the exercise of
any right, power or discretion or any matter not expressly provided for
in the Finance Documents. Any such instructions given by the Majority
Banks will be binding on all the Banks. In the absence of such
instructions each Agent may act as it considers to be in the best
interests of all the Banks.
(b) No Agent is authorised to act on behalf of a Bank (without first
obtaining that Bank's consent) in any legal or arbitration proceedings
relating to any Finance Document.
21.5 DELEGATION
Each Agent may act under the Finance Documents through its personnel
and agents.
21.6 RESPONSIBILITY FOR DOCUMENTATION
None of the Agents and the Arranger is responsible to any other Party
for:
(a) the execution, genuineness, validity, enforceability or
sufficiency of any Transaction Document or any other document;
(b) the collectability of amounts payable under any Finance
Document; or
(c) the accuracy of any statements (whether written or oral) made
in or in connection with any Transaction Document (including,
without limitation, the Information Package).
21.7 DEFAULT
(a) No Agent is obliged to monitor or enquire as to whether or not a
Default has occurred. No Agent will be deemed to have knowledge of the
occurrence of a Default. However, if an Agent receives notice from a
Party referring to this Agreement, describing the Default and stating
that the event is a Default, it shall promptly notify the Banks.
(b) No Agent may require the receipt of security satisfactory to it
(whether by way of payment in advance or otherwise) against any
liability or loss which it will or may incur in taking any proceedings
or action arising out of or in connection with any Finance Document
before it commences these proceedings or takes that action.
21.8 EXONERATION
(a) Without limiting paragraph (b) below, no Agent will be liable to any
other Party for any action taken or not taken by it under or in
connection with any Finance Document, unless directly caused by its
gross negligence or wilful misconduct.
(b) No Party may take any proceedings against any officer, employee or
agent of any Agent in respect of any claim it might have against that
Agent or in respect of any act or omission of any
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kind (including gross negligence or wilful misconduct) by that officer,
employee or agent in relation to any Finance Document.
21.9 RELIANCE
Each Agent may:
(a) rely on any notice or document believed by it to be genuine
and correct and to have been signed by, or with the authority
of, the proper person;
(b) rely on any statement made by a director or employee of any
person regarding any matters which may reasonably be assumed
to be within his knowledge or within his power to verify; and
(c) engage, pay for and rely on legal or other professional
advisers selected by it (including those in the relevant
Agent's employment and those representing a Party other than
the relevant Agent).
21.10 CREDIT APPROVAL AND APPRAISAL
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance
Document, each Bank confirms that it:
(a) has made its own independent investigation and assessment of
the financial condition and affairs of each Obligor and its
related entities, and of each Borrowing Base Asset and Project
Document, in connection with its participation in this
Agreement and has not relied exclusively on any information
provided to it by either Agent or the Arranger in connection
with any Finance Document; and
(b) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities, and
all of the other matters referred to in paragraph (a) above,
while any amount is or may be outstanding under the Finance
Documents or any Commitment is in force.
21.11 INFORMATION
(a) Each Agent shall promptly forward to the person concerned the original
or a copy of any document which is delivered to that Agent by a Party
for that person.
(b) The Facility Agent shall promptly supply a Bank with a copy of each
document received by the Facility Agent under Clause 4 (Conditions
precedent) (other than any Fee Letter) upon the request and at the
expense of that Bank.
(c) Except where this Agreement specifically provides otherwise, neither
Agent is obliged to review or check the accuracy or completeness of any
document it forwards to another Party.
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(d) Except as provided above, no Agent has any duty:
(i) either initially or on a continuing basis to provide any Bank
with any credit or other information concerning the financial
condition or affairs of any Obligor or any related entity of
any Obligor, or concerning any Borrowing Base Asset or Project
Document, in each case whether coming into its possession or
that of any of its related entities before, on or after the
date of this Agreement; or
(ii) unless specifically requested to do so by a Bank in accordance
with a Finance Document, to request any certificates or other
documents from any Obligor.
21.12 THE AGENTS AND THE ARRANGER INDIVIDUALLY
(a) If it is also a Bank, each Agent and the Arranger has the same rights
and powers under this Agreement as any other Bank and may exercise
those rights and powers as though it were not an Agent or the Arranger.
(b) Each Agent and the Arranger may:
(i) carry on any business with an Obligor or its related entities;
(ii) act as agent or trustee for, or in relation to any financing
involving, an Obligor or its related entities; and
(iii) retain any profits or remuneration in connection with its
activities under the Finance Documents or in relation to any
of the above.
(c) In acting as an Agent, the agency division of each Agent shall be
treated as a separate entity from its other divisions and departments.
Any information acquired by an Agent which, in its opinion, is acquired
by it otherwise than in its capacity as that Agent may be treated as
confidential by that Agent and shall not be deemed to be information
possessed by that Agent in its capacity as such.
(d) Each Obligor irrevocably authorises each Agent to disclose to the other
Finance Parties any information which in its opinion is received by it
in its capacity as Agent.
(e) The Facility Agent may deduct from any amount received by it for the
Banks pro rata any unpaid fees, costs and expenses of any Agent
incurred in connection with the Finance Documents.
21.13 INDEMNITIES
(a) Without limiting the liability of any Obligor under the Finance
Documents, each Bank shall immediately on demand indemnify each Agent
for its proportion of any liability or loss incurred by that Agent in
any way relating to or arising out of its acting as Agent, except to
the extent that the liability or loss arises directly from the relevant
Agent's gross negligence or wilful misconduct.
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(b) A Bank's proportion of the liability or loss set out in paragraph (a)
above is the proportion which the aggregate principal amount of its
participations in all outstanding Loans (if any) bears to the aggregate
principal amount of all outstanding Loans on the date of the demand.
However, if there are no Loans outstanding on the date of demand, then
the proportion will be the proportion which its Commitment bears to the
Total Commitments at the date of demand or, if the Total Commitments
have been cancelled, bore to the Total Commitments immediately before
being cancelled.
21.14 COMPLIANCE
(a) Each Agent may refrain from doing anything which might, in its opinion,
constitute a breach of any law or regulation or be otherwise actionable
at the suit of any person, and may do anything which, in its opinion,
is necessary or desirable to comply with any law or regulation of any
jurisdiction.
(b) Without limiting paragraph (a) above, no Agent need disclose any
information relating to an Obligor or any of its related entities, or
to any Borrowing Base Asset or Project Agreement, if the disclosure
might, in the opinion of the relevant Agent, constitute a breach of any
law or regulation or any duty of secrecy or confidentiality or be
otherwise actionable at the suit of any person.
