EXHIBIT 10.3
X X X X X X X X LIMITED LIABILITY PARTNERSHIP
C H A N C E
VAALCO GABON (ETAME), INC.
And
X.X. XXXXXX TRUSTEE AND DEPOSITARY COMPANY LIMITED
And
JPMORGAN CHASE BANK, LONDON BRANCH
ETAME FIELD
TRUSTEE AND PAYING AGENT AGREEMENT
CONTENTS
CLAUSE PAGE
1. Defined Terms...................................................................................... 1
2. Receipt Of Funds................................................................................... 7
3. Disbursements With Respect To Government Payments.................................................. 14
4. Establishment Of Etame Operating Account........................................................... 14
5. Disbursements With Respect To Trustee Compensation And The Tinworth Reserve Account............... 14
6. Procedures Respecting Accounts And Security Interests Under This Agreement......................... 16
7. Investment Of Funds Held In Accounts Under This Agreement.......................................... 18
8. Concerning The Trustee And Paying Agent And Account Bank........................................... 19
9. Miscellaneous...................................................................................... 29
Schedule A Consortium Members Account And Subordinate Secured Party Designations.................. 38
Schedule B Trustee And Paying Agent And Account Bank Fee Schedule................................. 39
Schedule C Funds Transfer Confirmation Contact Party Designation.................................. 40
Schedule D Tinworth Draw Notice................................................................... 41
Schedule E Form Of Notice Of Assignment Of Crude Oil Sales Contract............................... 43
Schedule F Form Of Acknowledgement Of Crude Oil Sales Contract Assignment......................... 45
Schedule G Form Of Notice Of Assignment........................................................... 46
Schedule H Form Of Acknowledgement Of Assignment.................................................. 48
Schedule I Form Of Deed Of Accession.............................................................. 52
THIS AGREEMENT, made as of the 26 day of June, 2002 between VAALCO GABON
(ETAME), INC., a Delaware corporation ("VGEI"), on behalf of itself, in its
capacity as Operator acting under the Operating Agreement and as a Consortium
Member and on behalf of each other Consortium Member under the Operating
Agreement, X.X. Xxxxxx Trustee and Depositary Company Limited having its
registered office at 000 Xxxxxx Xxxx, Xxxxxx XX0X 0XX as Trustee and Paying
Agent and JPMorgan Chase Bank, London Branch (the "Bank"), acting through its
branch located at Xxxxxxx Xxxxx, 0 Xxxxxx Xxxx Xxxxxx, Xxxxxx, Xxxxxxx X0X 0XX
as Account Bank (all capitalized terms in the Preface and Recitals are
hereinafter defined under Section 1 below).
WITNESSETH:
WHEREAS, VGEI, as the Operator and on behalf of the Consortium Members, will be
executing Crude Oil Sales Contracts;
WHEREAS, each Crude Oil Sales Contract will provide that the Buyer shall pay
Crude Oil Sales Contract Revenues due thereunder to the Etame Revenue Account;
WHEREAS, pursuant to the FPSO Contract between VGEI, as Operator, and TINWORTH,
TINWORTH is entitled to receive certain Compensation subject to the terms and
conditions thereof secured by the TINWORTH Reserve Account created and funded as
provided herein;
WHEREAS, from time to time Consortium Members may enter into financing
agreements with Subordinate Secured Parties and assign as security therefor,
subject to funding Government Payments, Fees and Expenses and Additional
Remuneration of the Trustee and Paying Agent and of the Account Bank and the
TINWORTH Reserve Account (as provided herein), their pro rata share of Crude Oil
Sale Contract Revenues;
WHEREAS, to secure payment of amounts due to (i) TINWORTH under the FPSO
Contract and (ii) the several obligations of the Consortium Members to their
Subordinate Secured Parties, VGEI, as the Operator and on behalf of the
Consortium Members, wishes to assign its rights and their respective rights to
the Crude Oil Sales Contract Revenues in respect of the related Crude Oil Sales
Contracts to the Trustee and Paying Agent upon the terms and conditions set
forth in this Agreement;
WHEREAS, amounts paid with respect to the Crude Oil Sales Contract Revenues in
respect of the Crude Oil Sales Contracts will be received, held, managed and
disbursed by the Trustee and Paying Agent (as provided herein);
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the
Parties hereto agree as follows:
1. DEFINED TERMS
1.1 The following defined terms shall have the meanings set forth below, such
meanings to be applicable to both the singular and the plural forms of such
expressions:
"Accession Deed" shall have the meaning set forth in Section 2.9.
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"Accounts" shall mean the Etame Reserve Account, the Etame Operating
Account and the TINWORTH Reserve Account.
"Account Bank" shall mean the JPMorgan Chase Bank or any Successor
appointed pursuant to Section 8.7.
"Account Bank's Office" shall mean the office of the Account Bank, the
address of the first Account Bank being set out in Section 9.6 or any other
office of the Account Bank in London, the address of which is notified to
the Operator and TINWORTH, with copies to any Subordinate Secured Parties,
by the Account Bank pursuant to Section 9.6 or the office specified in an
instrument delivered by any Successor.
"Agreement" shall mean this Etame Field Trustee and Paying Agent Agreement,
as modified, supplemented or amended from time to time in accordance with
the terms hereof.
"Applicable Law" shall have the meaning set forth in Section 9.9.
"Assigned Property" shall mean the property subject to the Crude Oil Sales
Contracts Assignments.
"Authority" any national, supranational, regional or local government or
governmental, administrative, fiscal, judicial, or government-owned body,
department, commission, authority, tribunal, agency or entity, or central
bank (or any person, whether or not government owned and howsoever
constituted or called, that exercises the functions of a central bank);
"Authorisation" any consent, registration, filing, agreement, notarization,
certificate, license, approval, permit, authority or exemption from by or
with any Authority, whether given by express action or deemed given by
failure to act within any specified time period and all corporate,
creditors' and stockholders' approvals or consents;
"Bank" shall have the meaning set forth in the introduction to this
Agreement.
"Beneficiaries" shall have the meaning set forth in Section 2.4.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banking institutions in London and New York are
authorized or obligated by law to remain closed.
"Buyers" shall mean collectively each of the buyers of Crude Oil under the
Crude Oil Sales Contracts and their respective successors and permitted
assigns thereunder.
"Charter" the articles of incorporation and bylaws an/or such other
constitutive documents, howsoever called;
"Collection Actions" shall have the meaning set forth in Section 2.7(f).
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"Compensation" shall mean all charter rate, operating rate and any other
compensation whatsoever payable by the Operator to TINWORTH in accordance
with their obligations and liabilities under the FPSO Contract.
"Consortium Members" shall mean collectively VGEI, PetroEnergy, Pan African
Energy, Sasol, WAAL and NISSHO, and in each case its successors and
permitted assigns under the Production Sharing Contract and the Operating
Agreement.
"Consortium Member Accounts" shall mean the designated deposit accounts for
each Consortium Member as designated on Schedule A hereto.
"Crude Oil" shall mean crude oil produced from the Field.
"Crude Oil Sales Contract Revenues" shall mean each amount payable in U.S.
Dollars pursuant to sales of Crude Oil exported from the Project and any
amounts payable on account of interest due by reason of the late payment
for Crude Oil under the Crude Oil Sales Contracts, in each case net of
sales commissions provided for in the Crude Oil Sales Contracts or in any
sales agency agreements entered into in connection therewith.
"Crude Oil Sales Contracts" shall mean each and all of the sales contracts
for the marketing and sale of Crude Oil from the Project to be entered into
either by:
(i) the Operator on behalf of itself, the Consortium Members and the
Government of Gabon and its assigns and each of the Buyers thereof;
and
(ii) such Consortium Members who elect to take in kind and separately
sell its share of Crude Oil from the Project directly and each of the
Buyers thereof;
as the same may be modified, supplemented or amended, including any
extension or renewal thereof.
"Crude Oil Sales Contracts Assignment" shall have the meaning set forth in
Section 2.7 (a).
"Crude Sharing Agreement" shall mean any agreement entered into between the
Operator and any Consortium Member under which such Consortium Member
elects to take in kind its share of Crude Oil from the Project and to sell
it directly under a Crude Oil Sales Contract.
"Eligible Bank" means the Bank or any of the Bank's affiliates or any other
bank or trust company with a registered office or branch in London,
England, provided the Bank or its relevant affiliate or such other bank or
trust company has capital and surplus of at least US $500,000,000 and whose
long term senior debt is rated at least "A" by Standard & Poor's
Corporation or its successor or at least "A3" by Xxxxx'x Investors Service,
Inc. or its successor, or any equivalent rating, issued by such services or
successors, as from time to time may be in effect.
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"Environmental Law" shall mean all applicable laws, including common law,
orders, decrees, permits, rules or regulations pertaining to the
environment, health and safety, hazardous substances, or the environmental
conditions on, under, or about the Field, the Project or the loading,
storage, off-loading and transportation of Crude Oil from the Field.
"Environmental Liability" shall mean any liability under any Environmental
Law.
"Etame Operating Account" shall mean the account established and maintained
pursuant to Section 4.1 by the Trustee and Paying Agent in the Trustee and
Paying Agent's name with the Account Bank, having the designation "JPMTDC
Re: Etame Operating Account" and account number 00000000.
"Etame Revenue Account" shall mean the account established and maintained
pursuant to Section 2.1 by the Trustee and Paying Agent in the Trustee and
Paying Agent's name with the Account Bank, having the designation "JPMTDC
Re: Etame Revenue Account" and account number 00000000.
"Fees and Expenses" shall have the meaning set forth in Section 8.2.
"Field" shall mean the Etame Field located offshore Gabon and more
particularly described in the Production Sharing Contract and the Operating
Agreement.
"Final Compensation Payment" shall mean the final payment for Compensation
due and owing to TINWORTH under the FPSO Contract.
"Finance Document" means any agreement or deed relating to the transactions
contemplated by this Agreement, other than this Agreement.
"FPSO Contract" shall mean the Contract for the Provision and Operation of
an FPSO for the Field dated August 20, 2001, between the Operator and
TINWORTH, as the same may hereafter be modified, supplemented or amended,
including any extension or renewal thereof.
"Gabon" shall mean the Republic of Gabon.
"Government" shall mean the government of Gabon.
"Government Payments" shall mean any funds to be disbursed by the Trustee
and Paying Agent to the Government under Section 3.1.
"Investment Designation" shall have the meaning set forth in Section 7.1.
"Letters of Credit" shall mean each irrevocable and transferable letter of
credit or any similar payment security provided by a Buyer in favor of the
Operator, any Consortium Member or Trustee and Paying Agent to provide for
the payment when due of the purchase price of Crude Oil sold pursuant to
the Crude Oil Sales Contracts.
"NISSHO" shall mean Nissho Iwai Corporation, a Japanese corporation.
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"Operating Agreement" shall mean the joint operating agreement effective as
of April 4, 1997 between VGEI, VAALCO Energy (Gabon), Inc., WAAL,
Petrofields Exploration & Development Co. Inc. and Xxxxxx Petroleum and
Mineral Corporation, as the same has been and may hereafter be modified,
supplemented or amended, including any extension or renewal thereof and any
successors of the original parties.
"Operator" shall mean VGEI, the designated Operator pursuant to the
Operating Agreement and its successors and permitted assigns under the
Operating Agreement and the Production Sharing Contract.
"Pan African Energy" shall mean Pan African Energy Gabon Corporation,
(formerly known as VAALCO Energy (Gabon), Inc.), a Delaware Corporation.
"Party" shall mean each of the Trustee and Paying Agent, the Account Bank
and the Operator.
"Payment Default" shall have the meaning set forth in Section 5.3.
"Payment Due Date" shall mean the date on which the Buyer must pay the
amount due under the relevant Crude Oil Sales Contract to the Operator or,
as the case may be, the relevant Consortium Member.
