Document:

a11-12_ex10point2.htm

Exhibit B

 

VERSION: MAY 2000

 

 

 

 

 

 

 

 

GLOBAL MASTER SECURITIES LENDING AGREEMENT

 

 

 

 

 

 

 

 

CLIFFORD CHANCE

  

  

  

CONTENTS

 

	
1.

	
Applicability

	
1

 

	
2.

	
Interpretation

	
1

 

	
3.

	
Loans Of Securities

	
5

 

	
4.

	
Delivery

	
5

 

	
5.

	
Collateral

	
7

 

	
6.

	
Distributions And Corporate Actions

	
10

 

	
7.

	
Rates Applicable To Loaned Securities And Cash Collateral

	
11

 

	
8.

	
Redelivery Of Equivalent Securities

	
11

 

	
9.

	
Failure To Redeliver

	
13

 

	
10.

	
Set-Off Etc

	
14

 

	
11.

	
Transfer Taxes

	
17

 

	
12.

	
Lender's Warranties

	
17

 

	
13.

	
Borrower's Warranties

	
18

 

	
14.

	
Events Of Default

	
18

 

	
15.

	
Interest On Outstanding Payments

	
19

 

	
16.

	
Transactions Entered Into As Agent

	
19

 

	
17.

	
Termination Of This Agreement

	
21

 

	
18.

	
Single Agreement

	
21

 

	
19.

	
Severance

	
21

 

	
20.

	
Specific Performance

	
22

 

	
21.

	
Notices

	
22

 

	
22.

	
Assignment

	
22

 

	
23.

	
Non-Waiver

	
22

 

	
24.

	
Governing Law And Jurisdiction

	
23

 

	
25.

	
Time

	
23

 

	
26.

	
Recording

	
23

 

	
27.

	
Waiver Of Immunity

	
23

 

	
28.

	
Miscellaneous

	
23

 

	
Schedule

	
25

 

  

  

  

AGREEMENT

 

BETWEEN:

 

DnB NOR Bank ASA ("Party A") a company incorporated under the laws of Norway whose registered office is at Stranden 21, 0021 Oslo acting through a Designated Office; and

 

Siem Industries Inc ("Party B") a company incorporated under the laws of Cayman Islands whose registered office is at P.O.Box 10718 George Town, Grand Cayman, KY1-1006 Cayman Islands acting through a Designated Office.

 

	
1.

	
APPLICABILITY

 

	
1.1

	
From time to time the parties may enter into transactions in which one party ("Lender") will transfer to the other ("Borrower") securities and financial instruments ("Securities") against the transfer of Collateral (as defined in paragraph 2) with a simultaneous agreement by Borrower to transfer to Lender Securities equivalent to such Securities on a fixed date or on demand against the transfer to Borrower by Lender of assets equivalent to such Collateral.

 

	
1.2

	
Each such transaction shall be referred to in this Agreement as a "Loan" and shall be governed by the terms of this Agreement, including the supplemental terms and conditions contained in the Schedule and any Addenda or Annexures attached hereto, unless otherwise agreed in writing.

 

	
1.3

	
Either party may perform its obligations under this Agreement either directly or through a Nominee.

 

	
2.

	
INTERPRETATION

 

	
2.1

	
In this Agreement:-

 

"Act of Insolvency" means in relation to either Party

 

	
  

	
(i)

	
its making a general assignment for the benefit of, or entering into a reorganisation, arrangement, or composition with creditors; or

 

	
  

	
(ii)

	
its stating in writing that it is unable to pay its debts as they become due; or

 

	
  

	
(iii)

	
its seeking, consenting to or acquiescing in the appointment of any trustee, administrator, receiver or liquidator or analogous officer of it or any material part of its property; or

 

	
  

	
(iv)

	
the presentation or filing of a petition in respect of it (other than by the other Party to this Agreement in respect of any obligation under this Agreement) in any court or before any agency alleging or for the bankruptcy, winding-up or insolvency of such Party (or any analogous proceeding) or seeking any reorganisation, arrangement, composition, re-adjustment, administration, liquidation, dissolution

 

  

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or similar relief under any present or future statute, law or regulation, such petition not having been stayed or dismissed within 30 days of its filing (except in the case of a petition for winding-up or any analogous proceeding in respect of which no such 30 day period shall apply); or

 

	
  

	
(v)

	
the appointment of a receiver, administrator, liquidator or trustee or analogous officer of such Party over all or any material part of such Party's property; or

 

	
  

	
(vi)

	
the convening of any meeting of its creditors for the purpose of considering a voluntary arrangement as referred to in Section 3 of the Insolvency Act 1986 (or any analogous proceeding);

 

"Alternative Collateral" means Collateral having a Market Value equal to the Collateral delivered pursuant to paragraph 5 and provided by way of substitution in accordance with the provisions of paragraph 5.3;

 

"Base Currency" means the currency indicated in paragraph 2 of the Schedule;

 

"Business Day" means a day other than a Saturday or a Sunday on which banks and securities markets are open for business generally in each place stated in paragraph 3 of the Schedule and, in relation to the delivery or redelivery of any of the following in relation to any Loan, in the place(s) where the relevant Securities, Equivalent Securities, Collateral or Equivalent Collateral are to be delivered;

 

