EXHIBIT 4.15
______________________________________________________________________________
______________________________________________________________________________
California Petroleum Transport Corporation
and
CalPetro Tankers (Bahamas I) Limited
___________________________________
ISSUE OF ONE DEBENTURE
Dated ________ __, 1995
___________________________________
________________________________________________________________________________
________________________________________________________________________________
Table of Contents
Page No.
ARTICLE I
DEFINITIONS............................. 1
ARTICLE II
COVENANT TO PAY........................... 1
Section 2.1. Covenant to Pay............................................ 1
ARTICLE III
MORTGAGE, CHARGE AND ASSIGNMENT................... 2
Section 3.1. Charge..................................................... 2
Section 3.2. Legal Securities........................................... 3
Section 3.3. Conversion of Floating Charge.............................. 3
Section 3.4. Negative Pledge............................................ 3
Section 3.5. New Accounts............................................... 3
ARTICLE IV
PRESERVATION OF SECURITY....................... 3
Section 4.1. Continuing Security........................................ 3
Section 4.2. Waiver of Defenses......................................... 4
Section 4.3. Immediate Recourse......................................... 5
Section 4.4. Preservation of Rights..................................... 5
Section 4.5. Additional Security........................................ 5
Section 4.6. Certificate................................................ 5
Section 4.7. Discharge.................................................. 5
Section 4.8. Registration............................................... 5
Section 4.9. Lender's Power's With Respect to Security Assets........... 5
Section 4.10. Calls...................................................... 6
Section 4.11. Delegation By Lender....................................... 6
Section 4.12. Further Assurances......................................... 6
Section 4.13. Redemption of Prior Mortgages.............................. 6
Section 4.14. Power of Attorney.......................................... 6
Section 4.15. Avoidance of Payments...................................... 7
Section 4.16. Powers to Lend............................................. 7
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ARTICLE V
DEALINGS WITH SECURITY ASSETS...................... 8
Section 5.1. Day to Day Business......................................... 8
Section 5.2. Charged Accounts............................................ 8
Section 5.3. Deposit of Proprietary Rights............................... 8
Section 5.4. Liability to Perform........................................ 8
ARTICLE VI
ENFORCEMENT.............................. 9
Section 6.1. When Security Becomes Enforceable........................... 9
Section 6.2. Enforcement of Security..................................... 9
Section 6.3. Remedies, Waivers and Consents.............................. 9
ARTICLE VII
RECEIVER................................ 9
Section 7.1. Appointment and Powers of Receiver.......................... 9
Section 7.2. Comply with Instructions.................................... 12
Section 7.3. Removal and Remuneration.................................... 12
Section 7.4. Lender May Exercise Receiver's Powers....................... 12
Section 7.5. No Liability As Mortgagee In Possession..................... 12
Section 7.6. Protection Of Third Parties................................. 12
Section 7.7. Expenses.................................................... 13
Section 7.8. Indemnity................................................... 13
ARTICLE VIII
APPLICATION OF PROCEEDS........................ 13
Section 8.1. Order of Application........................................ 13
Section 8.2. Suspense Accounts........................................... 14
ARTICLE IX
MISCELLANEOUS PROVISIONS........................ 14
Section 9.01. Amendment................................................... 14
Section 9.02. Severability................................................ 14
Section 9.03. Notices..................................................... 14
Section 9.04. Consent to Jurisdiction..................................... 14
Section 9.05. Captions.................................................... 15
Section 9.06. Governing Law............................................... 15
Section 9.07. No Partnership.............................................. 15
Section 9.08. Counterparts................................................ 15
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Section 9.09. Survival.................................................... 15
Section 9.10. Integration................................................. 15
Section 9.11. Reproduction of Documents................................... 15
Section 9.12. Successors and Assigns; Assignment.......................... 16
Section 9.13. General Interpretive Principles............................. 16
This Issue of One Debenture, dated ________ __, 1995 (the
"Debenture"), from CalPetro Tankers (Bahamas I) Limited, a company organized
under the laws of The Commonwealth of the Bahamas (the "Owner") to California
Petroleum Transport Corporation, a corporation organized under the laws of the
State of Delaware (the "Lender") is issued pursuant to Clause __ of the
Memorandum of Association and Article 32 of the Articles of Association of the
Owner passed at the meeting of the Directors held on the __ day of _________,
1995.
PRELIMINARY STATEMENT
The Owner has requested that the Lender make two loans to the Owner:
one in the aggregate principal amount equal to $____________ (the "Term Loan")
and one in the aggregate principal amount equal to $____________ (the "Serial
Loan" and, collectively with the Term Loan, the "Loans"). The Loans will be
made pursuant to the terms and conditions of two Loan Agreements, each dated as
of the date hereof, each between the Lender and the Owner. The net proceeds of
the Serial Loan and the Term Loan will be used by the Owner to acquire the m.t.
_________ (the "Vessel") from Chevron Transport Corporation (the "Initial
Charterer"). The Vessel will be bareboat chartered to the Initial Charterer
pursuant to the Bareboat Charter (the "Initial Charter"), dated as of the date
hereof, between the Owner and the Initial Charterer. As collateral security for
its obligations under the Loan Agreements, the Owner will assign, pledge,
mortgage and grant the Lender a security interest in, inter alia, the Vessel,
the Initial Charter, the earnings and insurances of the Vessel and will grant
this debenture in favor of the Lender.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and of other valuable consideration, receipt of
which is hereby acknowledged, the Owner and the Lender hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Debenture shall have the meanings
assigned to such terms in Schedule 1 to this Debenture, and the definitions of
such terms shall be equally applicable to both the singular and plural forms of
such terms.