"Permitted Investments" shall mean any of the following investments having
a maturity date not later than the Business Day immediately preceding the
date on which it is anticipated the proceeds thereof will be required in
order to make any payment hereunder and in any event not more than one year
from the date the investment is acquired by the Trustee and Paying Agent:
(i) Eurodollar time deposits with Eligible Banks, (ii) Eurodollar
certificates of deposit of Eligible Banks, (iii) commercial paper, finance
company paper or bonds denominated in Eurodollars of any issuer, including
Trustee and Paying Agent or any of its affiliates, or (iv) money market
funds, provided that in the case of any investments described in either
clause (iii) or (iv) above, such investments shall be rated not less than
"P-I" by Moody's Bank Credit Report Service or its successors and "A-1 +"
by Standard & Poor's Corporation CD Ranking Service or its successors, or
any equivalent rating, issued by such services or successors, as from time
to time may be in effect, all in accordance with Section 7.1.
"PetroEnergy" shall mean PetroEnergy Resources Corporation, a Philippine
corporation.
"Production Sharing Contract" shall mean the Production Sharing Contract
executed by VGEI and VAALCO Energy (Gabon), Inc. with the Ministry of
Petroleum of Gabon on July 6, 1995, as the same has been and may hereafter
be modified, supplemented or amended, including any extension or renewal
thereof.
"Project" shall mean the floating production storage and offloading system
and the three oil xxxxx existing in the Field and such other xxxxx or
facilities as may be added to develop the Field.
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"Sasol" shall mean Sasol Petroleum International (Pty) Ltd., a South
African Corporation.
"Secured Obligations" shall mean collectively such obligations owed by the
Operator, for itself and as agent for and on behalf of the other Consortium
Members to TINWORTH under the FPSO Contract and the several obligations, if
any, owed by the Consortium Members to their respective Subordinate Secured
Parties.
"Security" shall mean the security created or expressed to be created in
favour of the Trustee and Paying Agent pursuant to this Agreement.
"Subordinate Secured Parties" shall mean, at any time, the party or parties
identified in Schedule A that a Consortium Member has notified in writing
to the Operator, the Trustee and Paying Agent and the Account Bank is a
secured creditor with respect to such Consortium Member's share of the
Crude Oil Sales Contract Revenues and a beneficiary of the Crude Oil Sales
Contract Assignment with respect to such share.
"Successor" shall have the meaning set forth in Section 8.7.
"Tax" shall mean all present and future taxes, levies, imposts or duties
(including value added and stamp duties) whatsoever and wheresoever
imposed.
"TINWORTH" shall mean TINWORTH Ltd., a Bermudian corporation or its
successor.
"TINWORTH Draw Notice" shall mean a written notification in form of
Schedule D attached hereto as provided in Section 5.3.
"TINWORTH Reserve Account" shall mean the account established pursuant to
Section 5.1 by the Trustee and Paying Agent in the Trustee and Paying
Agent's name with the Account Bank, having designation "JPMTDC: TINWORTH
Reserve Account" and account number 00000000.
"TINWORTH Reserve Account Maximum Balance" shall have the meaning set forth
in Section 5.2.
"Trustee Acts" shall mean the Trustee Xxx 0000 and the Trustee Xxx 0000 of
England and Wales.
"Trustee and Paying Agent" shall mean the person designated as such by the
Operator pursuant to Section 2.1 or any Successor appointed pursuant to
Section 8.7.
"Trustee and Paying Agent's Office" shall mean the office of the Trustee
and Paying Agent, the address of the first Trustee and Paying Agent being
set out in Section 9.6 or any other office of the Trustee and Paying Agent
in London, the address of which is notified to the Operator and TINWORTH,
with copies to any Subordinate Secured Parties, by the Trustee and Paying
Agent pursuant to Section 9.6 or the office specified in an instrument
delivered by any Successor.
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"Trust Funds" shall have the meaning set forth in Section 2.4.
"Trust Property" shall mean the property held by the Trustee and Paying
Agent upon the terms of the trusts set out in Section 2.4.
"Underlying Security" shall mean all liens, security interests, Letters of
Credit, mortgages or similar rights securing payment by the Buyers of the
Crude Oil Sales Contract Revenues.
"US$" and "U.S. Dollars" shall mean the lawful currency of the United
States of America.
"VGEI" shall have the meaning set forth in the introduction to this
Agreement.
"WAAL" shall mean Western Atlas Afrique, Ltd., a Bermuda Corporation.
1.2 INTERPRETATION
In this Agreement, unless the context otherwise requires:
(a) headings are for convenience only and do not affect the interpretation
of this Agreement;
(b) words importing the singular include the plural and vice versa;
(c) a "person" includes any company, corporation, partnership, trust,
estate, unincorporated organization, joint venture, association,
juridical entity, corporation or other body corporate and any
government, state or any political subdivision, authority or agency
thereof;
(d) a reference to a party, Schedule or Section is a reference to that
Section of, or that party or Schedule to, this Agreement;
(e) a reference to a party to any document includes that party's
successors and permitted assigns; and
(f) a reference to a statute or statutory provision shall be construed as
a reference to such statute or statutory provision as the same shall
have been or may be amended or re-enacted.
2. RECEIPT OF FUNDS
2.1 DESIGNATION OF TRUSTEE AND PAYING AGENT AND ETAME REVENUE ACCOUNT
The Operator hereby appoints X.X. Xxxxxx Trustee and Depositary Company
Limited as the Trustee and Paying Agent and X.X. Xxxxxx Trustee and
Depositary Company Limited hereby accepts its appointment as Trustee and
Paying Agent and its obligations hereunder upon and subject to the terms
and conditions of this Agreement. The Trustee and Paying Agent may delegate
all or any of the rights, powers and discretions vested in it by this
Agreement pursuant to Clause 8.1(k). All Crude Oil Sales Contract Revenues
shall be paid to the Trustee and Paying Agent. In the event any Consortium
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Member sells its share of Crude Oil directly under a Crude Oil Sales
Contract such Consortium Member shall, as shall be required by the Operator
under the relevant Crude Sharing Agreement, appoint X.X. Xxxxxx Trustee and
Depositary Company Limited as the Trustee and Paying Agent to which Crude
Oil Sales Contract Revenues under its Crude Oil Sales Contract shall be
paid. The Trustee and Paying Agent shall establish and maintain the Etame
Revenue Account, to which all Crude Oil Sales Contract Revenues and any
other monies which may be payable to Consortium Members in respect of any
Crude Oil Sales Contract Revenues shall be paid. The Trustee and Paying
Agent shall deposit in the Etame Revenue Account each amount of Crude Oil
Sales Contract Revenues and any other monies which may be payable to
Consortium Members in respect of any Crude Oil Sales Contract Revenues
received by it.
2.2 The Operator shall and shall cause any Consortium Member selling Crude Oil
directly to send to the Trustee and Paying Agent (i) any Crude Oil Sales
Contract promptly following the execution of the contract and (ii) a copy
of each invoice at the same time that such invoice is sent to the relevant
Buyer.
2.3 COVENANT TO PAY
The Operator on behalf of each of the Consortium Members covenants with the
Trustee and Paying Agent on behalf of itself and as trustee for and on
behalf of the Beneficiaries (as defined below) that the Operator and such
Consortium Members will pay and discharge the Secured Obligations owed to
TINWORTH under the FPSO Contract.
2.4 DECLARATION OF TRUST FUNDS
All amounts received in the Etame Revenue Account pursuant to Section 2.1,
and Section 2.1 as applied by Section 2.9, in the Etame Operating Account
pursuant to Section 4.2 and the TINWORTH Reserve Account pursuant to
Section 5.2, Section 7.1 and Section 7.2 are herein referred to as the
"Trust Funds." The Trustee and Paying Agent hereby declares itself trustee
of the Trust Funds on trust for itself, the Operator, the Consortium
Members, TINWORTH and the Subordinate Secured Parties each as the case may
be (being the beneficiaries hereto) the "Beneficiaries" and shall hold the
Trust Funds and the benefit of all related rights in trust for the
Beneficiaries in accordance with their respective rights hereunder. Such
funds shall be held upon trust for the benefit of those having a right to
receive disbursements and distributions to the extent provided in this
Agreement.
2.5 AMOUNTS RECEIVED
(a) In the event the Trustee and Paying Agent receives any amount from any
person which amount is not designated for the Etame Revenue Account or
for any other account established or to be established hereunder, or
an amount in relation to which it has not received a notification from
the Operator, the Trustee and Paying Agent shall request instructions
from the Operator as to
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the proper account designation of the amount received and shall
deposit such amount in the account or accounts specified in the
designation given by the Operator.
(b) If the Operator receives any sum which, pursuant to this Agreement,
should have been paid to the Trustee and Paying Agent, that sum shall
be held by the Operator on trust for the Beneficiaries and shall
promptly be paid to the Trustee and Paying Agent in accordance with
this Agreement.
2.6 CURRENCY CONVERSION
If the Trustee and Paying Agent recovers a payment in a currency other than
US dollars, the Trustee and Paying Agent may convert the moneys received or
recovered by the Trustee and Paying Agent into US dollars at the spot rate
at which the Trustee and Paying Agent is able to purchase US dollars with
the amount received.
2.7 CRUDE OIL SALE CONTRACTS ASSIGNMENT
(a) To the extent permitted or not prohibited by the Crude Oil Sales
Contracts, the Operator on behalf of each of the Consortium Members
with full title guarantee and as continuing security for the payment
and discharge of the Secured Obligations to the Trustee and Paying
Agent for the benefit of TINWORTH and the Subordinate Secured Parties
assigns by way of security absolutely to the Trustee and Paying Agent
(the "Crude Oil Sales Contracts Assignment") all the Crude Oil Sales
Contract Revenues in respect of the Crude Oil Sales Contracts to which
it is a party, and all liens, security interests, Letters of Credit,
mortgages or similar rights securing payment by the Buyers of the
Crude Oil Sales Contract Revenues pursuant to the related Crude Oil
Sales Contracts, including without limitation:
(i) the right to receive all Crude Oil Sales Contract Revenues,
(ii) payments arising from any claims for damages in respect of
Crude Oil Sales Contract Revenues, and
(iii) payments received as a result of the Operator, Trustee and
Paying Agent or its assignee compelling performance of the
payment of such Crude Oil Sales Contract Revenues (all of
which shall be held by the Trustee and Paying Agent upon the
terms of the trusts set out in Section 2.4 above);
provided however that the Trustee and Paying Agent shall have
no right or obligation (unless instructed to do so by the
Operator) to consent or agree to any amendment, modification or
waiver under or with respect to any such Crude Oil Sales
Contract or any such lien, security interest, Letter of Credit,
mortgage or similar right. The Trustee and Paying Agent hereby
accepts such Crude Oil Sale Contracts Assignment in accordance
with the terms hereof.
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The Operator shall, contemporaneously with the execution of
each Crude Oil Sales Contract to which it is a party, serve a
notice of the Crude Oil Sales Contract Assignment, in the form
set out in Schedule E on each Buyer thereunder and the Operator
shall use its reasonable endeavors to procure that each Buyer
promptly executes and delivers to the Trustee and Paying Agent
(with a copy thereof to the Operator, TINWORTH and the
Subordinate Secured Parties) an acknowledgement of the Crude
Oil Sales Contract Assignment in the form set out in Schedule
F. The Operator shall use its reasonable endeavors to obtain
any relevant consent, waiver or acknowledgement necessary to
give full effect to the foregoing assignment to the Trustee and
Paying Agent.
(b) The Operator for itself and on behalf of each of the Consortium
Members represents, warrants and covenants that:
(i) it has not assigned and will not assign for itself or on behalf
of each of the Consortium Members any of its rights or
interests hereby assigned to any person other than the Trustee
and Paying Agent as aforesaid;
(ii) it has and will have the necessary power to enable it to enter
into and perform its obligations under this Agreement;
(iii) this Agreement constitutes and will constitute its legal,
valid, binding and enforceable obligation (except as
enforcement may be limited by bankruptcy, moratorium,
insolvency, reorganisation or similar laws generally affecting
creditors' rights as well as the awards by courts of relief in
lieu of specific performance of contractual provisions); and
(iv) all necessary authorisations to enable it to enter into this
Agreement have been obtained and are, and will remain, in full
force and effect.