"Cash Collateral" means Collateral that takes the form of a transfer of currency;

 

"Close of Business" means the time at which the relevant banks, securities exchanges or depositaries close in the business centre in which payment is to be made or Securities or Collateral is to be delivered;

 

"Collateral" means such securities or financial instruments or transfers of currency as are referred to in the table set out under paragraph 1 of the Schedule as being acceptable or any combination thereof as agreed between the Parties in relation to any particular Loan and which are delivered by Borrower to Lender in accordance with this Agreement and shall include Alternative Collateral;

 

"Defaulting Party" shall have the meaning given in paragraph 14;

 

"Designated Office" means the branch or office of a Party which is specified as such in paragraph 4 of the Schedule or such other branch or office as may be agreed to in writing by the Parties;

 

"Equivalent" or "equivalent to" in relation to any Securities or Collateral provided under this Agreement means securities, together with cash or other property(in the case of Collateral) as the case may be, of an identical type, nominal value, description and amount to particular Securities or Collateral, as the case may be, so provided. If and to the extent that such Securities or Collateral, as the case may be, consists of securities that are partly paid or have been converted, subdivided, consolidated, made the subject of a takeover, rights of pre-emption, rights to receive securities or a certificate which may at a future date be exchanged for securities, the expression shall include such securities or

  

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other assets to which Lender or Borrower as the case may be, is entitled following the occurrence of the relevant event, and, if appropriate, the giving of the relevant notice in accordance with paragraph 6.4 and provided that Lender or Borrower, as the case may be, has paid to the other Party all and any sums due in respect thereof. In the event that such Securities or Collateral, as the case may be, have been redeemed, are partly paid, are the subject of a capitalisation issue or are subject to an event similar to any of the foregoing events described in this paragraph, the expression shall have the following meanings:-

 

	
  

	
(a)

	
in the case of redemption, a sum of money equivalent to the proceeds of the redemption;

 

	
  

	
(b)

	
in the case of a call on partly paid securities, securities equivalent to the relevant Loaned Securities or Collateral, as the case may be, provided that Lender shall have paid Borrower, in respect of Loaned Securities, and Borrower shall have paid to Lender, in respect of Collateral, an amount of money equal to the sum due in respect of the call;

 

	
  

	
(c)

	
in the case of a capitalisation issue, securities equivalent to the relevant Loaned Securities or Collateral, as the case may be, together with the securities allotted by way of bonus thereon;

 

	
  

	
(d)

	
in the case of any event similar to any of the foregoing events described in this paragraph, securities equivalent to the Loaned Securities or the relevant Collateral, as the case may be, together with or replaced by a sum of money or securities or other property equivalent to that received in respect of such Loaned Securities or Collateral, as the case may be, resulting from such event;

 

"Income" means any interest, dividends or other distributions of any kind whatsoever with respect to any Securities or Collateral;

 

"Income Payment Date", with respect to any Securities or Collateral means the date on which Income is paid in respect of such Securities or Collateral, or, in the case of registered Securities or Collateral, the date by reference to which particular registered holders are identified as being entitled to payment of Income;

 

"Letter of Credit" means an irrevocable, non-negotiable letter of credit in a form, and from a bank, acceptable to Lender;

 

"Loaned Securities" means Securities which are the subject of an outstanding Loan;

 

"Margin" shall have the meaning specified in paragraph 1 of the Schedule with reference to the table set out therein;

 

"Market Value" means:

 

	
  

	
(a)

	
in relation to the valuation of Securities, Equivalent Securities, Collateral or Equivalent Collateral (other than Cash Collateral or a Letter of Credit):

 

	
  

	
(i)

	
such price as is equal to the market quotation for the bid price of such Securities, Equivalent Securities, Collateral and/or Equivalent Collateral 

 

  

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as derived from a reputable pricing information service reasonably chosen in good faith by Lender; or

 

	
  

	
(ii)

	
if unavailable the market value thereof as derived from the prices or rates bid by a reputable dealer for the relevant instrument reasonably chosen in good faith by Lender,

 

in each case at Close of Business on the previous Business Day or, at the option of either Party where in its reasonable opinion there has been an exceptional movement in the price of the asset in question since such time, the latest available price; plus (in each case)

 

	
  

	
(iii)

	
the aggregate amount of Income which has accrued but not yet been paid in respect of the Securities, Equivalent Securities, Collateral or Equivalent Collateral concerned to the extent not included in such price,

 

(provided that the price of Securities, Equivalent Securities, Collateral or Equivalent Collateral that are suspended shall (for the purposes of paragraph 5) be nil unless the Parties otherwise agree and (for all other purposes) shall be the price of such Securities, Equivalent Securities, Collateral or Equivalent Collateral, as the case may be, as of Close of Business on the dealing day in the relevant market last preceding the date of suspension or a commercially reasonable price agreed between the Parties;

 

	
  

	
(b)

	
in relation to a Letter of Credit the face or stated amount of such Letter of Credit; and

 

	
  

	
(c)

	
in relation to Cash Collateral the amount of the currency concerned;

 

"Nominee" means an agent or a nominee appointed by either Party to accept delivery of, hold or deliver Securities, Equivalent Securities, Collateral and/or Equivalent Collateral or to receive or make payments on its behalf;

 

"Non-Defaulting Party" shall have the meaning given in paragraph 14;

 

"Parties" means Lender and Borrower and "Party" shall be construed accordingly;

 

"Posted Collateral" has the meaning given in paragraph 5.4;

 

"Required Collateral Value" shall have the meaning given in paragraph 5.4;

 

"Settlement Date" means the date upon which Securities are transferred to Borrower in accordance with this Agreement.

