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EXHIBIT 10.47
DATED 30th August 1994
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HORIZON EXPLORATION LTD.
-AND-
THE BANK OF X. XXXXXXXXXXX & SON LTD
LETTER OF HYPOTHECATION AND PLEDGE
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LETTER OF HYPOTHECATION AND PLEDGE
TO: THE BANK OF N.T. XXXXXXXXXXX & SON LTD
00 XXXXXXXX XXXXXX
XXXXXX XXX 0XX
1. CONSIDERATION
In consideration of you making/continuing advances to us or
incurring liability on our behalf by way of acceptance or
discount bills of exchange or in respect of documentary
creditors or collection or otherwise in any way whatsoever or
otherwise making credit/banking facilities available to us, we
agree with you as follows to the intent that the provisions
set out below shall apply on a continuing basis to all such
transactions.
2. REPRESENTATIONS AND WARRANTY
We represent and warrant to you that we have a good right to
pledge with you the Goods and to execute or sign any transfers
delivery orders or other requisite documents and the Documents
(as herein defined) are valid and that we have good title to
them and that the Goods are within our own disposition and
control free from any other hypothecation, pledge, charge or
encumbrance of any kind.
3. TERMS OF AGREEMENT
It is understood and agreed that the terms upon which the
above credit/banking facilities will be made/given are as
follows:
3.1 All bills of exchange, promissory notes and negotiable
instruments of any description, all bills of lading, shipping
documents, dock warrants, delivery orders wharfingers and
other warehouse warrants and receipts, policies and
certificates of insurance, invoices and all other documents of
title or documents relating to produce and goods (the
"Documents") and all produce and goods represented by such
documents or to which such documents relate (the "Goods")
which shall be negotiated with you or handed to you for
collection or otherwise or against which you may from time to
time make available banking facilities or accommodation with
or without collateral security, are hereby held; and
All Documents and/or Goods which are now or may at any time
after the date of this letter be in your possession or
deposited with you or your agents or representatives or lodged
with you or transferred to you or your nominees by us
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or by others in our name or for our account (whether deposited
for safe custody, collection, security or for any specific
purpose or generally and whether in England or elsewhere), are
hereby pledged and
As a continuing security for the payment or discharge or
demand of all moneys obligations and liabilities whether
actual or contingent now or hereafter due or to become due
owing or incurred to you by us in whatever currency
denominated whether on any current or other account or
otherwise in any manner whatsoever (whether alone or jointly
and in whatever style name or form and whether as principal or
surety) including all liabilities in connection with foreign
exchange transactions, accepting or endorsing or discounting
any notes or bills or under bonds guarantees indemnities
documentary or other credits or any instruments whatsoever
from time to time entered into by you or at the request of us
together with interest to date of payment at such rates and
upon such terms as may from time to time be agreed and all
commissions fees and other charges and all legal and other
costs and expenses incurred by you (including those of your
nominees and agents) in relation to us or the goods and a full
indemnity basis.
3.2 Negative Covenants. We will not [and will procure that none
of our subsidiaries for the time being will] without your
prior written consent.
3.2.1 give any guarantees or indemnities otherwise than to you or
any of your subsidiaries or in the ordinary course of trading
(which expression shall not include guarantees or indemnities
in respect of monies borrowed, credit incurred or financial
obligations assumed by any third party);
3.2.2 part with, convey, lease or otherwise dispose of or enter into
any agreement for parting with conveying or leasing or
otherwise disposing of any of the freehold or leasehold
properties now or hereafter belonging to us or our
subsidiaries at below the then current market value;
3.2.3 create or permit to subsist any mortgage, debenture,
hypothecation, charge, assignment by way of security, pledge
or lien or any other encumbrance or security whatsoever (other
than any such disclosed to you in writing prior to the date
hereof) over all or any part of our or their respective
present or future undertakings, properties, assets, revenues
or uncalled capital except liens arising solely by operation
of law in the ordinary course of trading which are discharged
within sixty days of arising (unless being contested in good
faith and by appropriate proceedings);
3.2.4 permit to increase the amount secured by any mortgage,
debenture, hypothecation, charge, assignment by way of
security, pledge or lien or any other encumbrance or security
existing at the date hereof over all or any part of our or
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their respective present or future undertakings, properties,
assets, revenues or uncalled capital except as aforesaid.