(c) Anything herein to the contrary notwithstanding, the Operator agrees
for the benefit of the Trustee and Paying Agent and for the benefit of
each person having an interest in or right at any time to distribution
or disbursement of Trust Funds hereunder that:
(i) the Operator shall at all times remain liable to the other
party or parties to each Crude Oil Sales Contract to which the
Operator is a party to perform all of the duties and
obligations of the Operator thereunder as if the Crude Oil Sale
Contracts Assignment hereunder had not been made, and
(ii) the Trustee and Paying Agent shall not have any obligation or
liability under any Crude Oil Sales Contract or in respect of
any Crude Oil Sales Contract Revenue or any lien, security
interest, Letter of Credit, mortgage or similar right securing
payment by the Buyers of the Crude Oil Sales Contract Revenues
pursuant to the related Crude Oil Sales Contracts or any other
instrument or agreement securing
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payment by the Buyers of the Crude Oil Sales Contract Revenues
pursuant to the related Crude Oil Sales Contracts by reason of,
or arising under, this Agreement or be obligated to perform any
of the obligations of the Operator under any thereof or, except
as otherwise expressly provided in Section 2.7(f), to make any
payment or to make any inquiry as to the sufficiency of any
payment received by it or to present or file any claim or to
take any other action to collect or enforce any claim for or
right to any payment or security therefor assigned hereunder.
(d) The Operator on behalf of each of the Consortium Members does hereby
constitute the Trustee and Paying Agent and its respective delegates,
the Operator's true and lawful attorney irrevocably, with full power
(in the name of the Operator or otherwise on its behalf) to do all
acts and all things (including full power to delegate) and to sign,
seal, execute, deliver, perfect and do all deeds, instruments and
documents, acts and things which may be necessary hereunder and to
ask, require, demand, receive, compound and give acquittance for any
and all monies and claims for monies due and to become due under or
arising out of each Crude Oil Sales Contract to which the Operator is
a party and, to endorse any instruments or orders in connection
therewith. The Operator ratifies and confirms and agrees to ratify and
confirm whatever any attorney appointed hereunder shall do in its
capacity as such. Unless and until the Trustee and Paying Agent shall
take any action or exercise any right under Section 2.7(f) and shall
have notified the Operator to such effect, the Operator may in its
discretion take any such action or exercise any such right.
(e) The Operator agrees that, subject to the Operating Agreement, the
Operator will, at its own expense, promptly and duly execute and
deliver any and all such further notices, instruments and documents
and take such further action as the Trustee and Paying Agent may
require or consider necessary in order to obtain the full benefits of
the Crude Oil Sale Contracts Assignment and the rights and powers
herein granted. The Operator shall deliver, and shall cause to be
delivered, to the Trustee and Paying Agent all Crude Oil Sales
Contracts and Letters of Credit and any other security for performance
of the Buyers under the Crude Oil Sales Contracts. The Operator shall
provide, and shall cause to be provided, to the Trustee and Paying
Agent all amendments, modifications or supplements to the Crude Oil
Sales Contracts, the Letters of Credit or any other instruments or
agreements securing payment by the Buyers of the Crude Oil Sales
Contract Revenues pursuant to the related Crude Oil Sales Contracts or
the Letters of Credit; provided however that until the Trustee and
Paying Agent shall have received any such amendment, modification or
supplement, it may assume and act or not act on the basis that the
executed original documentation in its possession is solely
authoritative, in effect and binding.
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(f) In the event payment is not made in respect of any Crude Oil Sales
Contract or Letter of Credit when due, the Trustee and Paying Agent
shall have no duty to exercise any right or take any action under any
Crude Oil Sales Contract or, except as set forth in Section 2.8, under
any Letter of Credit ("Collection Actions"). The Trustee and Paying
Agent may, and if instructed in writing by the Operator, shall appoint
the Operator or its nominee as the agent of the Trustee and Paying
Agent to exercise any such right or take any such action provided that
the Trustee and Paying Agent is indemnified and or secured to its
satisfaction. In acting (or refraining from acting) as such agent of
the Trustee and Paying Agent, the Operator and its assignee shall have
all rights, benefits, powers and protections provided to the Trustee
and Paying Agent under or pursuant to this Agreement.
(g) Notwithstanding anything to the contrary contained herein, the Trustee
and Paying Agent makes no representation as to the collectability of
any lien or security interest purported to be created hereby, or as to
the sufficiency, validity or genuineness of any instruments or
documents at any time assigned or deposited with the Trustee and
Paying Agent hereunder, or any liens purported to be created hereunder
or under any other document referred to or provided for in this
Section. The Trustee and Paying Agent shall have no duty to do, cause
to be done or advise with respect to any filing or recording or to the
maintenance of any such filing or recording with any governmental
agency or office or otherwise. The Trustee and Paying Agent shall, if
directed by the Operator or its nominee in accordance with Section
2.7(f), deliver or cause to be delivered to the Operator such
instruments, notices or other documents designed to create, protect,
perfect or effect the Crude Oil Sales Contracts Assignment, which
instruments, notices or other documents shall have been prepared by
the Operator or its nominee and delivered to the Trustee and Paying
Agent.
2.8 LETTERS OF CREDIT
(a) If, as indicated by the relevant invoice, payment for Crude Oil sold
pursuant to a Crude Oil Sales Contract is to be effected by a Letter
of Credit, the Trustee and Paying Agent shall, but only to the extent
that the applicable Letter of Credit (together with all documents
required to be presented thereunder) is in the possession of the
Trustee and Paying Agent, draw on the applicable Letter of Credit in
the manner provided therein and for the amount then due on the
applicable payment due date. If any invoice under a Crude Oil Sales
Contract is not paid when due in respect of which invoice a Letter of
Credit is held by the Trustee and Paying Agent as security for payment
of such invoice, the Trustee and Paying Agent shall notify the
Operator of such event and the Trustee and Paying Agent shall draw on
the applicable Letter of Credit, in the manner provided therein and
for the amount then due, after the lapse of five (5) calendar days
following the applicable payment due date, but in any event prior to
the expiration date of the relevant Letter of Credit. If the
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applicable Letter of Credit is in favour of the Operator or any
Consortium Member, the Trustee and Paying Agent shall request such
party to draw on the Letter of Credit and deposit such funds into the
Etame Revenue Account.
(b) In the event the issuing bank, advising bank or confirming bank, as
the case may be, fails to honor any draw by or on behalf of the
Trustee and Paying Agent under a Letter of Credit, the Trustee and
Paying Agent shall promptly notify the Operator and shall make prompt
written demand on the issuing bank, advising bank or confirming bank.
The Trustee and Paying Agent may, and if requested by the Operator
shall, provided that the Trustee and Paying Agent is indemnified
and/or secured to its satisfaction, take or cause to be taken such
other reasonable action as may be specified by the Operator to, cause
the issuing bank, advising bank or confirming bank to honor such
Letter of Credit, which instructions may be to appoint the Operator or
its nominee as the Trustee and Paying Agent's agent pursuant to
Section 2.7(f). If the Operator should directly receive any monies
from the issuing bank, advising bank or confirming bank as a result of
such action such monies shall be held on trust by the Operator and
shall immediately be transferred to the Trustee and Paying Agent and
shall be treated as Crude Oil Sales Contract Revenues.
2.9 DIRECT SALES/CRUDE SHARING AGREEMENTS
In the event that any Consortium Member elects to sell its share of Crude
Oil from the Project directly to a Buyer, the Operator shall cause such
Consortium Member to enter into a Crude Sharing Agreement with the Operator
whereby such Consortium Member shall covenant, among other matters, to
perform, with respect to the Crude Oil Sales Contracts and Crude Oil Sales
Contract Revenues related to such Consortium Member's share of Crude Oil,
the obligations of the Operator under Sections 2.1 (save for the obligation
of the Operator referred to in the 4th sentence thereof), 2.2, 2.3, 2.4,
2.5(b), 2.6, 2.7, 2.8, 8.1(a), (i), (m), (p)(iii), and 9.4(c) as more
particularly set forth under such Crude Sharing Agreement (including, for
avoidance of doubt, an obligation of the Operator to cause any such
Consortium Member to duly execute an assignment of such Consortium Member's
rights under such Crude Oil Sales Contracts to the Trustee and Paying Agent
in accordance with Section 2.5) and to execute an instrument acceding to
this Agreement in substantially the form of Schedule I hereto ("Accession
Deed"). The Trustee and Paying Agent shall be entitled to Fees and Expenses
and Additional Remuneration in connection therewith pursuant to Section 8.2
and 8.3.
2.10 ACCEPTANCE OF ACCESSION DEEDS
Each of the Parties hereto appoints the Trustee and Paying Agent to receive
on its behalf each Accession Deed delivered to the Trustee and Paying Agent
pursuant to Section 2.9 and to accept and sign it if the Trustee and Paying
Agent has received such documentation from the acceding Consortium Member
that it, in its sole discretion, requires in order to comply with all
applicable legal and regulatory requirements. No Accession Deed shall be
effective unless and until accepted and signed by the Trustee and Paying
Agent. The Trustee and Paying Agent shall be entitled to assume, without
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further enquiry, that any such Accession Deeds are duly executed,
authentic, legal, valid, binding and enforceable.
3. DISBURSEMENTS WITH RESPECT TO GOVERNMENT PAYMENTS
3.1 GOVERNMENT PAYMENTS
The Trustee and Paying Agent shall as soon as practicable but not more than
three (3) Business Days after receipt of any amount of Crude Oil Sales
Contract Revenues, pay over from the Etame Revenue Account to the
Government an amount specified by the operator as the Government's share of
such amount pursuant to the Production Sharing Contract ("Government
Payments"), which amount shall be as specified in the notice received by
the Trustee and Paying Agent from the Operator at least three (3) Business
Days prior to the due date of each invoice for the sale of Crude Oil under
the relevant Crude Oil Sales Contract, failing the receipt of which the
Trustee and Paying Agent shall act in accordance with the previous such
notice in determining the applicable amount to be paid to the Government.
Amounts payable to the Government hereunder shall be paid to such account
as shall be specified in writing by the Operator to the Trustee and Paying
Agent.
4. ESTABLISHMENT OF ETAME OPERATING ACCOUNT
4.1 ETAME OPERATING ACCOUNT
The Trustee and Paying Agent shall establish and maintain the Etame
Operating Account.
4.2 FUNDS TO BE DEPOSITED
As soon as practicable but no later than two (2) Business Days after
receipt by it of any amount in funds in the Etame Revenue Account, the
Trustee and Paying Agent shall deposit in the Etame Operating Account all
amounts in the Etame Revenue Account in excess of the amount of Government
Payments required to be made pursuant to Section 3.1.
5. DISBURSEMENTS WITH RESPECT TO TRUSTEE COMPENSATION AND THE TINWORTH
RESERVE ACCOUNT
5.1 ESTABLISHMENT OF TINWORTH RESERVE ACCOUNT
The Trustee and Paying Agent shall establish and maintain the TINWORTH
Reserve Account.
5.2 PAYMENT
Any time funds are deposited in the Etame Operating Account, the Trustee
and Paying Agent shall as soon as practicable after such deposit but in no
event more than two (2) Business Days thereafter pay or deposit such funds
in the following order:
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First, pay Fees and Expenses incurred in accordance with Section 8.2 hereof
and Additional Remuneration incurred in accordance with Section 8.3 hereof.
Second, deposit such amounts in the TINWORTH Reserve Account as may be
necessary to ensure that the credit balance of the TINWORTH Reserve
Account, including the value of any Permitted Investments and accrued
interest in accordance with Section 7, is equal to $2,500,000 (the
"TINWORTH Reserve Account Maximum Balance").
Third, distribute the balance remaining in the Etame Operating Account, if
any, to each of the Consortium Member's Accounts the amounts in accordance
with their respective entitlements under Production Sharing Contract and
the Operating Agreement, as shall be specified in the notice received by
the Trustee and Paying Agent from the Operator at least three (3) Business
Days prior to the date of such distribution.
