EXHIBIT 99.4
THIS SECURITY AGREEMENT is dated 26 January 2004 and is made
BETWEEN:
(1) THE COMPANIES identified in Schedule 1 (together with each company
which becomes a party to this Security Agreement by executing a Deed of
Accession, each a Chargor and together the Chargors); and
(2) SABERASU JAPAN INVESTMENTS II B.V., a company organised under the laws
of The Netherlands (the Collateral Agent) as agent and trustee for
itself and each of the Beneficiaries (as defined below).
WHEREAS:
(A) It is a condition of the Financing Agreement (as defined below) that
the Chargors enter into this Security Agreement.
(B) The board of directors of each Chargor is satisfied that it is in the
interests, and for the benefit, of such Chargor to enter into and
perform its obligations under this Security Agreement.
(C) The Collateral Agent has agreed to enter into this Security Agreement
as security trustee for the Beneficiaries and to hold the benefit of
the security constituted by this Security Agreement on trust for the
benefit of the Beneficiaries.
(D) It is intended by the parties to this Security Agreement that it shall
take effect as a deed notwithstanding the fact that a party may execute
it under hand only.
NOW IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Security Agreement (including the Recitals):
Account Receivable and Accounts Receivable shall have the meaning given to such
terms in the Financing Agreement.
Administrative Agent means Saberasu Japan Investments II B.V.
Administrative Borrower means Foster Wheeler Energy.
Administrator means any administrator appointed by the Collateral Agent in
respect of any Chargor (whether out of court or otherwise).
Assignation of Rents means, in respect of the Scottish Property, an assignation
of rents by a Chargor in favour of the Collateral Agent.
Beneficiary means each of the Administrative Agent, the Lenders and the
Collateral Agent (together the Beneficiaries).
Client Advance Accounts means the bank account(s) specified in Schedule 8 and
includes any replacement, substitute or additional account of such Client
Advance Accounts from time to time whether by way of transfer of monies,
redesignation, renumbering or otherwise and any sub-account(s) of such
account(s).
Client Specific Assets means all plant, machinery, computers, vehicles, office
or other equipment now or in the future owned by any Chargor and its interest in
any plant, machinery, computers, vehicles, office or other equipment in its
possession that is acquired on behalf of a client for a particular assignment or
project, in each case, in good faith and in the ordinary course of business on
ordinary business terms.
Collection Account and Collection Accounts have the meanings given to such terms
in the Financing Agreement.
Deed of Accession means a deed substantially in the form of Schedule 6 executed,
or to be executed, by a Chargor.
Default has the meaning given to the term Default in the Financing Agreement.
Default Rate means a rate determined in accordance with Section 2.04(b) (Default
Interest) of the Financing Agreement.
Enforcement Event means the occurrence of an Event of Default which is
continuing.
Event of Default has the meaning given to the term Event of Default in the
Financing Agreement.
Excluded Debt means any Debt (as such term is defined in the Senior Note
Indenture) owed to any of the Chargors from time to time and which falls within
any prohibition, restriction or limitation in the Senior Note Indenture on the
creation of security over any such Debt.
Financing Agreement means the financing agreement dated on or about the date
hereof entered into by, amongst others, the Collateral Agent, the Beneficiaries
and the Chargors.
Fixtures means, in relation to any freehold, heritable or leasehold property
mortgaged or charged by or pursuant to this security, all fixtures and fittings
(including trade fixtures and fittings) and fixed plant, machinery and equipment
owned by any Chargor from time to time on or forming part of such property.
Group Shares means:
(a) all shares specified in Schedule 3 or in the Schedule to any Deed of
Accession or, when used in relation to a particular Chargor, such of
those shares as are specified against its name in Schedule 3 or as are
specified in the Schedule to a Deed of Accession to which it is party;
(b) any and all shares held by any Chargor from time to time which are
subject to any prohibition, restriction or limitation in the Senior
Note Indenture or the US Bank Agreement on the creation of security
over the assets of any subsidiary companies; and
(c) any and all interests of any Chargor in any joint venture arrangements
(whether incorporated or not) the terms of which (A) prohibit or
restrict the assignment of, or creation of Security Interests over,
such Chargor's interests therein or (B) would entitle another party to
exercise any rights in respect of or affecting such Chargor's
interests in such joint venture arrangements following the assignment
of, or creation of Security Interests over, its interests in such joint
venture arrangements,
and any reference in this Security Agreement to Group Shares shall be deemed to
include, in relation to such shares or interests, all dividends, coupons and
other distributions paid or payable after the date of this Security Agreement on
all or any of such shares and interests and all stocks, shares, securities (and
the dividends or interest thereon), rights, money, allotments, benefits,
advantages or property accruing or offered at any time by way of redemption,
bonus, preference, option rights or otherwise to or in respect of any of such
shares and interests or in substitution, conversion or exchange therefor.
Insolvency Act 1986 means the Insolvency Act 1986 (as amended by the Insolvency
Act 2000 and the Enterprise Act 2002 and as otherwise amended from time to
time).
Intellectual Property Rights means patents, trade marks, service marks, logos,
get-up, trade names, rights in domain names, rights in designs, copyright
(including rights in computer software) and moral rights, database rights,
semi-conductor topography rights, utility models, rights in know-how and trade
secrets and other intellectual property rights, in each case whether registered
or unregistered and including applications for registration, and all rights or
forms of protection having equivalent or similar effect anywhere in the world
and all rights under any licences or agreements relating to the use or
exploitation of any such rights.
Investments means all physical stocks and shares (other than Group Shares),
options, debentures, bonds, warrants, coupons, certificates or other securities
and investments or, where relevant, the right, title, interest and benefit in
and to such assets now or in the future owned or held by any Chargor or (when
used in relation to a particular Chargor) that Chargor from time to time.
Land Registry means Her Majesty's Land Registry.
Lease means any lease, letting, underlease or sublease (however remote), tenancy
or right to possession, occupation or use and any agreement for any of them.
Lender and Lenders have the meanings given to such terms in the Financing
Agreement.
Loan Document and Loan Documents have the meanings given to such terms in the
Financing Agreement.
LRA means the Land Registration Act 2002.
Material Contracts has the meaning given to such term in the Financing
Agreement.
Material Insurances means all contracts and policies of insurance (including,
for the avoidance of doubt, all cover notes) of whatever nature which are from
time to time taken out by or on behalf of any Chargor or (to the extent of such
interest) in which any Chargor has an interest, other than contracts and
policies of insurance relating to employer's liability, public and products
liability, motor fleet, motor uninsured loss, group personal accident and
travel, professional indemnity and such other contracts and policies of
insurance as the Collateral Agent, acting reasonably, may agree.
Material Real Property means, in the case of freehold property, such property
the value of which as at the date of acquisition is in excess of (pound)250,000
and, in the case of leasehold property, such property which is leased for a
period in excess of at least 5 years at an annual rent of at least
(pound)100,000.
Mortgaged Property means each freehold, heritable and leasehold property
mortgaged and/or charged by or pursuant to this Security Agreement (including,
without limitation, those individually identified in Part A and/or Part B of
Schedule 2 or in any Schedule to any Deed of Accession) and each and every part
of such freehold, heritable and leasehold properties including, for the
avoidance of doubt, Scottish Property.
Natwest Accounts means the bank account(s) with National Westminster Bank Plc
and designated "Foster Wheeler Petroleum Development Limited" or "Foster Wheeler
Energy Limited" as set out in Schedule 10, and includes any replacement,
substitute or additional account of such Natwest Accounts from time to time
whether by way of transfer of monies, redesignation, renumbering or otherwise
and any sub-account(s) of such account(s).
Natwest Deposits means any amounts standing to the credit of the Natwest
Accounts.
Operating Accounts means the bank account(s) specified in Schedule 9 and
includes any replacement, substitute or additional account of such Operating
Accounts from time to time whether by way of transfer of monies, redesignation,
renumbering or otherwise and any sub-account(s) of such account(s).
Planning Acts means any laws and regulations intended to control or regulate the
construction, demolition, alteration or change of use of land or buildings or to
preserve or protect the national heritage.
Realisations Account means each account maintained from time to time by or in
the name of the Chargors or any of them for the purposes of Clause 15.6
(Contingencies) with a bank or financial institution as the Collateral Agent may
from time to time approve and includes any replacement, substitute or additional
account of such Realisations Account from time to time whether by way of
transfer of monies, redesignation, renumbering, or otherwise and any
sub-account(s) of such account.
Receiver means a receiver and manager, an administrator, an administrative
receiver or a receiver.
Scottish Property means any heritable or leasehold property now or at any time
during the Security Period belonging to a Chargor and located in Scotland.
Secured Liabilities means:
(a) all present and future obligations and liabilities (whether actual or
contingent and whether owed jointly or severally or in any other
capacity whatsoever and in any currency) of each Chargor to the
Beneficiaries (or any of them) under each or any of the Loan Documents;
(b) all banking, legal and other costs, charges and expenses incurred by
any Beneficiary in connection with the protection, preservation or
enforcement of its respective rights under the Loan Documents; and
(c) all losses and damages sustained, suffered or incurred by any
Beneficiary arising out of or in connection with any act, matter or
thing done or omitted to be done by any Chargor under this Security
Agreement or any other Loan Document,
and Secured Liability shall be construed accordingly.
Security Accounts means the Collection Accounts, the Operating Accounts and the
Realisations Account(s).
Security Assets means all assets, rights, interests, undertaking and property of
the Chargors or any of them the subject of any security created or expressed to
be created by or pursuant to this Security Agreement.
Security Documents means this Security Agreement, each Standard Security, each
Assignation of Rents, each Deed of Accession and every other document entered
into by the Chargors or any Subsidiary of any Chargor pursuant to this Security
Agreement or Section 7.01(b) (Additional Guaranties and Collateral Security) of
the Financing Agreement or designated as a "Security Document" by the Collateral
Agent and the Administrative Borrower.
Security Interest means any mortgage, standard security, assignation of rents,
deed of trust, pledge, lien (statutory or otherwise), hypothecation, security
interest, charge, option or right of pre-emption or other encumbrance or
security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any Capitalized
Lease and any agreement, assignment, deposit arrangement, trust, other
arrangement (including a right of set-off or combination) or financing lease
intended as, or having the effect of, security.
Security Period means the period beginning on the date of this Security
Agreement and ending on the date on which the Secured Liabilities are
irrevocably discharged in full.
Standard Security means, in respect of a Scottish Property, a standard security
over the Scottish Property by a Chargor in favour of the Collateral Agent,
substantially in the form of Schedule 9.
1925 Act means the Law of Property Act 1925.
1.2 Construction of specific terms
(a) Save as expressly herein defined, capitalised terms defined in the
Financing Agreement shall have the same meaning when used herein.
(b) The provisions of Section 1.02 (Terms Generally) of the Financing
Agreement shall also apply to this Security Agreement as if expressly
set out in it mutatis mutandis with each reference to "this Agreement"
or to "the Loan Documents" being deemed to be a reference to this
Security Agreement and each reference to "the Agent" or "the
Administrative Agent" or "the Collateral Agent" being deemed to be a
reference to the Collateral Agent.
(c) The terms of the other Loan Documents and of any side letters issued or
delivered pursuant to or in connection with the Security Agreement
between the parties to this Security Agreement in relation to the Loan
Documents (as the case may be) are incorporated in this Security
Agreement to the extent required for any contract for the disposition
of land or any interest in land contained in this Security Agreement to
be a valid disposition in accordance with section 2(1) of the Law of
Property (Miscellaneous Provisions) Act 1989.
(d) References in this Security Agreement to freehold, heritable and
leasehold property include all estates, rights and interests in all
freehold, heritable and leasehold property
and all buildings, structures and Fixtures for the time being on such
freehold, heritable and leasehold property.
