Exhibit 10.6
Agreed terms document under the joint venture shareholders' agreement dated 14
October 2005 among Baltic Petroleum (E&P) Limited, Siberian Energy Group Inc.
and Zauralneftegaz Limited
DATED 9th November 2005
(1) ZAURALNEFTEGAZ LIMITED
in favour of
(2) CASPIAN FINANCE LIMITED
DEBENTURE
XXXXXXXXX & XXXXXXX
REGISTERED FOREIGN LAWYERS AND SOLICITORS - XXXXXX
XXXXXX XX0X 0XX
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION 2
2. COVENANT TO PAY 5
3. GRANT OF SECURITY 5
4. COLLECTING RECEIVABLES 8
5. NEGATIVE PLEDGE AND OTHER RESTRICTIONS 8
6. FURTHER ASSURANCE 9
7. CONTINUING SECURITY 9
8. INSURANCE 9
9. PROPERTY OBLIGATIONS 9
10. LEASES, POSSESSION, CONSOLIDATION OF MORTGAGES 10
11. POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS 10
12. APPOINTMENT OF A RECEIVER OR AN XXXXXXXXXXXXX 00
00. XXXXX XX XXXXXXXX 00
00. COSTS, CHARGES AND LIABILITIES 14
15. SET-OFF 15
16. FOREIGN CURRENCIES 15
17. TRANSFER AND XXXXXXXXXX 00
00. FORBEARANCE AND SEVERANCE 15
19. COMMUNICATIONS 16
20. LAW AND JURISDICTION 16
21. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 17
22. COUNTERPARTS AND COMMENCEMENT 17
THIS DEBENTURE is dated 9th November 2005
BETWEEN:
(1) ZAURALNEFTEGAZ LIMITED, a company incorporated in England and Wales
under company number 5525360 and whose registered office is at c/o
Gilchrist Solicitors, 00x Xxxxxxx Xxxxxx, Xxxxxx X0X 0XX, Xxxxxx Xxxxxxx
(the "CHARGOR"); and
(2) CASPIAN FINANCE LIMITED, a company incorporated in England and Wales
under company number 5530897 and whose registered office is at c/o Salans,
Millennium Bridge House, 2 Xxxxxxx Xxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx
(the "LENDER").
BACKGROUND
(A) Pursuant to a loan agreement of even date herewith (the "LOAN
AGREEMENT") made between the Lender and the Borrower, the Lender has agreed
to make a loan facility available to and for the benefit of the Borrower.
(B) Pursuant to a Guarantee of even date herewith (the "GUARANTEE") given
by the Chargor to the Lender, the Chargor has agreed to guarantee the
Borrower's obligations to the Lender under the Loan Agreement.
(C) The Chargor has agreed to enter into this deed to secure its
obligations to the Lender under the Guarantee.
1. DEFINITIONS AND INTERPRETATION
1.1 In this deed, unless the context otherwise requires:
"ASSETS" means all of the Chargor's undertaking, property, assets,
rights and revenues, whatever and wherever in the world, present and
future, and includes each or any of them;
"BORROWER" means OOO Zauralneftegaz, a limited liability company
incorporated under the laws of the Russian Federation under the main state
registration number (ORGN) 1024500513950, located at 00 Xxxxx Xxxxxx,
Xxxxxx, 00000, Xxxxxx Oblast, Russian Federation;
"BORROWER INTERESTS" means all of the following: (i) the 100 per cent.
participatory interest of the Chargor in the Borrower with a nominal value
of 10,000 Russian rubles that the Chargor now has or holds or hereafter
has, holds, acquires, possesses or becomes entitled to, including, without
limitation, those limited liability company interests as specified in
Schedule 2 in more detail; (ii) all Certificates; (iii) all agreements
entered into in substitution or replacement for or in addition to any of
the foregoing, and any agreement representing or evidencing such
participatory interests; and (iv) all book-entries and entitlements
relating to any of the foregoing;
"BUSINESS DAY" means a day which is not a Saturday or Sunday or a bank
or public holiday in England and Wales;
"CERTIFICATES" means all certificates and instruments evidencing,
documenting or representing the Borrower Interests, if any;
"DEFAULT RATE" means the 2% per annum above the cost to the Lender as
certified by the Lender of funding the relevant amount on the London
Interbank Market for such period or consecutive periods as the Lender in
its sole discretion may select;
"ENFORCEMENT EVENT" means any event set out in clause 12.1;
"FINANCE DOCUMENTS" means the Loan Agreement, the Guarantee, the Joint
Venture Agreement, this deed and all agreements, instruments and other
documents delivered under any of the foregoing or in connection therewith;
"FLOATING CHARGE ASSETS" means those of the Chargor's Assets that are
for the time being comprised in the floating charge created by clause
3.1(c), but only insofar as concerns that floating charge;
"GROUP" means the Chargor and each company which is now or in the
future a subsidiary undertaking of the Chargor or the Chargor's parent
undertaking (as defined by section 258 of the Companies Act 1985);
"GUARANTEE" means the guarantee of even date herewith given by the
Chargor to the Lender in respect of the Borrower's obligations under the
Loan Agreement;
"INTELLECTUAL PROPERTY" means all patents (including supplementary
protection certificates), utility models, registered and unregistered trade
marks (including service marks), rights in passing off, copyright, database
rights, registered and unregistered rights in designs (including in
relation to semi conductor products) and in each case, any extensions and
renewals of, and any applications for, these rights;
"INTELLECTUAL PROPERTY RIGHTS" means the Chargor's Intellectual
Property and all other intellectual property rights and other rights,
causes of action, interests and assets comprised in clause 3.1(b)(vi);
"JOINT VENTURE AGREEMENT" means the joint venture shareholders'
agreement dated October 2005 among Baltic Petroleum (E&P) Limited, Siberian
Energy Group Inc. and the Chargor;
"LAND" includes freehold and leasehold, and any other estate in land
and (outside England and Wales) immovable property and in each case all
buildings and structures upon and all things affixed to Land (including
trade and tenant's fixtures);