ARTICLE II
COVENANT TO PAY
Section 2.1. Covenant to Pay. The Owner hereby covenants and agrees
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to pay and discharge each sum owing under the Term Obligations and the Serial
Obligations as and when the same shall fall due, whether at maturity, by
acceleration or otherwise; provided, however, the Lender, and any subsequent
assignee or transferee of this Debenture, hereby agrees
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that the Owner has and shall have no personal liability or obligation with
respect to the payment of the Term Obligations or the Serial Obligations, and
that the Term Obligations and the Serial Obligations are payable solely from the
proceeds received by the Lender (or the Lender's successors and assigns) from
the Lender's right, title and interest in and to the collateral granted to the
Lender hereunder and under the other Security Documents.
ARTICLE III
MORTGAGE, CHARGE AND ASSIGNMENT
Section 3.1. Charge. As continuing security for the Term Obligations
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and the Serial Obligations, equally and ratably, the Owner hereby:
(a) conveys, transfers and assigns absolutely to and unto the Lender all
rights of the Owner in and to the Current Receivables by way of fixed
security;
(b) mortgages, charges and assigns, and agrees to mortgage, charge and
assign to the Lender all present and future rights of the Owner in and
to all freehold or leasehold property of the Owner and all other
estates or interests therein together with all trade fixtures and fixed
plant and machinery now and for the time being thereon, by way of a
fixed charge;
(c) mortgages, charges and assigns, and agrees to mortgage, charge and
assign, to the Lender all rights now owned or hereafter acquired in and
to the goodwill, franchises, patent rights, copyrights, trademarks and
other intangible Assets of the Owner by way of filed charge;
(d) mortgages, charges and assigns, and agrees to mortgage, charge and
assign, to the Lender all rights relating to the aforesaid property
specified in Sections 3.1(a), (b) and (c) including, inter alia,
negotiable instruments, legal and equitable charges, reservations of
property rights, rights of action, collection, recovery or security,
rights of tracing and unpaid vendor's liens and similar and associated
rights, by way of fixed legal mortgage and charge; and
(e) mortgages and charges in favor of the Lender all rights of the Owner
now owned or hereafter acquired in and to all other Assets for the time
being of the Owner not subject to the fixed securities created by
Sections 3.1(a), (b), (c) and (d) wheresoever situate (including, inter
alia, all undertakings and businesses of the Owner) by way of a
floating charge and the Owner shall not be at liberty to create any
mortgage or charge on any of the securities created by this Section
3.1(e) and no lien shall in any case or in any manner arise on or
affect any part of the said securities in priority to or pari passu
with all charges hereby created, it being the intention that the Owner
shall have no power, without the written
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consent of the Lender, to part with or dispose of any part of the said
securities except by way of sale in the ordinary course of its business;
provided, however, that upon the unconditional payment and satisfaction of the
Serial Obligations, the rights of the Lender hereunder will secure solely and
exclusively the Term Obligations;
provided further, that upon the unconditional payment and satisfaction of the
Term Obligations the rights of the Lender hereunder will terminate and the
Lender will at the direction, cost and expense of the Owner release or reassign
to the Owner all remaining rights of the Lender in and to the balance of the
Security Assets.
Section 3.2. Legal Securities. The Owner will forthwith at the
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request of the Lender execute a legal mortgage, charge or assignment over all or
any of the Security Assets subject to or intended to be subject to any fixed
security hereby created in favor of the Lender in such form as the Lender may
reasonably require.
Section 3.3. Conversion of Floating Charge. The Lender may at any
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time by notice to the Owner convert the floating charges hereby created into a
specific charge as regards any Assets specified in the notice which the Lender
shall consider to be in danger of being seized or sold under any form of
distress, attachment, execution or other legal process or to be otherwise in
jeopardy and (whether or not this security has become enforceable) may at any
time appoint a Receiver (as defined in Section 7.1 hereof) thereof.
Section 3.4. Negative Pledge. The Owner shall not, without the prior
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written consent of the Lender, permit the sale, transfer, assignment lease or
other disposition of any Security Asset, or any Encumbrance or other right in or
over any Security Asset to subsist, arise or be created, other than such
Encumbrance as is created by this Debenture.
Section 3.5. New Accounts. If the Lender receives or is deemed to be
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affected by notice whether actual or constructive of any subsequent Encumbrance
or other interest affecting any Security Asset or the proceeds of sale thereof,
the Lender may open a new account or accounts for the Owner. If the Lender does
not open a new account it shall nevertheless be treated as if it had done so at
the time when it received or was deemed to have received notice and as from that
time all payments made to the Lender shall be credited or be treated as having
been credited to the new account and shall not operate to reduce the amount for
which this Debenture is security.
ARTICLE IV
PRESERVATION OF SECURITY
Section 4.1. Continuing Security. The security constituted by this
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Debenture shall be a continuing security and shall not be satisfied by any
intermediate payment or
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satisfaction of the Term Obligations and the Serial Obligations but shall secure
the ultimate balance of the Term Obligations and the Serial Obligations;
provided, however, that, in the event that the Serial Obligations are satisfied
and paid in full pursuant to the terms and conditions of the Serial Loan
Agreement, this Assignment will be security solely and exclusively for the Term
Obligations. The security hereby given shall be in addition to and shall not be
discharged, released, prejudiced or otherwise affected by any other security or
Encumbrance now or hereafter held by the Lender for the Term Obligations or the
Serial Obligations.