4. UNDERTAKINGS
4.1 We hereby undertake to provide you with funds;
4.1.1 to meet on demand all bills negotiated, endorsed or advanced
against or purchased by you for us which may be dishonored on
presentation for acceptance or which may not be paid at the
due date thereof according to the original tenor and all
liability in respect thereof however arising and non-payment
of a xxxx shall be deemed to have taken place if at that date
funds have not been placed at your free disposal for the whole
sum due;
4.1.2 to reimburse you for all advances made against documents of
title which may not have been duly taken up on presentation;
4.1.3 to meet re-exchange expenses and all interest commission,
discount and other bankers charges, legal, notarial and other
costs, disbursements and expenses on a full indemnity basis;
4.1.4 to meet all freight, warehouse, dock, transit and other
charges the cost of insurance, rent and all other costs of and
incidental to such goods.
4.2 We hereby undertake to indemnify you and your correspondents
and agents on demand against all losses claims expenses
demands and liabilities of whatever nature now or hereafter
incurred by (or by any agent officer or employee of) you or
any of them for anything done or omitted in the exercise or
purported exercise of the powers herein contained or
occasioned by any breach by any of us our obligations
hereunder.
5. BANK'S AUTHORITIES
If, after due inquiry with us, you are not satisfied at the
responses provided, you are authorised at your absolute
discretion without further notice to us or further consent of
any person interested;
5.1 to insure all the Goods against all insurance risks whether by
land, sea or air for their full value and to recover the full
amount from the insurers;
5.2 to land and store or arrange for the storage of the goods
and/or re-ship the same to any other port;
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5.3 to pay all freight, warehouse, dock, transit and other
charges, the cost of insurance, rent and all other costs of
and incidental to the Goods as you may from time to time think
fit;
5.4 to pay or retain and charge us with such charges for
commission as are usual between merchant and correspondent and
such interest re-exchange notarial and banking charges as are
usually payable in these circumstances;
5.5 to take conditional acceptance of bills of exchange (including
acceptances for honor) and/or to extend the due date for
payment thereof upon such conditions as you think fit;
5.6 to accept payment from drawees or acceptors (whether or not
the acceptance is conditional) before maturity under rebate or
discount on payment to deliver up the relative Documents to or
to the order of the drawees or acceptors;
5.7 to accept part payment before maturity and to deliver such
proportionate part of the goods held against the same as you
in your absolute discretion think fit;
5.8 to convert into Sterling by telegraphic reminance or otherwise
at your discretion any monies received by you under or by
virtue of this letter of hypothecation and to debit our
account with all costs, charges and loss on exchange thereby
incurred;
5.9 to debit our account with all payments of freight, warehouse,
dock, transit and other charges the cost of insurance, rent,
interest and all other expenses incurred hereunder and with
all money chargeable to us under this letter of hypothecation
and pledge and with the amount of unaccepted or unpaid bills
of exchange or of advances against other documents of title
for which we are liable to you or any deficiency arising after
realization;
but so that you are under no obligation to do any of the
foregoing and are not liable for any loss we may sustain as a
result of your delay or failure so to do.
6. DISPOSAL OF SECURITY
6.1 You are authorised without demand for payment or notice or
further consent of any person to sell or otherwise dispose of
all or any of the goods at such times or times in such manner
and for such consideration (whether payable or deliverable
immediately or by installments) as you may in your absolute
discretion think fit without being under any responsibility to
us for the price obtained thereby in any of the following
events.
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6.1.1 on default of acceptance on presentation or in payment at
maturity of any xxxx of exchange or of any of the sums due
hereunder;
6.1.2 on any drawee or acceptor of any xxxx (whether conditionally
or absolutely accepted) suspending payment, becoming bankrupt
or insolvent or taking any steps composition or arrangement
with creditors;
6.1.3 on our failure to repay on demand any money obligation or
liability due, owing or incurred to you by us with all
interest, commission, discount and other bankers charges,
legal and other costs, disbursements and expenses due or
incurred in respect thereof;
6.1.4 on any payment being made by you which you are authorised to
make hereunder;
6.1.5 if and whenever you consider it desirable (having regard to
the then market value of the Goods) that the Goods should be
sold whether or not any contingent or other liability of ours
shall have actually matured to you:
but so that you are under no obligation so to sell or
otherwise dispose and you are not liable for any loss we may
sustain as a result of your delay of failure so to do:
6.2 We will from time to time execute and sign all transfers,
delivery order and other documents which you may require for
perfecting your title or for vesting or enabling you to vest
any of the Goods in you or for facilitating delivery of the
same to you or your nominee(s) or transferee(s) or to effect
delivery of the same as you may require and to do all such
acts and things as may from time to time be necessary or
expedient for effecting any sale or other disposition you may
make. You and your agent(s) and nominee(s) are hereby
severally and irrevocably authorised to execute and deliver
any such document as our agent and to do any such act or thing
on our behalf;
6.3 After deduction of all expenses, charges and commissions the
net proceeds of such sale or disposal of the Goods shall be
applied at your absolute discretion in discharge or reduction
of any actual or contingent debt, obligation or liability to
you of us and any surplus shall (subject to the provisions of
this letter of hypothecation and pledge) be at our disposal.