"LOAN AGREEMENT" means the loan agreement of even date herewith
entered into between the Borrower and the Lender;
"PERMITTED SECURITY" any lien arising in the ordinary course of
trading, any retention of title rights in favour of a supplier or other
third party arising in the ordinary course of business, any rights of set
off arising in the ordinary course of business and any security interests
over any assets acquired after the date hereof in the ordinary course of
business where such security interest existed over such asset prior to its
acquisition by the Chargor and was not created in contemplation of the
acquisition of that asset by the Chargor;
"RECEIVABLES" means, all sums of money receivable by the Chargor now
or in the future consisting of or payable under or derived from any Assets
referred;
"RECEIVER" means every person the Lender may appoint as a receiver and
manager under clause 12, including any substituted receiver and manager;
"RELATED RIGHTS" means, in relation to any Securities, all assets
deriving from such Securities including all allotments, accretions, rights,
dividends, interest or other property whether of a capital or income
nature, accruing, offered, issued or deriving at any time by way of
dividend, bonus, preference, redemption, exchange, purchase, substitution,
conversion, consolidation, subdivision, preference, option or otherwise
attributable to any Securities or incidental to any such Securities or any
Related Rights previously described;
"SECURED LIABILITIES" means all monies obligations and liabilities
whatsoever whether for principal interest or otherwise in whatever currency
which may now or at any time in the future be due owing or incurred by the
Chargor to the Lender under or in connection with the Finance Documents or
otherwise, whether actual or contingent and whether alone, severally or
jointly as principal, guarantor, surety or otherwise and in whatever name
or style and whether on any current or other account or in any other manner
whatsoever; and
"SECURITIES" means all shares, stocks, debentures, debenture stock,
bonds, warrants, options, coupons or other securities and investments of
any kind whatsoever owned by the Chargor, including, for the avoidance of
doubts, the Borrower Interests, (including rights to subscribe for, convert
into or otherwise acquire the same) whether marketable or otherwise, and
all other interests (including loan capital) now or in the future owned by
the Chargor from time to time in any company, firm, consortium or entity
wherever situate.
1.2 References to clauses and schedules are to the clauses and schedules
to this deed.
1.3 Clause headings are inserted for ease of reference only and are not to
affect the interpretation of this deed.
1.4 Except to the extent the context otherwise requires any reference in
this document to "THIS DEED" and any other document referred to in it
includes any document expressed to be supplemental to or collateral with or
which is entered into pursuant to or in accordance herewith or therewith
and shall be deemed to include any instruments amending, varying,
supplementing, novating or replacing the terms of any such documents from
time to time.
1.5 References to a person are to be construed to include corporations,
firms, companies, partnerships, individuals, associations, states and
administrative and governmental and other entities whether or not a
separate legal entity.
1.6 References to any person are to be construed to include references to
that person's successors, transferees and assigns whether direct or
indirect.
1.7 References to any statutory provision are to be construed as
references to that statutory provision as amended supplemented, re-enacted
or replaced from time to time (whether before or after the date of this
deed) and are to include any orders, regulations, instruments or other
subordinated legislation made under or deriving validity from that
statutory provision.
1.8 The words "OTHER" and "OTHERWISE" are not to be construed ejusdem
generis with any foregoing words where a wider construction is possible.
1.9 The words "INCLUDING" and "IN PARTICULAR" are to be construed as being
by way of illustration or emphasis only and are not to be construed as, nor
shall they take effect as, limiting the generality of any foregoing words.
1.10 In construing this deed general words introduced by the word "OTHER"
shall not be given a restrictive meaning by reason of the fact that they
are preceded by words indicating a particular class of acts, matters or
things and general words shall not be given a restrictive meaning by reason
of the fact that they are followed by particular examples intended to be
embraced by the general words.
1.11 The perpetuity period applicable to the trusts created by this deed is
80 years.
2. COVENANT TO PAY
2.1 The Chargor hereby unconditionally and irrevocably, as primary obligor
and not merely as surety, covenants with the Lender that it will on demand
pay and/or discharge the Secured Liabilities when due to the Lender.
2.2 The Chargor shall pay interest to the date of payment or discharge
(notwithstanding any demand or any judgment obtained by the Lender or the
liquation or administration of or any arrangement or composition with
creditors by the Chargor) at the rate or rates applicable under the
agreements or arrangements giving rise to the relevant obligations or
liabilities or, if no such rate or rates are specified, at the Default Rate
upon such days and upon such terms as the Lender may from time to time
determine. Such interest shall be compounded in the event of it not being
punctually paid in accordance with the usual practice of the Lender but
without prejudice to the right of the Lender or require payment of such
interest.