Section 4.2. Waiver of Defenses. The obligations of the Owner under
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this Debenture and this security shall not be discharged, released, prejudiced
or otherwise affected by any act, omission or circumstance which but for this
provision might so operate or otherwise release or discharge the Owner from the
Term Obligations or the Serial Obligations, or the security created under this
Debenture including without limitation and whether or not known to or
discoverable by the Owner or the Lender:
(a) any time, indulgence, waiver, consent or other relief granted to or
composition with the Owner or any other Person;
(b) the taking, variation, extension, compromise, renewal or release of, or
refusal or neglect to perfect or enforce, any rights under the Term
Loan Agreement, the Serial Loan Agreement, this Debenture, any Security
Document or any other guarantee, agreement or obligation or any right
against, or any security granted by, the Owner or any other Person;
(c) any irregularity, invalidity or unenforceability of any obligation of
the Owner under the Term Loan Agreement, the Serial Loan Agreement, any
Security Document, this Debenture or any other guarantee, of any
government or authority (whether of right or in fact) purporting to
reduce or otherwise affect any such obligation to the intent that such
obligation and this security shall remain in full force and this
Debenture shall be construed accordingly as if there were no such
irregularity, unenforceability, invalidity, law or order;
(d) any legal limitation, disability, incapacity or other circumstance
relating to the Owner, any guarantor or any other Person;
(e) any defect in or invalidity or inadequacy of the constitution or
incorporation or borrowing powers of the Owner or of its board of
directors, executive committee or other equivalent of analogous body or
in the authorization, execution or delivery of the Term Loan Agreement,
the Serial Loan Agreement, any Security Document, this Debenture or any
other guarantee, agreement or obligation; or
(f) any supplement, amendment or modification to the terms of the Term Loan
Agreement, the Serial Loan Agreement, this Debenture, any other
Security Document or any other guarantee, agreement or obligation.
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Section 4.3. Immediate Recourse. The Owner waives any right it may
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have of first requiring the Lender to proceed against or claim payment from the
Owner or enforce the Term Loan Agreement, the Serial Loan Agreement, any
Security Documents or other guarantee, agreement or obligation before enforcing
this Debenture.
Section 4.4. Preservation of Rights. Until the Term Obligations and
----------------------
the Serial Obligations have been irrevocably paid and discharged in full, the
Lender may:
(a) refrain from applying or enforcing any other security, money or right
held or received by the Lender in respect of the Term Obligations or
the Serial Obligations or apply and enforce the same in such manner
and order as the Lender sees fit; and
(b) hold in a suspense account (without liability to pay interest thereon)
any moneys received or on account of this Debenture by way of a
partial payment.
Section 4.5. Additional Security. This Debenture shall be in
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addition to and shall not in any way be prejudiced by any other security now or
hereafter held by the Lender.
Section 4.6. Certificate. A certificate of the Lender setting forth
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the amount due from the Owner in respect of the Term Obligations and/or the
Serial Obligations shall, in the absence of manifest error, be prima facie
evidence of such amount.
Section 4.7. Discharge. Where any discharge (whether in respect of
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the Term Loan Agreement, the Term Obligations, the Serial Loan Agreement, the
Serial Obligations, this Debenture, or any other guarantee, agreement,
obligation or security or otherwise) is made in whole or in part or any
arrangement is made on the faith of any payment, security or other disposition
which is avoided or must be repaid on bankruptcy, liquidation, winding-up,
dissolution or otherwise, this security and the obligations of the Owner under
this Debenture shall continue as if there had been no such discharge or
arrangement.
Section 4.8. Registration. The Owner hereby agrees to arrange for
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this Debenture, any Security Asset or any agreement, document or instrument
relating thereto to be registered with or notified to any Person to preserve or
perfect the Lender's security in any Security Asset.
Section 4.9. Lender's Power's With Respect to Security Assets. The
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Lender may without demand or notice to the Owner being required at any time
after this security becomes enforceable exercise at its discretion (in the name
of the Owner or otherwise) and without any further consent or authority by the
Owner, any right which may be exercised by the Person in whose name any Security
Asset is registered or who is the holder thereof under the terms thereof or
otherwise including, but without limitation, all the powers given to trustees by
statute in respect of securities or property subject to a trust; provided,
however, that until the
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security hereby constituted becomes enforceable, the Lender shall procure that
the rights attached to each such Security Asset are exercised in such manner as
the Owner shall direct so long as the same is not inconsistent with any term of
the Term Loan Agreement, the Serial Loan Agreement or this Debenture and account
to the Owner for any sum or other distribution paid in respect of such Security
Asset.
Section 4.10. Calls. The Owner will for so long as the Term
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Obligations and the Serial Obligations remain outstanding pay all sums which may
become due in respect of the Security Assets and in the event of default the
Lender may if it thinks fit make such payments on behalf of the Owner. Any sums
so paid by the Lender shall be immediately due and payable by the Owner to the
Lender without demand or notice being required.
Section 4.11. Delegation By Lender. The Lender may at any time and
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from time to time delegate by power of attorney or in any other manner to any
Person or Persons all or any of the rights and discretions which are for the
time being exercisable by the Lender under this Debenture in relation to any
Security Asset. Any such delegation may be made upon such terms (including power
to sub-delegate) and subject to such regulations as the Lender may think fit.
The Lender shall not be in any way liable or responsible to the Owner for any
loss or damage arising from any act, default, omission or misconduct on the part
of any such delegate or sub-delegate.