If such proceeds are insufficient for such purpose we
undertake to make good such deficiency. Section 93 and the
provisions contained in S. 103 of the Law of Property Xxx
0000 shall not apply. Any statement of account rendered to us
by you shall be sufficient proof of the sale or other disposal
of any of the Goods hereunder and of our deficiency resulting
therefrom and shall for all purposes be conclusive between us
and you.
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7. INSURANCE
We undertake that the Goods will be kept insured in their full
value or for such other value as you may specify against all
insurable risks including fire and flood and a note of your
interest has been endorsed on the relevant policies and all
policies whether effected by you or not are to be treated as
part of your security. Should any claim arise under any
insurance you are hereby irrevocably authorised to recover the
full amount thereof from the insurers and to give a valid
receipt on our behalf to charge the same commission on the
proceeds as on a sale of the produce of goods and to apply
such proceeds as if the same represented proceeds of any sale
or disposal of any such goods hereunder. We hereby undertake
to assign to you the policies of insurance for that purpose
and to deliver them to you on demand and in the case of loss
or damage to such goods howsoever caused to pay over to you
all sums received by us in respect of such insurance and make
up any deficiency which may result in the amount of any monies
due to you and pending payment we shall hold all such sums in
trust for you.
8. MAINTENANCE OF SECURITY
We undertake to maintain such margin of security over
liabilities as you shall from time to time stipulate, either
by payment to you of cash or, if so agreed by you, by the
deposit of additional collateral approved by you.
9. ADDITIONAL GUARANTEES
Your holding additional guarantees or securities is not to
prejudice your rights on any bills of exchange in case of
dishonor nor shall any recourse or proceedings taken thereon
or your giving time or granting any indulgence or making any
arrangement of composition affecting your title to any
security or our liability.
10. RESTRICTION OF LIABILITY
We hereby irrevocably acknowledge that you are not to be
liable to account as mortgage in possession or otherwise in
any circumstances for;
10.1 any default by any insurer, warehouse keeper, broker,
auctioneer, agent, carrier, captain or other officer of any
ship or craft or other person employed in the insurance, sale,
disposal, storage, shipment or carriage of any of the Goods or
for any other purpose connected therewith nor;
10.2 any deterioration or deficiency in the quantity, quality,
condition, delivery insurance or value of any of the Goods
nor;
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10.3 the stoppage or detention thereof by the shipper or any other
person whomsoever nor;
10.4 the correctness, validity, sufficiency or genuineness of any
of the Documents relating to the Goods from time to time
deposited with you or your agents representatives or for any
delay or omission which may occur in connection with the
acceptance or payment of any drafts drawn on the buyers of any
of the Goods nor;
10.5 loss on exchange rates or any other loss, damage or delay
howsoever caused relating directly or indirectly to any of the
Goods or the sale or disposal thereof.
11. RIGHT OF SET-OFF
11.1 If any xxxx of exchange hypothecated to you by us is not paid
in full at maturity then all advances made by you and all
credits given by you to us against any other xxxx at any time
drawn upon or accepted by the same drawee or acceptor and all
other such sums shall forthwith become due and repayable to
you without further demand and you shall be entitled without
notice to set-off all or any of such advances credits or other
such sums against any monies standing to our credit alone or
jointly with others on any current or other account and shall
have a lien on and be entitled to retain as security for the
foregoing all or any cheques, drafts, bills, notes and
negotiable instruments of us.
11.2 All monies received by you from us or from any other person
may be applied to such account or liability of us or any one
or more of us as you in your absolute discretion may from time
to time conclusively determine.
12. OFFICER'S AUTHORITY ETC
All the powers and authorities hereby given to you are powers
and authorities equally given to or in favour of any Director,
Manager of Offices of your Bank and your Correspondents or
other Agents and the holders for the time being of any xxxx as
if such persons were in each case specifically named and such
powers and authorities may be exercised accordingly.