2.3 All sums payable by the Chargor under this deed shall be paid without
any set-off, counterclaim, withholding or deduction whatsoever unless
required by law in which event the Chargor will simultaneously with making
the relevant payment under this deed pay to the Lender such additional
amount as will result in the receipt by the Lender of the full amount which
would otherwise have been receivable and will supply the Lender promptly
with evidence satisfactory to the Lender that the Chargor has accounted to
the relevant authority for the sum withheld or deducted.
3. GRANT OF SECURITY
3.1 By executing this deed the Chargor charges to the Lender with full
title guarantee and as a continuing security for the payment, performance
and discharge of all the Secured Liabilities the following assets, both
present and future, from time to time to the extent owned by it or to the
extent in which it has an interest:
(a) by way of first equitable mortgage, all of its Securities and, if
and to the extent not effectively assigned by clause 3.2, all Related
Rights relating to all its Securities;
(b) by way of fixed charge:
(i) all Land which is now, or in the future becomes, the
property of the Chargor;
(ii) all plant and machinery now or in the future attached to any
Land;
(iii) all rental and other income and all debts and claims which
are due or owing to the Chargor now or in the future under or in
connection with any lease, agreement or licence relating to Land;
(iv) all insurance and assurance contracts and policies now or in
the future held by or otherwise benefiting the Chargor:
(a) which relate to Assets themselves subject to a fixed
charge in favour of the Lender; or
(b) which are now or in the future deposited by the Chargor
with the Lender; together with all such rights and interests
as the Chargor may have in these contracts and policies
(including the benefit of all claims arising and all money
payable under them);
(v) all the goodwill of the Chargor and uncalled share capital
for the time being;
(vi) all Intellectual Property Rights present and future,
including any Intellectual Property to which the Chargor is not
absolutely entitled or to which the Chargor is jointly entitled
together with others;
(vii) the benefit of all agreements and licences now or in the
future entered into or enjoyed by the Chargor relating to the use
or exploitation of any Intellectual Property in any part of the
world;
(viii) all trade secrets, confidential information and know how
owned or enjoyed by the Chargor now or in the future in any part
of the world;
(ix) all of its rights (including against third parties) and
benefits in and to the Receivables, to the extent that they do
not fall within any other paragraph of this clause 3.1;
(x) all other debts now or in the future owing to the Chargor
save for those arising on fluctuating accounts with associates
(as defined in section 53(3) of the Companies Act 1989);
(xi) the benefit of all instruments, guarantees, charges, pledges
and other rights now or in the future available to the Chargor as
security in respect of any Asset itself subject to a fixed charge
in favour of the Lender;
(c) by way of floating charge all Assets which are not effectively
charged by the fixed charges detailed above, but so that the Chargor
shall not without the Lender's prior written consent:
(i) take any step referred to in clause 5.1 with respect to any
of the Floating Charge Assets; or
(ii) sell, transfer, part with or dispose of any of the Floating
Charge Assets except by way of sale in the ordinary course of
business.
3.2 The Chargor with full title guarantee and as a continuing security for
the payment, performance and discharge of the Secured Liabilities hereby
assigns absolutely (in each case to the fullest extent capable of
assignment) by way of security to the Lender all of its present and future
rights, title and interest in and to (to the extent that the Chargor is
interested therein) the Related Rights (including any rights, title and
interest that relate to the Borrower Interests) and all monies which at any
time may be or become payable to it pursuant to the terms of any contract
or licence and the proceeds of any claims, awards and judgments which may
at any time be receivable or received by it pursuant thereto.
3.3 The Lender may at any time crystallise any floating charge created in
clause 3.1(c) into a fixed charge, or subsequently reconvert it into a
floating charge, by notice in writing given at any time by the Lender to
the Chargor in relation to any or all Floating Charge Assets, as the Lender
may specify in the notice.
3.4 Subject to the rights of any prior mortgagee, the Chargor must:
(a) deposit with the Lender for retention by it, all title deeds and
documents relating to all Assets charged by way of fixed charge under
clause 3.1, including insurance and assurance policies; and
(b) execute and deliver to the Lender such documents and transfers as
the Lender may require at any time to constitute or perfect an
equitable or legal charge or a pledge (at the option of the Lender)
over the Securities, including uncertificated Securities, within any
clearing, transfer, settlement and/or depositary system, and give any
instructions and take any actions the Lender may require to achieve
this.
3.5 Unless and until this deed becomes enforceable:
(a) the Chargor may continue to exercise all voting and other rights
attaching to Securities as long as it remains their registered owner;
and
(b) if Securities are registered in the name of the Lender's nominee,
all voting and other rights attached to them will be exercised by the
nominee in accordance with the instructions that the Chargor issues
from time to time. In the absence of instructions, the nominee will
refrain from exercising any of these rights.
3.6 Any mortgage, fixed charge or other fixed security which the Chargor
creates in favour of the Lender will have priority over the floating charge
created by clause 3.1(c) unless the Lender states otherwise on or after its
creation.
3.7 Any debentures, mortgages or charges (fixed or floating) which the
Chargor creates in the future (except those in favour of the Lender) shall
be expressed to be subject to this deed and shall rank in order of priority
behind the charges created by this deed.