21.15 RESIGNATION OF AGENTS
(a) Notwithstanding its irrevocable appointment, either Agent may resign by
giving notice to the Banks and the Borrowers' Agent, in which case that
Agent may immediately appoint one of its Affiliates as successor Agent
or, failing that, the Majority Banks may, with the consent of the
Borrowers' Agent (including in relation by fees) (which shall not be
unreasonably withheld or delayed), appoint a successor Agent. The
parties agree that any resignation of the US Security Agent shall be
governed by the provision of the Security Documents to which it is a
party.
(b) If the appointment of a successor Agent is to be made by the Majority
Banks but they have not, within 30 days after notice of resignation,
appointed a successor Agent which accepts the appointment, the retiring
Agent may appoint a successor Agent (regardless of whether or not the
Borrowers' Agent or any other Obligor consents to the appointment).
(c) The resignation of the retiring Agent and the appointment of any
successor Agent will both become effective only upon the successor
Agent notifying all the Parties that it accepts the appointment. On
giving the notification, the successor Agent will succeed to the
position of the retiring Agent and the term "FACILITY AGENT",
"TECHNICAL AGENT" or "AGENT" (as the case may be) will mean the
successor Agent.
(d) The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance
as the successor Agent may reasonably request for the purposes of
performing its functions as Agent under this Agreement.
(e) Upon its resignation becoming effective, this Clause 21 (The Agents and
the Arranger) shall continue to benefit the retiring Agent in respect
of any action taken or not taken by it under or in
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connection with the Finance Documents while it was Agent, and, subject
to paragraph (d) above, it shall have no further obligation under any
Finance Document.
21.16 BANKS
(a) Each Agent may treat each Bank as a Bank, entitled to payments under
this Agreement and as acting through its Facility Office(s), until it
has received not less than five Business Days' prior notice from the
Bank to the contrary.
(b) Each Agent may at any time, and shall if required to do so by the
Majority Banks, convene a meeting of the Banks.
21.17 EXTRAORDINARY MANAGEMENT TIME AND RESOURCES
MCE shall immediately on demand pay each Agent for the cost of
utilising its management time or other resources in connection with:
(a) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf
of an Obligor and relating to a Finance Document or a document
referred to in any Finance Document other than any such
amendment, waiver, consent or suspension of rights that is
reasonable and routinely required for a facility of this
nature and in relation to the re-negotiation of the Gas Sales
Agreement; or
(b) the occurrence of a Default; or
(c) the enforcement of, or the preservation of any rights under,
any Finance Document.
Any amount payable to an Agent under this Clause will be calculated on
the basis of such reasonable daily or hourly rates as the relevant
Agent may notify to the Borrowers' Agent, and is in addition to any fee
paid or payable to the Agent under Clause 22 (Fees).
21.18 AGENT AS TRUSTEE
(a) Each of the Facility Agent and the US Security Agent in its capacity as
trustee or otherwise under the Security Documents:
(i) is not liable for any failure, omission or defect in
perfecting or registering the security constituted or created
by any Finance Document;
(ii) may accept without enquiry such title as any Obligor may have
to any asset secured by any Security Document;
(iii) is not under any obligation to hold any Transaction Document
or any other document in connection with the Finance Documents
or the assets secured by any Finance Document (including title
deeds) in its own possession or to take any steps to protect
or preserve the same; and
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(iv) the Facility Agent may permit any Obligor to retain any
Transaction Document or other document in its possession.
(b) Except as otherwise provided in the Finance Documents, all moneys which
under the trusts contained in the Finance Documents are received by the
Facility Agent or the US Security Agent in its capacity as trustee or
otherwise may be invested in the name of or under the control of the
Agent in question in any investment authorised by English law for the
investment by trustees of trust money or in any other investments which
may be selected by that Agent. Additionally, the same may be placed on
deposit in the name of or under the control of the relevant Agent at
such bank or institution (including any of the Agents) and upon such
terms as the Agent in question may think fit.
22. FEES
22.1 ARRANGEMENT AND AGENCY FEES
MCE shall make payments to the Arranger and each of the Agents of the
amounts, and payable on the dates, set out in the Fee Letter(s) to
which the Arranger or the relevant Agent (as appropriate) is party.
22.2 COMMITMENT FEE
(a) MCE shall pay to the Facility Agent for each Bank a commitment fee in
Dollars computed at the rate of 1.25% per annum on the undrawn,
uncancelled amount of that Bank's Commitment from the date of this
Agreement until the end of the Commitment Period.
(b) Accrued commitment fee is payable quarterly in arrears, with the first
such payment being due on 30th June, 2001. Accrued commitment fee shall
also be payable to the Facility Agent for the relevant Bank(s) on the
cancelled amount of its Commitment at the time any cancellation comes
into effect.
22.3 VAT
Any payment or fee referred to in this Clause 22 is exclusive of any
value added tax or any other tax which might be chargeable in
connection with that payment or fee. If any value added tax or other
tax is so chargeable, it shall be paid by the Borrowers at the same
time as they pay the relevant fee.
23. EXPENSES
23.1 INITIAL AND SPECIAL COSTS
MCE shall immediately on demand pay the Agents and the Arranger the
amount of all reasonable costs and expenses (including legal fees)
incurred by any of them in connection with:
(a) the negotiation, preparation, printing and execution of:
(i) this Agreement and any other documents referred to in
this Agreement;
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(ii) any other Finance Document (other than a Novation
Certificate) executed on or after the date of this
Agreement;
(b) any amendment, waiver, consent or suspension of rights (or any
proposal for any of the foregoing) requested by or on behalf
of an Obligor or, in the case of Clause 2.4 (Change of
currency), the Facility Agent, and relating to a Finance
Document or a document referred to in any Finance Document;
and
(c) the syndication of the Facility.
23.2 ENFORCEMENT COSTS
Each Obligor shall promptly on demand pay to each Finance Party the
amount of all costs and expenses (including legal fees) incurred by it
in connection with the enforcement of, or the preservation of any
rights under, any Finance Document.
24. STAMP DUTIES
Each Obligor shall pay, and immediately on demand indemnify each
Finance Party against any liability it incurs in respect of, any stamp,
registration and similar tax which is or becomes payable in connection
with the entry into, performance or enforcement of any Finance
Document.