(e) References in this Security Agreement to a mortgage or charge of any
freehold, heritable or leasehold property includes:
(i) the proceeds of sale of any part of that property to the
extent that the Chargor of that property is entitled to the
benefit of those proceeds; and
(ii) the benefit of any covenants for title given or entered into
by any predecessor in title of the Chargor in respect of that
property to that Chargor or any monies paid or payable in
respect of those covenants.
(f) If the Collateral Agent considers that an amount paid by any Chargor to
any Beneficiary under any Loan Document, is capable of being avoided or
otherwise set aside on the liquidation or administration of such
Chargor or otherwise, then such amount shall not be considered to have
been irrevocably paid for the purposes of this Security Agreement.
(g) No Beneficiary shall be concerned to see or investigate the powers or
authorities of any of the Chargors or their respective officers or
agents, and monies obtained or Secured Liabilities incurred in
purported exercise of such powers or authorities or by any person
purporting to be an Chargor shall be deemed to form a part of the
Secured Liabilities, and Secured Liabilities shall be construed
accordingly.
1.3 General construction
In construing this Security Agreement, unless the context otherwise requires:
(a) a reference to a person includes, as appropriate, its successors,
permitted assignees or transferees;
(b) references to Clauses and Schedules are references to, respectively,
clauses of and schedules to this Security Agreement and references to
this Security Agreement include its Schedules;
(c) a reference to any agreement (including any Loan Document) shall be
construed as a reference to that agreement as it may from time to time
be amended without giving rise to a breach of that agreement or a Loan
Document;
(d) a provision of law is a reference to that provision as extended,
applied or amended from time to time and includes any subordinate
legislation;
(e) a time of day is a reference to London time;
(f) the index to and the headings in this Security Agreement are inserted
for convenience only and are to be ignored in construing this Security
Agreement;
(g) words importing the plural include the singular and vice versa;
(h) where a term is defined in this Security Agreement in plural form to
mean persons or things a reference to that term in singular form shall
be construed as meaning any such person or thing;
(i) a provision obliging a Chargor to refrain from an activity shall be
construed as also obliging the Chargor not to enter into or permit to
subsist an agreement to perform that activity unless the agreement is
subject to a condition which would prevent the Chargor being required
to perform the activity in breach of a Loan Document; and
(j) rights and obligations shall be construed as applying from time to
time.
(k) the term "set-off" shall include any right of retention, form of
compensation or right to balance accounts on insolvency.
1.4 Application of the Trustee Act 1925 and the Trustee Act 2000
(a) Disapplication of Trustee Act 2000: To the fullest extent permitted by
law, none of Parts I, II, III, IV, or V of the Trustee Act 2000 nor the
requirement to discharge the duty of care set out in Section 1(1) of
the Trustee Act 2000 in exercising any of the powers contained in
Sections 15 or 22 of the Trustee Act 1925 shall apply to the trust
constituted by this Security Agreement or to the role of the Collateral
Agent in relation to such trust.
(b) Exercise of Rights and Powers: Any exercise by the Collateral Agent of
any rights or powers under this Security Agreement that are the same as
or similar to any rights or powers conferred on a trustee by the
Trustee Act 2000 shall be construed solely as the exercise of the
relevant rights or powers under this Security Agreement and not as the
exercise of the same or any similar rights or powers under the Trustee
Act 2000.
(c) Securities: For the avoidance of doubt:
(i) the Collateral Agent may retain or invest in securities
payable to bearer without appointing a person to act as a
custodian; and
(ii) the application of sections 22 or 23 of the Trustee Act 2000
is inconsistent with the terms of this Security Agreement.
(d) Exclusion of Trustee Act 2000: The disapplication of certain parts or
sections of the Trustee Act 2000 as provided in this Security Agreement
shall constitute an exclusion of the relevant parts of the Trustee Act
2000 for the purposes of that Act.
1.5 Provisions relating to Chargors
Where a representation, warranty or undertaking contained in this Security
Agreement is expressed to apply to Chargors generally, it shall be construed as
a representation, warranty or undertaking, as applicable, by each Chargor in
respect of itself and (where applicable by procuring the same) its Subsidiaries
to the extent that any such Subsidiary is also a Chargor.
1.6 Certificates
A certificate of the Collateral Agent setting forth the amount of any Secured
Liability due from any Chargor shall be prima facie evidence of such amount
against such Chargor in the absence of manifest error.
2. COVENANT TO PAY
2.1 Covenant to pay
Each Chargor, as primary Chargor and not merely as surety, covenants with the
Collateral Agent (as agent and trustee as aforesaid) that it will on demand pay
or discharge the Secured Liabilities on the date or dates on which such Secured
Liabilities are expressed to become due or apply and in the manner provided in
the relevant Loan Document.
2.2 Interest
Any amount not paid under the Loan Documents (including, without limitation,
this Security Agreement) when expressed to become due shall bear interest (after
as well as before judgment or the liquidation or administration of any Chargor,
and payable on demand) at the Post-Default Rate from time to time from the due
date until the date such amount is unconditionally and irrevocably paid and
discharged in full, save to the extent that interest at such rate on such amount
for such period is charged pursuant to the relevant Loan Document and itself
constitutes a Secured Liability.
3. COVENANT TO MAKE FACILITIES AVAILABLE
Each Beneficiary, by the Collateral Agent's execution of this Security
Agreement, undertakes to each Borrower, to the intent that each such undertaking
shall be binding on each Beneficiary severally in accordance with Article II
(The Loans) of the Financing Agreement as if the same applied to this Clause 3
(Covenant To Make Facilities Available) mutatis mutandis, that each Beneficiary
will, upon and subject to the terms of the Financing Agreement, perform its
obligations under the Financing Agreement to make the Facilities available to
the Borrowers on and subject to the terms of the Financing Agreement including,
without limitation but subject as aforesaid, advances and further advances or
other financial accommodation to the extent (if at all) that the making of such
advances, further advances or other financial accommodation by such Beneficiary
is provided for in the Financing Agreement.
4. FIXED SECURITY
4.1 Fixed security over freehold, heritable and leasehold property
Each Chargor as continuing security for the payment, discharge and performance
of all Secured Liabilities at any time owed or due to the Beneficiaries (or any
of them), charges in favour of the Collateral Agent (as agent and trustee for
the Beneficiaries):
(a) by way of first legal mortgage all the freehold, heritable and
leasehold property (if any) now belonging to it and specified in
Schedule 2 and/or in the Schedule to the Deed of Accession by which it
became party to this Security Agreement; and
(b) to the extent the same are not the subject of an effective legal
mortgage under Clause 4.1(a) (but not where that is the case pending
registration at the Land Registry only) by way of first fixed charge
all existing and future Material Real Property belonging to it but
excluding any Scottish Property.
4.2 Fixed security over specified assets
Each Chargor as continuing security for the payment, discharge and performance
of all Secured Liabilities at any time owed or due to the Beneficiaries (or any
of them), charges in favour of the Collateral Agent (as agent and trustee for
the Beneficiaries) by way of first fixed charge:
(a) (to the extent that they are not Fixtures):
(i) all plant, machinery, computers, vehicles, office or other
equipment now or in the future owned by it;
(ii) its interest in any plant, machinery, computers, vehicles,
office or other equipment in its possession (but excluding any
for the time being part of such Chargor's stock-in-trade,
work-in-progress or Client Specific Assets) to the extent that
the creation or subsistence of a charge over any such
interests are not prohibited by the terms of the agreement
setting out or creating such interests, but for the avoidance
of doubt, the Chargor shall not be obliged to notify any
person of the creation of this first fixed charge over such
interests; and
(iii) the benefit of all contracts, licences and warranties relating
to the assets identified in (i) and (ii) above;
(b) all monies (including interest) from time to time standing to the
credit of the Collection Accounts and the Realisation Accounts with any
bank, financial institution or other person and the debts represented
by them;
(c) to the extent the same are not effectively assigned under Clause 5
(Assignments) all rights and benefits in respect of the Material
Insurances and all claims and returns of premiums in respect of such
Material Insurances;
(d) its present and future goodwill; and
(e) the benefit of all present and future licences, permissions, consents
and authorisations (statutory or otherwise) held by it in connection
with its business or the use of any of the Security Assets and the
right to recover and receive all compensation which may at any time
become payable to it in respect of such present and future licences,
permissions, consents and authorisations to the extent that the
creation or subsistence of a charge over any such licence, permission,
consent and/or authorisation is not prohibited by statute, regulation,
operation of law or the express terms of such licence, permission,
consent and/or authorisation;
4.3 Fixed security over Accounts Receivable
(a) Fixed Charge over Accounts Receivable: Each Chargor as continuing
security for the payment, discharge and performance of all Secured
Liabilities at any time owed or due to the Beneficiaries (or any of
them), charges in favour of the Collateral Agent (as agent and trustee
for the Beneficiaries) by way of first fixed charge the Accounts
Receivable belonging to it provided that, for the avoidance of doubt,
the Chargors shall not be required to (and the Collateral Agent may
not) notify the creation of this charge to the Chargors' respective
debtors except in the circumstances contemplated by Clause 6.3 and/or
Clause 13.2(c).
(b) Collection of Accounts Receivable: Each Chargor will get in and realise
the Accounts Receivable belonging to such Chargor in the ordinary
course of its business as agent for and on behalf of the Collateral
Agent by instructing the debtors owing such Accounts Receivable to pay
all amounts due in respect of such Accounts Receivable into the
Collection Account in the name of such Chargor.
(c) Collection Account: Each Chargor may not withdraw all or any monies
(including interest) standing to the credit of the relevant Collection
Account in its name without the prior written consent of the Collateral
Agent (acting on the instructions of all the Lenders).
(d) Restrictions on dealing with Accounts Receivable: Each Chargor may not
assign or otherwise transfer, factor, discount, sell, release,
compound, subordinate, defer, declare a trust over or vary the terms of
and not create or permit to exist any Security Interest (other than a
Security Interest created pursuant to the Security Documents or
expressly permitted by the terms of the Financing Agreement) over any
Accounts Receivable belonging to it or over the Collection Account in
its name or any interest in it.
4.4 Omissions
The fact that no or incomplete details of freehold, heritable and/or leasehold
properties are included or inserted in Schedule 2 or in the Schedule to the Deed
of Accession (if any) by which any Chargor became a party to this Security
Agreement to shall not affect the validity or enforceability of the charges
created by or pursuant to this Security Agreement.
5. ASSIGNMENTS
5.1 Assignments
Each Chargor as continuing security for the payment, discharge and performance
of the Secured Liabilities at any time owed or due to the Beneficiaries (or any
of them), assigns and agrees to assign to the Collateral Agent (as agent and
trustee for the Beneficiaries) absolutely all its right, title, interest and
benefit (if any) in and to the Material Insurances.
5.2 Notices of assignment
(a) Each Chargor shall forthwith give notice of each such assignment of its
right, title and interest (unless waived by the Collateral Agent) in
and to the Material Insurances, by sending a notice in the form of
Schedule 4 Part A (with such amendments as the Collateral Agent may
agree) duly completed to each of the other parties to the Material
Insurances and the Administrative Borrower and each Chargor
incorporated in England and Wales shall use its reasonable endeavours
to procure that within 14 days of the date of this Security Agreement,
or if later, the date of entry into any such agreement, each such other
party delivers a letter of undertaking to the Collateral Agent in the
form of Schedule 4 Part B with such amendments as the Collateral Agent
may agree.
(b) Any such notice required in accordance with Clause 5.2(a) above to be
given to any person which is also a Chargor, and any such undertaking
required in accordance with Clause 5.2(a) above to be given to the
Collateral Agent by any person which is also a Chargor, need not
actually be given, but this Security Agreement and the Schedules
and the execution of this Security Agreement by such Chargor shall be
deemed to constitute such notice or such undertaking (as the case may
be).