 

	
2.2

	
Headings

 

All headings appear for convenience only and shall not affect the interpretation of this Agreement.

 

	
2.3

	
Market terminology

 

  

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Notwithstanding the use of expressions such as "borrow", "lend", "Collateral", "Margin", "redeliver" etc. which are used to reflect terminology used in the market for transactions of the kind provided for in this Agreement, title to Securities "borrowed" or "lent" and "Collateral" provided in accordance with this Agreement shall pass from one Party to another as provided for in this Agreement, the Party obtaining such title being obliged to redeliver Equivalent Securities or Equivalent Collateral as the case may be.

 

	
2.4

	
Currency conversions

 

For the purposes of determining any prices, sums or values (including Market Value, Required Collateral Value, Relevant Value, Bid Value and Offer Value for the purposes of paragraphs 5 and 10 of this Agreement) prices, sums or values stated in currencies other than the Base Currency shall be converted into the Base Currency at the latest available spot rate of exchange quoted by a bank selected by Lender (or if an Event of Default has occurred in relation to Lender, by Borrower) in the London interbank market for the purchase of the Base Currency with the currency concerned on the day on which the calculation is to be made or, if that day is not a Business Day the spot rate of exchange quoted at Close of Business on the immediately preceding Business Day.

 

	
2.5

	
The parties confirm that introduction of and/or substitution (in place of an existing currency) of a new currency as the lawful currency of a country shall not have the effect of altering, or discharging, or excusing performance under, any term of the Agreement or any Loan thereunder, nor give a party the right unilaterally to alter or terminate the Agreement or any Loan thereunder. Securities will for the purposes of this Agreement be regarded as equivalent to other securities notwithstanding that as a result of such introduction and/or substitution those securities have been redenominated into the new currency or the nominal value of the securities has changed in connection with such redenomination.

 

	
2.6

	
Modifications etc to legislation

 

Any reference in this Agreement to an act, regulation or other legislation shall include a reference to any statutory modification or re-enactment thereof for the time being in force.

 

	
3.

	
LOANS OF SECURITIES

 

Lender will lend Securities to Borrower, and Borrower will borrow Securities from Lender in accordance with the terms and conditions of this Agreement. The terms of each Loan shall be agreed prior to the commencement of the relevant Loan either orally or in writing (including any agreed form of electronic communication) and confirmed in such form and on such basis as shall be agreed between the Parties. Any confirmation produced by a Party shall not supersede or prevail over the prior oral, written or electronic communication (as the case may be).

 

	
4.

	
DELIVERY

 

	
4.1

	
Delivery of Securities on commencement of Loan

 

  

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Lender shall procure the delivery of Securities to Borrower or deliver such Securities in accordance with this Agreement and the terms of the relevant Loan. Such Securities shall be deemed to have been delivered by Lender to Borrower on delivery to Borrower or as it shall direct of the relevant instruments of transfer, or in the case of Securities held by an agent or within a clearing or settlement system on the effective instructions to such agent or the operator of such system which result in such Securities being held by the operator of the clearing system for the account of the Borrower or as it shall direct, or by such other means as may be agreed.

 

	
4.2

	
Requirements to effect delivery

 

The Parties shall execute and deliver all necessary documents and give all necessary instructions to procure that all right, title and interest in:

 

	
  

	
(a)

	
any Securities borrowed pursuant to paragraph 3;

 

	
  

	
(b)

	
any Equivalent Securities redelivered pursuant to paragraph 8;

 

	
  

	
(c)

	
any Collateral delivered pursuant to paragraph 5;

 

	
  

	
(d)

	
any Equivalent Collateral redelivered pursuant to paragraphs 5 or 8;

 

shall pass from one Party to the other subject to the terms and conditions set out in this Agreement, on delivery or redelivery of the same in accordance with this Agreement with full title guarantee, free from all liens, charges and encumbrances. In the case of Securities, Collateral, Equivalent Securities or Equivalent Collateral title to which is registered in a computer based system which provides for the recording and transfer of title to the same by way of book entries, delivery and transfer of title shall take place in accordance with the rules and procedures of such system as in force from time to time. The Party acquiring such right, title and interest shall have no obligation to return or redeliver any of the assets so acquired but, in so far as any Securities are borrowed or any Collateral is delivered to such Party, such Party shall be obliged, subject to the terms of this Agreement, to redeliver Equivalent Securities or Equivalent Collateral as appropriate.

 

	
4.3

	
Deliveries to be simultaneous unless otherwise agreed

 

Where under the terms of this Agreement a Party is not obliged to make a delivery unless simultaneously a delivery is made to it, subject to and without prejudice to its rights under paragraph 8.6 such Party may from time to time in accordance with market practice and in recognition of the practical difficulties in arranging simultaneous delivery of Securities, Collateral and cash transfers waive its right under this Agreement in respect of simultaneous delivery and/or payment provided that no such waiver (whether by course of conduct or otherwise) in respect of one transaction shall bind it in respect of any other transaction.