Section 4.12. Further Assurances. The Owner shall at its own expense
------------------
execute and deliver all such agreements, documents and instruments and do all
such assurances, acts and things as the Lender may require for perfecting or
protecting this security over any Security Asset or for facilitating the
realization of such property and in the exercise of all rights vested in the
Lender or in any sub-delegate as aforesaid. The Owner shall in particular
execute all transfers, conveyances, assignments and assurances of such property
whether to the Lender or its nominees and give all notices, orders and
directions which the Lender may think expedient and, for the purposes of this
Section, a certificate in writing by the Lender to the effect that any
particular assurance, act or thing required by it is reasonably required shall
be conclusive evidence of such fact in favor of all third parties.
Section 4.13. Redemption of Prior Mortgages. The Lender may at any
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time after the security hereby constituted has become enforceable redeem any
prior Encumbrance against any Security Asset or procure the transfer thereof to
itself and may settle and pass the accounts of the prior Encumbrances. Any
accounts so settled and passed shall be conclusive and binding on the Owner. All
principal moneys, interest, costs, charges and expenses of and incidental to
such redemption and transfer shall be immediately due by the Owner to the Lender
without notice or demand being required.
Section 4.14. Power of Attorney. (a) The Owner hereby by way of
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security irrevocably nominates, constitutes and appoints the Lender and every
Receiver of any Security Asset appointed hereunder and every such delegate or
sub-delegate as aforesaid, each of them acting alone or jointly with any other
of them, to be its attorney (the "Attorney") and on its
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behalf and in its name or otherwise to sign under seal or otherwise and deliver
all such agreements, documents and instruments and do all such assurances, acts
and things which the Owner ought to do but fails to do under the covenants and
provisions contained in the Indenture or this Debenture (including without
prejudice to the generality of the foregoing to make any demand upon or give any
notice or receipt to any Person owing moneys to the Owner and to execute and
deliver any charges, legal and equitable generally in its name and on its behalf
to exercise all or any of the rights conferred by or pursuant to this Debenture
or by statute on the Attorney and (without prejudice to the generality of the
foregoing) to sign under seal or otherwise and deliver and otherwise perfect any
assurance, agreement, instrument or act which the Attorney may deem proper in or
for the purpose of exercising any of such rights.
(b) The Owner hereby ratifies and confirms and agrees to ratify and
confirm any such Attorney described in Section 4.14(a).
Section 4.15. Avoidance of Payments. No assurance, security or
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payment which may be avoided under any enactment relating to bankruptcy, and no
release, settlement or discharge given or made by the Lender on the faith of any
such assurance, security or payment, shall prejudice or affect the right of the
Lender to enforce the security created by or pursuant to this Debenture in
respect of the full extent of the moneys thereby secured. The Lender shall be at
liberty at its absolute discretion to retain the security so created as security
for the Term Obligations and Serial Obligations, equally and ratably, for a
period of seven months in the case of fixed security and thirteen months in the
case of floating security after the Term Obligations and Serial Obligations
shall have been paid in full, notwithstanding any release, settlement, discharge
or arrangement given or made by the Lender on or as a consequence of, such
termination of liability. If at any time within the period of six months in the
case of fixed security and twelve months in the case of floating security after
such termination a petition shall be presented to a competent court for an order
for the winding up of the Owner or the Owner shall commence to be wound up
voluntarily, the Lender shall be at liberty, notwithstanding as aforementioned,
to continue to retain such security or any part thereof for and during such
further period as the Lender in its absolute discretion shall determine. The
Owner agrees that such security shall be deemed to have been and to have
remained held by the Lender as and by way of security for the payment to the
Lender of all or any sums which are now or may become due and owing to the
Lender under the Term Loan Agreement, the Serial Loan Agreement and the rest of
the Security Documents.
Section 4.16. Powers to Lend. The Lender may advance money on the
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security of any Security Asset for the purpose of defraying any costs, charges,
losses and expenses which shall be paid or incurred by it in relation to this
Debenture (including the remuneration of any Receiver) or which the Lender
anticipates may be paid or incurred in the exercise of the rights vested in it
or for all other purposes of this Debenture or any of them and the Lender may
advance such moneys at such rates of interest and generally on such terms and
conditions as it shall think fit.
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ARTICLE V
DEALINGS WITH SECURITY ASSETS
Section 5.1. Day to Day Business. For so long as the security hereby
-------------------
constituted shall not have become enforceable, the Owner may in the ordinary
course of trading (a) for the purpose of getting in and realizing any Current
Receivable compromise, settle, release or otherwise dispose any thereof,
including any Encumbrance or other security relating thereto, save that nothing
in this Section 5.1 shall be construed so as to permit the Owner to sell, factor
or discount any Current Receivable and, (b) acquire, deal in and dispose of any
Security Asset specified in Section 3.1(b) other that pursuant to the applicable
terms of the Term Loan Agreement and the Serial Loan Agreement.
Section 5.2. Charged Accounts. The Owner shall cause all sums
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hereafter received or recovered by or for it in respect of any Current
Receivable to be directly credited to a separate and distinct account as the
Lender may from time to time designate and, if called upon to do so by notice in
writing from the Lender, shall execute an absolute assignment of any such
Current Receivable in favor of the Lender, all at the cost of the Owner. Until
the security hereby constituted is fully discharged in accordance with the terms
hereof, the Owner shall not be entitled to withdraw any sum standing to the
credit of any such account established as aforesaid without the prior written
consent of the Lender.
Section 5.3. Deposit of Proprietary Rights. The Owner shall, if the
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Lender so requires, deposit with the Lender all certificates and other documents
of title or evidence of ownership in relation to the patents and rights referred
to in Section 3.1(c).