5.3 Assignment of proceeds, damages etc.
To the extent that any such right, title and interest described in Clause 5.1
(Assignments) and Clause 5.2 (Notices of assignment) is not assignable or
capable of assignment, such assignment purported to be effected by Clause 5.1
(Assignments) shall operate as an assignment of any and all proceeds of present
or future Material Insurances received by each Chargor; and as continuing
security for the payment, discharge and performance of the Secured Liabilities
at any time owed or due to the Beneficiaries (or any of them).
6. FLOATING CHARGES
6.1 Creation of floating charges
Each Chargor as continuing security for the payment, discharge and performance
of the Secured Liabilities, charges in favour of the Collateral Agent (as agent
and trustee for the Beneficiaries) by way of a first floating charge:
(a) all its undertaking and assets of whatever type (other than Excluded
Debt, Group Shares, Client Advance Accounts and any amounts standing to
the credit of those accounts, and the Client Specific Assets) and
wherever located both present and future, including, but not limited
to:
(i) the Material Contracts;
(ii) the Natwest Deposits; and
(iii) the Operating Accounts,
subject always to all mortgages, fixed charges and assignments created
by or pursuant to Clause 4 (Fixed Security) and all security
assignments created by or pursuant to Clause 5 (Assignments) or any
other provision of this Security Agreement; and
(b) whether or not subject to a mortgage, fixed charge, assignment or
security assignment created as aforesaid, all undertaking and assets of
each Chargor of whatever type (other than Excluded Debt, Group Shares,
Client Advance Accounts and any amounts standing to the credit of those
accounts and the Client Specific Assets), both present and future,
located in or otherwise governed by the laws of Scotland.
Without prejudice to Clause 13.2 (Further security), the floating charge created
pursuant to this Clause 6.1 shall not include any asset belonging to any Chargor
to the extent only that such Chargor is prohibited from creating a Security
Interest over such asset.
6.2 Restrictions on dealing
Each Chargor undertakes to each Beneficiary that, save as expressly permitted
under the terms of the Loan Documents, it will not:
(a) create or permit to subsist any Security Interest over all or any part
of its assets, rights or property or agree to do so other than pursuant
to this Security Agreement or any other Security Document; or
(b) part with, grant or enter into a Lease of, sell, transfer, assign or
otherwise dispose of (including by way of declaration of trust) all or
any part of its assets, rights or property or any interest in them or
agree to do so.
6.3 Conversion of floating charges
(a) By notice: Subject to the Insolvency Act 1986, the Collateral Agent may
by notice to any Chargor convert the floating charges created by this
Security Agreement into specific charges as regards all or any of such
Chargor's assets, rights and property secured by such floating charge
and specified in the notice:
(i) if an Enforcement Event has occurred; or
(ii) if the Collateral Agent in good faith considers such assets,
rights or property 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 immediate jeopardy; or
(iii) if such Chargor fails to comply, or takes or threatens to take
any action which in the reasonable opinion of the Collateral
Agent is likely to result in it failing to comply, with its
obligations under Clause 6.2 (Restrictions on dealing).
(b) Automatic conversion: Subject to the Insolvency Act 1986 and Clause
6.3(c) below, the floating charges created by this Security Agreement
shall (in addition to the circumstances in which the same will occur
under general law) automatically be converted (without any notice) into
fixed charges over the assets, rights and property of any Chargor
secured by such floating charge:
(i) on the convening of any meeting of the members or directors of
such Chargor to consider a resolution to wind such Chargor up
or put such Chargor into administration;
(ii) on a resolution being passed or an order being made for the
winding-up, dissolution, administration or re-organisation of
such Chargor;
(iii) on the appointment of a liquidator or an administrator
(whether out of court or otherwise) to such Chargor;
(iv) on any person levying or attempting to levy any distress,
execution or other process against any Security Assets of such
Chargor;
(v) on such Chargor ceasing to carry on business or a substantial
part of it or ceasing to be a going concern;
(vi) on such Chargor stopping making payments to all or any class
of its creditors or giving notice to all or any class of its
creditors that it intends to stop such payment;
(vii) on such Chargor creating or attempting to create a trust over
any of the Security Assets secured by the floating charge
granted by such Chargor pursuant to Clause 6.1 (Creation of
floating charges);
(viii) on the holder of any other Security Interest whether ranking
in priority to or pari passu with or after the charges and
security contained in this Security Agreement or such Chargor
appointing an administrator, an administrative
receiver, receiver, manager or receiver and manager in respect
of such Chargor; or
(ix) any floating charge granted by such Chargor to any person
crystallising for any reason whatsoever.
(c) Moratorium: the floating charges created pursuant to Clause 6.1
(Creation of floating charges) may not be converted into fixed charges
solely by reason of:
(i) the obtaining of a moratorium; or
(ii) anything done with a view to obtaining a moratorium,
under the Insolvency Act 2000.
6.4 Qualifying Floating Charge
Paragraph 14 of Schedule B1 to the Insolvency Act 1986 (incorporated by Schedule
16 of the Enterprise Act 2002) shall apply to all floating charges created
pursuant to this Security Agreement.
6.5 Standard Security
Foster Wheeler Energy will on the date of this Agreement, as security for
payment of the Secured Liabilities, enter into and deliver to the Collateral
Agent a validly subscribed Standard Security in the form set out in Schedule 9
in respect of Scottish Property belonging to Foster Wheeler Energy on the date
of this Agreement, together with (1) a cheque for registration dues (2) a cheque
for Companies House dues (3) a Form 10/12 report in respect of the Scottish
Property, together with personal searches against and a Search in the Register
of Charges/Mortgage Register and the Company file of Foster Wheeler Energy, all
brought down to a date as near as practicable to the date of this Agreement and
showing no entries adverse to Foster Wheeler Energy's interest in the Scottish
Property or to its ability to grant the Standard Security and (4) Foster Wheeler
Energy solicitor's letter of obligation in normal form.
7. IMPLIED COVENANTS AS TO TITLE
7.1 Implied covenants and statement under LRA Rule 68
Each legal mortgage, fixed charge, assignment and/or floating charge contained
in or created pursuant to this Security Agreement by each Chargor is made with
full title guarantee under the Law of Property (Miscellaneous Provisions) Act
1994 but in each case so that the covenant set out in section 3(1) of the Law of
Property (Miscellaneous Provisions) Act 1994 shall extend to any charges,
encumbrances or rights which the Chargor does not and could not reasonably be
expected to know about.
7.2 Event of Default for breach of implied covenants as to title
Any breach of any covenant as to title implied by the Law of Property
(Miscellaneous Provisions) Act 1994 pursuant to any full title guarantee made by
any Chargor shall be treated as a failure to comply with an obligation or
undertaking for the purposes of Section 9.01(d) of the Financing Agreement.
8. PERFECTION OF SECURITY, ETC.
8.1 Land Registry
In respect of the Mortgaged Property specified in Schedule 2 opposite the name
of any Chargor the title to which is registered at the Land Registry and in
respect of any other registered title(s) against which this Security Agreement
may be noted (to the extent that the same will be subject to compulsory first
registration by virtue of this Security Agreement) but excluding any Scottish
Property:
(a) such Chargor undertakes to make or procure that there is made a due
application to the Land Registry (with the Chargor's consent as
proprietor of the relevant registered estate) at the same time as
registering each legal charge in Clause 4:
(i) to enter a restriction in the following terms on the register
of title relating to it:
"No disposition of the registered estate by the proprietor of
the registered estate or by the proprietor of any registered
charge is to be registered without a written consent signed by
the proprietor for the time being of the charge dated [date of
this deed] in favour of [chargee - e.g. [Collateral Agent] (as
agent and trustee for itself and [each of the Beneficiaries]]
[or signed on such proprietor's behalf by [its secretary or
conveyancer or specify who is to be able to sign]"; and
(ii) to enter an obligation to make further advances on the
register of title relating to it; and
(b) such Chargor certifies to the Land Registry that the security created
by or pursuant to this Security Agreement, any Standard Security and
any Assignation of Rents does not contravene any of the provisions of
the memorandum or articles of association or other constitution of such
Chargor.
8.2 Delivery of documents of title, etc. to Mortgaged Property
(a) Each Chargor shall on the date of this Security Agreement deliver (or
procure delivery) to the Collateral Agent of, and the Collateral Agent
shall be entitled to hold and retain during the Security Period, all
deeds, certificates and other documents of title relating to the
Mortgaged Property (including any Leases or licences relating to it).
(b) Each Chargor shall on the date of acquisition by it of any interest in
any freehold, heritable, leasehold or other immovable property, deliver
(or procure delivery) to the Collateral Agent of, and the Collateral
Agent shall be entitled to hold and retain during the Security Period,
all deeds, certificates and other documents of title relating to such
property (including any Leases or licences relating to it).
8.3 Security Accounts
(a) Identity of bank or financial institution holding Security Accounts:
Any Security Account may be changed to any other bank or financial
institution at any time with the agreement of the Administrative
Borrower (for itself and as agent for the Chargors) and the Collateral
Agent (acting on the instructions of the Required Lenders) but, in each
case, such change shall only become effective upon the
proposed new bank or financial institution agreeing with the Collateral
Agent (acting on the instructions of the Required Lenders) and the
Administrative Borrower (for itself and as agent for the Chargors), in
a manner satisfactory to the Collateral Agent, to hold such Security
Account pursuant to the terms of this Security Agreement.
(b) Notice to bank or financial institution holding Security Accounts: The
Administrative Borrower (for itself and as agent for the Chargors) on
behalf of the relevant Chargors will forthwith give notice to the bank
or financial institution holding any Security Account for any Chargor
(and forthwith on any change in their identity give notice to the new
bank or financial institution holding such Security Account) of this
Security Agreement substantially in the form of in Schedule 5 Part A
and use all reasonable endeavours to procure that such bank or
financial institution or any new bank or financial institution (as the
case may be) acknowledges such notice to the Collateral Agent
substantially in the form of Schedule 5 Part B.
(c) Transfer of balances in Security Accounts: The amount (if any) standing
to the credit of the Security Accounts shall be transferred to the
corresponding Security Accounts maintained with any new bank or
financial institution appointed pursuant to Clause 8.3(a) (Identity of
bank or financial institution holding Security Accounts) promptly upon
such appointment taking effect. Each Chargor irrevocably gives all
authorisations and instructions necessary for any such transfer to be
made.
(d) Further perfection: Each Chargor shall do all such things as the
Collateral Agent may request in order to facilitate any change of bank
pursuant to Clause 8.3(a) (Identity of bank or financial institution
holding Security Accounts) or any transfer of credit balances pursuant
to Clause 8.3(c) (Transfer of balances in Security Accounts)
(including, without limitation, the execution of bank mandate forms)
and the Collateral Agent is irrevocably constituted the Chargor's
attorney to do any such things should such other Chargor fail to do so.
9. REPRESENTATIONS AND WARRANTIES
9.1 Representations and warranties
Each Chargor represents and warrants to the Collateral Agent and each
Beneficiary as follows:
(a) In respect of the Mortgaged Property:
(i) the freehold, heritable and leasehold property listed in
Schedule 2 in respect of which a Chargor is named as owner
comprises all the Material Real Property owned by that Chargor
or in relation to which it has any right, title, interest or
liability;
(ii) where it is the Chargor named as owner in respect of any
Mortgaged Property specified in Schedule 2 or in the Schedule
to the Deed of Accession (if any) by which it became a party
to this Security Agreement, it is the legal (or following
registration at the Land Registry or the General Register of
Sasines/Land Register of Scotland, will be the legal) and
beneficial owner/heritable proprietor of such property; and
(iii) the Mortgaged Property belonging to it is free from any
Security Interests other than as created in favour of the
Collateral Agent under this Security Agreement and other
Security Interests expressly permitted under the Financing
Agreement.