4. COLLECTING RECEIVABLES
4.1 The Chargor must collect and realise all its Receivables in the
ordinary course of business and immediately on receipt pay all money which
it receives in respect of them into its Lender account with the Lender, or
into any other account designated by the Lender, in each case on such terms
as the Lender may direct. Pending that payment, the Chargor will hold all
money so received upon trust for the Lender. The Chargor may, without the
prior written consent of the Lender, charge, factor, discount, assign,
postpone, subordinate or waive its rights in respect of any Receivable in
favour of any other person or purport to do so.
4.2 If a credit balance on any account held by the Chargor with the Lender
includes proceeds of Receivables credited or transferred to that account
the Lender shall have an absolute discretion whether to permit or refuse to
permit the Chargor to utilise or withdraw that credit balance and the
Lender may in its sole discretion at any time transfer all or any part of
that credit balance to any other account held by the Chargor with the
Lender or to an account in the Lender's own name.
4.3 If the Lender releases, waives or postpones its rights in respect of
any Receivables for the purpose of enabling the Chargor to factor, discount
or otherwise sell them to the Lender or to a third party, the charges
created by this deed will in all other respects remain in full force and
effect. In particular, all amounts due to the Chargor from the Lender or
the third party and any Receivables re-assigned or due to be re-assigned to
the Chargor will be subject to the relevant fixed charge detailed in clause
3.1(b) subject only to any defences or rights of retention or set-off which
the Lender or the third party may have against the Chargor.
5. NEGATIVE PLEDGE AND OTHER RESTRICTIONS
The Chargor may not, except with the prior written consent of the Lender:
5.1 create or attempt to create any fixed or floating security of any kind
or any trust over any of its Assets, or permit any lien (other than a lien
arising by operation of law in the ordinary course of business and save for
Permitted Security) to arise or subsist over any of its Assets, in any such
case ranking in priority to or pari passu with the security created
hereunder; or
5.2 sell, assign, lease, license or sub-license, or grant any interest in,
its Intellectual Property Rights, or purport to do so, or part with
possession or ownership of them, or allow any third party access to them or
the right to use any copy of them.
6. FURTHER ASSURANCE
The Chargor shall if so demanded by the Lender in writing execute and deliver to
the Lender at the cost of the Chargor, any document that the Lender may require
further to secure the payment of the Secured Liabilities, or to create, enhance
or perfect any fixed security, intended to be created by this deed, over any of
the Assets, or to give full effect to this deed, or to vest title, in accordance
with this deed, to any of the Assets in the Lender or the Lender's nominee or
any purchaser.
7. CONTINUING SECURITY
This deed will remain a continuing security in favour of the Lender regardless
of any settlement of account or any other matter whatever and shall be without
prejudice and in addition to every other right, remedy or security which the
Lender may have now or in the future in respect of any of the Assets for the
payment of any Secured Liabilities.
8. INSURANCE
8.1 The Chargor shall insure all of its insurable Assets, and shall
procure that each of its subsidiaries shall insure its undertaking,
property, assets, rights and revenues, with an insurance office or
underwriter acceptable to the Lender, in such manner and to such extent as
is reasonable and customary for a business engaged in the same or a similar
business to that carried on by the Chargor or the relevant subsidiary and
in the same or similar localities or as the Lender may reasonably require.
8.2 The Chargor must, and shall procure that each of its subsidiaries
shall, punctually make all premium and other payments necessary to effect
or maintain these insurances and produce receipts for these payments on the
Lender's request. If, at any time the Chargor or any of its subsidiaries
fails to have the required insurance cover in place or to produce any
receipt on request or to deposit any policy with the Lender under clause
3.4 or on request, the Lender may take out or renew any insurance in any
sum and on any terms as the Lender may think appropriate.
9. PROPERTY OBLIGATIONS
The Chargor must at all times:
9.1 keep all buildings and all fixtures, charged under this deed in good
repair and condition provided that in relation to any buildings which are
held under a lease the Chargor shall be under any greater obligation under
this clause than shall be imposed on it under such lease; and
9.2 keep all plant and machinery and other tangible moveable property
charged under this deed in good and serviceable condition (fair wear and
tear excepted and allowing for replacement and redundancy) provided that in
relation to any such plant, machinery and other tangible moveable property
which is leased, subject to a hire-purchase agreement or rented, the
Chargor shall be under any greater obligation under this clause than shall
be imposed on it under any relevant leasing, hire-purchase, rental or
similar agreement.
10. LEASES, POSSESSION, CONSOLIDATION OF MORTGAGES
10.1 The Chargor may not without the prior written consent of the Lender
exercise any power of leasing, or accepting surrenders of leases of, any of
its Land, or (unless obliged to do so by law) extend, renew or vary any
lease or tenancy agreement or give any licence to assign or underlet.
10.2 The Chargor may not part with possession (otherwise than on the
determination of any lease, tenancy or licence granted to the Chargor) of
any of its Land or share the occupation of it with any other person, or
agree to do so, without the prior written consent of the Lender.
10.3 Section 93 of the Law of Property Xxx 0000, dealing with consolidation
of mortgages, will not apply to this deed.
11. POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS
11.1 Section 103 of the Law of Property Act 1925 will not apply to this
deed, but the statutory power of sale (as between the Lender and a
purchaser from the Lender) will arise on and be exercisable at any time
after the execution of this deed. However, the Lender will not exercise
this power of sale until this deed has become enforceable in accordance
with clause 12.1. This provision will not affect any purchaser or require
him to ask whether it has become enforceable.