25. INDEMNITIES
25.1 CURRENCY INDEMNITY
(a) If a Finance Party receives an amount in respect of an Obligor's
liability under the Finance Documents, or if such a liability is
converted into a claim, proof, judgment or order, in a currency other
than the currency (the "CONTRACTUAL CURRENCY") in which the amount is
expressed to be payable under the relevant Finance Document:
(i) that Obligor shall indemnify that Finance Party as an
independent obligation against any loss or liability arising
out of or as a result of the conversion;
(ii) if the amount received by that Finance Party, when converted
into the contractual currency at a market rate in the usual
course of its business, is less than the amount owed in the
contractual currency, the Obligor concerned shall immediately
on demand pay to that Finance Party an amount in the
contractual currency equal to the deficit; and
(iii) the Obligor shall immediately on demand pay to the Finance
Party concerned any exchange costs and taxes payable in
connection with any such conversion.
(b) Each Obligor waives any right it may have in any jurisdiction to pay
any amount under the Finance Documents in a currency other than that in
which it is expressed to be payable.
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25.2 OTHER INDEMNITIES
(a) MCE shall immediately on demand indemnify each Finance Party against
any loss or liability which that Finance Party incurs as a consequence
of:
(i) the occurrence of any Default;
(ii) a change in currency of a country or the operation of Clause
2.4 (Change of currency), Clause 20.22 (U.S. Bankruptcy laws)
or Clause 31 (Pro rata sharing);
(iii) any payment of principal or an overdue amount being received
from any source otherwise than on the last day of a relevant
Interest Period or Designated Interest Period (as defined in
Clause 9.3 (Default interest)) relative to the amount so
received; or
(iv) a Loan (or part of a Loan) not being prepaid in accordance
with a notice of prepayment or (other than by reason of
negligence or default by that Finance Party) a Loan not being
made after the Borrowers' Agent has delivered a Request.
MCE's liability in each case includes any loss of margin or other loss
or expense on account of funds borrowed, contracted for or utilised to
fund any amount payable under any Finance Document, any amount repaid
or prepaid or any Loan.
(b) MCE irrevocably and unconditionally undertakes that it will,
immediately on demand, indemnify the sole Bank as at the date of this
Agreement against any loss or liability which the Bank suffers or
incurs under or in connection with:
(i) the letter of credit dated 30th June, 1998 issued by Bank of
Scotland; and/or
(ii) the counter-indemnity agreement of the same date as this
Agreement which that Bank has, at MCE's request, given to Bank
of Scotland in respect of that letter of credit.
26. EVIDENCE AND CALCULATIONS
26.1 ACCOUNTS
Accounts maintained by a Finance Party in connection with this
Agreement are prima facie evidence of the matters to which they relate.
26.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or
amount under the Finance Documents is, in the absence of manifest
error, conclusive evidence of the matters to which it relates.
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26.3 CALCULATIONS
Interest (including any applicable Mandatory Cost) and the fee payable
under Clause 22.2 (Commitment fee) accrue from day to day and are
calculated on the basis of the actual number of days elapsed and a year
of 360 days.
27. AMENDMENTS AND WAIVERS
27.1 PROCEDURE
(a) Subject to Clause 27.2 (Exceptions), any term of the Finance Documents
may be amended or waived with the agreement of the Borrowers' Agent and
the Majority Banks. The Facility Agent may effect, on behalf of any
Finance Party, an amendment or waiver permitted under this Clause.
(b) The Facility Agent shall promptly notify the other Parties of any
amendment or waiver effected under paragraph (a) above, and any such
amendment or waiver shall be binding on all the Parties.
27.2 EXCEPTIONS
(a) An amendment or waiver not agreed by a Bank and which relates to:
(i) the definition of "MAJORITY BANKS" in Clause 1.1
(Definitions);
(ii) an extension of the date for, or a decrease in an amount or a
change in the currency of, any payment under the Finance
Documents (including the Margin and any fee payable under
Clause 22.2 (Commitment fee));
(iii) an increase in that Bank's Commitment;
(iv) the incorporation of additional borrowers or a change in the
identity of either Guarantor;
(v) a term of a Finance Document which expressly requires the
consent of that Bank; or
(vi) Clause 2.3 (Nature of a Finance Party's rights and
obligations), Clause 28.2 (Transfers by Banks), Clause 31 (Pro
rata sharing) or this Clause 27,
is not binding on that Bank.
(b) An amendment or waiver which relates to the rights and/or obligations
of the Facility Agent may not be effected without the agreement of the
Facility Agent.
(c) An amendment or waiver of:
(i) any right of a Borrower or Hedging Bank under any Hedging
Agreement; or
(ii) any other provision of the Finance Documents to the extent
that the amendment or waiver in question adversely affects the
interests of a Hedging Bank in respect of a
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Hedging Agreement to a greater extent than it adversely
affects the interests of the Banks in respect of this
Agreement,
may not be effected without the agreement of the Borrower and the
Hedging Bank party to that Hedging Agreement.
27.3 WAIVERS AND REMEDIES CUMULATIVE
The rights of each Finance Party under the Finance Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the
general law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a waiver
of that right.
28. CHANGES TO THE PARTIES
28.1 TRANSFERS BY OBLIGORS
No Obligor may assign, transfer, novate or dispose of any of, or any
interest in, its rights and/or obligations under the Finance Documents.
28.2 TRANSFERS BY BANKS
(a) A Bank (the "EXISTING BANK") may, subject to paragraph (b) below, at
any time assign, transfer or novate any of its Commitment and/or any of
its rights and/or obligations under the Finance Documents to another
bank or financial institution (the "NEW BANK").
(b) The prior consent of the Borrowers' Agent is required for any such
assignment, transfer or novation, unless the New Bank is another Bank
or an Affiliate of a Bank. However, such consent may not be
unreasonably withheld or delayed and will be deemed to have been given
if, within five Business Days of receipt by the Borrowers' Agent of an
application for consent, it has not been expressly refused. Any
transfer by a Bank of part of its Commitment must be of an amount of at
least $5,000,000.
(c) A transfer of obligations will be effective only if either:
(i) the obligations are novated in accordance with Clause 28.3
(Procedure for novations); or
(ii) the New Bank confirms to the Facility Agent and the Borrowers'
Agent that it undertakes to be bound by the terms of this
Agreement as a Bank in form and substance satisfactory to the
Facility Agent.