Section 5.4. Liability to Perform. Notwithstanding any other
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provision herein contained to the contrary, the Owner shall remain liable to
observe and perform all of the respective conditions and obligations assumed by
it in respect of each Security Asset and the Lender shall be under no obligation
by reason of this Debenture, nor shall the Lender be required in any manner, to
perform or fulfil any obligation of the Owner in respect of any Security Asset
or to make any payment or make any enquiry as to the maturity, amount, nature or
sufficiency of any rental, interest, proceeds, payments or receipts received by
it or them or the Owner or to present or file any claim or take any other action
or give any notice to collect, exercise or enforce the payment of any amount or
the taking up of any rights or property to which the Owner may have been or to
which it may be now or hereafter entitled thereunder at any time.
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ARTICLE VI
ENFORCEMENT
Section 6.1. When Security Becomes Enforceable. The security hereby
---------------------------------
conferred shall become immediately enforceable and the floating charge created
by this Debenture shall be deemed to have crystallized and the power of sale and
other powers conferred by statute as varied or amended by this Debenture shall
be immediately exercisable (i) if the Owner fails to meet the Term Obligations
and the Serial Obligations in the manner specified in Section 2.1 or (ii) upon
and after the occurrence of any Event of Default as defined in the Term Loan
Agreement or the Serial Loan Agreement. After this security has become
enforceable, the Lender may in its discretion enforce all or any part of this
security, and exercise all or any rights of enforcement hereby granted, in such
manner as the Lender sees fit.
Section 6.2. Enforcement of Security. For the purposes of all powers
-----------------------
implied by statute the Term Obligations and the Serial Obligations shall be
deemed to have become due and payable on the date hereof and any statutory
restrictions on the power of sale and restrictions on the right of consolidation
shall not apply to this security.
Section 6.3. Remedies, Waivers and Consents. No delay or omission of
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the Lender in exercising any right under this Debenture shall impair or be
construed as a waiver of such right nor shall any single or partial exercise of
any such right preclude any further exercise thereof or the exercise of any
other right. The rights provided in this Debenture are cumulative and not
exclusive of any rights provided by law, agreement or otherwise. Any waiver and
any consent by the Lender under this Debenture must be in writing and may be
given subject to any conditions thought fit by the Lender . Any waiver or
consent shall be effective only in the instance and for the purpose for which it
is given.
ARTICLE VII
RECEIVER
Section 7.1. Appointment and Powers of Receiver. At any time after
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this security becomes enforceable the Lender may without further notice appoint
in writing under its hand any one or more Person(s) to be a receiver or receiver
and manager (hereinafter each called "a Receiver") as the Lender at its sole
discretion may see fit of any Security Asset in like manner in every respect as
if the Lender had become entitled under statute to exercise the power of sale
thereby conferred. Every Receiver so appointed shall, in addition to any powers
conferred by statute or common law, have and be entitled to exercise all rights
to do any or all of the following things:
(a) Take Possession. Enter upon and take immediate possession of, get in
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and collect any Security Asset and undertake any works of demolition,
building, reconstruction, repair or decoration thereon;
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(b) Sell Assets. Subject to any necessary consent or approval of any
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judicial, administrative, governmental or other regulatory body, office
or agency, sell, convert into money and realize any Security Asset by
public auction or private contract, dispose of, grant options and other
rights in respect of and exercise all other rights conferred on an
owner under any statute, at common law or otherwise, in respect of any
Security Asset and generally in such manner and on such terms (which
may consist wholly or partly of shares or securities of any company or
body corporate) as the Receiver shall think fit and transfer, convey,
assign or grant an assurance of the same in the name and on behalf of
the Owner. Without prejudice to the generality of the foregoing, the
Receiver may do any of these things for a consideration consisting of
cash, debentures or other obligations, shares or other valuable
consideration in cash or in any other form whatsoever and any such
consideration may be payable in a lump sum or by installments spread
over such period as the Receiver may think fit;
(c) Compromise. Settle, adjust, refer to arbitration, compromise and
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arrange any claims, accounts, disputes, questions and demands with or
by any Person who is or claims to be a creditor of the Owner or
relating in any way to any Security Asset;
(d) Borrow and Create Security. Borrow or raise money and secure the
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repayment thereof and interest thereon by mortgaging, sub-mortgaging or
otherwise charging any Security Asset or this Debenture (whether or not
in priority to the sums and obligations secured by this Debenture) in
such manner and on such terms as the Receiver shall think fit;
provided, however, that:
(i) no Receiver shall exercise such right without first obtaining the
written consent of the Person appointing him and the Lender shall not
incur any responsibility to the Owner or any other Person by reason
of giving or refusing its consent, whether directly or subject to any
limitation or condition; and
(ii) no Person lending such money shall be concerned to enquire as to the
existence of such consent or the terms thereof or as to the propriety
or purpose of the exercise thereof or to see to the application of
any money so borrowed or raised;
(e) Employ Agents. Employ solicitors, managers, agents and others as the
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Receiver shall deem necessary;
(f) Receipts. Give valid receipts and discharges for all moneys and claims
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and execute all assurances and things which may be proper or desirable
for realizing any Security Assets;
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(g) Consideration. Receive or pay any consideration in cash or other
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valuable consideration and so that the same may be receivable or payable either