5.3 TINWORTH RESERVE ACCOUNT DRAWS
TINWORTH shall be entitled to draw such amounts out of the TINWORTH Reserve
Account up to the TINWORTH Reserve Account Maximum Balance in the event
Operator fails to pay any Compensation due to TINWORTH under the FPSO
Contract on the due date thereof and after the expiration of any applicable
grace periods (a "Payment Default"), upon five (5) Business Days' written
notice from TINWORTH ("TINWORTH Draw Notice") to the Trustee and Paying
Agent with copies to the Operator and each of the Subordinate Secured
Parties (as designated on the most recent Schedule A delivered to TINWORTH
pursuant to Section 6.1(b)), declaring that a Payment Default has occurred
under the FPSO Contract and for these purposes the Trustee and Paying Agent
can rely without enquiry on a certificate from TINWORTH certifying that
TINWORTH has sent such copies of the TINWORTH Draw Notice and the Trustee
and Paying Agent shall not be liable for so acting. TINWORTH shall have no
obligation to confirm that Schedule A is a complete and current list of
Subordinate Secured Parties. The Trustee and Paying Agent shall distribute
to TINWORTH such amounts in the TINWORTH Reserve Account up to the TINWORTH
Reserve Account Maximum Balance as certified due and owing under the
TINWORTH Draw Notice. Trustee and Paying Agent shall liquidate the
Permitted Investments to the extent necessary to fund the full amount of
the TINWORTH Draw Notice, whether or not such Permitted Investments have
matured. Anything herein to the contrary notwithstanding, the Operator on
behalf of itself and each of the Consortium Members agrees for the benefit
of the Trustee and Paying Agent that the Trustee and Paying Agent shall be
under no duty to inquire or seek approval from Operator, any Consortium
Member or any Subordinate Secured Party or any other person with respect to
the occurrence or not of the Payment Default or the right of TINWORTH to
receive the amount requested under the TINWORTH Draw Notice and Trustee and
Paying Agent shall have no liability to the Operator, any Consortium Member
or Subordinate Secured Party to determine or resolve any claims with
respect to their
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rights under the FPSO Contract, TINWORTH's Compensation, or any other
disputes between TINWORTH and the Operator thereunder for payment of such
amounts.
5.4 FINAL COMPENSATION PAYMENT
After the date of payment of the Final Compensation Payment pursuant to the
FPSO Contract as confirmed by notice from the Operator and TINWORTH to the
Trustee and Paying Agent, the Trustee and Paying Agent shall as promptly as
practicable convert to cash any Permitted Investments then held in the
TINWORTH Reserve Account and promptly pay all amounts remaining in the
TINWORTH Reserve Account to the Consortium Members' Accounts in accordance
with the instructions as provided by the Operator in the manner described
in Paragraph "Third" under Section 5.1, and thereafter close the TINWORTH
Reserve Account.
6. PROCEDURES RESPECTING ACCOUNTS AND SECURITY INTERESTS UNDER THIS AGREEMENT
6.1 BENEFICIAL RIGHTS IN TRUST FUNDS
(a) TINWORTH shall have under this Agreement or otherwise no claim or
interest in the Etame Revenue Account or Etame Operating Account
except to the extent funds deposited in the Etame Operating Account
are to be deposited in the TINWORTH Reserve Account as provided in
Section 5.2. The funds in the TINWORTH Reserve Account, up to the
TINWORTH Reserve Account Maximum Balance, shall be held for the
benefit of TINWORTH as security for and payment of the Compensation.
Except as provided under Section 7.2, prior to the Final Compensation
Payment, neither Operator nor any Consortium Member or any Subordinate
Secured Party shall have any security interest in the TINWORTH Reserve
Account. TINWORTH has no claim or interest in the Consortium Member
Accounts under this Agreement or otherwise.
(b) At any time and from time to time any Consortium Member may give
notice to the Trustee and Paying Agent and the Operator that it has
assigned with full title guarantee to its Subordinate Secured Party by
way of security absolutely all of such Consortium Member's rights in
and to the Etame Operating Account funds substantially in the form of
Exhibit G hereto. Upon receipt of such notice, (i) the Trustee and
Paying Agent and Operator shall amend Schedule A as appropriate and
deliver a copy thereof to each of TINWORTH, each of the Consortium
Members and each of their respective Subordinate Secured Parties, if
applicable (ii) the Trustee and Paying Agent and the Operator shall
acknowledge such Subordinate Secured Party's security interest
substantially in the form of Exhibit H hereto and (iii) thereafter the
Trustee and Paying Agent shall distribute such Consortium Member's
share of the Etame Operating Account funds to such Consortium Member's
Account as directed in such notice.
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6.2 NO OVERDRAFT
None of the Accounts may go to into overdraft.
6.3 ACCOUNTING FOR ASSETS
All assets under the jurisdiction and control of the Trustee and Paying
Agent and held from time to time in the Trust Funds shall be accounted for
within the Etame Revenue Account, Etame Operating Account and TINWORTH
Reserve Account specifying the designated account to which such assets may
be allocated and the place or places at which Permitted Investments may be
held in custody for the account of the Trustee and Paying Agent. The
Trustee and Paying Agent shall maintain such books of account and other
records as may be necessary to ensure full and proper segregation of the
funds credited to such accounts as may be established by the Trustee and
Paying Agent hereunder. Such books of account shall be open to inspection
by the duly authorized representatives of the Operator, TINWORTH, the
Government, the Consortium Members and their respective Subordinate Secured
Parties at all reasonable times and upon reasonable notice.
6.4 REPORTS
The Trustee and Paying Agent shall furnish to the Operator, TINWORTH and
each Subordinate Secured Party the following reports:
(a) Within 20 days after the close of each calendar quarter, a statement
prepared by the Trustee and Paying Agent setting forth the amount and
source (by category) of funds received pursuant to this Agreement and
the disbursements of such funds as disclosed by the records and
accounts kept by the Trustee and Paying Agent pursuant to Section 6.3
during such preceding calendar quarter and a statement of the cash and
investments held in the accounts under this Agreement as of the end of
such period.
(b) As soon as practicable after its receipt or disbursement of any funds
pursuant to this Agreement, a statement by facsimile transmission or,
if so requested by any party, by e-mail, of such transactions
specifying the amount and the source (by category) of the funds
received and disbursed and the amounts credited or charged to the
Etame Revenue Account, the Etame Operating Account, the TINWORTH
Reserve Account and each Consortium Member's Account.
6.5 TAX CONSIDERATIONS
(a) All payments from the Trust Funds to Consortium Members shall be paid
gross except to the extent required by law and the Trustee and Paying
Agent shall be entitled to deduct or withhold any sum on account of
any Tax required or which in its view is required to be so deducted or
withheld or for which it is in its view liable or accountable by law
or practice of any relevant revenue
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authority of any jurisdiction and in each case in accordance with the
Trustee and Paying Agent's usual and customary business practice.
(b) The Operator shall use reasonable endeavors to procure, on request
from the Trustee and Paying Agent, that each Consortium Member makes
such declarations as may be required (including, without limitation,
declarations under paragraph 4 of the Income Tax (Paying and
Collecting Agents) Regulations 1996 (as amended)) that may be required
to avoid any withholding from payments out of the Trust Fund that
would otherwise be required by law.
7. INVESTMENT OF FUNDS HELD IN ACCOUNTS UNDER THIS AGREEMENT
7.1 PERMITTED INVESTMENTS
The Trustee and Paying Agent shall invest amounts held by it from time to
time in the TINWORTH Reserve Account solely in such Permitted Investments
specifically designated by the Operator (as to type, obligor, yield,
maturity and other necessary information) from time to time in writing
("Investment Designation"); provided that (a) if the Trustee and Paying
Agent has not received an Investment Designation as to any funds required
to be invested hereunder it shall invest such funds in an interest bearing
deposit account held with the Account Bank and bearing a rate of interest
of the JPMorgan Chase Bank overnight bid rate for deposits in US dollars
less 50 basis points or such other interest rate as may be agreed from time
to time; (b) upon receipt of an Investment Designation, the Trustee and
Paying Agent shall to the extent practicable terminate non-designated
investments to which such Investment Designation applies and re-invest the
proceeds thereof in the Permitted Investments designated therein; and (c)
the Trustee and Paying Agent shall in no event have any liability if a
Permitted Investment not made performs better than any other investment the
Trustee and Paying Agent enters into. For the avoidance of doubt the
Trustee and Paying Agent shall not exercise discretion with regard to the
selection of Permitted Investment except as directed in 7.1(a). All
Permitted Investments shall be and become part of the Trust Funds and shall
be included in the credit balance of the TINWORTH Reserve Account for the
purpose of meeting the TINWORTH Reserve Account Maximum Balance. The
Permitted Investments shall be valued in accordance with the Trustee and
Paying Agent's normal banking practice.
7.2 INTEREST ALLOCATION
Interest and any other income arising out of the Permitted Investments
shall be and become a part of the Trust Funds, allocated to the account for
which such investment was made; provided, as of the first Business Day of
each calendar quarter during the term hereof, Trustee and Paying Agent
shall transfer to the Etame Operating Account quarterly all interest and
any other income accruing on amounts in the TINWORTH Reserve Account in
excess of the TINWORTH Reserve Account Maximum Balance.
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8. CONCERNING THE TRUSTEE AND PAYING AGENT AND ACCOUNT BANK
8.1 In connection with its duties, rights and powers under this Agreement
(including in relation to transactions it may enter into pursuant hereto),
the Trustee and Paying Agent shall be subject to the following:
(a) Instructions. The Trustee and Paying Agent shall, except as otherwise
contemplated herein, act solely in accordance with instructions given
to it by the Operator for and on behalf of itself and the Consortium
Members. The Trustee and Paying Agent shall be entitled to assume that
(i) any instruction received by it from the Operator is duly given by
or on behalf of the Consortium Members, if applicable, in accordance
with the terms of the Operating Agreement and any other applicable
Finance Documents, (ii) unless it has received actual written notice
of revocation, that any instructions or directions given by the
Operator have not been revoked and no revocation of any instructions
by the Operator shall affect any action of the Trustee and Paying
Agent in reliance upon such instruction or direction prior the actual
receipt of the notice of revocation, and (iii) the Operator is
entitled under the Operating Agreement and other Finance Documents to
give such instructions. The Trustee and Paying Agent shall be entitled
to request clarification of any instruction or direction and pending
receipt of such clarification to its satisfaction may refrain from
acting and shall have no liability for the consequences thereof.
(b) Reliance on Certificates. The Trustee and Paying Agent shall be
entitled to act upon any notice, certificate, request, direction,
waiver, receipt or other document which it in good faith believes to
be genuine; and it shall be entitled to rely upon the due execution,
validity and effectiveness, and the truth and acceptability of any
provisions contained therein.
(c) Gross Negligence. The Trustee and Paying Agent shall not be liable for
any error of judgment or for any act done or omitted by it in good
faith or for any mistake of fact or law, or for anything which it may
do or refrain from doing, except for its own gross negligence or
wilful misconduct.
(d) Professional Advice. The Trustee and Paying Agent may consult with,
and obtain advice from accounting and legal advisers or such other
advisers, consultants and agents as the Trustee and Paying Agent may
deem necessary or advisable and it shall incur no liability or loss
and shall be fully protected in acting in good faith in accordance
with the opinion and advice of any such advisers, consultants or
agents, as the case may be.
(e) No other duties. The Trustee and Paying Agent shall have no duties
other than those specifically set forth or provided for in this
Agreement and shall not have any implied duties, obligations or
responsibilities. In performing or carrying out its duties,
obligations and responsibilities, the Trustee and Paying
- 19 -
Agent shall be considered to be acting only in a mechanical and
administrative capacity (save as expressly provided in this Agreement)
(f) Recitals. The recitals contained herein shall be taken as the
statements of the Operator, and the Trustee and Paying Agent assumes
no responsibility for their correctness.
(g) Other agreements. The Trustee and Paying Agent shall have no
obligation to familiarize itself with and shall have no responsibility
with respect to any Finance Document, including, without limitation,
the Crude Oil Sale Contracts, the Operating Agreement and the
Production Sharing Contract, relating to the transactions contemplated
by this Agreement nor any obligation to inquire whether any notice,
instruction, statement or calculation is in conformity with the terms
of any such agreement, except for those irregularities, errors or
mistakes apparent on the face of such document or to the knowledge of
the Trustee and Paying Agent. If, however, any remittance or
communication received by the Trustee and Paying Agent appears
erroneous or irregular on its face, the Trustee and Paying Agent shall
be under a duty to make prompt inquiry to the person or party
originating such remittance or communication in order to determine
whether clerical error or inadvertent mistake has occurred.
(h) Payment in error. If the Trustee and Paying Agent pays out funds from
the Accounts in error, it shall be entitled to recoup such funds from
the party to whom it paid such funds.