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On a transfer becoming effective in the manner contemplated by
paragraph (ii) above, the Existing Bank shall be relieved of its
obligations under this Agreement to the extent that they are
transferred to the New Bank.
(d) Nothing in this Agreement restricts the ability of a Bank to
sub-contract an obligation if that Bank remains liable under this
Agreement for that obligation.
(e) On each occasion an Existing Bank assigns, transfers or novates any of
its Commitment and/or any of its rights and/or obligations under this
Agreement, the New Bank shall, on the date the assignment, transfer
and/or novation takes effect, pay to the Facility Agent for its own
account a fee of $1,500.
(f) An Existing Bank is not responsible to a New Bank for:
(i) the execution, genuineness, validity, enforceability or
sufficiency of any Transaction Document or any other document;
(ii) the collectability of amounts payable under any Finance
Document; or
(iii) the accuracy of any statements (whether written or oral) made
in or in connection with any Finance Document.
(g) Each New Bank confirms to the Existing Bank and the other Finance
Parties that it:
(i) has made its own independent investigation and assessment of
the financial condition and affairs of each Obligor and its
related entities, and of the Borrowing Base Assets and Project
Documents, in connection with its participation in this
Agreement and has not relied exclusively on any information
provided to it by the Existing Bank in connection with any of
the above documents or matters; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities, and
of the other matters referred to in paragraph (i) above, while
any amount is or may be outstanding under this Agreement or
any Commitment is in force.
(h) Nothing in any Finance Document obliges an Existing Bank to:
(i) accept a re-transfer from a New Bank of any of the rights
and/or obligations assigned, transferred or novated under this
Clause; or
(ii) support any losses incurred by the New Bank by reason of the
non-performance by any Obligor of its obligations under this
Agreement or otherwise.
(i) Any reference in this Agreement to a Bank includes a New Bank, but
excludes a Bank if no amount is or may be owed to or by that Bank under
this Agreement and its Commitment has been cancelled or reduced to nil.
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28.3 PROCEDURE FOR NOVATIONS
(a) A novation is effected if:
(i) the Existing Bank and the New Bank deliver to the Facility
Agent a duly completed certificate, substantially in the form
of Part I of Schedule 5 (a "NOVATION CERTIFICATE"); and
(ii) the Facility Agent executes it.
(b) Each Party (other than the Existing Bank and the New Bank) irrevocably
authorises the Facility Agent to execute any duly completed Novation
Certificate on its behalf.
(c) To the extent that they are expressed to be the subject of the novation
in the Novation Certificate:
(i) the Existing Bank and the other Parties (the "EXISTING
PARTIES") will be released from their obligations to each
other (the "DISCHARGED OBLIGATIONS");
(ii) the New Bank and the existing Parties will assume obligations
towards each other which differ from the discharged
obligations only insofar as they are owed to or assumed by the
New Bank instead of the Existing Bank;
(iii) the rights of the Existing Bank against the existing Parties
and vice versa (the "DISCHARGED RIGHTS") will be cancelled;
and
(iv) the New Bank and the existing Parties will acquire rights
against each other which differ from the discharged rights
only insofar as they are exercisable by or against the New
Bank instead of the Existing Bank,
all on the date of execution of the Novation Certificate by the
Facility Agent or, if later, the date specified in the Novation
Certificate.
28.4 ADDITIONAL GUARANTORS
(a) Subject to paragraph (c) below, MOC shall procure that each company or
other person that becomes one of its Subsidiaries after the date of
this Agreement becomes an Additional Guarantor within 14 days of it
becoming a Subsidiary by delivering to the Facility Agent a Guarantor
Accession Agreement, duly executed by that Subsidiary. Upon execution
and delivery of a Guarantor Accession Agreement, the relevant
Subsidiary shall automatically become an Additional Guarantor.
(b) Unless otherwise agreed by the Facility Agent, MOC shall procure that,
at the same time as a Guarantor Accession Agreement is delivered to the
Facility Agent, there is also delivered to the Facility Agent all those
other documents listed in Part II of Schedule 2, in each case in form
and substance satisfactory to the Facility Agent.
84
(c) If MOC demonstrates to the satisfaction of the Facility Agent that it
is illegal for it to comply with its obligations under paragraph (a)
above, MOC shall only be obliged so to comply within 14 days after it
becomes legal to do so.
(d) The execution of a Guarantor Accession Agreement constitutes
confirmation by the Subsidiary concerned that the representations and
warranties set out in Clause 18 (Representations and warranties) to be
made by it on the date of the Guarantor Accession Agreement are
correct, as if made with reference to the facts and circumstances then
existing.
28.5 REFERENCE BANKS
If a Reference Bank (or, if a Reference Bank is not a Bank, the Bank of
which it is an Affiliate) ceases to be a Bank, the Facility Agent shall
(after consultation with the Borrowers' Agent) appoint another Bank or
an Affiliate of a Bank to replace that Reference Bank.
28.6 REGISTER
The Facility Agent shall keep a register of all the Parties and shall
supply any other Party (at that Party's expense) with a copy of the
register on request.
28.7 NO ADDITIONAL PAYMENTS
If following:
(a) any assignment, transfer or novation of all or any part of the
rights or obligations of a Bank to a New Bank under this
Clause 28; or
(b) any change in a Bank's Facility Office,
any additional amount is required to be paid to the New Bank or that
Bank (as the case may be) by any Obligor under Clause 11 (Taxes) or 13
(Increased costs) as a result of laws or regulations in force at the
time of that assignment, transfer, novation or change, then the New
Bank or Bank (acting through its new Facility Office) will be entitled
to receive any such amount only to the extent that the Existing Bank or
Bank (acting through its old Facility Office) would have been so
entitled had there been no assignment, transfer, novation or change in
Facility Office.
29. DISCLOSURE OF INFORMATION
(a) Subject to paragraph (b) below, each Finance Party undertakes to the
Borrowers' Agent to keep confidential all information received by it in
relation to the Finance Documents and not disclose it to any third
party (other than another Finance Party) except to the extent that:
(i) disclosure is to its directors, officers, employees, servants,
subcontractors (or their professional advisers) or agents to
the extent necessary to enable it to monitor, perform (or to
cause to be performed) or enforce any of its rights or
obligations under or in respect of any Finance Document;
85
(ii) disclosure is required by or pursuant to any law or regulation
or the rules or any order of any court, tribunal or agency of
competent jurisdiction;
(iii) disclosure is to its legal or other professional advisers;
(iv) the information has, except as a result of breach of
confidentiality by the Finance Party in question, become
publicly available or generally know to the public at the time
of such disclosure;
(v) the information is already lawfully in the possession of the
recipient or lawfully known to him prior to such disclosure;
(vi) disclosure is necessary in order to enforce its rights under
or in respect of a Finance Document;
(vii) disclosure is to any banking, taxation or other governmental
or regulatory authority which is lawfully entitled to that
disclosure or to which the Finance Party is accustomed to
disclose; or
(viii) disclosure to another Finance Party,
in all of which cases the Finance Party concerned may disclose the
relevant information.