13. NOTICES
Any notice or copy of protest for non-acceptance or non-payment
or any other communication having reference to any transaction
under this letter of hypothecation and pledge shall without
prejudice to any other effective mode of making the same be
deemed to have been sufficiently made on us if served on any
one of the Directors or on the Secretary personally or if left
for or sent by post to our registered office and shall be
assumed to have reached the addressee within 24 hours of
posting and in proving such service it shall be sufficient to
prove that the notice or communication was properly addressed,
stamped and posted by first class post.
14. INTERPRETATION
14.1 Reference to you in this letter of hypothecation and pledge
shall, where the context admits, include your successors and
assigns whether immediate or derivative and if this letter is
signed by two or more persons all agreements, obligations,
warranties, powers, authorities, liabilities and charges herein
contained or implied on their part are joint and several and
shall be entitled to any of the rights or remedies legal or
equitable of a surety as regards the indebtedness obligations
or liabilities of any others of the undersigned:
14.2 You shall be at liberty to release compound with or otherwise
vary or agree to vary the liability of or to grant time or
indulgence to or make other arrangements with or any other
person without prejudicing or affecting your rights and
remedies against any others of the undersigned.
15. CONTINUING SECURITY ETC.
The security created by this letter of hypothecation and pledge
shall apply to all current and future transactions
(nothwithstanding that any current transaction may have been
entered into prior to the date hereof) and shall remain in
force notwithstanding the liquidation, incapacity or any change
in our constitution or any intermediate settlement of account
or other matter whatsoever until the expiration of one month
after receipt by you of notice to determine the same PROVIDED
ALWAYS that such notice shall not have effect to terminate the
security created by this letter of hypothecation in respect of
amounts owing to you as at the date of receipt of such notice
or in respect of obligations or liabilities present or future,
actual or contingent occurred by us with you or arising out of
any transaction effected prior to receipt of such notice and is
in addition to and shall not merge with or otherwise prejudice
or effect any guarantee, xxxx, xxxx, note, mortgage or other
security right or remedy now or hereafter held by or available
to you and neither this letter of hypothecation and pledge to
your lien as bankers nor your rights or remedies on any xxxx or
otherwise shall be in any way prejudiced or affected thereby or
by the invalidity thereof by you now or hereafter dealing with
exchanging, releasing, modifying or abstaining from perfecting
or enforcing any of the same or any rights or remedies which
you may now or hereafter have no giving time for performance or
indulgence or compounding with any other person liable.
16. CURRENCY
16.1 Moneys received or held by you pursuant to this pledge and
hypothecation may from time to time after demand has been made
be converted into such currency as you consider necessary or
desirable to cover the obligations and liabilities actual or
contingent of us that currency at your then prevailing spot
rate of exchange (as conclusively determined by you) for
purchasing the currency to be acquired with the existing
currency.
16.2 If and to the extent that we fail to pay the amount when due
on demand, you may in your absolute discretion without notice
to us purchase at any time thereafter so much of a currency as
you consider necessary or desirable to cover obligations and
liabilities actual or contingent in such currency hereby
secured at your then prevailing spot rate of exchange (as
conclusively determined by you) for purchasing such currency
with sterling and we hereby agree to indemnify you against the
full sterling cost incurred by you for such purchase.
16.3 No payment to you (whether under any judgment or court order
or otherwise) shall discharge the obligation or liability in
respect of which it was made unless and until you shall have
received payment in full in the currency in which such
obligation was incurred as to the extent the amount of any
such payment shall on actual conversion into such currency
fall short of such obligation or liability expressed in that
currency you shall have a further separate cause of action
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against and shall be entitled to enforce this pledge and
hypothecation to recover the amount of the shortfall.
17. GOVERNING LAW AND JURISDICTION
This letter of hypothecation and pledge shall be governed and
interpreted in accordance with English law and we irrevocably
submit to the non-exclusive jurisdiction of the High Court of
Justice in England and/or Wales but it shall be open to you to
enforce this letter of hypothecation and pledge in the courts
of any other competent jurisdiction.
Dated 30th August 1994
SIGNED by /s/ X.X. Xxxxxxxx
for and on behalf of HORIZON EXPLORATION LTD
in the presence of
Signature:Xxxxxx Xxxxxx
Address:
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Occupation: Director
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