(b) In respect of the remaining Security Assets (other than the
Mortgaged Property):
(i) each Chargor is the legal and beneficial owner of, and
absolutely entitled to, such Security Assets vested in it
which it purports to mortgage, charge or assign pursuant to
this Security Agreement; and
(ii) such Security Assets referred to in Clause 9.1(b)(i) above are
free from any Security Interests other than as created in
favour of the Collateral Agent under this Security Agreement
and other Security Interests expressly permitted under the
Financing Agreement.
9.2 Times for making representations and warranties
The representations and warranties set out in this Clause 9 (Representations and
warranties):
(a) will survive the execution of each Loan Document and the making of each
Loan under the Financing Agreement; and
(b) are made on the date of this Security Agreement and (other than the
representation and warranty contained in Clause 9.1(a)) are deemed to
be repeated on each date during the Security Period on which any of the
representations and warranties set out in Article VI (Representations
and warranties) of the Financing Agreement are repeated, with reference
to the facts and circumstances then existing.
10. UNDERTAKINGS
10.1 Duration and with whom made
The undertakings in this Clause 10 (Undertakings):
(a) shall remain in force throughout the Security Period; and
(b) are given by each Chargor for the benefit of the Collateral Agent and each
Beneficiary.
10.2 Undertakings relating specifically to the Security Assets
(a) Book debts and receipts: Each Chargor will:
(i) get in and realise such Chargor's:
(A) Investments to the extent held by way of temporary
investment;
(B) book and other debts and other money (other than
Accounts Receivable); and
in each case in the ordinary course of its business and hold
the proceeds of such getting in and realisation (until payment
into the relevant Collection Accounts) in accordance with
Clause 10.2(a)(ii) below but always subject to
Clause 4.2 (Fixed security over Specified Assets) upon trust
for the Collateral Agent (as agent and trustee for the
Beneficiaries);
(ii) save to the extent that the Collateral Agent
otherwise agrees in writing or if permitted in
accordance with this Security Agreement or the
Financing Agreement and in particular Clause 4.2(b)
(Fixed security over Specified Assets) of this
Security Agreement, pay the proceeds of such getting
in and realisation into the relevant Collection
Accounts;
(iii) upon the occurrence of an Enforcement Event, not
withdraw all or any monies (including interest)
standing to the credit of the Collection Accounts;
and
(iv) except with the prior written consent of the
Collateral Agent (acting on the instructions of the
Required Lenders) or as expressly permitted by the
terms of the Financing Agreement, not assign or
otherwise transfer, factor, discount, sell, release,
compound, subordinate, defer or vary the terms of and
not create or permit to exist any Security Interest
(other than a Security Interest created pursuant to
the Security Documents or expressly permitted by the
terms of the Financing Agreement) over any of the
property or assets referred to in Clause 10.2(a)(i)
above or over the Collection Accounts or any interest
therein.
10.3 Preservation of Mortgaged Property
Each Chargor will, and will procure that each other Chargor will:
(a) Repair: keep the Mortgaged Property, all buildings forming part of the
Mortgaged Property and all Fixtures in good and substantial repair and
condition, in accordance with its obligations under the Financing
Agreement in particular (but without limitation) under Section 7.01(g)
(Maintenance of Properties) of the Financing Agreement) subject in all
cases to any fair wear and tear and subject in the case of leasehold
properties to the relevant Chargor being under no greater obligation to
repair the Mortgaged Property than that owed to the landlord under the
relevant Lease, or (if better) as may be required in order that the
Mortgaged Property may be fit for the proper carrying on of the
relevant Chargor's business;
(b) Material Insurance: at all times comply with its obligations as to
insurance set out in the Financing Agreement and in particular (but
without limitation) Section 7.01(h) (Maintenance of Insurance) of the
Financing Agreement;
(c) Compliance with leases: perform and observe all the covenants,
undertakings, obligations, agreements and stipulations on the part of
such Chargor (whether as landlord or tenant) contained in any Lease in
accordance with the terms of the Financing Agreement and in particular
(but without limitation) Section 7.01(g) (Maintenance of Properties) of
the Financing Agreement;
(d) Statutes, taxes and outgoings: at all times comply with its obligations
as to statutes, taxes and outgoings set out in the Financing Agreement
and in particular (but without limitation) Section 7.01(c) (Compliance
with Laws, Etc) of the Financing Agreement;
(e) VAT election: to notify the Collateral Agent as soon as such Chargor
becomes aware that the landlord of any leasehold property for the time
being owned by any Chargor (and which property constitutes Mortgaged
Property) has made an election
under paragraph 2 of schedule 10 to the Value Added Tax Act 1994 in
respect of the leasehold property for the time being owned by any
Chargor and not without the prior written consent of the Collateral
Agent to make such an election in respect of any Mortgaged Property;
(f) User: use the Mortgaged Property only for such purpose or purposes as
may for the time being be authorised as the permitted use or user of
such Mortgaged Property under or by virtue of the Planning Acts and in
compliance with all matters affecting the Mortgaged Property;
(g) Notices: within 7 Business days after the receipt by such Chargor of
any application, requirement, direction, proposal, order or notice
served or given by any public or local or any other authority
(including without limitation any made pursuant to the Planning Acts or
Environmental Laws) with respect to the Security Assets (or any part of
the Security Assets), whether relating to compulsory acquisition,
development or otherwise, send a copy of it and accompanying material
to the Collateral Agent and also within 7 Business Days after demand
from the Collateral Agent inform it of the steps taken or proposed to
be taken by such Chargor to comply with any requirement made in it or
implicit in it and (if the Collateral Agent requires) to contest or
appeal any such application, requirement, direction, proposal order or
notice and to take all necessary steps without delay to comply with or
make objections or representations as to the same;
(h) No prejudicial land matters: not create or knowingly permit to arise or
permit to subsist any right, interest, matter or thing falling within
(or treated under the LRA as falling within) any of the paragraphs of
Schedule 1, 3 or 12 to the LRA nor enter into any onerous or
restrictive obligations affecting the Mortgaged Property;
(i) Leases: except (A) to its Subsidiaries or Loan Parties or (B) on
arm's-length terms in the ordinary course of business or (C) with the
prior written consent of the Collateral Agent, not grant or agree to
grant or enter into (whether in exercise or independently of any
statutory power) any Lease in relation to the Mortgaged Property or any
part of it or vary or accept a surrender of any Lease save where it is
being granted pursuant to any statutory rights of renewal and, prior to
such grant, provide full details of such grant or proposed grant to the
Collateral Agent and the landlord (if any) of the relevant Mortgaged
Property and without prejudice to the foregoing:
(i) not exercise or agree to exercise the statutory or other
powers of making leases or of accepting or agreeing to accept
surrenders of leases nor grant or agree to grant any licence
or right to occupy any Mortgaged Property or any other
freehold, heritable or leasehold property for the time being
owned by any Chargor;
(ii) not cancel, surrender, assign or permit to be forfeit or
irritated any Lease or any part of any Lease or agree to do so
whether such Lease is held by any Chargor or is superior to it
or is derived out of any Chargor's interest therein or sub-let
or permit to be cancelled, surrendered, irritated, assigned,
sub-let or charged the whole or any part of the property
comprised in such a Lease or agree to do so and if any of the
Mortgaged Property is tenanted serve all notices necessary to
ensure that the right to recover rents or other fixed charges
payable under any Leases are preserved and otherwise manage
such property in a proper and efficient manner and not agree
the amount of any rent reviews or grant any licence in respect
of such property and not vary or
release any covenant contained in any lease or licence
affecting such property; and
(iii) not part with possession (otherwise than on determination of
any tenancy or licence) of any of the Mortgaged Property or
share occupation of it with any other person;
(j) No waivers: not waive or vary nor permit to be waived or varied the
terms of any of the documents relating to or affecting the Mortgaged
Property and not in any manner or by any means lessen the value of any
Chargor's interest in any of the Mortgaged Property;
(k) Covenants: duly and punctually perform and observe all covenants,
obligations and stipulations restrictive or otherwise affecting all or
any part of the Mortgaged Property and all or any facilities necessary
for the enjoyment and use of the Mortgaged Property and/or the carrying
on of the business at the Mortgaged Property, including without
limitation access to and egress from the Mortgaged Property, and
indemnify the Collateral Agent and each Beneficiary in respect of any
breach of such covenants and/or stipulations;
(l) Access: permit the Collateral Agent and any person nominated by it at
all reasonable times during normal business hours on reasonable notice
to enter upon the Mortgaged Property and view the state of the same;
(m) Investigation of title: upon the occurrence of an Enforcement Event or
otherwise if the Collateral Agent believes that the value of the
Mortgaged Property is materially and adversely affected or for any
other purpose which the Collateral Agent may require, grant the
Collateral Agent or its lawyers on request all such facilities within
the power of such Chargor to enable such lawyers (at the expense of
such Chargor subject to the provisions of Section 4.01 of the Financing
Agreement) to carry out investigations of title to any such property
which is or may be subject to this security and enquiries into matters
in connection therewith as may be carried out by a prudent mortgagee or
heritable creditor; and
(n) Report on title: on written demand by the Collateral Agent, following
the occurrence of an Enforcement Event or otherwise if the Collateral
Agent believes that the value of the Mortgaged Property is materially
and adversely affected, provide the Collateral Agent as soon as
practicable with a report (prepared at the Chargor's expense subject to
the provisions of Section 4.01 of the Financing Agreement by a law firm
approved by the Collateral Agent) as to the title of any Chargor to
such property which is or may be subject to this security and related
matters which may properly be sought to be covered by a prudent
mortgagee or heritable creditor in a law firm's report of this nature.
10.4 Further negative pledge provision
If any Chargor creates or permits to subsist any Security Interest in breach of
the provisions of Section 7.02 of the Financing Agreement then, to the extent
possible under applicable law, all the obligations of such Chargor under each of
the Loan Documents shall automatically and immediately be secured upon the same
assets equally and rateably with the other obligations secured thereon.
11. CONTINUING SECURITY, ETC.
11.1 Continuing security and further advances
The security constituted by this Security Agreement shall be continuing, is made
for securing further advances and will extend to the ultimate balance of the
Secured Liabilities, regardless of any intermediate payment or discharge in
whole or in part.
11.2 Reinstatement
Where any discharge (whether in respect of the obligations of any Chargor or any
security for those obligations or otherwise) is made in whole or in part or any
arrangement is made on the faith of any payment, security or other disposition
which is avoided or must be restored, or which the Collateral Agent considers
will be avoided or must be restored, on insolvency, liquidation or otherwise
without limitation, the liability of each Chargor under this Security Agreement
shall continue as if the discharge or arrangement had not occurred.
11.3 Retention of charges
(a) If the Collateral Agent shall have grounds in its absolute discretion
for believing:
(i) that any Chargor may be insolvent or deemed to be insolvent
pursuant to the provisions of the Insolvency Act 1986 or any
analogous provisions under any foreign law as at the date of
any payment made by such Chargor to the Collateral Agent (or
any Beneficiary); or
(ii) that any payment, security or other disposition made by any
Chargor may be avoided or may require to be restored due to
insolvency, liquidation or some other event affecting such
Chargor,
the Collateral Agent shall be at liberty to retain the security
contained in or created pursuant to this Security Agreement until the
expiry of a period of one month plus such statutory period within which
any assurance, security, guarantee or payment can be avoided or
invalidated after the payment and discharge in full of all Security
Liabilities notwithstanding any release, settlement, discharge or
arrangement which may be given or made by the Collateral Agent on, or
as a consequence of, such payment or discharge of liability.