(b) A Bank may disclose to one of its Affiliates or any person with whom it
is proposing to enter, or has entered into, any kind of transfer,
participation or other agreement in relation to this Agreement:
(i) a copy of any Finance Document; and
(ii) any information which that Bank has acquired under or in
connection with any Finance Document.
30. SET-OFF
A Finance Party may set off any matured obligation owed by an Obligor
under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any obligation (whether or not matured) owed by
that Finance Party to that Obligor, regardless of the place of payment,
booking branch or currency of either obligation. If the obligations are
in different currencies, the Finance Party may convert either
obligation at a market rate of exchange in its usual course of business
for the purpose of the set-off. If either obligation is unliquidated or
unascertained, the Finance Party may set off in an amount estimated by
it in good faith to be the amount of that obligation.
86
31. PRO RATA SHARING
31.1 REDISTRIBUTION
If any amount owing by an Obligor under the Finance Documents to a
Finance Party (the "RECOVERING FINANCE PARTY") is discharged by
payment, set-off or any other manner other than through the Facility
Agent in accordance with Clause 10 (Payments) (a "RECOVERY"), then:
(a) the recovering Finance Party shall, within three Business
Days, notify details of the recovery to the Facility Agent;
(b) the Facility Agent shall determine whether the recovery is in
excess of the amount which the recovering Finance Party would
have received had the recovery been received by the Facility
Agent and distributed in accordance with Clause 10 (Payments);
(c) subject to Clause 31.3 (Exception), the recovering Finance
Party shall, within three Business Days of demand by the
Facility Agent, pay to the Facility Agent an amount (the
"REDISTRIBUTION") equal to the excess;
(d) the Facility Agent shall treat the redistribution as if it
were a payment by the Obligor concerned under Clause 10
(Payments) and shall pay the redistribution to the Finance
Parties (other than the recovering Finance Party) in
accordance with Clause 10.7 (Partial payments); and
(e) after payment of the full redistribution, the recovering
Finance Party will be subrogated to the portion of the claims
paid under paragraph (d) above, and that Obligor will owe the
recovering Finance Party a debt which is equal to the
redistribution, immediately payable and of the type originally
discharged.
31.2 REVERSAL OF REDISTRIBUTION
If under Clause 31.1 (Redistribution):
(a) a recovering Finance Party must subsequently return a
recovery, or an amount measured by reference to a recovery, to
an Obligor; and
(b) the recovering Finance Party has paid a redistribution in
relation to that recovery,
each Finance Party shall, within three Business Days of demand by the
recovering Finance Party through the Facility Agent, reimburse the
recovering Finance Party all or the appropriate portion of the
redistribution paid to that Finance Party together with interest on the
amount to be returned to the recovering Finance Party for a period
whilst it held the re-distribution. Thereupon the subrogation in Clause
31.1(e) (Redistribution) will operate in reverse to the extent of the
reimbursement.
87
31.3 EXCEPTIONS
(a) A recovering Finance Party need not pay a redistribution to the extent
that it would not, after the payment, have a valid claim against the
Obligor concerned in the amount of the redistribution pursuant to
Clause 31.1(e) (Redistribution).
(b) A recovering Finance Party is not obliged to share with any other
Finance Party any amount which the recovering Finance Party has
received or recovered as a result of taking legal proceedings, if the
other Finance Party had an opportunity to participate in those legal
proceedings but did not do so and did not take separate legal
proceedings.
32. SEVERABILITY
If a provision of any Finance Document is or becomes illegal, invalid
or unenforceable in any jurisdiction, that shall not affect:
(a) the legality, validity or enforceability in that jurisdiction
of any other provision of the Finance Documents; or
(b) the legality, validity or enforceability in other
jurisdictions of that or any other provision of the Finance
Documents.
33. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts,
and this has the same effect as if the signatures on the counterparts
were on a single copy of the Finance Document.
34. NOTICES
34.1 GIVING OF NOTICES
All notices or other communications under or in connection with this
Agreement shall be given in writing and, unless otherwise stated, may
be made by letter, telex or facsimile. Any such notice will be deemed
to be given as follows:
(a) if by letter, when delivered personally or on actual receipt;
(b) if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and
at the end of the sender's copy of the notice; and
(c) if by facsimile, when received in legible form.
However, a notice given in accordance with the above but received on a
non-working day or after business hours in the place of receipt will
only be deemed to be given on the next working day in that place.
88
34.2 ADDRESSES FOR NOTICES
(a) The address and facsimile number of each Party (other than the
Borrowers' Agent and the Facility Agent) for all notices under or in
connection with this Agreement are:
(i) those notified by that Party for this purpose to the Facility
Agent on or before it becomes a Party; or
(ii) any other notified by that Party for this purpose to the
Facility Agent by not less than five Business Days' notice.
(b) The address and facsimile number of the Borrowers' Agent are:
Madison/Chart Energy S.C.S.
00/00 Xxxxxxxxx xx xx Xxxxxxxxx
00000 Xxxxx
Xxxxxx
Attention: Xxxx Dalbiez
Facsimile No: (x00) 0 00 00 00 00
with a copy to:
Madison Oil Company
0000 Xxxxx Xxxxxxx Xxxxxxxxxx
Xxxxx 0000
Xxxxxx
Xxxxx 00000
XXX
Attention: Xxxxxxx Xxxxxxx
Facsimile No: (x0) 000 000 0000
or such other as the Borrowers' Agent may notify to the other Parties
by not less than five Business Days' notice (provided that there is at
all times only a single address and facsimile number for all of the
Obligors).
(c) The address and facsimile number of the Facility Agent are:
Global Syndications and Loans - Agency Division
0 Xxx Xxxxx Xxxxxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
Facsimile No: 0207 773 4893
For the attention of: Xxxxx Xxxxxx
89
or such other as the Facility Agent may notify to the other Parties by
not less than five Business Days' notice.