 

	
4.4

	
Deliveries of Income

 

In respect of Income being paid in relation to any Loaned Securities or Collateral, Borrower in the case of Income being paid in respect of Loaned Securities and Lender in

  

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the case of Income being paid in respect of Collateral shall provide to the other Party, as the case may be, any endorsements or assignments as shall be customary and appropriate to effect the delivery of money or property equivalent to the type and amount of such Income to Lender, irrespective of whether Borrower received the same in respect of any Loaned Securities or to Borrower, irrespective of whether Lender received the same in respect of any Collateral.

 

	
5.

	
COLLATERAL

 

	
5.1

	
Delivery of Collateral on commencement of Loan

 

Subject to the other provisions of this paragraph 5, Borrower undertakes to deliver to or deposit with Lender (or in accordance with Lender's instructions) Collateral simultaneously with delivery of the Securities to which the Loan relates and in any event no later than Close of Business on the Settlement Date. In respect of Collateral comprising securities, such Collateral shall be deemed to have been delivered by Borrower to Lender on delivery to Lender or as it shall direct of the relevant instruments of transfer, or in the case of such securities being held by an agent or within a clearing or settlement system, on the effective instructions to such agent or the operator of such system, which result in such securities being held by the operator of the clearing system for the account of the Lender or as it shall direct, or by such other means as may be agreed.

 

	
5.2

	
Deliveries through payment systems generating automatic payments

 

Unless otherwise agreed between the Parties, where any Securities, Equivalent Securities, Collateral or Equivalent Collateral (in the form of securities) are transferred through a book entry transfer or settlement system which automatically generates a payment or delivery, or obligation to pay or deliver, against the transfer of such securities, then:-

 

	
  

	
(i)

	
such automatically generated payment, delivery or obligation shall be treated as a payment or delivery by the transferee to the transferor, and except to the extent that it is applied to discharge an obligation of the transferee to effect payment or delivery, such payment or delivery, or obligation to pay or deliver, shall be deemed to be a transfer of Collateral or redelivery of Equivalent Collateral, as the case may be, made by the transferee until such time as the Collateral or Equivalent Collateral is substituted with other Collateral or Equivalent Collateral if an obligation to deliver other Collateral or redeliver Equivalent Collateral existed immediately prior to the transfer of Securities, Equivalent Securities, Collateral or Equivalent Collateral; and

 

	
  

	
(ii)

	
the party receiving such substituted Collateral or Equivalent Collateral, or if no obligation to deliver other Collateral or redeliver Equivalent Collateral existed immediately prior to the transfer of Securities, Equivalent Securities, Collateral or Equivalent Collateral, the party receiving the deemed transfer of Collateral or redelivery of Equivalent Collateral, as the case may be, shall cause to be made to the other party for value the same day either, where such transfer is a payment, an irrevocable payment in the amount of such transfer or, where such transfer is a 

 

  

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delivery, an irrevocable delivery of securities (or other property, as the case may be) equivalent to such property.

 

	
5.3

	
Substitutions of Collateral

 

Borrower may from time to time call for the repayment of Cash Collateral or the redelivery of Collateral equivalent to any Collateral delivered to Lender prior to the date on which the same would otherwise have been repayable or redeliverable provided that at the time of such repayment or redelivery Borrower shall have delivered or delivers Alternative Collateral acceptable to Lender and Borrower is in compliance with paragraph 5.4 or paragraph 5.5, as applicable.

 

	
5.4

	
Marking to Market of Collateral during the currency of a Loan on aggregated basis

 

Unless paragraph 1.3 of the Schedule indicates that paragraph 5.5 shall apply in lieu of this paragraph 5.4, or unless otherwise agreed between the Parties:-

 

	
  

	
(i)

	
the aggregate Market Value of the Collateral delivered to or deposited with Lender (excluding any Equivalent Collateral repaid or redelivered under Paragraphs 5.4(ii) or 5.5(ii) (as the case may be)) ("Posted Collateral") in respect of all Loans outstanding under this Agreement shall equal the aggregate of the Market Value of the Loaned Securities and the applicable Margin (the "Required Collateral Value") in respect of such Loans;

 

	
  

	
(ii)

	
if at any time on any Business Day the aggregate Market Value of the Posted Collateral in respect of all Loans outstanding under this Agreement exceeds the aggregate of the Required Collateral Values in respect of such Loans, Lender shall (on demand) repay and/or redeliver, as the case may be, to Borrower such Equivalent Collateral as will eliminate the excess;

 

	
  

	
(iii)

	
if at any time on any Business Day the aggregate Market Value of the Posted Collateral in respect of all Loans outstanding under this Agreement falls below the aggregate of Required Collateral Values in respect of all such Loans, Borrower shall (on demand) provide such further Collateral to Lender as will eliminate the deficiency.