(b) If at any time within such period referred to in Clause 11.3(a) above,
a petition shall be presented to a competent court for an order for the
winding-up or the making of an administration order in respect of such
Chargor, or such Chargor shall commence to be wound up or to go into
administration or any analogous proceedings shall be commenced by or
against such Chargor, the Collateral Agent shall be at liberty to
continue to retain such security for such further period as it may
determine and such security shall be deemed to continue to have been
held as security for the payment and discharge to the Collateral Agent
of all Secured Liabilities.
11.4 Concession or compromise of claims
In exercising its rights under Clauses 11.2 and 11.3 above, the Collateral Agent
may concede or compromise any claim that any payment, security or other
disposition is liable to avoidance or restoration.
11.5 Waiver of defences
(a) The liability of each Chargor under this Security Agreement and the
security intended to be created by or pursuant to this Security
Agreement will not be affected by any act, omission, circumstance,
matter or thing which but for this provision would release or prejudice
any of its obligations under this Security Agreement or prejudice or
diminish such obligations in whole or in part, including without
limitation and whether or not known to any other Chargor, any
Beneficiary or any other person whatsoever:
(i) any time, indulgence or waiver granted to, or composition
with, any Chargor or any other person; or
(ii) the release of any other Chargor or any other person under the
terms of any composition or arrangement with any creditor of
any Chargor (or direct or indirect holding company of any
Chargor); or
(iii) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect or take up or
enforce any rights or remedies against, or any security over
assets of, any Chargor or any other person or any
non-presentment or non-observance of any formality or other
requirement in respect of any instruments or any failure to
realise the full value of any other security; or
(iv) any legal limitation, disability, incapacity or lack of
powers, authority or legal personality of or dissolution or
change in the members or status of or other circumstance
relating to, any Chargor or any other person; or
(v) any variation (however fundamental and whether or not
involving any increase in the liability of any Chargor under
it) or replacement of a Loan Document or any other document or
security so that references to that Loan Document or other
documents or security in this Security Agreement shall include
each such variation or replacement; or
(vi) any unenforceability, illegality, invalidity or frustration of
any obligation of any Chargor or any other person under any
Loan Document or any other document or security, or any
failure of any other Chargor or proposed Chargor to become
bound by the terms of any Loan Document, in each case whether
through any want of power or authority or otherwise; or
(vii) any postponement, discharge, reduction, non-provability or
other similar circumstance affecting any obligation of any
Chargor under a Loan Document resulting from any insolvency,
liquidation or dissolution proceedings or from any law,
regulation or order, this Security Agreement being construed
as if there were no such circumstance,
to the intent that each Chargor's obligations under this Security
Agreement shall remain in full force, and this Security Agreement be
construed accordingly, as if there were no such circumstance, act,
variation, limitation, omission, unenforceability, illegality, matter
or thing.
(b) For the avoidance of doubt, each Chargor shall be bound by this
Security Agreement notwithstanding the fact that not all of the other
members of the Group may have executed this Security Agreement and/or
any of the other Security Documents
required by the terms of the Loan Documents to be entered into by it or
that any such document which has been entered into may be invalid,
unenforceable or otherwise ineffective.
11.6 Immediate recourse
Each Chargor waives any right it may have of first requiring any Beneficiary to
proceed against or enforce any other rights or security before enforcing the
security constituted by this Security Agreement.
11.7 Appropriations
Upon and after the occurrence of an Enforcement Event and until all the Secured
Liabilities have been unconditionally and irrevocably paid and discharged in
full, each Beneficiary may:
(a) refrain from applying or enforcing any other monies, security or rights
held or received by it in respect of the Secured Liabilities or apply
and enforce the same in such manner and order as it sees fit (whether
against the Secured Liabilities or otherwise) and no Chargor shall be
entitled to the benefit of the same; and
(b) hold in a suspense account any monies received from any Chargor or on
account of any Chargor's liability in respect of the Secured
Liabilities. Amounts standing to the credit of any such suspense
account shall bear interest at a rate reasonably considered by such
Beneficiary to be a fair market rate.
11.8 Non-competition
Until all the Secured Liabilities have been unconditionally and irrevocably paid
and discharged in full no Chargor shall, by virtue of any payment made, security
realised or monies received or recovered under any Loan Document for or on
account of the liability of any other Chargor(s), unless the Collateral Agent
directs it to do so after an Enforcement Event has occurred:
(a) be subrogated to any rights, security or monies held, received or
receivable by any Beneficiary or be entitled to any right of
contribution or indemnity; or
(b) claim, rank, prove or vote as a creditor of any Chargor or its estate
in competition with any Beneficiary; or
(c) receive, claim or have the benefit of any payment, distribution or
security from or on account of any Chargor, or exercise any right of
set-off as against any Chargor.
Each Chargor will hold in trust for and promptly pay or transfer to the
Collateral Agent (acting as agent and trustee as aforesaid) any payment or
distribution or benefit of security received by it contrary to the above. If any
Chargor exercises any right of set-off contrary to the above, it will promptly
pay an amount equal to the amount set off to the Collateral Agent (acting as
agent and trustee for the Beneficiaries).
11.9 Security held by Chargor
No Chargor will without the prior written consent of the Collateral Agent hold
any security from any other Chargor in respect of such Chargor's liability under
this Security Agreement. Each Chargor will hold any security held by it in
breach of this provision on trust for the Collateral Agent (as agent and trustee
for the Beneficiaries).
12. OTHER SECURITY, ETC.
12.1 Additional security/non-merger
This Security Agreement is in addition to and shall not be merged in and is not
in any way excluded or prejudiced by any other security now or hereafter held by
any Beneficiary in respect of the Secured Liabilities or any other amount due by
any Chargor to any Beneficiary.
12.2 Power of consolidation
Section 93 of the 1925 Act (restricting the right of consolidation) shall not
apply to this security.
12.3 New accounts/ruling off
(a) If for any reason the security constituted by this Security Agreement
ceases to be a continuing security in respect of any Chargor (other
than by way of discharge of such security), whether as a result of the
Collateral Agent or any Beneficiary receiving or being deemed to be
affected by notice (actual or constructive) of any subsequent Security
Interest affecting any part of the Security Assets and/or the proceeds
of sale of such Security Assets or otherwise, then the Collateral Agent
or any Beneficiary (as the case may be) may open a new account or
accounts or continue any existing account with such Chargor and the
liability of each Chargor in respect of the Secured Liabilities
relating to such Chargor at the date of such cessation shall remain
regardless of any payments in or out of any such account.
(b) If the Collateral Agent or any Beneficiary (as the case may be) 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 Collateral Agent
or such Beneficiary (as the case may be) 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 Security Agreement is
security.
12.4 Redemption, etc. of prior Security Interests
If there are any Security Interests having priority to the security contained in
or intended to be created by or pursuant to this Security Agreement in respect
of all or any part of the Security Assets then:
(a) if any proceedings or steps are being taken to exercise or enforce any
powers or remedies conferred by such prior Security Interest against
the Security Assets, the Collateral Agent or any Receiver may (but
without prejudice to any rights the Collateral Agent or the Receiver
may have under statute) redeem such prior charge or procure the
transfer of such prior charge to itself or himself, as the case may be,
and may settle and pass the accounts of the prior chargee and any
account so settled and passed shall be conclusive and binding on the
relevant Chargor(s) and the principal, interest, costs, charges and
expenses of and incidental to such redemption or transfer shall be paid
by the relevant Chargor(s) to the Collateral Agent on demand with
interest in accordance with Clause 2.2 (Interest) and, until payment,
the Security Assets shall stand secured with the amount to be so paid;
and
(b) all the powers, authorities and discretions conferred by a prior charge
upon the chargee or any receiver under such prior charge shall be
exercisable by the Collateral Agent or a Receiver in like manner as if
the same were expressly included herein and
the Collateral Agent or a Receiver shall be entitled to exercise all
the powers, authorities and discretions of an administrative receiver,
receiver, manager or receiver and manager appointed under such prior
charge.
13. FURTHER ASSURANCES
13.1 General
(a) Each Chargor shall at its own expense execute and do all such
assurances, acts and things (including, but not limited to, making all
filings and registrations necessary for the creation, perfection,
protection or maintenance of any security created or intended to be
created by or pursuant to this Security Agreement) as the Collateral
Agent may require for perfecting or protecting the security intended to
be created by or pursuant to this Security Agreement over the Security
Assets or any part of the Security Assets or for facilitating (if and
when this security becomes enforceable) the realisation of the Security
Assets or any part of the Security Assets and in the exercise of all
powers, authorities and discretions vested in the Collateral Agent or
any Receiver of the Security Assets or any part of the Security Assets
or in any such delegate or sub-delegate as aforesaid.
(b) To that intent, each Chargor shall in particular execute all transfers,
conveyances, assignments and assurances of such property whether to the
Collateral Agent or to its nominees and give all notices, orders and
directions and make all registrations that the Collateral Agent may
think expedient.
13.2 Further security
Subject to Clause 13.3 (Consents), each Chargor will promptly at the request of
the Collateral Agent:
(a) where provided for in this Security Agreement or in any Loan Document;
and/or
(b) at any time after notifying the Collateral Agent of:
(i) the acquisition of any Material Real Property; and/or
(ii) the acquisition or creation of any Accounts Receivables;
and/or
(iii) the application to register any Intellectual Property Rights,
the acquisition of any registered Intellectual Property Rights
and/or any material unregistered Intellectual Property Rights
and/or the creation by it of any new material unregistered
Intellectual Property Rights in each case as required by
Section 7.01(r) of the Financing Agreement; and/or
(c) at any time after an Enforcement Event has occurred,
as continuing security for the payment, discharge and performance of all Secured
Liabilities at any time owed or due to the Beneficiaries (or any of them)
execute a legal mortgage, Standard Security, Assignation of Rents, charge or
assignment in favour of the Collateral Agent (as agent and trustee for the
Beneficiaries) over:
(i) any such Material Real Property;
(ii) any such Accounts Receivable; and
(iii) to the extent considered material by the Collateral Agent
acting reasonably, any such Intellectual Property Rights
notified pursuant to Section 7.01(r) of the Financing
Agreement,
in each case acquired or entered into (as the case may be) after the date of
this Security Agreement, in such form as the Collateral Agent may reasonably
require but containing terms no more onerous than those in this Security
Agreement other than:
(A) any Standard Security, which shall be substantially in the
form of Schedule 7, or Assignation of Rents in respect of any
Scottish Property; and
(B) to the extent considered material by the Collateral Agent
acting reasonably, any such Intellectual Property Rights
notified pursuant to Section 7.01(r) of the Financing
Agreement, which may be charged by way of first fixed charge
or legal mortgage. To the extent that any such Intellectual
Property Rights are not capable of being charged, whether by
reason of lack of any third party consent which is required,
or otherwise) the relevant Chargor shall assign and agrees to
assign in favour of the Collateral Agent (as agent and trustee
for the Beneficiaries) all its right, title and interest (if
any) in and to any and all damages, compensation,
remuneration, profit, rent, fees, royalties or income which
any Chargor may derive from such Intellectual Property Rights
or be awarded or entitled to in respect of such Intellectual
Property Rights. Upon receipt of a notice requesting the grant
of security pursuant to this provision, such Chargor shall
deliver (or procure delivery) to the Collateral Agent, and the
Collateral Agent shall be entitled to hold and retain, all
deeds, certificates and other documents of title relating to
such Intellectual Property Rights as are identified in such
notice.
13.3 Consents
Each Chargor shall procure that any third party consents required to effect a
legal mortgage, Standard Security, Assignation of Rents, charge or assignment by
way of security of any asset, right, interest, undertaking and/or property (as
contemplated in Clause 13.2 (Further Security)) are obtained unconditionally
prior to (or simultaneously with) the acquisition of such asset, right,
interest, undertaking and/or property (using, where applicable, the form of
consent in Schedule 4 Part C).