immediately or at a later time and in a lump sum or by installments spread over
such period as the Receiver shall think fit;
(h) Dealings. Generally to deal with and effect any transaction or
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arrangement of any kind whatsoever in respect of any Security Asset;
(i) Legal Proceedings. Settle, arrange, compromise and submit to
-----------------
arbitration any accounts, claims, questions or disputes whatsoever which may
arise in connection with any Security Asset or in any way relating to the
security constituted by this Debenture, to bring, take, defend, compromise,
submit to and discontinue any actions, suits, arbitration or proceedings
whatsoever whether civil or criminal in relation to the matters aforesaid, to
enter into, complete, disclaim, abandon or disregard, determine or rectify all
or any of the outstanding agreements or arrangements of the Owner in any way
relating to or affecting the Security Assets or any part thereof and to allow
time for payment of any debts either with or without security as the Receiver
shall think expedient;
(j) In Owner's Name. Generally at his option to use the name of the Owner
---------------
in the exercise of all or any of the rights hereby conferred;
(k) Exercise of Rights. Exercise, or permit the Owner or any nominee of
------------------
the Owner to exercise, any rights incident to the ownership of any Security
Asset in such manner as the Receiver may think fit and in particular (as regards
shares, stock and securities) any voting rights conferred by the same and (as
regards securities) any rights of enforcing the same by foreclosure, sale or
otherwise;
(l) Corporate Transfers. Transfer any Security Asset to any other company
-------------------
or body corporate, whether or not formed or acquired for the purpose;
(m) Carry on Business. Generally manage and carry on and conduct any of
-----------------
the undertakings and businesses of the Owner;
(n) Calls. Make calls, conditionally or unconditionally, on the members of
-----
the Owner in respect of all or any part of its uncalled capital with such and
the same rights of enforcement as are conferred by the Memorandum of Association
and Articles of Association of the Owner upon its directors in this respect;
(o) General Powers. Sign under seal or otherwise and deliver all such
--------------
agreements, documents and instruments and do all such other acts and things as
the Receiver may consider desirable or necessary for realizing any Security
Asset or incidental or conducive to any of the matters or rights conferred on a
Receiver under or by virtue of this Debenture and to exercise in relation to any
Security Asset all such
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rights as the Receiver should be capable of exercising if the Receiver
were the beneficial owner of the same; and
(p) Moneys received by Receiver. All moneys received by a Receiver shall
---------------------------
after providing for the matters specified by any law be applied by him
in or towards satisfaction of this Debenture and thereafter of any
other incumbrance of which he shall have notice and thereafter the
Receiver shall pay the residue of the moneys received by him to the
Owner.
Section 7.2. Comply with Instructions. Any Receiver shall in the exercise
------------------------
of the Receiver's rights conform to any regulations and directions from time to
time made and given by the Person appointing him but so that no Person dealing
with the Lender or any Receiver shall be concerned to enquire whether the
Receiver has so conformed to any such regulations or directions.
Section 7.3. Removal and Remuneration. The Lender may from time to time
------------------------
by writing under its hand remove any Receiver appointed by it and may whenever
it may deem it expedient appoint a new Receiver in the place of any Receiver
whose appointment may for any reason have terminated and may from time to time
fix the remuneration of any Receiver appointed by it.
Section 7.4. Lender May Exercise Receiver's Powers. All or any of the
-------------------------------------
rights which are conferred by this Debenture (either expressly or impliedly)
upon a Receiver of any Security Asset may be exercised after the security hereby
created becomes enforceable by the Lender in relation to any Security Asset
without first appointing a Receiver of the same or notwithstanding the
appointment of a Receiver of the same.
Section 7.5. No Liability As Mortgagee In Possession. The Lender shall
---------------------------------------
not nor shall any Receiver appointed as aforesaid by reason of the Lender or the
Receiver entering into possession of any Security Asset be liable to account as
mortgagee in possession or be liable for any loss or realization or for any
default or omission for which a mortgagee in possession might be liable. Every
Receiver duly appointed by the Lender shall be deemed to be the agent of the
Owner for all purposes and shall as such agent be deemed to be in the same
position as a Receiver duly appointed by a mortgagee under statute. The Owner
alone shall be responsible for its agreements, obligations, acts, omissions,
defaults and losses and the Lender shall not incur any responsibility therefor
(either to the Owner or to any other Person whatsoever) by reason of appointing
such Receiver or for any other reason whatsoever. Every such Receiver and the
Lender shall be entitled to all the rights, privileges and immunities by statute
conferred on mortgagees and receivers when such receivers have been duly
appointed.
Section 7.6. Protection Of Third Parties. No purchaser, mortgagee or
---------------------------
other Person dealing with the Lender or the Receiver or the agents of the Lender
or the Receiver shall be concerned to enquire whether any of the Term
Obligations or Serial Obligations are due or owing, the right which the Lender
or the Receiver is purporting to exercise has become
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exercisable or any money remains due under this Debenture, as to the propriety
or regularity of the actions of the Lender or such Receiver, or to see to the
application of any money paid to the Lender or to such Receiver.
Section 7.7. Expenses. All costs, charges and expenses incurred and all
--------
payments made by the Lender or any Receiver appointed hereunder in the exercise
in good faith of any right hereby conferred whether or not occasioned by any
act, neglect or default of the Lender or such Receiver shall bear interest from
the date of the same being incurred or becoming due at the Default Rate. The
amount of all such costs, charges, expenses and payments and all interest
thereon and all remuneration payable hereunder shall be payable by the Owner on
demand. All such costs, charges, expenses and payments shall be paid and charged
as between the Lender and the Owner on the basis of a full indemnity and not on
the basis of party and party or any other kind of taxation.