11.2 The Lender's statutory powers of sale, leasing and accepting
surrenders are extended to allow the Lender (whether in the name of the
Chargor or in the name of the Lender) to grant a lease or leases of any
Land vested in the Chargor or in which the Chargor has an interest with any
rights relating to other Land and containing any covenants on the part of
the Chargor and any terms and conditions that the Lender may think fit.
11.3 The Lender's statutory power of sale is extended to allow the Lender
to sever any fixtures from Land and sell them separately.
11.4 All powers of a Receiver under this deed may be exercised by the
Lender to the full extent permitted by law after it has become enforceable
in accordance with clause 12.1, whether as attorney of the Chargor or
otherwise, and whether or not a Receiver or administrator has been
appointed.
12. APPOINTMENT OF A RECEIVER OR AN ADMINISTRATOR
12.1 The following events shall constitute Enforcement Events:
(a) the occurrence of an Event of Default (as defined in the Loan
Agreement) which is continuing and which has not been remedied or
waived in accordance with the terms of the Loan Agreement;
(b) if the Chargor fails to pay any sums payable by it from time to
time to the Lender on the due date therefore or fails to comply with
any term, condition, covenant or other provisions of this deed or of
any facility from the Lender or any related security document
including but not exclusive to the Finance Documents or to perform any
of its obligations or liabilities to the Lender or if any
representation or warranty from time to time made to the Lender by the
Chargor is or becomes incorrect or misleading in a material respect;
(c) if an encumbrancer takes possession of or a trustee, receiver or
similar officer is appointed in respect of all or any part of the
business or assets of the Chargor or a distress execution attachment
or other legal process is levied or enforced upon or sued out against
all or any substantial part of such assets and is not discharged
within 10 days;
(d) if the Chargor is deemed unable to pay its debts or commences
negotiations with any one or more of its creditors with a view to the
general readjustment or rescheduling of its indebtedness or makes a
general assignment for the benefit of or a composition with its
creditors;
(e) if the Chargor takes any corporate action or other steps are
taken or legal proceedings are started for its winding-up, dissolution
or reorganisation (otherwise than for the purposes of an amalgamation
or reconstruction whilst solvent on terms previously approved in
writing by the Lender) or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of
it or of all or a material part of its revenues and assets;
(f) if the Chargor suspends or threatens to suspend a substantial
part of its business operations (otherwise than for the purposes of a
reconstruction or amalgamation on terms previously approved in writing
by the Lender) or any governmental authority permits or procures or
threatens to permit or procure any reorganisation, transfer or
expropriation (whether with or without compensation) of a substantial
part of the business or assets of the Chargor;
(g) if any guarantee, indemnity or other security for any of the
Secured Liabilities fails or ceases in any respect to have full force
and effect or to be continuing or is terminated or disputed or in the
opinion of the Lender is in jeopardy invalid or unenforceable or if
this deed or the security created by or is disputed or in the opinion
of the Lender is in jeopardy;
(h) if at any time it is or becomes unlawful for the Chargor to
perform or comply with any or all of its obligations under this deed,
the Finance Documents or any of such obligations of the Chargor are
not or cease to be legal, valid, binding and enforceable; or
(i) if in the opinion of the Lender a material adverse change occurs
in thefinancial condition, results of operations or business of the
Chargor.
12.2 Paragraph 14 of Schedule B1 to the Insolvency Xxx 0000 shall apply to
this deed. If any Enforcement Event shall occur and be continuing, or if
requested by the Chargor, the Lender may appoint by writing insofar as
permitted by law, any person or persons to be a receiver and manager of all
or any of the Assets or an administrator or administrators of the Chargor
and this deed shall in any of such events become immediately enforceable.
12.3 Where the Lender appoints more than one person as Receiver or
administrator, they shall have power to act separately unless the Lender
specifies to the contrary in the appointment.
12.4 The Lender may from to time determine the remuneration of the Receiver.
12.5 Once a Receiver is appointed, the Lender will not be precluded from
making any subsequent appointment of a Receiver over any Assets, whether or
not any Receiver previously appointed continues to act.
12.6 The Receiver will be the agent of the Chargor which will be solely
liable for his acts, defaults and remuneration unless it goes into
liquidation, after which he shall act as principal and not become the
Lender's agent.
12.7 The Receiver will be entitled to exercise all the powers set out in
Schedules 1 and 2 to the Insolvency Xxx 0000. In addition, but without
limiting these powers (and without prejudice to the Lender's own powers),
the Receiver will have power with or without the concurrence of others:
(a) to sell, let, lease or grant licences of, or vary the terms or
terminate or accept surrenders of leases, tenancies or licences of,
all or any of the Assets, or grant options over them, on any terms the
Receiver thinks fit in his absolute discretion; and any sale or
disposition may be for cash, payable in a lump sum or by instalments,
or other valuable consideration;
(b) to sever any fixtures from Land and/or sell them separately;
(c) to promote a company to purchase all or any Assets or any interest in
them;
(d) to make and effect all repairs, renewals and improvements to the
Assets and effect, renew or increase insurances on the terms and
against the risks that he thinks fit;
(e) to exercise all voting and other rights attaching to Securities
and investments generally;
(f) to redeem any prior encumbrance and settle and pass the accounts
of the encumbrancer so that all accounts so settled and passed will
(except for any manifest error) be conclusive and binding on the
Chargor and the money so paid will be deemed to be an expense properly
incurred by the Receiver;
(g) to pay all proper charges as may be incurred by the Lender for
time spent by the Lender's employees and agents in dealing with
matters raised by the Receiver or relating to the receivership; and
(h) to do all other acts and things which he may consider incidental
or conducive to any of the above matters or powers or to the
preservation, improvement or realisation of the Assets.