13.4 Further Subsidiaries
(a) Each Chargor undertakes to ensure that each Subsidiary which is
required to grant security pursuant to Section 7.01(b) (Additional
Guaranties and Collateral Security) of the Financing Agreement,
promptly executes a Deed of Accession substantially in the form set out
in Schedule 6 and such company shall on the date on which such Deed of
Accession is executed by it become a party to this Security Agreement
in the capacity of a Chargor and this Security Agreement shall be read
and construed for all purposes as if such company had been an original
party to this Security Agreement as a Chargor (but for the avoidance of
doubt the security created by such company shall be created on the date
of the Deed of Accession). The Collateral Agent is authorised to agree
any amendments or change to the form or manner in which any such
Subsidiary gives such security which is in the opinion of the
Collateral Agent necessary in order that such security may lawfully be
given.
(b) The Administrative Borrower shall procure that all registrations or
other steps necessary to perfect or protect any security created
pursuant to any Deed of Accession are completed promptly after the date
of such Deed of Accession and in any event within any applicable time
limit stipulated by the Collateral Agent.
14. POWER TO REMEDY
(a) In case of any default by any Chargor in observing or punctually
performing any of its obligations to the Collateral Agent or any
Beneficiary, whether under this Security Agreement or otherwise, the
Collateral Agent may serve notice on the relevant Chargor to remedy
such default in an appropriate manner forthwith or within such longer
period as may be specified in such notice.
(b) If such default is not remedied to the satisfaction of the Collateral
Agent forthwith or within such longer period as may be specified in
such notice:
(i) in the case of a default affecting any Mortgaged Property,
such Chargor will permit the Collateral Agent or its agents
and contractors to enter on the Mortgaged Property and to
comply with or object to any notice served on such Chargor in
respect of the Mortgaged Property and to effect such repairs
or insurance or generally do such things or pay all such
costs, charges and expenses as the Collateral Agent may
consider reasonably necessary or desirable to prevent or
remedy any breach of covenant or stipulation or to comply with
or object to any notice; and
(ii) in the case of any other default, the Collateral Agent shall
have power but shall not be obliged, on behalf of or in the
name of the relevant Chargor or otherwise, to perform the
obligation and to take any steps which the Collateral Agent
may, in its absolute discretion, consider appropriate with a
view to remedying or mitigating the consequences of the
failure, but so that the exercise of this power, or the
failure to exercise it, shall in no circumstances prejudice
the Collateral Agent's rights under this Security Agreement.
(c) Each Chargor will indemnify and keep the Collateral Agent indemnified
against all losses, costs, charges and expenses incurred in connection
with the exercise of the powers contained in this Clause 14 (Power to
Remedy).
15. ENFORCEMENT OF SECURITY
15.1 Amounts due
The Secured Liabilities shall be deemed to have become due and payable on the
date of this Security Agreement for the purposes of section 101 of the 1925 Act
and the power of sale and other powers conferred by section 101 of the 1925 Act
(as varied or extended by this Security Agreement) and all other powers shall be
deemed to arise immediately after execution of this Security Agreement.
15.2 Power of sale
Section 103 of the 1925 Act (restricting the exercise of the power of sale)
shall not apply to this security.
15.3 When security becomes enforceable
The security constituted by this Security Agreement shall become immediately
enforceable and the powers referred to in Clause 15.1 (Amounts due) shall be
immediately exercisable following the occurrence of an Enforcement Event or at
any time thereafter whilst the same is continuing or on the appointment of a
Receiver.
15.4 Manner of enforcement
After the security constituted by this Security Agreement has become
enforceable, the Collateral Agent may in its absolute discretion enforce all or
any part of such security in such manner as it sees fit or as the Required
Lenders direct and shall not be liable to any Chargor for any loss arising from
any omission on its part to take any steps to enforce such security or for the
manner in which it enforces or refrains from enforcing any such security.
15.5 Powers of leasing
The statutory powers of leasing conferred on the Collateral Agent shall be
extended so as to authorise the Collateral Agent to lease, make agreements for
leases, surrender, rescind or agree or accept surrenders of leases and grant
options on such terms and in such manner as the Collateral Agent in its absolute
discretion shall think fit or otherwise in the exercise of powers or authorities
pursuant to Clause 17.2(b)(ix) (Leases, etc.) as applied by Clause 17.8
(Collateral Agent may exercise) and without the need to comply with any of the
provisions of sections 99 and 100 of the 1925 Act.
15.6 Contingencies
(a) If the Collateral Agent enforces the security constituted by this
Security Agreement (whether by the appointment of a Receiver or
otherwise) at a time when no amounts are due under the Loan Documents
(but at a time when amounts may become so due), the Collateral Agent
(or such Receiver) may pay the proceeds of any recoveries effected by
it into such number of interest bearing Realisations Accounts as it
considers appropriate.
(b) The Collateral Agent (or such Receiver) may (subject to the payment of
any claims having priority to this security) withdraw amounts standing
to the credit of the Realisations Accounts to:
(i) meet all costs, charges and expenses incurred and payments
made by the Collateral Agent (or such Receiver or) in the
course of such enforcement;
(ii) pay remuneration to the Receiver as and when the same becomes
due and payable; and
(iii) meet amounts due and payable under the Loan Documents,
in each case, together with interest thereon (as well after as before
judgment and payable on demand) at the Default Rate from the date the
same become due and payable until the date the same are unconditionally
and irrevocably paid and discharged in full provided that like interest
payable under any of the Loan Documents should not be double counted.
(c) No Chargor will be entitled to withdraw all or any monies (including
interest) standing to the credit of any Realisations Account until the
expiry of the Security Period.
16. ADMINISTRATOR
16.1 Appointment of Administrator
(a) Subject to the Insolvency Act 1986, at any time and from time to time
after this security becomes enforceable, or if any Chargor so requests
the Collateral Agent in writing from time to time, the Collateral Agent
may appoint any one or more qualified persons to be an Administrator of
any of the Chargor(s), to act together or independently of the other or
others appointed (to the extent applicable).
(b) Any such appointment may be made pursuant to an application to court
under paragraph 12 of Schedule B1 of the Insolvency Act 1986
(Administration application) or by filing specified documents with the
court under paragraphs 14 - 21 of Schedule B1 of the Insolvency Act
1986 (Appointment of administrator by holder of floating charge).
(c) In this clause qualified person means a person who, under the
Insolvency Act 1986, is qualified to act as an Administrator of any
company with respect to which he is appointed.
17. RECEIVER
17.1 Appointment of Receiver
(a) Subject to the Insolvency Act 1986, at any time after this security
becomes enforceable, or if any Chargor so requests the Collateral Agent
in writing at any time, the Collateral Agent may without further notice
appoint under seal or in writing under its hand any one or more
qualified persons to be a Receiver of all or any part of the Security
Assets, to act together or independently of the other or others
appointed to the extent applicable.
(b) In this clause qualified person means a person who, under the
Insolvency Act 1986, is qualified to act as a receiver of the property
of any company with respect to which he is appointed or (as the case
may require) an administrative receiver of any such company.
17.2 Powers of Receiver
(a) Every Receiver appointed in accordance with Clause 17.1 (Appointment of
Receiver) shall have and be entitled to exercise all of the powers set
out in Clause 17.2(b) below in addition to those conferred by the 1925
Act on any receiver appointed under the 1925 Act. If at any time there
is more than one Receiver of all or any part of the Security Assets,
each such Receiver may (unless otherwise stated in any document
appointing him) exercise all of the powers conferred on a Receiver
under this Security Agreement individually and to the exclusion of each
other Receiver.
(b) The powers referred to in the first sentence of Clause 17.1(a) above
are:
(i) Take possession: to take immediate possession of, get in and
collect the Security Assets or any part of the Security Assets
whether accrued before or after the date of his appointment;
(ii) Carry on business: to carry on or manage the business of such
Chargor as he may think fit or to concur in or authorise the
management of, or appoint a manager of the whole or any part
of the business of such Chargor;
(iii) Protection of assets: to make and effect all repairs,
alterations, improvements, replacements, developments,
demolitions and insurances (including indemnity insurance and
performance bonds and guarantees) and do all other acts which
such Chargor might do in the ordinary conduct of its business
as well for the protection as for the improvement of the
Security Assets and to commence and/or complete any building
operations on the Mortgaged Property and to apply for and
maintain any planning permissions, building regulation
approvals and any other permissions, consents or licences, in
each case as he may in his absolute discretion think fit or
concur in any of the foregoing;
(iv) Employees: to appoint and discharge managers, officers,
agents, accountants, servants, workmen and other advisers for
the purposes of this Security Agreement upon such terms as to
remuneration or otherwise as he may think proper and to
discharge any such persons appointed by any such Chargor;
(v) Borrow money: for the purpose of exercising any of the powers,
authorities and discretions conferred on him by or pursuant to
this Security Agreement and/or of defraying any costs,
charges, losses or expenses (including his remuneration) which
shall be incurred by him in the exercise of such powers,
authorities and discretions or for any other purpose, to raise
and borrow money either unsecured or on the security of the
Security Assets or any part of the Security Assets either in
priority to the security constituted by this Security
Agreement or otherwise and generally on such terms and
conditions as he may think fit and no person lending such
money shall be concerned to enquire as to the propriety or
purpose of the exercise of such power or to see to the
application of any money so raised or borrowed;
(vi) Sell business: to sell or concur in selling the whole or any
part of any Chargor's business whether as a going concern or
otherwise;
(vii) Sell assets: to sell, exchange, grant options to purchase,
license, surrender, release, disclaim, abandon, return or
otherwise dispose of, convert into money or realise all or any
part of the Security Assets (including, without limitation, to
sell any of the Mortgaged Property) by public auction or
private contract and generally in such manner and on such
terms as he shall think proper or to concur in any such
transaction. Without prejudice to the generality of the
foregoing he may do any of these things for a consideration
consisting of cash, debentures or other obligations, shares,
stock or other valuable consideration and any such
consideration may be payable in a lump sum or by instalments
spread over such period as he may think fit. Fixtures, other
than landlords' fixtures, may be severed and sold separately
from the property containing them without the consent of the
relevant Chargor;
(viii) Acquire assets: for such consideration and on such terms as he
may think fit, to purchase outright or acquire by leasing,
hiring, licensing or otherwise, any land, buildings, plant,
equipment, vehicles or materials or any other property, assets
or rights of any description which he considers necessary or
desirable for the carrying on, improvement or realisation of
any of the Security Assets or the business of any Chargor or
otherwise for the benefit of the Security Assets;
(ix) Leases, etc.: to grant or agree to grant any leases whatsoever
and let on charter, sub-charter, hire, lease or sell on
condition and to grant rights, options, licences or easements
over all or any part of the Security Assets for such term and
at such rent (with or without a premium) as he may think
proper and to rescind, surrender and accept or agree to accept
a surrender or irritation of any lease or tenancy of such
Security Assets or agree to any variation of any such contract
affecting all or any part of the Security Assets on such terms
as he may think fit (including the payment of money to a
lessee or tenant on a surrender or any rent review);
(x) Uncalled capital: to call up or require the directors of any
Chargor to call up all or any portion of the uncalled capital
for the time being of such Chargor and to enforce payment of
any call by action (in the name of such Chargor or the
Receiver as may be thought fit);
(xi) Compromise: to negotiate, settle, adjust, refer to
arbitration, compromise, abandon and arrange any claims,
accounts, disputes, questions and demands with or by any
person who is or claims to be a creditor of such Chargor or
relating in any way to the Security Assets or any part of
them;
(xii) Legal actions: to bring, prosecute, enforce, defend and
abandon all such actions, suits and proceedings in relation to
the Security Assets or any part of them as may seem to him to
be expedient;
(xiii) Receipts: to give valid receipts for all monies and execute
all assurances and things which may be proper or desirable for
realising the Security Assets;
(xiv) Subsidiaries, etc.: to form a subsidiary or subsidiaries of
such Chargor and transfer to any such subsidiary or any other
company or body corporate, whether or not formed for the
purpose, all or any part of the Security Assets;
(xv) Powers, discretions, etc.: to exercise any powers,
discretions, voting, conversion or other rights or
entitlements in relation to any of the Security Assets or
incidental to the ownership of or rights in or to any Security
Assets and to complete or effect any transaction entered into
by any Chargor and complete, disclaim, abandon or modify all
or any of the outstanding contracts or arrangements of any
Chargor relating to or affecting all or any part of the
Security Assets;
(xvi) Powers of administrative receiver: to exercise all powers as
are described in schedule 1 to the Insolvency Act 1986,
whether or not the Receiver is an administrative receiver as
defined in the Insolvency Act 1986; and
(xvii) General powers: to do all such other acts and things as he may
consider desirable or necessary for realising the Security
Assets or any part of them or incidental or conducive to any
of the matters, powers or authorities conferred
on a Receiver under or by virtue of this Security Agreement,
to exercise in relation to the Security Assets or any part of
them all such powers, authorities and things as he would be
capable of exercising if he were the absolute beneficial owner
of them,
and to use the name of any Chargor for all or any of such purposes.