(i) Representations, defaults, etc. The Trustee shall be entitled to
assume, unless it has in its capacity as Trustee and Paying Agent for
the Beneficiaries received actual notice to the contrary from the
Operator, that any representation made or deemed to be made hereunder
is true and that neither the Operator nor the Consortium Members are
in breach of or default under any of its obligations under this
Agreement.
(j) Agents. The Trustee and Paying Agent may, in the conduct of its trust
business, instead of acting personally, employ and pay an agent on any
terms, selected by it whether or not a lawyer or other professional
person, to transact or conduct, or concur in transacting or
conducting, any business and to do or concur in doing all acts
required to be done by the Trustee and Paying Agent (including the
receipt and payment of money) and the Trustee and Paying Agent shall
not be responsible for any misconduct on the part of any person
appointed by it hereunder or be bound to supervise the proceedings or
acts of any such person, provided that the Trustee and Paying Agent
shall exercise reasonable care in selecting any such person;
(k) Delegates. The Trustee and Paying Agent may, at any time, delegate by
power of attorney or otherwise to any person for any period, all or
any of the rights, powers and discretions vested in it by this
Agreement, including
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without limitation to the Account Bank. The delegation may be made
upon any terms and conditions (including the power to sub-delegate)
and subject to any restrictions as the Trustee and Paying Agent may
think fit in the interest of the Beneficiaries and it shall not be
bound to supervise, or be in any way responsible for any loss incurred
by reason of any misconduct or default on the part of any delegate or
sub-delegate, provided that the Trustee and Paying Agent shall
exercise reasonable care in selecting any such delegate.
(l) Co-trustees. The Trustee and Paying Agent may at any time appoint (and
subsequently remove) any Eligible Bank to act as a separate trustee or
as a co-trustee jointly with it (i) if it considers that appointment
to be in the interests of the Beneficiaries or (ii) for the purposes
of confirming to any legal requirements, restrictions or conditions
which the Trustee and Paying Agent deems to be relevant or (iii) for
obtaining or enforcing any judgment in any jurisdiction, provided that
the Trustee and Paying Agent exercises reasonable care in selecting
any such co-trustee and uses reasonable endeavours to consult with the
other Beneficiaries in relation thereto, including, without
limitation, in respect of any remuneration expected to be paid to such
co-trustee. The Trustee and Paying Agent shall give notice to the
Operator and the Consortium Members of any appointment. Any person so
appointed (subject to the terms of this Agreement) shall have the
rights, powers and discretions (not exceeding those conferred on the
Trustee and Paying Agent by this Agreement) and the duties and
obligations as are conferred or imposed by the instrument of
appointment. The remuneration that the Trustee and Paying Agent may
pay to any person, and any costs and expenses incurred by that person
in performing its functions pursuant to that appointment shall, for
the purposes of this Agreement, be treated as costs and expenses
incurred by the Trustee and Paying Agent.
(m) No action without indemnification. The Trustee and Paying Agent may
refrain from acting in accordance with the instructions of the
Operator or from taking any other action hereunder unless and until it
has received indemnification and/or security as it may in its absolute
discretion require (whether by way of advance payment or otherwise)
and for all costs, losses, expenses, claims and liabilities which it
may incur or expend or to which it may be exposed.
(n) Expending own funds. Nothing contained in this Agreement shall require
the Trustee and Paying Agent to expend or risk its own funds or
otherwise incur any financial liability and the Trustee and Paying
Agent shall not be obliged to do or omit anything, including entering
into any transaction or incurring any liability including without
limitation any Environmental Liability unless the Trustee and Paying
Agent's liability is limited in a manner satisfactory to it in its
absolute discretion. Nor shall the Trustee and Paying Agent in any
circumstances be obliged to give its own indemnity to any receiver or
delegate or to become a mortgagee in possession.
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(o) Excluded Obligations. Notwithstanding anything to the contrary
expressed or implied hereunder or in any of the Finance Documents, the
Trustee and Paying Agent shall not:
(i) be bound to enquire as to the performance, default or any
breach by the Operator, any of the Consortium Members, TINWORTH
or any of the Subordinate Secured Parties of any of their
respective obligations hereunder or under any of the Finance
Documents;
(ii) be bound to assess or keep under review the financial
condition, creditworthiness, condition, value, affairs, status
or nature of the Project;
(iii) except as provided in Sections 6.3 and 6.4, be bound to account
to any other Beneficiary for any sum or the profit element of
any sum received by the Trustee and Paying Agent for its own
account;
(iv) unless ordered to do so by a court of competent jurisdiction,
and except as provided in Section 6.3, be bound to disclose to
any other person (including any other Beneficiary) any
confidential information;
(v) except as specifically set out herein, have or be deemed to
have any duty, obligation or responsibility to, or relationship
of trust or agency with, the Operator or any Consortium Member;
(p) Exclusion of Liability. Unless caused directly by its gross negligence
or wilful misconduct the Trustee and Paying Agent shall not accept
responsibility or be liable for:
(i) the adequacy, accuracy and/or completeness of any information
supplied by the Trustee and Paying Agent or any other person in
connection with this Agreement or the transactions contemplated
in this Agreement, or any other agreement, arrangement or
document entered into, made or executed in anticipation of,
pursuant to or in connection with this Agreement;
(ii) the legality, validity, effectiveness, adequacy or
enforceability of the Agreement, the Security or the Underlying
Security or any other agreement, arrangement or document
entered into, made or executed in anticipation of, pursuant to
or in connection with this Agreement, the security or the
underlying security;
(iii) any losses to any person or any liability arising as a result
of taking or refraining from taking any action in relation to
this Agreement, the Security, the Underlying Security or
otherwise, whether in accordance with an instruction from the
Operator or otherwise;
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(iv) the exercise of, or the failure to exercise, any judgment,
discretion or power given to it by or in connection with this
Agreement or the Security, the Underlying Security or any other
agreement, arrangement or document entered into, made or
executed in anticipation of, pursuant to or in connection with
this Agreement, the Security or the Underlying Security; or
(v) any shortfall which arises on the enforcement of the Security
or the Underlying Security or otherwise.
(q) Own responsibility. It is understood and agreed by each Beneficiary
(except the Trustee and Paying Agent and Account Bank) that at all
times that Beneficiary has itself been, and will continue to be,
solely responsible for making its own independent appraisal of and
investigation into all risks arising under or in connection with this
Agreement including but not limited to:
(i) the financial condition, creditworthiness, condition, affairs,
status and nature of the Operator, each of the Consortium
Members and each of the Buyers;
(ii) the financial condition, creditworthiness, condition, value,
affairs, status and nature of the Project;
(iii) the legality, validity, effectiveness, adequacy and
enforceability of this Agreement and the Security and the
Underlying Security and any other agreement, arrangement or
document entered into, made or executed in anticipation of,
pursuant to or in connection with this Agreement, the Security
or the Underlying Security;
(iv) whether that Beneficiary has recourse, and the nature and
extent of that recourse, against the Operator, any Consortium
Member, any Buyer or any other person or any of their
respective assets under or in connection with this Agreement,
the transactions contemplated in this Agreement or any other
agreement, arrangement or document entered into, made or
executed in anticipation of, pursuant to or in connection with
this Agreement;
(v) the adequacy, accuracy and/or completeness of any information
provided by any person in connection with this Agreement, the
transactions contemplated in this Agreement or any other
agreement, arrangement or document entered into, made or
executed in anticipation of, pursuant to or in connection with
this Agreement; and
(vi) the right or title of any person in or to, or the value or
sufficiency of any part of the Trust Property, the priority of
any of the Security, the Underlying Security or the existence
of any security interest affecting the Trust Property,
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and the Operator for and on behalf of itself and the Consortium
Members warrants to the Trustee and Paying Agent that it has
not relied on and will not at any time rely on the Trustee and
Paying Agent in respect of any of these matters.
(r) No Responsibility to Perfect Security. The Trustee and Paying Agent
shall not be liable for any failure to:
(i) require the deposit with it of any deed or document certifying,
representing or constituting the title of any Beneficiary to
any of the Trust Property;
(ii) obtain any license, consent or other authority for the
execution, delivery, legality, validity, enforceability or
admissibility in evidence of this Agreement, the Security or
the Underlying Security;
(iii) register, file or record or otherwise protect any of the
Security or the Underlying Security (or the priority of any of
the Security or the Underlying Security) under any applicable
laws in any jurisdiction or to give notice to any person of the
execution of this Agreement or of the Security or the
Underlying Security;
(iv) take, or to require any of the Beneficiaries to take, any steps
to perfect its title to any of the Trust Property or to render
the Security or the Underlying Security effective or to secure
the creation of any ancillary security interest under the laws
of any jurisdiction; or
(v) require any further assurances in relation to this Agreement,
the Security or the Underlying Security.
(s) Insurance. Other than as required by applicable law or regulation, the
Trustee and Paying Agent shall not be under any obligation to insure
any of the Trust Property, to require any other person to maintain any
insurance or to verify any obligation to arrange or maintain insurance
contained in the Finance Documents. The Trustee and Paying Agent shall
not be responsible for any loss which may be suffered by any person as
a result of the lack of or inadequacy of any insurance.
(t) Custodians and Nominees. The Trustee and Paying Agent may appoint and
pay any person to act as a custodian or nominee on any terms in
relation to any assets of the trust as the Trustee and Paying Agent
may determine, including for the purpose of depositing with a
custodian this Agreement and the Trustee and Paying Agent shall not be
responsible for any loss, liability, expense, demand, cost, claim or
proceedings incurred by reason of the misconduct, omission or default
on the part of any person appointed by it under this Agreement or be
bound to supervise the proceedings or acts of any person, provided
that the Trustee and Paying Agent shall exercise reasonable care in
selecting any such custodian or nominee.
- 24 -
(u) Acceptance of Title. The Trustee and Paying Agent shall be entitled to
accept without enquiry, and shall not be obliged to investigate, the
right and title as the Operator or any of the Consortium Members may
have to any of the Assigned Property and shall not be liable for or
bound to require any Operator or any Consortium Member to remedy any
defect in its right or title.
(v) Illegality. The Trustee and Paying Agent may refrain from doing
anything which in its opinion will or may be contrary to any relevant
law, directive or regulation of any jurisdiction which would nor might
otherwise render it liable to any person, and the Trustee and Paying
Agent may do anything which is, in its opinion, necessary to comply
with any law, directive or regulation.
(w) Powers Supplemental. The rights, powers and discretions conferred upon
the Trustee and Paying Agent by this Agreement shall be supplemental
to the Trustee Acts and in addition to any which may be vested in the
Trustee and Paying Agent by general law or otherwise.
(x) Trustee Division Separate. In acting as trustee for the Secured
Parties, the Trustee and Paying Agent shall be regarded as acting
through its trustee division which shall be treated as a separate
entity from any of its other divisions or departments and any
information received by any other division or department of the
Trustee and Paying Agent may be treated as confidential and shall not
be regarded as having been given to the Trustee and Paying Agent's
trustee division.
(y) Disapplication. Section 1 of the Trustee Act 2000 shall not apply to
the duties of the Trustee and Paying Agent in relation to the trusts
constituted by this Agreement. Where there are any inconsistencies
between the Trustee Acts and the provisions of this Agreement, the
provisions of this Agreement shall, to the extent allowed by law,
prevail and, in the case of any inconsistency with the Trustee Xxx
0000, the provisions of this Agreement shall constitute a restriction
or exclusion for the purposes of that Act.
(z) Protection for Account Bank. If the Trustee and Paying Agent delegates
any of its functions to the Account Bank, then the relevant protective
language in this Agreement (including, without limitation, this
Section 8 (including, without limitation, Sections 8.2, 8.3 and 8.10))
in favour of the Trustee. Under no circumstances will the Account Bank
be liable to any party hereto for any consequential loss (inter alia,
being loss of business, goodwill, opportunity or profit) even if
advised of such loss or damage).