Section 7.8. Indemnity. Each of the Lender and every Receiver, attorney,
---------
manager, agent or other Person appointed by the Lender hereunder shall be
entitled to be indemnified out of the Security Assets in respect of all
obligations, costs, charges and expenses incurred and payments made by such
Person in good faith in the execution or purported execution of any right vested
in such Person pursuant hereto and against all actions, proceedings,
obligations, costs, claims and demands in respect of any matter or thing done or
omitted in anyway relating to any Security Asset and the Lender and any such
Receiver may retain and pay all sums in respect of the same out of any moneys
received under the rights hereby conferred.
ARTICLE VIII
APPLICATION OF PROCEEDS
Section 8.1. Order of Application. Any moneys received by the Lender
--------------------
pursuant to this Debenture or under the powers hereby conferred shall after the
security hereby constituted shall have become enforceable but subject to the
payment of any claims having priority to this security be applied for the
following purposes and in the following order of priority (but without prejudice
to the right of the Lender to recover any shortfall from the Owner):
(a) in satisfaction of or provision for all costs, charges and expenses
incurred and payments made by the Lender or any Receiver appointed
hereunder and of all remuneration due hereunder with interest on such
costs, charges, expenses and payments at the Default Rate;
(b) in or towards payment of interest on the Term Obligations and Serial
Obligations, pro rata, in accordance with their respective outstanding
balances;
(c) in or towards payment of principal on the Term Obligations and Serial
Obligations, pro rata, in accordance with their respective outstanding
balances;
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(d) in payment of the surplus (if any) to the Owner or other Person
entitled thereto.
Section 8.2. Suspense Accounts. Any moneys received under the rights
-----------------
hereby conferred may, at the discretion of the Lender, be placed in a suspense
account and kept there for so long as the Lender thinks fit.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment. This Debenture may be amended from time to time
---------
by written agreement signed by the parties hereto.
Section 9.02. Severability. If any provision of this Debenture is held to
------------
be in conflict with any applicable statute or rule of law or is otherwise held
to be unenforceable for any reason whatsoever, such circumstances shall not have
the effect of rendering the provision in question inoperative or unenforceable
in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent
whatsoever. The invalidity of any one or more phrases, sentences, clauses or
Sections of this Debenture contained, shall not affect the remaining portions of
this Debenture, or any part thereof.
Section 9.03. Notices. All demands, notices and communications hereunder
-------
shall be in writing, personally delivered or mailed by certified mail-return
receipt requested, and shall be deemed to have been duly given upon receipt (a)
in the case of the Lender, at the following address: c/o JH Management
Corporation, Room 6/9, One International Place, Boston, Massachusetts 02110-
2624, (b) in the case of the Owner, at the following address: United House, 14-
16 Nelson Street, Douglas, Isle of Man, or at other such address as shall be
designated by such party in a written notice to the other parties.
Section 9.04. Consent to Jurisdiction. Any legal suit, action or
-----------------------
proceeding against the Owner arising out of or relating to this Debenture, or
any transaction contemplated hereby, may be instituted in any federal or state
court in The City of New York, State of New York and the Owner hereby waives any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding, and the Owner hereby irrevocably submits to the
jurisdiction of any such court in any such suit, action or proceeding. The
Owner hereby irrevocably appoints and designates CT Corporation System, having
an address at 1633 Broadway, New York, New York, its true and lawful attorney-
in-fact and duly authorized agent for the limited purpose of accepting servicing
of legal process and the Owner agrees that service of process upon such party
shall constitute personal service of such process on the Owner. The Owner shall
maintain the designation and appointment of such authorized agent until all
amounts payable under this Debenture shall have been paid in full. If such
agent shall cease to so act, the Owner shall immediately designate and appoint
another such agent satisfactory to the Lender
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and shall promptly deliver to the Lender evidence in writing of such other
agent's acceptance of such appointment.
Section 9.05. Captions. The captions or headings in this Debenture are
--------
for convenience only and in no way define, limit or describe the scope or intent
of any provisions or sections of this Debenture.
Section 9.06. Governing Law. This Debenture shall be governed by and
-------------
interpreted in accordance with the laws of the [Commonwealth of the Bahamas]
[Isle of Man], without giving effect to the principles of conflicts of law.
Section 9.07. No Partnership. Nothing herein contained shall be deemed or
--------------
construed to create a partnership or joint venture among the parties hereto and
the services of each party shall be rendered as an independent contractor and
not as agent for any other party.
Section 9.08. Counterparts. This Debenture may be executed in any number
------------
of counterparts and by different parties hereto on separate counterpart, each of
which shall be deemed to be an original. Such counterparts shall constitute one
and the same agreement.
Section 9.09. Survival. The representations, covenants and agreements
--------
contained in or made pursuant to this Debenture in respect of either party
hereto shall survive the execution and delivery of this Debenture and shall
continue in effect so long as such party's obligations hereunder remain
outstanding.
Section 9.10. Integration. This Debenture and the Schedule and Exhibits
-----------
hereto constitute the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior
agreements, understandings or representations pertaining to the subject matter
hereof, whether oral or written. There are no warranties, representations or
other agreements between the parties in connection with the subject matter
hereof except as specifically set forth or incorporated herein.
Section 9.11. Reproduction of Documents. This Debenture and all documents
-------------------------
relating thereto, including, without limitation, (a) consents, waivers and
modifications which may hereafter be executed, (b) documents received by any
party at the closing, and (c) financial statements, certificates and other
information previously or hereafter furnished, may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties agree that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
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Section 9.12. Successors and Assigns; Assignment. This Debenture shall be
----------------------------------
binding upon and inure to the benefit of the Owner and the Lender and their
respective successors and assigns. The Owner shall not have the right to assign
its rights hereunder or any interest herein without the prior written consent of
the Lender. The Lender, at its sole option, shall have the right to assign this
Debenture, the Serial Loan Agreement, the Term Loan Agreement, the Security
Documents and any of its rights and interest hereunder and thereunder.