17.3 Removal
The Collateral Agent may from time to time by writing under its hand (subject to
any requirement for an order of the court in the case of an administrative
receiver) 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.
17.4 Remuneration
(a) The Collateral Agent may from time to time, subject to section 36 of
the Insolvency Act 1986, fix the remuneration of any Receiver appointed
by it (which remuneration may be or include a commission calculated by
reference to the gross amount of all monies received or otherwise and
may include remuneration in connection with claims, actions or
proceedings made or brought against the Receiver by any Chargor or any
other person or the performance or discharge of any obligation imposed
upon him by statute or otherwise) but such remuneration shall be
payable by such Chargor alone, and sections 109(6) and (8) of the 1925
Act shall not apply in relation to any Receiver appointed under this
Security Agreement; and
(b) the amount of such remuneration may be debited by the Collateral Agent
to any account of such Chargor, but shall, in any event, form part of
the Secured Liabilities and accordingly be secured on the Security
Assets under the security contained in this Security Agreement.
17.5 Extent of appointment
The exclusion of any Security Assets from the appointment of the Receiver shall
not preclude the Collateral Agent from subsequently extending his or their
appointment (or that of the Receiver replacing him or them) to that part or
appointing another Receiver over any other part of the Security Assets.
17.6 No liability as mortgagee in possession/heritable creditor
The Collateral Agent shall not, nor shall any Receiver appointed as aforesaid,
by reason of it or the Receiver entering into possession of the Security Assets
or any part of them, be liable to account as mortgagee or heritable creditor in
possession or be liable for any loss on realisation or for any default or
omission for which a mortgagee or heritable creditor in possession might be
liable.
17.7 Agent of relevant Chargor
(a) Every Receiver duly appointed by the Collateral Agent under the powers
in that respect contained in this Security Agreement shall be deemed to
be the agent of the relevant Chargor for all purposes and shall as such
agent for all purposes be deemed to be in the same position as a
Receiver duly appointed by a mortgagee or heritable creditor under the
1925 Act.
(b) The relevant Chargor alone shall be responsible for the contracts,
engagements, acts, omissions, defaults and losses of the Receiver and
for liabilities incurred by the Receiver and neither the Collateral
Agent nor any Beneficiary shall incur any liability for them (either to
any other Chargor or to any other person whatsoever) by reason of the
Collateral Agent appointing such Receiver or for any other reason
whatsoever.
17.8 Collateral Agent may exercise
To the fullest extent permitted by law, all or any of the powers, authorities
and discretions which are conferred by this Security Agreement (either expressly
or impliedly) upon a Receiver of the Security Assets may be exercised after the
security created under this Security Agreement becomes enforceable by the
Collateral Agent in relation to the whole of such Security Assets or any part of
them without first appointing a Receiver of such property or any part of it or
notwithstanding the appointment of a Receiver of such property or any part of
it.
18. DELEGATION BY COLLATERAL AGENT
The Collateral Agent or any Receiver appointed under this Security Agreement may
at any time and from time to time delegate by power of attorney or in any other
manner to any properly qualified person or persons all or any of the powers,
authorities and discretions which are for the time being exercisable by the
Collateral Agent or such Receiver under this Security Agreement in relation to
the Security Assets or any part of them. Any such delegation may be made upon
such terms (including power to sub-delegate) and subject to such regulations as
the Collateral Agent or such Receiver may think fit. The Collateral Agent or
such Receiver or shall not be in any way liable or responsible to any Chargor
for any loss or damage arising from any act, default, omission or misconduct on
the part of any such delegate or sub-delegate.
19. POWER OF ATTORNEY
19.1 Appointment
Each Chargor by way of security and to secure the performance of its obligations
under this Security Agreement and under the other Loan Documents irrevocably
appoints the Collateral Agent and every Receiver of the Security Assets or any
part of them appointed under this Security Agreement and every such delegate or
sub-delegate as aforesaid to be its attorney acting severally, and on its behalf
and in its name or otherwise, after the occurrence of an Enforcement Event or
where any Chargor has failed to perform any of its obligations under Clause 13
(Further Assurances):
(a) to execute and do all such assurances, acts and things which such
Chargor is required to do and fails to do under the covenants and
provisions contained in this Security Agreement (including, without
limitation, to make any demand upon or to give any notice or receipt to
any person owing monies to such Chargor and to execute and deliver any
charges, legal mortgages, standard securities, assignments or other
security and any transfers of securities);
(b) generally in its name and on its behalf to exercise all or any of the
powers, authorities and discretions conferred by or pursuant to this
Security Agreement or by statute on the Collateral Agent or any such
Receiver, delegate or sub-delegate; and
(c) (without prejudice to the generality of the foregoing) to seal and
deliver and otherwise perfect any deed, assurance, agreement,
instrument or act which it or he may
reasonably deem proper in or for the purpose of exercising any of such
powers, authorities and discretions or so as to vest any Security Asset
in any purchaser or other person with whom the Collateral Agent or (as
the case may be) such Receiver is dealing.
19.2 Ratification
Each Chargor ratifies and confirms and agrees to ratify and confirm whatever any
such attorney as is mentioned in Clause 19.1 (Appointment) shall do or purport
to do in the exercise or purported exercise of all or any of the powers,
authorities and discretions referred to in such Clause 19.1 (Appointment).
20. APPLICATION OF PROCEEDS
20.1 Right of appropriation
Upon the occurrence of an Enforcement Event, the Collateral Agent shall be
entitled to appropriate monies and/or assets to discharge any outstanding
Secured Liabilities in such manner or order as it sees fit (subject to Clause
20.2 (Application)) and any such appropriation shall override any appropriation
by any Chargor. This Clause 20.1 (Right of appropriation) shall not, however,
override the principle that (subject to Clause 20.2 (Application)) the
Beneficiaries are to share in recoveries on a pro rata basis.
20.2 Application
Any monies received by the Collateral Agent or by any Receiver appointed by it
pursuant to this Security Agreement and/or under the powers conferred by this
Security Agreement shall, after the security constituted by this Security
Agreement shall have become enforceable but subject to the payment of any claims
having priority to this security and to the Collateral Agent's and such
Receiver's rights under Clauses 15.6 (Contingencies), and 17.2 (Powers of
Receiver), be applied by the Collateral Agent for the following purposes and,
unless otherwise determined by the Collateral Agent or such Receiver or
Administrator (as applicable), in the following order or priority (but without
prejudice to the right of the Collateral Agent or any Beneficiary to recover any
shortfall from any Chargor):
(a) in satisfaction of or provision for all costs, charges and expenses
incurred and payments made by the Collateral Agent or any Receiver
appointed under this Security Agreement and of all remuneration due
under this Security Agreement;
(b) in or towards payment of the Secured Liabilities or such part of them
as is then due and payable; and
(c) in payment of the surplus (if any) to any Chargor or other person
entitled to it.
20.3 Receiver's receipts
Sections 109(6) and (8) of the 1925 Act shall not apply in relation to a
Receiver appointed under this Security Agreement.
21. PROTECTION OF THIRD PARTIES
21.1 Enquiry
No purchaser, mortgagee, heritable creditor or other person or company dealing
with the Collateral Agent or the Receiver or its or his agents shall be
concerned to enquire whether the Secured Liabilities have become payable or
whether any power which the Receiver is purporting to exercise has become
exercisable or whether any money remains due under this Security Agreement or
the other Loan Documents or to see to the application of any money paid to the
Collateral Agent or to such Receiver or and the protections contained in
sections 104 to 107 of the 1925 Act shall apply to any person purchasing from or
dealing with a Receiver or the Collateral Agent.
21.2 Receipts
The receipt of the Collateral Agent or the Receiver shall be an absolute and a
conclusive discharge to a purchaser and shall relieve him of any obligation to
see to the application of any monies paid to or by the direction of the
Collateral Agent or the Receiver.
21.3 Construction
In Clauses 21.1 (Enquiry) and 21.2 (Receipts), purchaser includes any person
acquiring any lease of or Security Interest over, or any other interest or right
whatsoever in relation to the Security Assets.
22. EXPENSES AND INDEMNITIES
22.1 Undertaking to pay costs, charges and expenses
All costs, charges and expenses incurred and all payments made by the Collateral
Agent or any Receiver appointed under this Security Agreement, and all
remuneration payable to the Collateral Agent or any Receiver, in each case in
the lawful exercise of the powers conferred by this Security Agreement whether
or not occasioned by any act, neglect or default of any Chargor, shall be
payable by the Chargors on demand. All such costs, charges, expenses, payments
and remuneration shall be paid and charged as between the Collateral Agent and
the Chargor or any of them on the basis of a full indemnity and not on the basis
of party and party or any other kind of taxation.
22.2 Indemnity
The Beneficiaries and every Receiver, attorney, manager, agent or other person
appointed by the Collateral Agent under this Security Agreement shall be
entitled to be indemnified out of the Security Assets in respect of all
liabilities and expenses properly incurred by them in the execution or purported
execution of any of the powers, authorities or discretions vested in them
pursuant to this Security Agreement and against all actions, proceedings, costs,
claims and demands in respect of any matter or thing done or omitted in any way
relating to the Security Assets and the Beneficiaries and any such Receiver may
retain and pay all sums in respect of the same out of any monies received under
the powers conferred by this Security Agreement. Notwithstanding the foregoing
no Beneficiary or Receiver and no person appointed by the Collateral Agent as
aforesaid shall be entitled to be indemnified in respect of any part of the
foregoing which results from such party's negligence or wilful misconduct.
22.3 Currency indemnity
If the Collateral Agent or any Receiver or any Beneficiary suffers or incurs a
loss, cost, liability or expense due to:
(a) it receiving an amount in respect of any Chargor's liability under any
Loan Document; or
(b) such a liability being converted into a claim, proof, judgment, order
or award,
in a currency differing from that in which the amount is expressed to be payable
under the relevant Loan Document, the relevant Chargor shall, as an independent
obligation, indemnify the Collateral Agent or the affected Receiver(s) or
affected Beneficiary(ies) against that loss, cost, liability or expense within
three Business Days of demand.