(d) All notices from or to an Obligor shall be sent through the Facility
Agent.
(e) The Facility Agent shall, promptly upon request from any Party, give to
that Party the address, telex number or facsimile number of any other
Party applicable at the time for the purposes of this Clause.
35. JURISDICTION
35.1 SUBMISSION
For the benefit of each Finance Party, each Obligor agrees that the
courts of England have jurisdiction to settle any disputes in
connection with any Finance Document and accordingly submits to the
jurisdiction of the English courts.
35.2 SERVICE OF PROCESS
Without prejudice to any other mode of service, each Obligor:
(a) irrevocably appoints Law Debenture Corporate Services Limited,
000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxx XX0X 0XX - Facsimile No 020
7606 0643 as their agent for service of process in relation to
any proceedings before the English courts in connection with
any Finance Document;
(b) irrevocably appoints Corporation Service Company, Xxx Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx XX 00000 - Facsimile No 00
1 212 299 9102 as its agent for service of process in relation
to any proceedings before any courts located in the State of
New York in connection with any Finance Document;
(c) agrees to maintain an agent for service of process in England
and in the State of New York until all Commitments have
terminated and the Loans and all other amounts payable under
the Finance Documents have been finally, irrevocable and
indefeasibly repaid in full;
(d) agrees that failure by a process agent to notify the Obligors
of the process will not invalidate the proceedings concerned;
(e) consents to the service of process relating to any such
proceedings by prepaid posting of a copy of the process to its
address for the time being applying under Clause 34.2
(Addresses for notices); and
(f) agrees that if the appointment of any person mentioned in
paragraph (a) above ceases to be effective, the Obligors shall
immediately appoint a further person in England to accept
service of process on its behalf in England and, failing such
appointment within 15 days, the Agent is entitled to appoint
such a person by notice to the Original Borrower or the
Guarantor (as the case may be); and
90
(g) Without prejudice to paragraph (a) above and for the benefit
of each Finance Party, each Obligor agrees that any New York
State court or Federal court sitting in New York City has
jurisdiction to settle any disputes in connection with any
Finance Document and accordingly submits to the jurisdiction
of those courts.
35.3 FORUM CONVENIENCE AND ENFORCEMENT ABROAD
Each Obligor:
(a) waives objection to the English courts on grounds of
inconvenient forum or otherwise as regards proceedings in
connection with a Finance Document; and
(b) agree that a judgment or order of an English court in
connection with a Finance Document is conclusive and binding
on it and may be enforced against it in the courts of any
other jurisdiction (to the extent permitted by applicable
law).
35.4 NON-EXCLUSIVITY
Nothing in this Clause 35 limits the right of a Finance Party to bring
proceedings against the Borrower in connection with any Finance
Document:
(a) in any other court of competent jurisdiction; or
(b) concurrently in more than one jurisdiction.
36. GOVERNING LAW
This Agreement is governed by English law.
37. WAIVER OF JURY TRIAL
THE OBLIGORS AND THE FINANCE PARTIES WAIVE ANY RIGHTS THEY MAY HAVE TO
A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED ON OR ARISING FROM
ANY FINANCE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THE FINANCE
DOCUMENTS. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
This Agreement has been entered into on the date stated at the
beginning of this Agreement.
91
SCHEDULE 1
PARTIES
PART I
BORROWERS
ENTITY JURISDICTION OF INCORPORATION REGISTERED NO.
MADISON OIL COMPANY EUROPE Delaware 234 1168
MADISON OIL FRANCE S.A. France 000 000 000
MADISON/CHART ENERGY S.C.S. France 391 727 450
92
PART II
GUARANTORS
ENTITY JURISDICTION OF INCORPORATION REGISTERED NO.
MADISON OIL COMPANY Delaware 325 8221
MADISON PETROLEUM INC. Delaware 234 1166
MADISON OIL COMPANY EUROPE Delaware 234 1168
MADISON OIL FRANCE S.A. France 000 000 000
MADISON/CHART ENERGY S.C.S. France 391 727 450
MADISON (TURKEY) INC Delaware 100 82895
MADISON OIL TURKEY INC Liberia
93
PART III
BANKS AND COMMITMENTS
BANKS COMMITMENTS
($)
Barclays Bank PLC $23,000,000
-----------
Total Commitments $23,000,000
-----------
94
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
PART I
INITIAL CONDITIONS PRECEDENT
1. OBLIGORS
(a) A copy of the full constitutional documents of each Obligor;
(b) a copy of a resolution of the respective board of directors of each
Obligor;
(i) approving the terms of, and the transactions contemplated by,
each Finance Document to which it is to be party and resolving
that it execute each such Finance Document;
(ii) authorising a specified person or persons to execute each such
Finance Document on its behalf;
(iii) authorising a specified person or persons, on its behalf, to
sign and/or despatch all other documents and notice to be
signed and/or despatched by it under or in connection with the
Finance Documents;
(c) for each Obligor, a specimen signature of each person authorised by the
resolutions referred to in paragraph (b) above;
(d) a copy of each Obligor's most recent audited accounts (if any);
(e) a copy of a "Bringdown Certificate" for each Obligor; and
(f) a copy of a Certificate of Status (or the equivalent thereof) for each
Obligor.
2. OBLIGORS' CERTIFICATE
A certificate of a person who is both a director and an authorised
signatory of each of the Obligors certifying that:
(a) the borrowing of the Total Commitments in full would not cause
any borrowing limit binding on any Obligor to be exceeded; and
(b) each copy document specified in this Schedule 2 is correct,
complete and in full force and effect as at a date no earlier
than the date of this Agreement.
3. INITIAL FINANCE DOCUMENTS
Originals of the following documents duly executed by all of their
respective parties:
95
(a) (i) the Receivables Assignment Agreement;
(ii) the Charge on Cash;
(iii) the Insurance Pledge Agreement;
(b) draft Share Pledge Agreement in respect of all of MCE's issued
shares in an agreed form;
(c) draft Shares Account Pledge Agreement in respect of all of
MOF's issued shares in an agreed form;
(d) Stock Pledge Agreement in respect of all of MOCE's issued
shares;
(e) Stock Pledge Agreement in respect of all of MPI's and Madison
Turkey's issued shares;
(f) Mortgage of Shares in respect of all of MOTI's shares.
(g) Subordination Agreement between MOC, the Facility Agent on
behalf of the senior creditors and PHD Partners L.P. as junior
creditors;
(h) Subordination Agreement between members of the Madison Group
as debtors, the Facility Agent for the senior creditors and
MOF, MOC, MOCE and MPI as junior creditors; and
(i) the Fee Letters.