12.8 Neither the Lender nor the Receiver will be liable to account as
mortgagee in possession or otherwise for any money not actually received by
the Lender or the Receiver.
12.9 Subject to section 45 of the Insolvency Xxx 0000, the Lender may at
any time remove a Receiver from all or any of the Assets of which he is the
Receiver.
12.10 If at any time after the security constituted by this deed has become
enforceable, the following provisions shall apply in relation to any of the
Assets situated in the Russian Federation, including, for avoidance of
doubt, the Borrower Interests (the "RUSSIAN ASSETS"):
(a) The Lender may (but will not be obliged to) levy execution on the
Russian Assets without any requirement to initiate any court or other
proceedings or to obtain any court or other order or judgment, and may
exercise its rights and powers under this deed cumulatively with all
rights and powers permitted by applicable law and/or by this deed.
(b) The Lender may (but will not be obliged to) levy execution on the
Russian Assets and in such case the Lender shall give a notice to such
party indicating that it has elected to effect the sale of the Russian
Assets and shall be entitled:
(iii) to sell all or any part of the Russian Assets pursuant to
the procedures set forth in Schedule 1 or in any other manner
permitted by applicable law;
(iv) to bring or defend claims before any authority, submit to
arbitration, conduct negotiations and terminate, withdraw and
settle any suits, claims, disputes and other matters, whether
before any authority, arbitrator or otherwise in respect of all
or any of the Russian Assets in the Chargor's name or otherwise;
(v) to collect, recover or compromise and to give a good
discharge for any monies payable to the Chargor in respect of all
or any portion of the Russian Assets;
(vi) to require an assignment or other effective transfer by the
Chargor of its rights to all or any portion of the Russian
Assets; and
(vii) to the extent necessary to enforce the rights of the Lender
under this deed, give all consents, waivers and ratifications in
respect of the Russian Assets, do all acts and things and execute
all documents which the Chargor could itself do in relation to
any of the Russian Assets.
(c) The Chargor hereby agrees that the Lender (or any trustee, agent
or other person acting on its behalf) shall be entitled to proceed
against or enforce any other rights or security or claim for payment
from any person before proceeding to enforce its rights hereunder.
12.11 Notwithstanding anything in this deed to the contrary, if the Lender
elects, in its sole discretion, not to levy execution on the Russian Assets
as provided for above, then the Chargor hereby agrees and covenants with
the Lender that, upon the request of the Lender, the Chargor shall enter
into an agreement or agreements, including in the form of a novation,
set-off, assignment or accord and satisfaction agreement, with the Lender
or any person designated by the Lender for the purpose of transferring or
otherwise disposing of the Russian Assets (or a specified portion thereof),
and any such agreement shall be in form and substance satisfactory to the
Lender, provided that, for the purpose of such arrangements, the value of
the Russian Assets shall be equal to the starting price determined pursuant
to the procedure set forth in Schedule 1 (unless the parties hereto agree
in writing otherwise).
12.12 The Chargor agrees that it shall create and maintain a corporate
pledge book as required by the Russian Federation Federal Law # 2872-I
(1992) within 10 days from the date hereof and issue an extract from the
said corporate pledge book certifying that the Borrower Interests have been
pledged in favour of the Lender and forthwith on demand produce such
certificates during the validity hereof.
13. POWER OF ATTORNEY
The Chargor, by way of security, irrevocably appoints the Lender (whether or not
a Receiver or administrator has been appointed) and any Receiver separately as
its attorney (with full power to appoint substitutes and to delegate) with power
in the name or on behalf of the Chargor and as the act and deed of the Chargor
or otherwise to execute and deliver and otherwise perfect any agreement,
assurance, deed, instrument or document, and to perform any act which may be
required of the Chargor or may be deemed by the attorney necessary or desirable
for any purpose of this deed, or, following this deed, to create, enhance or
perfect any fixed security over any of the Assets or, following this deed
becoming enforceable in accordance with clause 12.2, to convey or transfer legal
ownership of any Assets.
14. COSTS, CHARGES AND LIABILITIES
14.1 The Chargor will be responsible for all costs, charges and liabilities
(including all professional fees and disbursements and Value Added Tax
and/or any similar tax) and all other sums paid or incurred by the Lender
and/or any Receiver under or in connection with this deed. The Lender may
recover them from the Chargor on a full indemnity basis as a debt payable
on demand and debit them without notice to any accounts held by the Chargor
with the Lender. They will attract interest and be charged on the Assets.
14.2 The costs which may be recovered from the Chargor by the Lender and/or
any Receiver under this deed include without limitation:
(a) all costs incurred by the Lender in preparing and administering
this deed or perfecting the security created by it;
(b) all costs (whether or not allowable on a taxation by the Court)
of all proceedings to enforce this deed or to recover or attempt to
recover any of the Secured Liabilities;
(c) all money spent and all costs arising out of the exercise of any
power, right or discretion conferred by this deed; and
(d) all costs and losses arising from any default by the Chargor in
the payment when due of any of the Secured Liabilities or the
performance of the obligations of the Chargor under this deed.
