Mr. Z
Address….
Dear Sir,
Re: Project – Duties of BANK 1 in the capacities of Onshore Security Trustee and Onshore Account Bank in relation to the draft Common Terms Agreement dated 31.03.2001.
We have reviewed the draft Common Terms Agreement dated 31.03.2001 in order to ascertain and identify the duties/responsibilities that Citibank may have to bear in its capacities as the Onshore Security Trustee and the Onshore Account Bank. The salient features of the duties/responsibilities under this Agreement are outlined below:
1. Claims of tax
In the event the Onshore Security Trustee is required to make payment of or on account of tax in relation to any sum received or receivable under the Finance Documents or any sum liability arises as stated in Clause 6.2, the Onshore Security Trustee shall make notify the Inter creditor Agent of the event giving rise to the claim: Clause 6.3.
2.
The Secured Parties shall not have any independent power in connection with the enforcement of security except through the Onshore Security Trustee: Clause 2.2.1.
3. Application of the Enforcement Proceeds
Pursuant to Clause 3.1, all moneys received or recovered by the Security Trustee in connection with the enforcement of the Security shall be held by the relevant Trustee on trust to apply them in the following order of priority:
Ø In discharging pro rata any sums owing to each Security Trustee (in its capacity as Trustee), any Receiver or any Delegate;
Ø In payment to the Inter creditor Agent (IA), on behalf of the Creditors for adjustment of the loan liabilities of the Company with the Finance Parties
Ø If none of the Obligors is under no liability under the Finance Documents, in pro rata payment to any person to whom the Security Trustees are obliged to pay in priority to any Obligor;
Ø The balance, if any, in payment to the relevant Obligor.
If the Onshore Security Trustee for any reason whatsoever is unable to make the application of the proceeds in accordance with Clause 3.1, then within [ ] Business days of receipt of such proceeds, the proceeds shall be paid to the Offshore Security Trustee to be converted into US Dollars: Clause 3.2.1.
4. Discharge of Secured Obligations
Any payment to be made in respect of the Secured Obligations by any Security Trustee may be made to the IA on behalf of the Creditors: Clause 3.5.
5. Security Trustee’s Actions
The Onshore Security Trustee shall act only in accordance with the instructions given to it by the IA: Clause 4.1.1.
6. Security Trustee’s actions in respect of enforcement of Security.
Upon receipt by the Onshore Security Trustee of notice from the IA directing such Trustee to exercise all or any of the rights and powers under the Finance Documents, such Security Trustee shall, if so directed by the IA take action to enforce the Security.
7. Security Trustee’s Obligations
Ø Each Security Trustee shall promptly copy to the IA the contents of any notice or document received by it in its capacity as Security Trustee from any Obligor: Clause 4.4.1.
Ø Each Security Trustee shall promptly inform the IA upon its receipt of notice of the occurrence of any Event or any default by the Obligor in the performance under the Finance Documents: Clause 4.4.1.
8. Confidentiality of the Information
Each information received by any division other than its trustee division (deemed to be a separate one) should be considered as confidential: Clause 4.17.
9. Appointment of Successor Trustee
If any Security Trustee gives notice of resignation or is removed, the Majority Lenders may appoint a successor Trustee. The relevant Security Trustee may appoint a successor itself if no such successor trustee is appointed: Clause 5.3.
10. Obligor Accession Deed
The Security Trustee is hereby appointed by the IA and the Secured Parties to receive on its behalf each Obligor Accession Deed and to accept and sign it is complete and appears to be authentic and duly executed: Clause 6.3.
11. Additional Trustees
In the event the Onshore Security Trustee appoints any person to act as a separate trustee or as a co-trustee, it shall give prior notice to the Company and the Intercreditor Agent of any such appointment. The remuneration that the Security Trustee may pay to any such person and any costs and expenses incurred by such person in performing its functions pursuant to that appointment shall be treated as costs and expenses incurred by Such Security Trustee: Clause 7.2.
12. Releases
Upon a disposal of the Charged Property pursuant to enforcement of Security by a Receiver or a Security Trustee, or according to the Finance Documents, the relevant Security Trustee shall (at the cost of the Obligors) release that property from the Security and execute without the need for any further approval/authority from the Secured Parties, any release of the Security and issue any certificate of non-crystallization of floating charge as required/desirable: Clause 10.2.
13. Delivery
Pursuant to Clause 13.2, any communication or document to be made or delivered by one person to another pursuant to this Deed shall (unless that other person has by 15 days’ notice to each Security Trustee (or in the case of any Security Trustee, to the Inter creditor Agent and the Company) be made to such other person:
Ø If by way of fax, to the fax number identified with its signature below (or at the end of the relevant Accession Document or Obligor Accession Deed to which it is a party);
Ø If by way of letter at the address identified with its signature below (or at the end of relevant Accession Document or Obligor Accession Deed to which it is a party).
14. Delivery
In respect of winding up of the Trust according to Clause 14.1, each Security Trustee shall release, without recourse or warranty, all of the Security then held by it and the rights of the Security Trustees under each of the Security Documents: Clause 14.1.
Should you have any query, please do not hesitate to revert back.
Thanking you.
Yours faithfully,
………………….
For: “The Lawyers & Jurists”