 

	
5.5

	
Marking to Market of Collateral during the currency of a Loan on a Loan by Loan basis

 

If paragraph 1.3 of the Schedule indicates this paragraph 5.5 shall apply in lieu of paragraph 5.4, the Posted Collateral in respect of any Loan shall bear from day to day and at any time the same proportion to the Market Value of the Loaned Securities as the Posted Collateral bore at the commencement of such Loan. Accordingly:

 

	
  

	
(i)

	
the Market Value of the Posted Collateral to be delivered or deposited while the Loan continues shall be equal to the Required Collateral Value;

 

	
  

	
(ii)

	
if at any time on any Business Day the Market Value of the Posted Collateral in respect of any Loan exceeds the Required Collateral Value in respect of such Loan, 

 

  

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Lender shall (on demand) repay and/or redeliver, as the case may be, to Borrower such Equivalent Collateral as will eliminate the excess; and

 

	
  

	
(iii)

	
if at any time on any Business Day the Market Value of the Posted Collateral falls below the Required Collateral Value, Borrower shall (on demand) provide such further Collateral to Lender as will eliminate the deficiency.

 

	
5.6

	
Requirements to redeliver excess Collateral

 

Where paragraph 5.4 applies, unless paragraph 1.4 of the Schedule indicates that this paragraph 5.6 does not apply, if a Party (the "first Party") would, but for this paragraph 5.6, be required under paragraph 5.4 to provide further Collateral or redeliver Equivalent Collateral in circumstances where the other Party (the "second Party") would, but for this paragraph 5.6, also be required to or provide Collateral or redeliver Equivalent Collateral under paragraph 5.4, then the Market Value of the Collateral or Equivalent Collateral deliverable by the first Party ("X") shall be set-off against the Market Value of the Collateral or Equivalent Collateral deliverable by the second Party ("Y") and the only obligation of the Parties under paragraph 5.4 shall be, where X exceeds Y, an obligation of the first Party, or where Y exceeds X, an obligation of the second Party to repay and/or (as the case may be) redeliver Equivalent Collateral or to deliver further Collateral having a Market Value equal to the difference between X and Y.

 

	
5.7

	
Where Equivalent Collateral is repaid or redelivered (as the case may be) or further Collateral is provided by a Party under paragraph 5.6, the Parties shall agree to which Loan or Loans such repayment, redelivery or further provision is to be attributed and failing agreement it shall be attributed, as determined by the Party making such repayment, redelivery or further provision to the earliest outstanding Loan and, in the case of a repayment or redelivery up to the point at which the Market Value of Collateral in respect of such Loan equals the Required Collateral Value in respect of such Loan, and then to the next earliest outstanding Loan up to the similar point and so on.

 

	
5.8

	
Timing of repayments of excess Collateral or deliveries of further Collateral

 

Where any Equivalent Collateral falls to be repaid or redelivered (as the case may be) or further Collateral is to be provided under this paragraph 5, unless otherwise agreed between the Parties, it shall be delivered on the same Business Day as the relevant demand. Equivalent Collateral comprising securities shall be deemed to have been delivered by Lender to Borrower on delivery to Borrower or as it shall direct of the relevant instruments of transfer, or in the case of such securities being held by an agent or within a clearing or settlement system on the effective instructions to such agent or the operator of such system which result in such securities being held by the operator of the clearing system for the account of the Borrower or as it shall direct or by such other means as may be agreed.

 

	
5.9

	
Substitutions and extensions of Letters of Credit

 

Where Collateral is a Letter of Credit, Lender may by notice to Borrower require that Borrower, on the Business Day following the date of delivery of such notice, substitute

  

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Collateral consisting of cash or other Collateral acceptable to Lender for the Letter of Credit. Prior to the expiration of any Letter of Credit supporting Borrower's obligations hereunder, Borrower shall, no later than 10.30a.m. UK time on the second Business Day prior to the date such Letter of Credit expires, obtain an extension of the expiration of such Letter of Credit or replace such Letter of Credit by providing Lender with a substitute Letter of Credit in an amount at least equal to the amount of the Letter of Credit for which it is substituted.

 

	
6.

	
DISTRIBUTIONS AND CORPORATE ACTIONS

 

	
6.1

	
Manufactured Payments

 

Where Income is paid in relation to any Loaned Securities or Collateral (other than Cash Collateral) on or by reference to an Income Payment Date Borrower, in the case of Loaned Securities, and Lender, in the case of Collateral, shall, on the date of the payment of such Income, or on such other date as the Parties may from time to time agree, (the "Relevant Payment Date") pay and deliver a sum of money or property equivalent to the type and amount of such Income that, in the case of Loaned Securities, Lender would have been entitled to receive had such Securities not been loaned to Borrower and had been retained by Lender on the Income Payment Date, and, in the case of Collateral, Borrower would have been entitled to receive had such Collateral not been provided to Lender and had been retained by Borrower on the Income Payment Date unless a different sum is agreed between the Parties.

 

	
6.2

	
Income in the form of Securities

 

Where Income, in the form of securities, is paid in relation to any Loaned Securities or Collateral, such securities shall be added to such Loaned Securities or Collateral (and shall constitute Loaned Securities or Collateral, as the case may be, and be part of the relevant Loan) and will not be delivered to Lender, in the case of Loaned Securities, or to Borrower, in the case of Collateral, until the end of the relevant Loan, provided that the Lender or Borrower (as the case may be) fulfils their obligations under paragraph 5.4 or 5.5 (as applicable) with respect to the additional Loaned Securities or Collateral, as the case may be.