4. PERFECTION OF SECURITY
(a) Share certificates and share transfers, executed in blank, in respect
of all of the issued shares of each of the following Obligors:
(i) MOCI;
(ii) MPI;
(iii) MOCE; and
(iv) Madison Turkey;
(b) Evidence that notice of assignment has been, or will be, given to:
(i) the counterparties to such of the Project Documents as the
Facility Agent may require;
(ii) the insurers in respect of all Insurances; and
(iii) the Account Bank in respect of the Control Accounts;
96
5. BORROWING BASE ASSETS, INITIAL CONTRACTS ETC
(a) Copies of the following documents:
(i) the executed Sale and Purchase Agreement;
(ii) the concession and all relevant licences in respect of each
Borrowing Base Asset;
(iii) Intra-group Management Agreement between MPI (formerly known
as Madison Oil Company, Inc.) and MCE;
(iv) confirmation that the outstanding debt owed to PHD under the
PHD loan agreement has been assigned to MOC;
(v) copies of book entries evidencing intra-group loans;
(vi) Elf off-take agreement and related documentation;
(vii) Elf hedging agreement including the general terms and
conditions of derivative transactions for Elf Trading S.A.;
(b) legal opinion from Freshfields confirming MCE has good title to each of
the Borrowing Base Assets, and that all authorisations necessary for
the development and exploration of the Borrowing Base Assets as
contemplated by the initial Forecast have been obtained;
(c) evidence that the Sale and Purchase Agreement is within the powers of,
has been duly executed by and is binding on all of the parties to it;
(d) legal opinion from Freshfields confirming MCE's tax position and in
particular, that it will not be required to pay tax at any time before
the Final Repayment Date;
(e) an independent engineer's report in relation to each of the Borrowing
Base Assets; and
(f) evidence that all Insurances satisfactory to the Technical Agent are in
full force and effect.
6. MISCELLANEOUS
(a) The Computer Model and initial Forecast;
(b) evidence that MCE has opened each of the Control Accounts;
(c) a copy of the Information Package;
(d) evidence that all authorisations required for the entry into and
performance of each of the Finance Documents and the Sale and Purchase
Agreement have been obtained;
(e) evidence that, at or immediately upon the first Loan being borrowed:
97
(i) the Sale and Purchase Agreement will be completed and
confirmation from the vendor that all conditions precedent to
that agreement have been satisfied and that MOF will be the
owner of all of MCE's issued shares (other than one share held
by MOCE);
(ii) all amounts outstanding, accrued or owing under:
(A) the Bank of Scotland Credit Agreement:
(B) the Bridge Facility Letter; and
(C) the outstanding loan owed by MCE to the Chart Group
(referred to in paragraph 3.11 of the Sale and
Purchase Agreement),
will be repaid and paid in full and all security for such
amounts will be irrevocably released;
(f) Legal opinions from:
(a) Xxxxx & Xxxxx in relation to matters of English, French and
relevant US law; and
(b) Hill, Betts & Xxxx in relation to matters of Liberian law.
98
PART II
CONDITIONS PRECEDENT FOR AN ADDITIONAL GUARANTOR
1. A Guarantor Accession Agreement, duly executed as a deed by the
Additional Guarantor.
2. A copy of the memorandum and articles of association and certificate of
incorporation of the Additional Guarantor.
3. A copy of a resolution of the board of directors of the Additional
Guarantor:
(a) approving the terms of, and the transactions contemplated by,
each Finance Document to which it is to be a party and
resolving to execute the Guarantor Accession Agreement;
(b) authorising a specified person or persons to execute the
Guarantor Accession Agreement; and
(c) authorising a specified person or persons, on its behalf, to
sign and/or despatch all other documents and notices to be
signed and/or despatched by it under or in connection with the
Finance Documents.
4. A specimen of the signature of each person authorised by the
resolutions referred to in paragraph (3) above.
5. A certificate of a person who is both a director and an authorised
signatory of the Additional Guarantor certifying that:
(a) the borrowing of the Total Commitments in full would not cause
any borrowing limit on the Additional Guarantor to be
exceeded; and
(b) each copy document relating to it which is specified in this
Part II of Schedule 2 is correct, complete and in full force
and effect as at a date no earlier than the date of the
Guarantor Accession Agreement.
6. A copy of any other authorisation or other document, legal opinion or
assurance which the Facility Agent considers to be necessary or
desirable in connection with the entry into and performance of, and the
transactions contemplated by, the Finance Documents or for the validity
and enforceability of any Finance Document.
7. A copy of the latest audited accounts of the Additional Guarantor;
8. A legal opinion of an independent firm of lawyers (acceptable to the
Facility Agent), addressed to the Finance Parties.
99
SCHEDULE 3
CALCULATION OF THE MANDATORY COST
(a) The Mandatory Cost for a Loan for each of its Interest Periods is the
rate determined by the Facility Agent to be equal to the arithmetic
mean (rounded upward, if necessary, to four decimal places) of the
respective rates notified by each of the Reference Banks to the
Facility Agent and calculated in accordance with the following formula:
BY + S(Y-Z) + F x 0.01 % per annum
----------------------
100-(B + S)
where on the day of application of the formula:
B is the percentage of the Reference Bank's eligible liabilities
(in excess of any stated minimum) which the Bank of England
requires the Reference Bank to hold on a non-interest-bearing
deposit account in accordance with its cash ratio
requirements;
Y is LIBOR at or about 11.00 a.m. on that day for the relevant
Interest Period;
S is the percentage of the Reference Bank's eligible liabilities
which the Bank of England requires the Reference Bank to place
as a special deposit;
Z is the interest rate per annum allowed by the Bank of England
on special deposits; and
F is the charge payable by the Reference Bank to the Financial
Services Authority under paragraph 2.02 or 2.03 (as
appropriate) of the Fees Regulations (but where for this
purpose, the figure in paragraph 2.02b and 2.03b will be
deemed to be zero), expressed in pounds per Pound
Sterling1,000,000 of the fee base of the Reference Bank.
(b) For the purposes of this Schedule 3:
(i) "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the
meanings given to them at the time of application of the
formula by the Bank of England; and
(ii) "FEE BASE" has the meaning given to it in the Fees
Regulations;
(iii) "FEES REGULATIONS" means the Banking Supervision (Fees)
Regulations 1998 and/or any regulations governing the payment
of fees for banking supervision.