22.4 Taxes
All sums of whatsoever nature which are payable by any Chargor under this
Security Agreement and which are now or at any time hereafter become subject to
VAT or any similar tax shall be deemed to be exclusive of VAT or any similar tax
and such Chargor in addition to such sums will indemnify the Collateral Agent
from and against all claims and liabilities whatsoever in respect of such VAT or
similar tax.
23. ASSIGNMENTS, ETC.
23.1 Collateral Agent
The Collateral Agent may assign and transfer all of its respective rights and
obligations under this Security Agreement to a replacement Collateral Agent
appointed in accordance with the terms of the Financing Agreement. Upon such
assignment and transfer taking effect, the replacement Collateral Agent shall be
and be deemed to be acting as agent and trustee for each of the Beneficiaries
for the purposes of this Security Agreement in place of the former Collateral
Agent.
23.2 Assignments and transfers
Each Chargor shall be bound by the terms of Section 10.07 (Successor Agents) of
the Financing Agreement and, accordingly, each Chargor, for the purposes of any
transfer pursuant to any of such clauses, irrevocably authorises the Collateral
Agent to execute on its behalf any document required to perfect the security
granted to the Beneficiaries pursuant to the Loan Documents.
23.3 Agency provisions; pro rata sharing
Each Chargor shall be bound by the terms of Section 4.03 (Sharing of Payments,
Etc.) of the Financing Agreement.
24. WAIVERS, REMEDIES CUMULATIVE
(a) The rights of the Collateral Agent and each Beneficiary under this
Security Agreement:
(i) may be exercised as often as necessary;
(ii) are cumulative and not exclusive of its rights under general
law; and
(iii) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a waiver
of that right.
(b) The Collateral Agent may waive any breach by any Chargor of any of such
Chargor's obligations under this Security Agreement.
25. SET-OFF
25.1 Set-off
(a) The Collateral Agent and each Beneficiary may at any time and from time
to time without notice (but shall not be obliged to) set off any
obligation which is due and payable by any Chargor and unpaid (whether
under the Loan Documents or which has been assigned to the Collateral
Agent by any other Chargor under this Security Agreement) against any
obligation (whether or not matured) owed by the Collateral Agent or
such Beneficiary (as the case may be) to such Chargor, regardless of
the place of payment, booking branch or currency of either obligation.
(b) If the obligations are in different currencies, the Collateral Agent or
such Beneficiary (as the case may be) may convert either obligation at
a market rate of exchange in its usual course of business for the
purpose of the set-off.
(c) The Collateral Agent and/or each Beneficiary may in its absolute
discretion estimate the amount of any liability of any Chargor which is
contingent or unascertained and thereafter set off such estimated
amount and no amount shall be payable by the Collateral Agent or any
Beneficiary to any Chargor unless and until all Secured Liabilities
have been ascertained and fully repaid or discharged.
25.2 Time deposits
Without prejudice to Clause 25.1 (Set-Off), if any time deposit matures on any
account which any Chargor has with the Collateral Agent or any Beneficiary at a
time within the Security Period when:
(a) this security has become enforceable; and
(b) no amount of the Secured Liabilities is due and payable;
such time deposit shall automatically be renewed for such further maturity as
the Collateral Agent or such Beneficiary in its absolute discretion considers
appropriate unless the Collateral Agent or such Beneficiary otherwise agrees in
writing.
26. SEVERABILITY
26.1 General
If a provision of this Security Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction in respect of any Chargor, that shall not
affect:
(a) in respect of such Chargor the validity or enforceability in that
jurisdiction of any other provision of this Security Agreement;
(b) in respect of any other Chargor the validity or enforceability in that
jurisdiction of that or any other provision of this Security Agreement;
or
(c) in respect of any Chargor the validity or enforceability in other
jurisdictions of that or any other provision of this Security
Agreement.
26.2 Deemed separate charges
This Security Agreement shall, in relation to each Chargor, be read and
construed as if it were a separate Security Agreement relating to such Chargor
to the intent that if any Security Interest created by any other Chargor in this
Security Agreement shall be invalid or liable to be set aside for any reason,
this shall not affect any Security Interest created under this Security
Agreement by such first Chargor.
27. NOTICES, COMMUNICATIONS AND DEMANDS
27.1 Giving of notices, communications and demands in writing
All notices, communications and demands under, or in connection with, this
Security Agreement shall be given in writing by letter or by fax.
27.2 Service on any Chargor
(a) Any notice, communication or demand addressed to a Chargor and made
under or in connection with this Security Agreement shall, without
prejudice to any other effective mode of making the same, be deemed to
have been properly served on such Chargor if served on any one of its
Directors or its Secretary or delivered or sent to such Chargor at its
registered office or principal place of business for the time being.
(b) Proof of posting or despatch by facsimile of any notice, communication
or demand on a Chargor shall be deemed to be proof of receipt:
(i) in the case of any notice, communication or demand given by
letter which is sent by first-class prepaid letter post and is
posted before the last collection of letters from the letter
box in which it was posted has been made on any day, at 10.00
a.m. on the next succeeding day upon which a delivery of
letters is made; or
(ii) in the case of any notice, communication or demand given by
facsimile, two hours after the time of despatch,
provided, however, that any notice, communication or demand given to a
Chargor in accordance with the provisions set out above but received
either on a non-working day or after business hours in the place of
receipt is deemed to be given on the next working day in that place.
27.3 Service on the Collateral Agent
Any communication or document to be made or delivered to the Collateral Agent
shall be effective only when received by the Collateral Agent and then only if
the same is expressly marked for the attention of the department or officer as
the Collateral Agent shall from time to time specify for this purpose.
27.4 Addresses for notices
The address and facsimile number for each Chargor and the Collateral Agent for
all notices under, or in connection with, this Security Agreement are, in the
case of each Chargor, as set out in Schedule 1 or any Deed of Accession and, in
the case of the Collateral Agent, as set out in Section 12.01 (Notice) of the
Financing Agreement or, as the Administrative Borrower or any Chargor or the
Collateral Agent, as the case may be, may specify after the date of this
Security Agreement for such purpose to others by notice given in accordance with
Clauses 27.1 to 27.3 above.
28. COVENANT TO RELEASE
28.1 General release
Upon the expiry of the Security Period and subject to Clauses 1.2(f)
(Construction of specific terms) and 11.3 (Retention of Charges), the Collateral
Agent and each Beneficiary shall, at the request and cost of the Chargors,
execute and do all such deeds, acts and things as may be necessary to release
the Security Assets from the security constituted by or pursuant to this
Security Agreement.
29. GOVERNING LAW AND JURISDICTION
29.1 Governing law
This Security Agreement shall be governed by and construed in accordance with
English law.
29.2 Jurisdiction
(a) For the benefit of the Collateral Agent and the Beneficiaries, each
Chargor agrees that the courts of England have jurisdiction to settle
any disputes which may arise out of or in connection with this Security
Agreement and that any suit, action or proceedings in connection with
this Security Agreement may be brought in the courts of England and
accordingly irrevocably submits to the jurisdiction of the courts of
England.
(b) The agreement contained in Clause 29.2(a) above is included for the
benefit of the Collateral Agent and the Beneficiaries who shall retain
the right to take proceedings in any other courts (including the courts
of the State of New York to whose jurisdiction each Chargor irrevocably
submits) with jurisdiction. To the extent permitted by law, the
Collateral Agent and the Beneficiaries may take concurrent proceedings
in any number of jurisdictions.
(c) Each Chargor agrees that a judgment or order or any court referred to
in this Clause 29.2 (Jurisdiction) is conclusive and binding and may be
enforced against it in the courts of any other jurisdiction.
(d) Each party irrevocably waives any right it may have to a jury trial of
any action or proceeding in connection with this Security Agreement.
30. THIRD PARTIES
(a) Except as otherwise expressly provided in this Security Agreement, the
terms of this Security Agreement may be enforced only by a party to it
and the operation of the Contracts (Rights of Third Parties) Act 1999
is excluded.
(b) Notwithstanding any term of this Security Agreement, no consent of a
third party is required for any termination or amendment of this
Security Agreement.
31. COUNTERPARTS
This Security Agreement may be executed in any number of counterparts and by the
parties to it on separate counterparts, each of which is an original but all of
which together constitute one and the same instrument.
IN WITNESS whereof this Security Agreement has been duly executed as a deed on
the date first above written.
SIGNATORIES
(to Security Agreement)
The Chargors:
EXECUTED and DELIVERED
as a DEED by ) Director /s/ IAN MILLAR BILL
FOSTER WHEELER ENERGY LIMITED ) Ian Millar Bill
acting by two Directors/a Director ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
and the Secretary )
EXECUTED and DELIVERED
as a DEED by PROCESS INDUSTRIES ) Director /s/ IAN MILLAR BILL
AGENCY LIMITED ) Ian Millar Bill
acting by two Directors/a Director ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ IAN MILLAR BILL
FOSTER WHEELER (INDONESIA) ) Ian Millar Bill
LIMITED acting by two Directors/a )
Director and the Secretary ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
EXECUTED and DELIVERED
as a DEED by ) Director /s/ GEOFFREY JOHN RIMER
FOSTER WHEELER AUTOMATED ) Geoffrey John Rimer
WELDING LIMITED acting by ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
two Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ IAN MILLAR BILL
FOSTER WHEELER ENVIRONMENTAL ) Ian Millar Bill
(UK) LIMITED acting by ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
two Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ IAN MILLAR BILL
FOSTER WHEELER (G.B.) ) Ian Millar Bill
LIMITED acting by two Directors/a ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ IAN MILLAR BILL
FOSTER WHEELER (INDIA) ) Ian Millar Bill
LIMITED acting by two Directors/a ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ GEOFFREY JOHN RIMER
FOSTER WHEELER (NORTHERN) ) Geoffrey John Rimer
LIMITED acting by two Directors/a ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ GEOFFREY JOHN RIMER
FOSTER WHEELER (PACIFIC) ) Geoffrey John Rimer
LIMITED acting by two Directors/a ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by FOSTER WHEELER ) Director /s/ RICHARD JOHN LEAMON
PETROLEUM DEVELOPMENT & ) Richard John Leamon
ASSOCIATES LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ RICHARD JOHN LEAMON
FOSTER WHEELER PETROLEUM ) Richard John Leamon
DEVELOPMENT LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ RICHARD JOHN LEAMON
FOSTER WHEELER PETROLEUM ) Richard John Leamon
DEVELOPMENT (NORWAY) LIMITED ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
acting by two Directors/a Director and )
the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ GEOFFREY JOHN RIMER
FOSTER WHEELER PROCESS ) Geoffrey John Rimer
PLANTS LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ GEOFFREY JOHN RIMER
PROCESS PLANTS SUPPLIERS ) Geoffrey John Rimer
LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ GEOFFREY JOHN RIMER
FOSTER WHEELER SYNFUELS ) Geoffrey John Rimer
LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ GEOFFREY JOHN RIMER
FOSTER WHEELER WORLD ) Geoffrey John Rimer
SERVICES LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ GEOFFREY JOHN RIMER
OPERATIONS INTERNATIONAL ) Geoffrey John Rimer
LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ IAN MILLAR BILL
FW MANAGEMENT OPERATIONS ) Ian Millar Bill
(UK) LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
EXECUTED and DELIVERED
as a DEED by ) Director /s/ RICHARD JOHN LEAMON
INTERNATIONAL MANAGEMENT ) Richard John Leamon
SYSTEMS LIMITED acting by two ) Director / Secretary /s/ NICHOLAS CHRISTOPHER HOLT
Directors/a Director and the Secretary )
The Collateral Agent
EXECUTED and DELIVERED )
as a DEED by ) Managing Director /s/ BEN HUMMEL
SABERASU JAPAN INVESTMENTS II B.V. )
acting by two )
Directors ) Managing Director /s/ JERDEN ZWEERTS