8.2 TRUSTEE AND PAYING AGENT FEES
The Trustee and Paying Agent shall be entitled to receive fees as set forth
on Schedule B hereto for the services to be performed by it hereunder and
to be reimbursed for all properly incurred out-of-pocket expenses incurred
by the Trustee and Paying Agent on a full indemnity basis in connection
therewith, including properly incurred legal fees
- 25 -
and expenses (such fees and expenses payable under this Section 8.2 are
referred to herein as "Fees and Expenses"). The Trustee and Paying Agent
may charge such agreed Fees and Expenses and the Additional Remuneration
(referred to in Section 8.3 below) to the Etame Operating Account as an
expense to be paid under Section 5 prior to the payment of any other amount
thereunder, providing the Operator with such evidence as to the nature and
amount of such expenses as the Operator may reasonably require. If the
balance in the Etame Operating Account is insufficient therefor, the
Operator, on behalf of each of the Consortium Members, but not TINWORTH or
the Subordinate Secured Parties, shall pay such Fees and Expenses and the
Additional Remuneration to the Trustee and Paying Agent.
8.3 EXCEPTIONAL FEES
In the event of the occurrence of Collection Actions or if payment is not
made on any Crude Oil Sales Contract or Letter of Credit when due or the
Trustee and Paying Agent is requested by the Operator to undertake duties
which the Trustee and Paying Agent, the Operator and the Subordinate
Secured Parties agree to be of an exceptional nature or otherwise outside
the scope of the normal duties of the Trustee and Paying Agent under this
Agreement, the Operator shall pay to the Trustee and Paying Agent any
additional remuneration (together with any applicable VAT) as the Operator
and the Subordinate Secured Parties shall have consented to, such consent
not to be unreasonably withheld. If the Trustee and Paying Agent, the
Operator and the Subordinate Secured Parties fail to agree upon the nature
of the duties or upon such Additional Remuneration, that dispute shall be
determined by a investment bank (acting as an expert and not as an
arbitrator) selected by the Trustee and Paying Agent and approved by the
Operator and the Subordinate Secured Parties or, failing approval,
nominated (on the application of the Trustee and Paying Agent) by the
President for the time being of the Law Society of England and Wales (the
costs of the nomination and of the investment bank being payable by the
Operator) and the determination of any investment bank shall be final and
binding upon the Beneficiaries. Such remuneration payable under this
Section 8.3 is referred to herein as "Additional Remuneration".
8.4 STAMP TAXES.
The Operator shall pay all stamp, registration, notarial and other taxes or
fees to which this Agreement, the security or any judgment given in
connection with them, is or at any time may be, subject and shall, from
time to time, indemnify the Trustee and Paying Agent on demand against any
liabilities, costs, claims and expenses resulting from any failure to pay
or any delay in paying any tax or fee.
8.5 INTEREST ON DEMANDS
If the Operator fails to pay any amount payable by it to the Trustee and
Paying Agent under this Agreement on its due date interest shall accrue on
the overdue amount (and be compounded with it) from the due date up to the
date of actual payment (both before and after judgment and to the extent
interest at a default rate is not otherwise being paid on such sum) at the
rate which is one per cent. per annum over the rate at which
- 26 -
the Trustee and Paying Agent was being offered, by prime banks in the
London Interbank Market, deposits in an amount comparable to the unpaid
amounts in the currencies of those amounts for such period(s) as the
Trustee and Paying Agent may from time to time select
8.6 RESIGNATION AND TERMINATION
(a) The Trustee and Paying Agent may, at any time, without assigning any
reason and without being responsible for the costs and expenses
occasioned thereby, by notice to the Operator and TINWORTH tender its
resignation as Trustee and Paying Agent under this Agreement.
(b) The Operator may, with consent of TINWORTH and Subordinate Secured
Parties, at any time by notice given by it, terminate the Trustee and
Paying Agent's appointment hereunder. Such resignation or termination
shall be effective as from the appointment of a successor as
hereinafter provided and when all the Security has been transferred to
such successor.
8.7 APPOINTMENT OF SUCCESSOR
(a) Within 45 days of receipt of a notice of resignation or issuance of a
notice of termination, the Operator shall appoint a successor, being
an Eligible Bank, acceptable to TINWORTH and the Subordinate Secured
Parties. The proposed successor bank (the "Successor") shall promptly
give notice of its appointment to the Trustee and Paying Agent and
shall execute and deliver to each of the Parties an instrument in
writing accepting its appointment hereunder which shall specify the
office of the Successor in London which is to be that Trustee and
Paying Agent's Office for the purpose of this Agreement.
(b) If in any case a Successor shall not be appointed pursuant to the
foregoing provisions of this Section 8.7 within the 45 days aforesaid,
the Trustee and Paying Agent may be entitled on behalf of the Operator
to appoint a Successor being an Eligible Bank of good standing.
8.8 SUCCESSOR VESTED WITH RIGHTS
Upon and from the execution and delivery of the instrument in writing
appointing the successor and the transfer of all the Security to the
Successor, the Successor without any further act or deed shall become fully
vested with all the rights, powers and duties and subject to all the
obligations of the Trustee and Paying Agent hereunder, but the retiring
Trustee and Paying Agent shall be discharged from any further obligation
under this Agreement, but shall retain the benefit of this Section 8.
8.9 PAYMENTS AFTER NOTICE
Upon and from the date of notification from any Successor, any person
required to pay amounts to the Trustee and Paying Agent under this
Agreement shall pay the Successor
- 27 -
at its office specified as aforesaid all amounts described herein as
payable to the Trustee and Paying Agent.
8.10 INDEMNIFICATION
The Operator on behalf of itself and the Consortium Members hereby
irrevocably and unconditionally agrees to indemnify, and keep fully and
effectively (and on an after-Tax basis) indemnified, the Trustee and Paying
Agent against all actions, proceedings, claims, demands, losses, damages,
liabilities, calls, assessments, costs, charges and expenses, which may be
brought or preferred against or incurred by the Trustee and Paying Agent
(otherwise than as a result of its gross negligence or wilful misconduct)
in connection with the Trust Fund, this Agreement or the performance of the
Trustee and Paying Agent's obligations hereunder including, without
prejudice to the generality of the foregoing, any Tax, other than tax on or
attributable to the income earned by the Trustee and Paying Agent for which
the Trustee and Paying Agent is or may be liable or accountable in
connection with the Trust Fund, this Agreement or the performance of the
Trustee and Paying Agent's obligations hereunder.
8.11 TRUSTEE AND PAYING AGENT IN INDIVIDUAL CAPACITY
The Trustee and Paying Agent, in its individual capacity, or any affiliate
thereof shall have the same rights, powers and authority to enter into any
deposit agreement, loan agreement or any other banking or business
relationship permitted by law with any of the Government, the Operator, the
Consortium Members, TINWORTH or the Subordinate Secured Parties as though
it were not the Trustee and Paying Agent under this Agreement.
8.12 SET-OFF
The Trustee and Paying Agent is entitled at any time to exercise rights of
set-off against (or otherwise make a deduction from) the Trust Fund, in
relation to any payment due to the Trustee and Paying Agent under this
Agreement in respect of any indemnification, Fees and Expenses or
Additional Remuneration.
8.13 SECURITY PROCEDURES
In the event funds transfer instructions are given (other than in writing
at the time of execution of this Agreement), whether in writing, by
facsimile or otherwise, the Trustee and Paying Agent is authorized to seek
confirmation of such instructions by telephone call-back to the person or
persons designated on Schedule C and the Trustee and Paying Agent may rely
upon the confirmation of anyone purporting to be the person or persons so
designated. In the event Trustee and Paying Agent is unable to obtain a
call-back within two (2) Business Days the Trustee and Paying Agent shall
proceed on the written instructions as originally received. The persons and
telephone numbers for call-backs may be changed only by written
instructions actually received and acknowledged by the Trustee and Paying
Agent. The Trustee and Paying Agent in any funds transfer may rely solely
upon any account numbers or similar identifying
- 28 -
numbers provided by the Operator, the Consortium Members, TINWORTH or the
Subordinate Secured Parties identifying:
(i) the beneficiary,
(ii) the beneficiary's bank, or
(iii) an intermediary bank.
The Trustee and Paying Agent may apply any of the Trust Funds for any
payment order it executes using any such identifying number, even where its
use may result in a person other than the beneficiary being paid, or the
transfer of funds to a bank other than the beneficiary's bank or an
intermediary bank designated. The Parties acknowledge that these security
procedures are commercially reasonable.
8.14 REPRESENTATIONS AND WARRANTIES
Each of the Trustee and Paying Agent and the Account Bank represents and
warrants:
(a) It is duly incorporated and validity existing under the laws of its
jurisdiction of incorporation, and has the corporate power and has
obtained all required Authorisations to enter into, and comply with
its obligations under this Agreement;
(b) This Agreement has been duly authorised and executed by it and
constitutes a valid and legally binding obligation the Trustee and
Paying Agent or, as the case may be, the Account Bank, enforceable in
accordance with its terms, except as may be affected by bankruptcy,
administration, insolvency and other similar laws affecting creditors
rights generally;
(c) Neither the entering into of this Agreement nor the compliance with
its terms will conflict with or result in a breach of any of the
terms, conditions or provisions of, or constitute a default or require
any consent under, any indenture, mortgage, agreement or other
instrument or arrangement to which the Trustee and Paying Agent or, as
the case maybe, the Account Bank is a party or by which it is bound,
or violate any of the terms or provisions of the Trustee and Paying
Agent's or, as the case maybe the Account Bank's Charter or any
Authorisation, judgment, decree or order or any statute, rule of
regulation applicable to the Trustee and Paying Agent or, as the case
maybe, the Account Bank.
9. MISCELLANEOUS
9.1 REMEDIES AND WAIVERS
No failure to exercise, or any delay in exercising, on the part of any
Secured Party, any right or remedy under this Agreement shall operate as a
waiver, nor shall any single or partial exercise of any right or remedy
prevent any further or other exercise thereof or the exercise of any other
right or remedy. The rights and remedies provided
- 29 -
in this Agreement are cumulative and not exclusive of any rights or
remedies provided by law.
9.2 PARTIAL INVALIDITY
If, at any time, any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under any law of any jurisdiction,
neither the legality, validity or enforceability of the remaining
provisions nor the legality, validity or enforceability of the provision
under the law of any other jurisdiction will in any way be affected or
impaired.
9.3 COUNTERPARTS; TERM
This Agreement may be executed in any number of counterparts and by the
Parties on separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts together shall
constitute one and the same instrument. Complete sets of counterparts shall
be lodged with the Trustee and Paying Agent. This Agreement shall be
effective as of the date hereof and shall remain in effect with respect to
provisions regarding the TINWORTH Reserve Account until TINWORTH and the
Operator have notified the Trustee and Paying Agent that the Final
Compensation Payment has been paid and with respect to all other provisions
until the Operator and each Subordinate Secured Party shall have notified
the Trustee and Paying Agent that this Agreement shall terminate.
9.4 DISPUTES AND SUBMISSION TO JURISDICTION
(a) The Parties hereby irrevocably submit to the non-exclusive
jurisdiction of the English courts in any legal action or proceedings
in relation to any disputes which may arise in connection with the
rights and obligations established by this Agreement or otherwise
arising in connection with this Agreement. England shall be each of
the Trustee and Paying Agent's and the Account Bank's jurisdiction for
the purposes of the Uniform Commercial Code as in effect in any
jurisdiction. Each of the Trustee and Paying Agent, the Account Bank
and the Operator represents that it has not entered into any agreement
relating to the Accounts that designates any other jurisdcition as the
Trustee and Paying Agent's or the Account Bank's jurisdiction for such
purposes and agrees that it will not enter into any such agreement;
(b) Each of Trustee and Paying Agent, the Operator, TINWORTH, the
Consortium Members and the Subordinate Secured Parties (with the
exception of the International Finance Corporation) irrevocably waives
any objections on the ground of venue or forum non conveniens or any
similar grounds;
(c) Each of Trustee and Paying Agent, the Operator and TINWORTH
irrevocably consents to service of process by mail or in any manner
permitted by the relevant law.
9.5 NOTICE OF TRUST AND PAYING AGENT AGREEMENT
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The Operator hereby undertakes to give notice of the trust created hereby
and a copy of this Agreement to the Beneficiaries promptly following the
execution of this Agreement.
9.6 NOTICES
All notices, approvals, instructions, and other communications for purposes
of this Agreement shall be in writing, and shall be transmitted by
certified or registered airmail, hand, overnight courier, facsimile or
e-mail, directed as set forth below:
(a) To the Operator at the following mail, facsimile and e-mail addresses:
VAALCO Gabon (Etame), Inc.