 

	
6.3

	
Exercise of voting rights

 

Where any voting rights fall to be exercised in relation to any Loaned Securities or Collateral, neither Borrower, in the case of Equivalent Securities, nor Lender, in the case of Equivalent Collateral, shall have any obligation to arrange for voting rights of that kind to be exercised in accordance with the instructions of the other Party in relation to the Securities borrowed by it or transferred to it by way of Collateral, as the case may be, unless otherwise agreed between the Parties.

 

	
6.4

	
Corporate actions

 

Where, in respect of any Loaned Securities or any Collateral, any rights relating to conversion, sub-division, consolidation, pre-emption, rights arising under a takeover offer, rights to receive securities or a certificate which may at a future date be exchanged for securities or other rights, including those requiring election by the holder for the time

  

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being of such Securities or Collateral, become exercisable prior to the redelivery of Equivalent Securities or Equivalent Collateral, then Lender or Borrower, as the case may be, may, within a reasonable time before the latest time for the exercise of the right or option give written notice to the other Party that on redelivery of Equivalent Securities or Equivalent Collateral, as the case may be, it wishes to receive Equivalent Securities or Equivalent Collateral in such form as will arise if the right is exercised or, in the case of a right which may be exercised in more than one manner, is exercised as is specified in such written notice.

 

	
7.

	
RATES APPLICABLE TO LOANED SECURITIES AND CASH COLLATERAL

 

	
7.1

	
Rates in respect of Loaned Securities

 

In respect of each Loan, Borrower shall pay to Lender, in the manner prescribed in sub-paragraph 7.3, sums calculated by applying such rate as shall be agreed between the Parties from time to time to the daily Market Value of the Loaned Securities.

 

	
7.2

	
Rates in respect of Cash Collateral

 

Where Cash Collateral is deposited with Lender in respect of any Loan, Lender shall pay to Borrower, in the manner prescribed in paragraph 7.3, sums calculated by applying such rates as shall be agreed between the Parties from time to time to the amount of such Cash Collateral. Any such payment due to Borrower may be set-off against any payment due to Lender pursuant to paragraph 7.1.

 

	
7.3

	
Payment of rates

 

In respect of each Loan, the payments referred to in paragraph 7.1 and 7.2 shall accrue daily in respect of the period commencing on and inclusive of the Settlement Date and terminating on and exclusive of the Business Day upon which Equivalent Securities are redelivered or Cash Collateral is repaid. Unless otherwise agreed, the sums so accruing in respect of each calendar month shall be paid in arrear by the relevant Party not later than the Business Day which is one week after the last Business Day of the calendar month to which such payments relate or such other date as the Parties shall from time to time agree.

 

	
8.

	
REDELIVERY OF EQUIVALENT SECURITIES

 

	
8.1

	
Delivery of Equivalent Securities on termination of a Loan

 

Borrower shall procure the redelivery of Equivalent Securities to Lender or redeliver Equivalent Securities in accordance with this Agreement and the terms of the relevant Loan on termination of the Loan. Such Equivalent Securities shall be deemed to have been delivered by Borrower to Lender on delivery to Lender or as it shall direct of the relevant instruments of transfer, or in the case of Equivalent Securities held by an agent or within a clearing or settlement system on the effective instructions to such agent or the operator of such system which result in such Equivalent Securities being held by the operator of the clearing system for the account of the Lender or as it shall direct, or by such other means as may be agreed. For the avoidance of doubt any reference in this Agreement or in any other agreement or communication between the Parties (howsoever

  

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expressed) to an obligation to redeliver or account for or act in relation to Loaned Securities shall accordingly be construed as a reference to an obligation to redeliver or account for or act in relation to Equivalent Securities.

 

	
8.2

	
Lender's right to terminate a Loan

 

Subject to paragraph 10 and the terms of the relevant Loan, Lender shall be entitled to terminate a Loan and to call for the redelivery of all or any Equivalent Securities at any time by giving notice on any Business Day of not less than the standard settlement time for such Equivalent Securities on the exchange or in the clearing organisation through which the Loaned Securities were originally delivered. Borrower shall redeliver such Equivalent Securities not later than the expiry of such notice in accordance with Lender's instructions.

 

	
8.3

	
Borrower's right to terminate a Loan

 

Subject to the terms of the relevant Loan, Borrower shall be entitled at any time to terminate a Loan and to redeliver all and any Equivalent Securities due and outstanding to Lender in accordance with Lender's instructions and Lender shall accept such redelivery.

 

	
8.4

	
Redelivery of Equivalent Collateral on termination of a Loan

 

On the date and time that Equivalent Securities are required to be redelivered by Borrower on the termination of a Loan, Lender shall simultaneously (subject to paragraph 5.4 if applicable) repay to Borrower any Cash Collateral or, as the case may be, redeliver Collateral equivalent to the Collateral provided by Borrower pursuant to paragraph 5 in respect of such Loan. For the avoidance of doubt any reference in this Agreement or in any other agreement or communication between the Parties (however expressed) to an obligation to redeliver or account for or act in relation to Collateral shall accordingly be construed as a reference to an obligation to redeliver or account for or act in relation to Equivalent Collateral.

 

	
8.5

	
Redelivery of Letters of Credit

 

Where a Letter of Credit is provided by way of Collateral, the obligation to redeliver Equivalent Collateral is satisfied by Lender redelivering for cancellation the Letter of Credit so provided, or where the Letter of Credit is provided in respect of more than one Loan, by Lender consenting to a reduction in the value of the Letter of Credit.