15. SET-OFF
At any time after the security under this deed shall have become enforceable in
accordance with clause 12.2, the Lender may apply all or any of that money in
satisfaction of all or part of the Secured Liabilities as the Lender may select
(whether presently payable or not) and may also use that money to purchase any
other currency required for this purpose.
16. FOREIGN CURRENCIES
If under any applicable law or regulation or pursuant to a judgment or order
being made or registered against the Chargor or the liquidation of the Chargor
or without limitation for any other reason any payment under or in connection
with this deed is made or falls to be satisfied in a currency (the "PAYMENT
CURRENCY") other than the currency in which such payment is expressed to be due
under or in connection with this deed (the "CONTRACTUAL CURRENCY") then to the
extent that the amount of such payment actually received by the Lender when
converted into the contractual currency at the rate of exchange falls short of
the amount due under or in connection with this deed the Chargor as a separate
and independent obligation shall indemnify and hold harmless the Lender against
the amount of such shortfall. For the purposes of this clause "RATE OF
EXCHANGE" means the rate at which the Lender is able on or about the date of
such payment to purchase, in accordance with its normal practice, the
contractual currency with the payment currency and shall take into account (and
the Chargor shall be liable for) any premium and other costs of exchange
including any taxes or duties incurred by reason of any such exchange.
17. TRANSFER AND DISCLOSURE
17.1 The Lender may at any time transfer all or any part of its rights
under this deed and the Secured Liabilities to any person or otherwise
grant an interest in them to any person.
17.2 The Lender may also at any time disclose any information about the
Chargor, this deed and the Secured Liabilities to:
(a) any company associated with Lender;
(b) any prospective or actual transferee or grantee referred to in
clause 17.1; and
(c) any other person considered by the Lender to be concerned in the
relevant or prospective transaction.
18. FORBEARANCE AND SEVERANCE
18.1 No delay or omission on the part of the Lender in exercising any
right, power or privilege under this deed will impair it or be construed as
a waiver of it. A single or partial exercise of any right, power or
privilege will not in any circumstances preclude any other or further
exercise of it or the exercise of any other right, power or privilege.
18.2 If any provision of this deed is or becomes invalid or unenforceable,
the remainder of it shall not be affected and each provision shall be valid
and enforceable to the fullest extent permitted by law.
19. COMMUNICATIONS
19.1 Every notice demand or other communication under this deed shall be in
writing and may be delivered personally or by letter, telex or facsimile
transmission despatched by the Lender to the Chargor to its address or to
the numbers specified below:
The Lender
----------
Caspian Finance Limited Attn: Fax:
c/o Salans
Millennium Bridge House Xxxx XxXxxxxx +44 (0) 20 7429 6001
0 Xxxxxxx Xxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
----------------------- -------------- --------------------
TheChargor
----------
Zauralneftegaz Limited Attn: Fax:
x/x Xxxxxxxxx Xxxxxxxxxx
00x Xxxxxxx Xxxxxx Company Secretary x00 (0) 00 0000 0000
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
------------------------ ----------------- --------------------
19.2 Every notice, demand or other communication shall be deemed to have
been received (if sent by post) twenty-four hours after being posted first
class postage prepaid (if posted from and to an address within the United
Kingdom) or 5 working days after being posted prepaid airmail and (if
delivered personally or despatched by telex subject to receiving the
correct telex answerback or by facsimile transmission) at the time of
delivery or despatch if during normal business hours in the place of
intended receipt on a working day in the place of intended receipt and
otherwise at the opening of business in that place on the next succeeding
such working day.
20. LAW AND JURISDICTION
20.1 This deed is governed by and shall be construed in accordance with
English law.
20.2 The Chargor irrevocably agrees for the exclusive benefit of the Lender
that the courts of England shall have exclusive jurisdiction to hear and
determine any suit action or proceeding and to settle any dispute which may
arise out of or in connection with this deed and for such purposes
irrevocably submits to the jurisdiction of such courts.
20.3 Nothing contained in this clause shall limit the right of the Lender
to take proceedings against the Chargor in any other court of competent
jurisdiction nor shall the taking of any such proceedings in one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction
whether concurrently or not (unless precluded by applicable law).
20.4 The Chargor irrevocably waives any objection which it may have now or
in the future to the courts of England being nominated for the purpose of
this clause on the ground of venue or otherwise and agrees not to claim
that any such court is not a convenient or appropriate forum.
21. CONTRACTS (RIGHTS OF THIRD PARTIES) XXX 0000
21.1 Except as expressly provided in this deed, the parties do not intend
that any term of this deed shall be enforceable by virtue of the Contracts
(Rights of Third Parties) Xxx 0000 or otherwise by any person who is not a
party.
21.2 The parties may rescind, vary, waive, restore, assign, novate or
otherwise dispose of all or any of their respective rights or obligations
under this deed without the consent of any person who is not a party.
22. COUNTERPARTS AND COMMENCEMENT
22.1 This deed may be executed in any number of counterparts and by
different parties to it in separate counterparts, each of which when
executed and delivered shall be an original. All such counterparts will
together constitute one and the same instrument.