0000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: President or Vice President
Telephone: 000-000-0000
Facsimile No.: 000-000-0000
Email address: xxxxxx@xxxxxx.xxx
(b) to TINWORTH at the following mail, facsimile and e-mail addresses:
TINWORTH
c/o Xxxx.Xxxxx Production A.S.
Xxxx.Xxxxx Xxxx 0
XX Xxx 0000 Xxxxxxx
0000 XXXX
Xxxxxx
Attention: Commercial Manager
Facsimile No.: 47 22 42 9946
Email address: xxxx@xxxxxxxxx.xx
(c) To the Trustee and the Paying Agent at the following mail, facsimile
and e-mail addresses:
JPMorgan Chase Bank
Trinity Tower
9 Xxxxxx Xxxx Street
London E1W 1YT
Attention: Manager, Escrow Administration
Facsimile No.: 44 20 7777 5410
44 20 7777 5450
Email address: xxxx.xxxxx@xxxxxxxx.xxx
xxxxxxx.xxxxxxxx@xxxxxxxx.xxx
- 31 -
(d) To the Account Bank at the following mail, facsimile and e-mail
addresses:
JPMorgan Chase Bank
Trinity Tower
9 Xxxxxx Xxxx Street
London E1W 1YT
Attention: Manager, Escrow Administration
Facsimile No.: 44 20 7777 5410
44 20 7777 5450
Email address: xxxx.xxxxx@xxxxxxxx.xxx
xxxxxxx.xxxxxxxx@xxxxxxxx.xxx
(e) To each of the Subordinate Secured Parties at the mail and facsimile
address specified on Schedule A.
The Parties may designate additional addresses for particular
communications as required from time to time, and may change any address,
by notice given ten days in advance of such additions or changes.
Immediately upon receiving communications by facsimile or e-mail
transmission, a Party may request a repeat transmittal of the entire
communication or confirmation of particular matters.
All notices and other communications given to any Party in accordance with
the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service, or the
day after the date of receipt if sent by facsimile or e-mail, or on the
date seven Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
Party as provided in this Section or in accordance with the latest
unrevoked direction from such Party given in accordance with this Section.
9.7 INCUMBENCY CERTIFICATES; NOTICES
(a) The Operator shall furnish the Trustee and Paying Agent, from time to
time, with duly executed incumbency certificates showing the names,
titles and specimen signatures of the persons authorized on behalf of
Operator, TINWORTH and the Subordinate Secured Parties, respectively,
to give the notifications and approvals required by this Agreement and
such other material in relation to the opening and operating of the
Accounts as Trustee and Paying Agent may reasonably request. The
Trustee and Paying Agent has a general right, in relation to the
receipt of notices, instructions and certificates, to act in
accordance with normal banking practice. The Operator shall furnish to
the Trustee and Paying Agent from time to time any information as the
Trustee and Paying Agent may reasonably specify as being necessary or
desirable to enable the Trustee and Paying Agent to perform its
functions hereunder.
- 32 -
(b) The Trustee and Paying Agent shall furnish the Operator, from time to
time, with notice of the officers of the Trustee and Paying Agent who
are authorized to act on its behalf in the performance by the Trustee
and Paying Agent of its duties under this Agreement.
9.8 NO AMENDMENT EXCEPT IN WRITING
This Agreement may not be revoked, amended, modified, varied or
supplemented except by an instrument in writing signed by the Parties
hereto after submission to the Trustee and Paying Agent of the written
consent to such amendment of TINWORTH and the Subordinate Secured Parties;
provided, however, the Parties agree that Schedule A may be revised and
replaced from time to time with a new Schedule A upon receipt of a
notification from a Consortium Member as to the identity of such Consortium
Member's Subordinate Secured Party or confirmation or change of the
respective Consortium Member's Account, accompanied by the written consent
of such Subordinate Secured Party.
9.9 APPLICABLE LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF ENGLAND AND WALES (the "Applicable Law").
9.10 BENEFIT OF AGREEMENT
This Agreement shall be binding upon the Parties, and inure to the benefit
of, the Parties, each Consortium Member, TINWORTH and each Subordinate
Secured Party and their respective successors and assigns.
9.11 LANGUAGE
All notices and documents given under this Agreement shall be in English.
9.12 THIRD PARTY RIGHTS
The Parties agree that TINWORTH, the Consortium Members and each of their
Subordinate Secured Parties has the right to enforce the terms of this
Agreement to the extent necessary to enforce their benefits hereunder, but
that no other person has any right under the Contracts (Rights of Third
Parties) Xxx 0000 to enforce or to enjoy the benefit of any term of this
Agreement.
9.13 PERPETUITY PERIOD
The perpetuity period under the rule against perpetuities, if applicable to
this Agreement, shall be the period of eighty years from the date of this
Agreement.
9.14 WINDING UP OF TRUST
If the Trustee and Paying Agent with the written consent of the Operator,
TINWORTH and Subordinate Secured Parties determines that all of the Secured
Obligations have
- 33 -
been fully and finally discharged then the trust shall be wound up. At that
time the Trustee and Paying Agent shall, at the cost and expense of the
Operator, release, without recourse or warranty, all of the security held
by it hereunder and the Trustee and Paying Agent shall be released from its
obligations under this Agreement (save for those which arose prior to such
winding-up). The Trustee and Paying Agent shall also reassign to the
relevant parties those rights assigned to it pursuant to the Crude Oil Sale
Contracts Assignment and shall forthwith instruct the Account Bank to
transfer all amounts together with any accrued but uncredited interest, if
any, standing to the credit of the Accounts to the Consortium Member
Accounts and close the Accounts.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as a
deed by their respective duly authorized signatories as of the date first above
written.
- 34 -
Executed as a deed by:
VAALCO GABON (ETAME), Inc.
acting by and
and acting
under the authority of VAALCO
GABON (ETAME), Inc.
By:
Name:
Title:
By:
Name:
Title:
Executed as a deed by:
JPMORGAN CHASE BANK
----------------------------
Authorized Signatory
In the presence of:
----------------
Signature of Witness:
---------------
Name of Witness:
--------------------
Address of Witness:
-----------------
Occupation of Witness:
--------------
- 35 -
The Common Seal of:
X.X. XXXXXX TRUSTEE AND
DEPOSITARY COMPANY LIMITED
was hereunto affixed
in the presence of:
----------------------------
Authorised Signatory
----------------------------
Authorised Signatory
IN WITNESS WHEREOF, TINWORTH acknowledges and consents to the terms of this
Agreement, executed by its duly authorized signatory as of the date first above
written.
TINWORTH LIMITED
By:
Name:
---------------------
Title:
By:
Name:
---------------------
Title:
- 36 -
Schedules
A. Consortium Members Account and Subordinate Secured Party Designations
B. Trustee Fee Schedule
C. Funds Transfer Confirmation Contact Party Designation
D. TINWORTH Draw Notice
E. Notice of Assignment of Crude Oil Sales Contract
F. Acknowledgement of Crude Oil Sales Contract Assignment
G. Notice of Assignment of Consortium Member's Account
H. Acknowledgement of Assignment of Consortium Member's Account
I. Appointment Instrument
- 37 -
SCHEDULE A
CONSORTIUM MEMBERS ACCOUNT AND SUBORDINATE SECURED PARTY
DESIGNATIONS
- 38 -
SCHEDULE B
TRUSTEE AND PAYING AGENT AND ACCOUNT BANK FEE SCHEDULE
Initial Acceptance Fee: US$25,000
Etame Revenue Account Administration Fee: US$7,500 per annum or part thereof
Etame Operating Account Administration Fee: US$7,500 per annum or part thereof
TINWORTH Reserve Account Administration Fee: US$7,500 per annum or part thereof
- 39 -
SCHEDULE C
FUNDS TRANSFER CONFIRMATION CONTACT PARTY DESIGNATION
VAALCO Gabon (Etame), Inc. PetroEnergy Resources Corporation
0000 Xxxx Xxx Xxxxx Xxxxx 000 7th Floor, JMT Building
Xxxxxxx, XX 00000 XXX ADB Avenue, Ortigas Center
Attn: W. Xxxxxxx Xxxxxxxxx Pasig City, Metro Manila Philippines
President Tel: 000-000-0000
Tel: 000-000-0000 Fax: 000-000-0000
Fax: 000-000-0000 Attn: Xxxxxxxx X. Xxxxx, President
Nissho Iwai Corporation Sasol Petroleum International (Pty) Ltd.
3-1, Daiba 2-Chome 0xx Xxxxx, Xxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxx 000-0000 00 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxx X0X 0XX
Attn: Xx. Xxxxxxxx Xxxxxxxxx Tel: 00-000-000-0000
General Manager Fax: 00-000-000-0000
Offshore Energy Project Dept. Attn: Xxxx Xxxxxxxx
Tel: 000-0000-0000 Exploration Manager
Fax: 000-0000-0000
PanAfrican Energy Gabon Corporation Director General de Hydrocarbures
PanAfrican Energy Corporation Ltd. Ministere des Mines de L'Energie, du
PO Box 332, Xxx Xxxxxx Xxxxxxx House Petrole et des Ressources Hydraulique
00-00 Xxxxxxxxx, Xx. Xxxxxx, Xxxxxx B.P. 2199 Libreville Gabon
Channel Islands JE4 9YA Attn: Xxxx KOUMBI GUIYEDI
Tel: 00(0) 0000 000000 Directeur de l'Exportation
Fax: 00(0) 0000 000000 Tel: 000 00 00 00
Attn: Xxxxx Xxxxx Fax: 000 00 00 00
President
West Atlas Afrique, Ltd. TINWORTH
7th Floor, Marble Arch Tower c/o Xxxx.Xxxxx Production A.S.
00 Xxxxxxxxx Xxxxxx Xxxx.Xxxxxxxx.0
Xxxxxx X0X 0XX XX Xxx 0000 Sentrum
Tel: 00-000-000-0000 0152 OSLO
Fax: 00-000-000-0000 Norway
Attn: Xxxx Xxxxxxxx Tel: 00-00-00-00-00
Exploration Manager Fax: 00-00-00-0000
Attn: Xxxxx X. Xxxxxx, director
- 40 -
SCHEDULE D
TINWORTH DRAW NOTICE
From: TINWORTH, Ltd
To: Trustee and Paying Agent and the Account Bank
Copy to: The Operator, the other Consortium Members, and the Subordinate
Secured Parties
Dated:
TINWORTH DRAW NOTICE
Dear Sirs
Relating to a Trustee and Paying Agent Agreement dated 26 June 2002 between
Vaalco Gabon (Etame), Inc., JPMorgan Chase Bank, London Branch and X.X. Xxxxxx
Trustee and Depositary Company Limited as from time to time modified,
supplemented or amended in accordance with the terms thereof. Terms not
otherwise defined herein shall have the meaning given to them in the Trustee and
Paying Agent Agreement.
1. We hereby certify that the Operator has failed to pay the Compensation in
the amount of US$_________________ (the "Default Amount") to TINWORTH under
the FPSO Contract on the due date thereof and that all applicable grace
periods have expired. TINWORTH hereby declares that a Payment Default has
occurred.
2. We hereby further certify that the Default Amount is now due and owing to
TINWORTH under the FPSO Contract. Pursuant to Section 5.3 of the Trustee
and Paying Agent Agreement we hereby direct the Trustee and Paying Agent to
distribute the lesser of (i) the Default Amount and (ii) the balance of the
TINWORTH Reserve Account up to the TINWORTH Reserve Account Maximum Balance
to TINWORTH at the following account:
[specify bank account]
3. Our notice details for the purpose of receiving communications under the
Trustee and Paying Agent Agreement are as follows:
Address:
Attention:
Telephone No:
Facsimile No:
Email Address:
4. We hereby further certify that a copy of this TINWORTH Draw Notice has been
sent by facsimile with an overnight copy sent via international courier to
each of the
- 41 -
Operator, the other Consortium Members, and the Subordinate Secured Parties
as designated on the most recent Schedule A delivered to TINWORTH pursuant
to Section 6.1(b) of the Trustee and Paying Agent Agreement.
5. This TINWORTH Draw Notice shall be governed by, and construed in accordance
with, English law.
IN WITNESS whereof this TINWORTH Draw Notice has been executed and is intended
to be and is hereby delivered on the date first above written.