(c) In the application of the formula, B, Y, S and Z are included in the
formula as figures and not as percentages, e.g. if B = 0.5% and Y =
15%, BY is calculated as 0.5 x 15.
(d) If a Reference Bank does not supply a rate to the Facility Agent, the
applicable Mandatory Cost will be determined on the basis of the
rate(s) supplied by the remaining Reference Banks.
(e) (i) The formula is applied on the first day of the relevant Interest
Period.
100
(ii) Each rate calculated in accordance with the formula is, if
necessary, rounded upward to four decimal places.
(f) If the Facility Agent determines that a change in circumstances has
rendered, or will render, the formula inappropriate, the Facility Agent
(after consultation with the Banks) shall notify the Borrowers' Agent
of the manner in which the Mandatory Cost will subsequently be
calculated. The manner of calculation so notified by the Facility Agent
shall, in the absence of manifest error, be binding on all the Parties.
101
SCHEDULE 4
FORM OF REQUEST
To: BARCLAYS BANK PLC as Facility Agent
From: MADISON CHART SCS
Date: [ ], 2001
MADISON OIL COMPANY EUROPE, MADISON OIL FRANCE S.A. AND MADISON CHART ENERGY
SCS $23,000,000 REVOLVING CREDIT FACILITY DATED [ ], 2001.
1. We wish to borrow a Loan as follows:
(a) Tranche: [ ]
(b) Borrower: [ ]
(c) Drawdown Date: [ ]
(d) Amount: [ ]
(e) First Interest Period: [ ]
(f) Payment instructions: [ ].
2. We confirm that each condition specified in Clause 4.2 (Further
conditions precedent) is satisfied on the date of this Request.
By:
MADISON CHART SCS
Authorised Signatory
102
SCHEDULE 5
CHANGES TO THE PARTIES
PART I
FORM OF NOVATION CERTIFICATE
To: BARCLAYS BANK PLC as Facility Agent
From: [THE EXISTING BANK] and [THE NEW BANK] Date: [ ], 2001
MADISON OIL COMPANY EUROPE, MADISON OIL FRANCE S.A. AND MADISON CHART ENERGY SCS
$23,000,000 REVOLVING CREDIT FACILITY DATED [ ], 2001.
We refer to Clause 28.3 (Procedure for novations).
1. We [ ] (the "EXISTING BANK") and [ ]
(the "NEW BANK") agree to the Existing Bank and the New Bank novating
all the Existing Bank's Commitment (or part), rights and obligations
referred to in the Schedule in accordance with Clause 28.3 (Procedure
for novations).
2. The specified date for the purposes of Clause 28.3(c) (Procedure for
novations) is [date of novation].
3. The Facility Office and address for notices of the New Bank for the
purposes of Clause 34.2 (Addresses for notices) are set out in the
Schedule.
4. This Novation Certificate is governed by English law.
THE SCHEDULE
COMMITMENT/RIGHTS AND OBLIGATIONS TO BE NOVATED
[Insert relevant details].
[NEW BANK]
[Facility Office Address for notices]
[Existing Bank] [New Bank] BARCLAYS BANK PLC
By: By: By:
Date: Date: Date:
103
PART II
FORM OF GUARANTOR ACCESSION AGREEMENT
To: BARCLAYS BANK PLC as Facility Agent
From: [PROPOSED GUARANTOR]
Date: [ ]
MADISON OIL COMPANY EUROPE, MADISON OIL FRANCE S.A. AND MADISON CHART
ENERGY SCS $23,000,000 REVOLVING CREDIT FACILITY DATED [DATE] (THE
"CREDIT AGREEMENT")
We refer to Clause 28.4 (Additional Guarantors).
We, [name of company] of [Registered Office] (Registered no. [ ])
agree to become an Additional Guarantor and to be bound by the terms of the
Credit Agreement as an Additional Guarantor in accordance with Clause 28.4
(Additional Guarantors).
Our address for notices for the purposes of Clause 34.2 (Addresses for notices)
is:
[
]
This Guarantor Accession Agreement is entered into by way of deed and is
governed by English law.
*[EXECUTED as a deed by )
[PROPOSED GUARANTOR] ) Director
acting by [NAME of )
DIRECTOR] and [NAME of )
DIRECTOR/SECRETARY]] ) Director/Secretary
--------
* Note: Substitute execution clause for foreign companies where appropriate.
104
SCHEDULE 6
TOTAL COMMITMENTS REDUCTION SCHEDULE
REDUCTION DATE ($)
----------------- ----------
7th July, 2001 22,500,000
7th January, 2002 20.000,000
7th July , 2002 17,500,000
7th January, 2003 15,000,000
7th July, 2003 12,500,000
7th January, 2004 10,000,000
7th July, 2004 7,500,000
7th January, 2005 5,000,000
7th July, 2005 2,500,000
7th January, 2006 0
105
SIGNATORIES
BORROWERS
MADISON OIL COMPANY EUROPE
By: /s/ J. Xxxxxx Xxxxxxxx
MADISON OIL FRANCE S.A.
By: /s/ Xxxxxxx Pinot
MADISON/CHART ENERGY S.C.S.
By: /s/ Xxxxxxx Pinot
GUARANTORS
MADISON OIL COMPANY EUROPE
By: /s/ J. Xxxxxx Xxxxxxxx
MADISON OIL FRANCE S.A.
By: /s/ Xxxxxxx Pinot
MADISON/CHART ENERGY S.C.S.
By: /s/ Xxxxxxx Pinot
MADISON OIL COMPANY
By: /s/ J. Xxxxxx Xxxxxxxx
MADISON PETROLEUM INC.
By: /s/ J. Xxxxxx Xxxxxxxx
MADISON (TURKEY) INC.
By: /s/ J. Xxxxxx Xxxxxxxx
MADISON OIL TURKEY INC
By: /s/ J. Xxxxxx Xxxxxxxx
106
ARRANGER
BARCLAYS CAPITAL
By: /s/ Xxxxx Xxxxxxxxx
BANKS
BARCLAYS BANK PLC
By: /s/ Xxxxx Xxxxxxxxx
FACILITY AGENT
BARCLAYS BANK PLC
By: /s/ Xxxxx Xxxxxxxxx
US SECURITY AGENT
BARCLAYS BANK PLC, NEW YORK BRANCH
By: /s/ Xxxxx Bridge
107