22.2 This deed shall come into effect on the date inserted by the Lender on
the front page and shall be binding on all those that have executed and
delivered it, notwithstanding that any one or more companies that were
intended to execute it may not do so or may not be effectually bound.
IN WITNESS WHEREOF, the Chargor has executed and delivered this debenture as a
deed the day and year first before written and, before such delivery, this
debenture has been signed on behalf of the Lender.
SCHEDULE 1 - PROCEDURES FOR LEVY OF EXECUTION OF THE RUSSIAN ASSETS
1. The Lender may (as specified in clause 12.10 of this deed) sell all or
any part of the Russian Assets at public auctions organised by the Lender
or by an organisation that specializes in coordinating such auctions (a
"SPECIALISED ORGANISATION") in accordance with applicable law. In the event
that all of the Russian Assets are not sold at the first such auction, the
Lender may in its sole discretion enter into an agreement with the Chargor
to acquire the Russian Assets or initiate a second auction.
2. The Lender or the Specialised Organisation, upon prior approval of the
Lender, shall be entitled (in such manner as the Lender may in its absolute
discretion see fit, subject to applicable law):
(a) to determine the date, time and place of each public auction;
(b) to establish the procedure for the holding of each public
auction;
(c) to make all arrangements for the holding of each public auction,
including, without limitation, such arrangements as the Lender or the
Specialised Organisation consider appropriate for advertising with a
view to obtaining the best price reasonably achievable for the Russian
Assets;
(d) to approve the results of the public auction(s) and notify the
Chargor and any other interested persons of the same;
(e) to appoint a pledge manager to assist the Lender in exercising
the powers contained in (a) to (d) above and delegate its powers to
such pledge manager;
(f) to engage professional advisers, including valuers, lawyers and
accountants in connection with the auction(s) and the exercise of the
Lender's rights; and
(g) to incur and pay the costs and expenses of holding the auction(s)
and of its advisers engaged pursuant to (e) and (f) above, together
with notarisation, registration and other costs and expenses in
relation to the transfer of the Russian Assets to the purchaser or the
Lender.
3. For the purpose of compliance with Article 350(3) of the Civil Code of
the Russian Federation, the Chargor and Lender shall promptly, following an
appropriate Lender's request to the Chargor, agree on a starting price for
the first and any subsequent public auction which shall be determined on
the basis of prevailing market conditions. In the event the Chargor and the
Lender fail to reach an agreement with respect to such starting price
within a reasonable time, the Lender shall determine a starting price for
the first and any subsequent public auction based on prevailing market
conditions.
4. The Lender or the Specialised Organisation may sell the Russian Assets
at either public auction for less than the price specified in paragraph 8
below. The Lender or the Specialised Organisation shall not be obliged to
delay either auction in order to receive a better price.
5. The Lender or the Specialised Organisation shall be entitled in its
own name as a representative for and on behalf of the Chargor to transfer
the Russian Assets to any purchaser free and clear of all rights and
interests of the Lender and the Chargor, and to give valid discharge to any
purchaser for payment of the purchase price, and the minutes of the results
of the public auction signed by the Lender or the Specialised Organisation
shall suffice for such purposes. Such purchaser shall be entitled to
register its title to the Russian Assets with all relevant authorities by
evidencing to the authorities this deed together with the minutes of the
results of the public auction signed by the Lender or the Specialised
Organisation stating that such purchaser has become the owner of the
Russian Assets. The Chargor shall ensure that the title of such purchaser
to the Russian Assets is duly documented.
6. The Lender may in its sole discretion either (i) enter into an
agreement with the Chargor to acquire the Russian Assets; or (ii) initiate
a second auction if the Lender or the Specialised Organisation (each in its
absolute discretion) consider the first public auction to have failed.
7. If the Lender or the Specialised Organisation (each in their absolute
discretion) consider the second public auction to have failed, the Lender
or the Specialised Organisation shall be entitled, by notice to the
Chargor, to declare the public auction to have failed, and the Lender shall
assume ownership of the Russian Assets and upon service of that notice
shall have good title to the Russian Assets free and clear of all rights
and interests of the Chargor without any additional agreements. The Lender
shall be entitled to register its title to the Russian Assets with all
relevant authorities by evidencing to the authorities this Deed together
with the minutes of the results of the public auction signed by the Lender
or the Specialised Organisation stating that the first and the second
public auction have failed and that the Lender has assumed ownership of the
Russian Assets. The Chargor shall use its reasonable endeavour to ensure
that the title of the Lender to the Russian Assets is duly documented.
8. The Parties agree that, as of the date hereof, the estimated value of
the Russian Assets is equal to the Russian Xxxxx equivalent of
US$7,705,079.
SCHEDULE 2 - BORROWER INTERESTS
ISSUING PERCENTAGE
COMPANY ISSUE DATE NOMINAL VALUE OWNERSHIP
OOO 10 November 10,000 100%
Zauralneftegaz 2001
(a Russian limited
liability company)
EXECUTED as a DEED by
ZAURALNEFTEGAZ LIMITED. /s/ Xxxxx Xxxxxxx Xxxxxxx
acting by a Director and ---------------------------------
a Director/Secretary Director
/s/ Xxxxx Xxxxxx
---------------------------------
Director/Secretary
SIGNED for and behalf of
CASPIAN FINANCE LIMITED /s/ Xxxxx Xxxx Xxxxx Xxxxxxxxx
---------------------------------