 

	
8.6

	
Redelivery obligations to be reciprocal

 

Neither Party shall be obliged to make delivery (or make a payment as the case may be) to the other unless it is satisfied that the other Party will make such delivery (or make an appropriate payment as the case may be) to it. If it is not so satisfied (whether because an Event of Default has occurred in respect of the other Party or otherwise) it shall notify the other party and unless that other Party has made arrangements which are sufficient to assure full delivery (or the appropriate payment as the case may be) to the notifying Party, the notifying Party shall (provided it is itself in a position, and willing, to perform

  

12

  

its own obligations) be entitled to withhold delivery (or payment, as the case may be) to the other Party.

 

	
9.

	
FAILURE TO REDELIVER

 

	
9.1

	
Borrower's failure to redeliver Equivalent Securities

 

	
  

	
(i)

	
If Borrower does not redeliver Equivalent Securities in accordance with paragraph 8.1 or 8.2, Lender may elect to continue the Loan (which Loan, for the avoidance of doubt, shall continue to be taken into account for the purposes of paragraph 5.4 or 5.5 as applicable) provided that if Lender does not elect to continue the Loan, Lender may either by written notice to Borrower terminate the Loan forthwith and the Parties' delivery and payment obligations in respect thereof (in which case sub-paragraph (ii) below shall apply) or serve a notice of an Event of Default in accordance with paragraph 14.

 

	
  

	
(ii)

	
Upon service of a notice to terminate the relevant Loan pursuant to paragraph 9.1(i):-

 

	
  

	
(a)

	
there shall be set-off against the Market Value of the Equivalent Securities concerned such amount of Posted Collateral chosen by Lender (calculated at its Market Value) as is equal thereto;

 

	
  

	
(b)

	
the Parties delivery and payment obligations in relation to such assets which are set-off shall terminate;

 

	
  

	
(c)

	
in the event that the Market Value of the Posted Collateral set-off is less than the Market Value of the Equivalent Securities concerned Borrower shall account to Lender for the shortfall; and

 

	
  

	
(d)

	
Borrower shall account to Lender for the total costs and expenses incurred by Lender as a result thereof as set out in paragraphs 9.3 and 9.4 from the time the notice is effective.

 

	
9.2

	
Lender's failure to Redeliver Equivalent Collateral

 

	
  

	
(i)

	
If Lender does not redeliver Equivalent Collateral in accordance with paragraph 8.4 or 8.5, Borrower may either by written notice to Lender terminate the Loan forthwith and the Parties' delivery and payment obligations in respect thereof (in which case sub-paragraph (ii) below shall apply) or serve a notice of an Event of Default in accordance with paragraph 14.

 

	
  

	
(ii)

	
Upon service of a notice to terminate the relevant Loan pursuant to paragraph 9.2(i):-

 

	
  

	
(a)

	
there shall be set-off against the Market Value of the Equivalent Collateral concerned the Market Value of the Loaned Securities;

 

	
  

	
(b)

	
the Parties delivery and payment obligations in relation to such assets which are set-off shall terminate;

 

  

13

  

 

	
  

	
(c)

	
in the event that the Market Value of the Loaned Securities held by Borrower is less than the Market Value of the Equivalent Collateral concerned Lender shall account to Borrower for the shortfall; and

 

	
  

	
(d)

	
Lender shall account to Borrower for the total costs and expenses incurred by Borrower as a result thereof as set out in paragraphs 9.3 and 9.4 from the time the notice is effective.

 

	
9.3

	
Failure by either Party to redeliver

 

This provision applies in the event that a Party (the "Transferor") fails to meet a redelivery obligation within the standard settlement time for the asset concerned on the exchange or in the clearing organisation through which the asset equivalent to the asset concerned was originally delivered or within such other period as may be agreed between the Parties. In such situation, in addition to the Parties' rights under the general law and this Agreement where the other Party (the "Transferee") incurs interest, overdraft or similar costs and expenses the Transferor agrees to pay on demand and hold harmless the Transferee with respect to all such costs and expenses which arise directly from such failure excluding (i) such costs and expenses which arise from the negligence or wilful default of the Transferee and (ii) any indirect or consequential losses. It is agreed by the Parties that any costs reasonably and properly incurred by a Party arising in respect of the failure of a Party to meet its obligations under a transaction to sell or deliver securities resulting from the failure of the Transferor to fulfil its redelivery obligations is to be treated as a direct cost or expense for the purposes of this paragraph.

 

	
9.4

	
Exercise of buy-in on failure to redeliver

 

In the event that as a result of the failure of the Transferor to fulfil its redelivery obligations a "buy-in" is exercised against the Transferee, then the Transferor shall account to the Transferee for the total costs and expenses reasonably incurred by the Transferee as a result of such "buy-in".

 

	
10.