TINWORTH, Ltd
-------------------------------------------
EXECUTED by [ ])
As attorney for and on behalf of ) ---------------------------
[ ] )
Witnessed by:
Name:
Address:
- 42 -
SCHEDULE E
FORM OF NOTICE OF ASSIGNMENT OF CRUDE OIL SALES CONTRACT
(On the Operator's letterhead)
To: [Counterparty to the Crude Oil Sales Contract]
Dear Sirs,
We hereby give you notice that pursuant to the Etame Field Trustee and Paying
Agent Agreement dated 26 June 2002 between ourselves and ___________________
[name of Trustee and Paying Agent] (the "Trustee and Paying Agent") and
___________________[name of Account Bank] (the "Account Bank") we have assigned
to the Trustee and Paying Agent, all our right, to and in respect of each amount
payable in U.S. Dollars pursuant to sales of crude oil produced from the Etame
Field (as more particularly described in the operating agreement (being the
joint operating agreement effective as of April 4, 1997 between Vaalco Gabon
(Etame), inc., VAALCO Energy (Gabon), Inc., Western Atlas Afrique Ltd.,
Petrofields Exploration & Development Co. Inc. and Xxxxxx Petroleum and Mineral
Corporation, as the same has been and may hereafter be modified, supplemented or
amended, including any extension or renewal thereof and any successors of the
original parties) and exported from the Project (being the floating production
storage and offloading system and the three oil xxxxx existing in the Etame
Field and such other xxxxx or facilities as may be added to develop the Etame
Field) and any amounts payable on account of interest due by reason of the late
payment for such crude oil under the Contract, in each case net of sales
commissions provided for in the Contract or in any sales agency agreements
entered into in connection therewith.(the "Crude Oil Sale Contract Revenues") in
respect of [details of contract] (the "Contract") and all liens, security
interests, Letters of Credit, mortgages or similar rights securing payment by
[name of buyer] (the "Buyers") of the Crude Oil Sales Contract Revenues in
respect of the Contract.
With effect from your receipt of this notice we hereby give you notice that we
have agreed that:
(a) all Crude Oils Sales Contract Revenues under or arising from the
Contract should be made to [specify bank account];
(b) all rights to compel performance of payment of Crude Oils Sales
Contract Revenues under or arising from the Contract shall be
exercisable by the Trustee and Paying Agent or its nominee and agents
(although we shall remain liable to perform all the obligations
assumed by us under the Contract); and
(c) all rights, interests and benefits whatsoever accruing to or for the
benefit of ourselves for the payment of the Crude Oils Sales Contract
Revenues under or arising from the Contract belong to the Trustee and
Paying Agent and no changes may be made to the terms of the Contract
nor may the Contract be
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terminated without the Trustee and Paying Agent's consent with respect
to the payment of any monies thereunder.
You are hereby authorized and instructed, without requiring further approval
from us, to provide the Trustee and Paying Agent with such information relating
to the Contract as it may from time to time request and to send copies of all
notices issued by you under the Contract to the Trustee and Paying Agent as well
as to us.
These instructions may not be revoked, nor may the terms of the Contract be
amended, varied or waived without the prior written consent of the Trustee and
Paying Agent.
Please acknowledge receipt of this notice by signing and dating the
acknowledgement set out on the enclosed copy and returning it to the Trustee and
Paying Agent.
Yours faithfully,
for and on behalf of
[the Operator]
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SCHEDULE F
FORM OF ACKNOWLEDGEMENT OF CRUDE OIL SALES CONTRACT ASSIGNMENT
To: [Insert name of Trustee and Paying Agent]
[insert address]
Attention:
We acknowledge receipt of the notice dated [ ] (the "Notice"). We confirm that
we have not received notice of any previous assignments or charges of or over
any of the rights, interests and title in, to or in respect of the Contract and
that we will comply with the terms of the Notice.
We further agree and confirm that:
(a) we will not, without your prior written consent, vary, suspend,
rescind, discharge or otherwise terminate the Contract or in any way
prejudice the rights, titles, benefits and interests assigned to you;
(b) we will not claim any set-off or counterclaim to your prejudice in
respect of any moneys payable under the Contract;
(c) we will procure that payments are made to you in accordance with the
authority and instruction contained in the Notice; and
(d) we will not withhold consent to the assignment of the Contract by you
to another person.
Yours faithfully,
For and on behalf of [ ]
By:
Date:
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SCHEDULE G
FORM OF NOTICE OF ASSIGNMENT
(On Consortium Member's letterhead)
To: [Insert Trustee and Paying Agent and Operator's Name and Address]
Dear Sirs,
We hereby give you notice that pursuant to an agreement dated [ ]
between ourselves and [Subordinate Secured Party] (the "Subordinate Secured
Party") we have assigned with full title guarantee to the Subordinate Secured
Party by way of security absolutely all our right, title and interest in, to and
in respect of the Etame Operating Account as defined and governed under the
Etame Field Trustee and Paying Agent Agreement dated 26 June 2002 (the "Trust
Agreement") including all monies which may be payable to us in respect of the
Etame Operating Account. We acknowledge that the right, title and interest in,
to and in respect of the Etame Operating Account so assigned is subject to the
rights of the Trustee and Paying Agent and the Account Bank under the Trust
Agreement.
With effect from your receipt of this notice we hereby give you notice that we
have agreed that:
(a) all payments to be made to us under or arising from the Etame
Operating Account should be made to [specify bank account ("Designated
Account")]; and
(b) all rights, interests and benefits whatsoever accruing to or for the
benefit of ourselves arising from the Etame Operating Account belong
to the Subordinate Secured Party.
We hereby covenant with the Trustee and Paying Agent on behalf of itself and as
trustee for an on behalf of the Beneficiaries that we will pay and discharge
those Secured Obligations to which we are liable when due.
You are hereby authorized and instructed, without requiring further approval
from us, to provide the Subordinate Secured Party with such information relating
to the Etame Operating Account as it may from time to time request and to send
copies of all notices issued by you under the Trust Agreement to the Subordinate
Secured Party as well as to us.
These instructions may not be revoked, nor may the Designated Account be amended
or changed without the prior written consent of the Subordinate Secured Party.
Please acknowledge receipt of this notice by signing and dating the
acknowledgement set out on the enclosed copy and returning it to Subordinate
Secured Party.
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Yours faithfully,
Executed as a Deed by:
[Insert relevant execution clause]
[Consortium Member]
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SCHEDULE H
FORM OF ACKNOWLEDGEMENT OF ASSIGNMENT
To: [Subordinate Secured Party]
[insert address]
Attention:
We acknowledge receipt of the Notice of Assignment dated [ ] (the "Notice")
from [Consortium Member] ("your Consortium Member"). We confirm that we have not
received notice of any previous assignments or charges of or over any of the
rights, interests and title in, to or in respect of your Consortium Member's
interest in and to the Etame Operating Account and that we will comply with the
terms of the Notice. Terms defined in the Notice shall have, when used in this
acknowledgement, the same meaning herein as therein, unless the context
otherwise requires.
We further agree and confirm that:
(a) we will not, without your prior written consent, amend or change the
Designated Account or in any way prejudice the rights, titles,
benefits and interests assigned to you;
(b) we will procure that payments are made to you in accordance with the
authority and instruction contained in the Notice;
(c) we will not withhold consent to the assignment of the Designated
Account by you to another person; and
(d) we will not claim any set off or counterclaim to your prejudice in
respect of any moneys held in the Designated Account; and
(e) we will not revoke, amend, modify, vary or supplement any of the Trust
Agreement without evidence of your consent, except with respect to
changes in Schedule A to the extent permitted under Section 9.8 of the
Trust Agreement insofar as such changes modify the identity of other
Subordinate Secured Parties and/or Consortium Members' Accounts other
than your Consortium Member's Account.
Yours faithfully,
For and on behalf of [insert name of Trustee and Paying Agent]
By:
Date:
- 48 -
And
For and on behalf of [VAALCO Gabon (Etame), Inc.]
By:
Date:
- 49 -
By:
----------------------
Name:
----------------------
Title:
----------------------
Executed as a deed by:
VAALCO GABON (ETAME), Inc.
acting by [name of person signing] and
[name of person signing] acting under
the authority of VAALCO GABON (ETAME), Inc.
By:
----------------------
Name:
----------------------
Title:
----------------------
By:
----------------------
Name:
----------------------
Title:
----------------------
Executed as a deed by:
VAALCO GABON (ETAME), Inc.
acting by [name of person signing] and
[name of person signing] acting under
the authority of VAALCO GABON (ETAME), Inc.
as attorney for [Retiring Party]
By:
----------------------
Name:
----------------------
Title:
----------------------
- 50 -
By:
----------------------
Name:
----------------------
Title:
----------------------
IN WITNESS WHEREOF, TINWORTH acknowledges and consents to the terms of this
Agreement, executed by its duly authorized signatory as of the date first above
written.
TINWORTH LIMITED
By:
----------------------
Name:
----------------------
Title:
----------------------
By:
----------------------
Name:
----------------------
Title:
----------------------
- 51 -
SCHEDULE I
FORM OF DEED OF ACCESSION
From: [Consortium Member]
To: Trustee and Paying Agent and the Account Bank
Copy to: The Operator, the other Consortium Members, TINWORTH and the
Subordinate Secured Parties
Dated:
Dear Sirs
Consortium Member Accession Deed
Relating to a Trustee and Paying Agent Agreement dated 26 June 2002 between
VAALCO Gabon (Etame), Inc., JPMorgan Chase Bank and X.X. Xxxxxx Trustee and
Depositary Company Limited as from time to time amended, varied, waived, novated
or supplemented. Terms not otherwise defined herein shall have the meaning given
to them in the Trustee and Paying Agent Agreement.
6. We hereby confirm that we have elected to sell our share of Crude Oil from
the Project directly to a Buyer and have entered into a Crude Sharing
Agreement with the Operator.
7. We acknowledge and agree that upon and by reason of our delivering this
Accession Deed to the Trustee and Paying Agent and acceptance by the
Trustee and Paying Agent of it we will thereby forthwith become a party to
the Trustee and Paying Agent Agreement as a Consortium Member thereunder
and shall be entitled to those rights and benefits, and be bound by those
obligations, of the Operator that are set out in Sections 2.1 (save for the
obligation of the Operator referred to in the 4th sentence thereof), 2.2,
2.3, 2.4, 2.5(b), 2.6, 2.7, 2.8, 8.1(a), (i), (m), (p)(iii) and 9.4(c) of
the Trust and Paying Agent Agreement.
8. We hereby make the representations, warranties and covenants set out in
Sections 2.7(b) and 8.1(q) to the Trustee and Paying Agent Agreement.
9. We confirm and agree that we have been, and will continue to be, solely
responsible for making our own independent appraisal of and investigations
into the financial condition, creditworthiness, condition, value, affairs,
status and nature of the Project and the legality, validity, effectiveness,
adequacy or enforceability of the Finance Documents and any documents or
other matters delivered pursuant thereto or of any security purportedly
granted by or pursuant thereto. We further confirm that we have not relied
and will not hereafter rely on any of the Trustee and Paying Agent or any
party to the Finance Documents:
- 52 -
(a) to check or enquire on our behalf into the adequacy, accuracy or
completeness of any information provided by any person in connection
with any of the Finance Documents;
(b) to assess or keep under review on our behalf the financial condition,
creditworthiness, condition, value, affairs, status or nature of the
Project; or
(c) to assess or keep under review on our behalf the legality, validity,
effectiveness, adequacy or enforceability of the Finance Documents or
any document or other matter delivered pursuant thereto or of any
security purportedly granted by or pursuant thereto.
10. Our notice details for the purpose of receiving communications under the
Trustee and Paying Agent Agreement are as follows:
Address:
Attention:
Telephone No:
Facsimile No:
Email Address:
11. This Accession Deed shall be governed by, and construed in accordance with,
English law.
IN WITNESS whereof this Accession Deed has been executed as a deed poll and is
intended to be and is hereby delivered on the date first above written.
-------------------------------------------
EXECUTED by [ ] )
as attorney for and on behalf of ) ---------------------------
[ ] )
Witnessed by:
Name:
Address:
Countersignature by Trustee and Paying Agent:
- 53 -
-------------------------------------------
[Trustee and Paying Agent]
- 54 -