Section 9.13. General Interpretive Principles. For purposes of this
-------------------------------
Debenture except as otherwise expressly provided or unless the context otherwise
requires:
(a) the defined terms in this Debenture shall include the plural as well as
the singular, and the use of any gender herein shall be deemed to include any
other gender;
(b) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles as
in effect on the date hereof;
(c) references herein to "Articles", "Sections", "Subsections",
"paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, paragraphs and other subdivisions of
this Debenture;
(d) a reference to a Subsection without further reference to a Section is a
reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to paragraphs and other
subdivisions;
(e) the words "herein", "hereof", "hereunder" and other words of similar
import refer to this Debenture as a whole and not to any particular provision;
and
(f) the term "include" or "including" shall mean without limitation by
reason of enumeration.
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IN WITNESS WHEREOF this Debenture has been executed by the Owner the day
and year first above written.
SIGNED, SEALED and DELIVERED )
as a Deed and Debenture )
by )
for and on behalf of )
CALPETRO TANKERS (BAHAMAS I)
LIMITED )
in the presence of:- )
SIGNED by )
for and on behalf of )
CALIFORNIA PETROLEUM TRANSPORT
CORPORATION )
in the presence of:- )
SCHEDULE 1
DEFINED TERMS USED IN THE DEBENTURE
"Assets" means, in relation to any person, the whole or any part of its
business, undertaking, property and assets and includes, without limitation, any
right to receive revenues.
"Assignment of Earnings and Insurances" means the assignment between the
Owner and the Lender, as amended from time to time in accordance with the terms
thereof, pursuant to which the Owner assigns to the Lender all of its right,
title and interest in, to and under the freights and hires (as well as any
charters entered into after the Closing Date) with respect to the Vessel to
secure its obligations under the Loan Agreements.
"Assignment of Guarantee" means the assignment between the Owner and the
Lender, as amended from time to time in accordance with the terms thereof,
pursuant to which the Owner assigns to the Lender all of its right, title and
interest in, to and under the Chevron Guarantee to secure its obligations under
the Loan Agreements.
"Chevron" means Chevron Corporation.
"Chevron Guarantee" means the guarantee of the obligations of the Initial
Charter given by Chevron.
"Closing Date" means ________ __, 1995.
"Current Receivables" means (a) all obligations of the trade debtors of the
Owner due or owing to the Owner on account of the prevailing debit balances of
the present book debts of the Owner and (b) all rights relating to the aforesaid
property specified in paragraph (a), including, inter alia, negotiable
instruments, legal and equitable charges, reservations of property rights,
rights of action, collection, recovery or security, rights of tracing an unpaid
vendor's liens and similar and associated rights (and each reference to a
"Current Receivable" shall be construed as a reference to the whole or any part
of any one or more of them).
"Encumbrance" means any encumbrance and includes any mortgage, charge
(whether fixed or floating, pledge, lien, hypothecation, title retention or
other security agreement or security interest of any kind whatsoever and
howsoever arising and any equivalent or analogous interest to any of the
foregoing.
"Event of Default" means an Event of Default under Section ____ of the Loan
Agreement.
"Guarantee" means any guarantee and also includes any indemnity, any other
form of assurance against financial loss and any other contingent obligation or
other obligation in respect of the payment of, or indemnity against the
consequences of default in the payment of, any indebtedness of any person or the
performance of any obligation by any person (and each reference to the act of
guaranteeing shall be construed accordingly).
-2-
"Initial Charter" means with respect to each Vessel, the Bareboat Charter,
dated
as of ________ 1, 1995, between the Initial Charterer and the Owner.
"Initial Charterer" means Chevron Transport Corporation.
"Issue of One Debenture" means each Issue of One Debenture between the
Owner and the Lender, as amended from time to time in accordance with the terms
thereof, pursuant to which the Owner grants to the Lender a security interest in
all of its assets.
"Person" means an individual, a partnership, a corporation, a joint
venture, an unincorporated association, a joint-stock company, a trust, or other
entity or a government or any agency or political subdivision thereof.
"Right" means any right (actual or contingent, present or future) expressed
to be created under any agreement, law or directive, or arising by operation of
law and includes any power, authority, discretion, privilege, remedy, title or
interest arising under, by reason of, or in connection therewith.
"Security Assets" means all of the present and future assets of the Owner,
including, inter alia, the Current Receivables (and each reference to a
"Security Asset" shall be construed as a reference to the whole or any part of
any one or more of them).
"Security Documents" means the Loan Agreement, the Mortgage, the Assignment
of Charter, the Assignment of Earnings and Insurances, the Assignment of
Guarantee, the Assignment of Management Agreement, the Issue of One Debenture,
collectively.
"Serial Loan Agreement" the Loan Agreement, dated as of _______ 1, 1995
between the Lender and the Owner pursuant to which the Lender will make the
Serial Loan to the Owner.
"Serial Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Owner under and pursuant to the Serial Loan
Agreement, any Security Document and any instrument, agreement or document
referred to therein.
"Term Loan Agreement" means the Loan Agreement, dated as of _______ 1, 1995
between the Owner and the Lender pursuant to which the Lender makes the Term
Loan to the Owner.
"Term Obligations" means the payment, performance or obligations of any
kind or nature whatsoever of the Owner under and pursuant to the Term Loan
Agreement, any Security Document and any instrument, agreement or document
referred to therein.
"Trustee" means Chemical Trust Company of California.