	
SET-OFF ETC

 

	
10.1

	
Definitions for paragraph 10

 

In this paragraph 10:

 

"Bid Price" in relation to Equivalent Securities or Equivalent Collateral means the best available bid price on the most appropriate market in a standard size;

 

"Bid Value" subject to paragraph 10.5 means:-

 

	
  

	
(a)

	
in relation to Collateral equivalent to Collateral in the form of a Letter of Credit zero and in relation to Cash Collateral the amount of the currency concerned; and

 

	
  

	
(b)

	
in relation to Equivalent Securities or Collateral equivalent to all other types of Collateral the amount which would be received on a sale of such Equivalent Securities or Equivalent Collateral at the Bid Price at Close of Business on the relevant Business Day less all costs, fees and expenses that would be incurred in

 

  

14

  

connection therewith, calculated on the assumption that the aggregate thereof is the least that could reasonably be expected to be paid in order to carry out such sale or realisation and adding thereto the amount of any interest, dividends, distributions or other amounts, in the case of Equivalent Securities, paid to Borrower and in respect of which equivalent amounts have not been paid to Lender and in the case of Equivalent Collateral, paid to Lender and in respect of which equivalent amounts have not been paid to Borrower, in accordance with paragraph 6.1 prior to such time in respect of such Equivalent Securities, Equivalent Collateral or the original Securities or Collateral held, gross of all and any tax deducted or paid in respect thereof;

 

"Offer Price" in relation to Equivalent Securities or Equivalent Collateral means the best available offer price on the most appropriate market in a standard size;

 

"Offer Value" subject to paragraph 10.5 means:-

 

	
  

	
(a)

	
in relation to Collateral equivalent to Collateral in the form of a Letter of Credit zero and in relation to Cash Collateral the amount of the currency concerned; and

 

	
  

	
(b)

	
in relation to Equivalent Securities or Collateral equivalent to all other types of Collateral the amount it would cost to buy such Equivalent Securities or Equivalent Collateral at the Offer Price at Close of Business on the relevant Business Day together with all costs, fees and expenses that would be incurred in connection therewith, calculated on the assumption that the aggregate thereof is the least that could reasonably be expected to be paid in order to carry out the transaction and adding thereto the amount of any interest, dividends, distributions or other amounts, in the case of Equivalent Securities, paid to Borrower and in respect of which equivalent amounts have not been paid to Lender and in the case of Equivalent Collateral, paid to Lender and in respect of which equivalent amounts have not been paid to Borrower, in accordance with paragraph 6.1 prior to such time in respect of such Equivalent Securities, Equivalent Collateral or the original Securities or Collateral held, gross of all and any tax deducted or paid in respect thereof;

 

	
10.2

	
Termination of delivery obligations upon Event of Default

 

Subject to paragraph 9, if an Event of Default occurs in relation to either Party, the Parties' delivery and payment obligations (and any other obligations they have under this Agreement) shall be accelerated so as to require performance thereof at the time such Event of Default occurs (the date of which shall be the "Termination Date" for the purposes of this clause) so that performance of such delivery and payment obligations shall be effected only in accordance with the following provisions:

 

	
  

	
(i)

	
the Relevant Value of the securities which would have been required to be delivered but for such termination (or payment to be made, as the case may be) by each Party shall be established in accordance with paragraph 10.3; and

 

  

15

  

 

	
  

	
(ii)

	
on the basis of the Relevant Values so established, an account shall be taken (as at the Termination Date) of what is due from each Party to the other and (on the basis that each Party's claim against the other in respect of delivery of Equivalent Securities or Equivalent Collateral or any cash payment equals the Relevant Value thereof) the sums due from one Party shall be set-off against the sums due from the other and only the balance of the account shall be payable (by the Party having the claim valued at the lower amount pursuant to the foregoing) and such balance shall be payable on the Termination Date.

 

If the Bid Value is greater than the Offer Value, and the Non-Defaulting Party had delivered to the Defaulting Party a Letter of Credit, the Defaulting Party shall draw on the Letter of Credit to the extent of the balance due and shall subsequently redeliver for cancellation the Letter of Credit so provided.

 

If the Offer Value is greater than the Bid Value, and the Defaulting Party had delivered to the Non-Defaulting Party a Letter of Credit, the Non-Defaulting Party shall draw on the Letter of Credit to the extent of the balance due and shall subsequently redeliver for cancellation the Letter of Credit so provided.

 

In all other circumstances, where a Letter of Credit has been provided to a Party, such Party shall redeliver for cancellation the Letter of Credit so provided.

 

	
10.3

	
Determination of delivery values upon Event of Default

 

For the purposes of paragraph 10.2 the "Relevant Value":-

 

	
  

	
(i)

	
of any securities to be delivered by the Defaulting Party shall, subject to paragraph 10.5 below, equal the Offer Value of such securities; and

 

	
  

	
(ii)

	
of any securities to be delivered to the Defaulting Party shall, subject to paragraph 10.5 below, equal the Bid Value of such securities.

 

	
10.4

	
For the purposes of paragraph 10.3, but subject to paragraph 10.5, the Bid Value and Offer Value of any securities shall be calculated for securities of the relevant description (as determined by the Non-Defaulting Party) as of the first Business Day following the Termination Date, or if the relevant Event of Default occurs outside the normal business hours of such market, on the second Business Day following the Termination Date (the "Default Valuation Time");

 

	
10.5

	
Where the Non-Defaulting Party has following the occurrence of an Event of Default but prior to the close of business on the fifth Business Day following the Termination Date purchased securities forming part of the same issue and being of an identical type and description to those to be delivered by the Defaulting Party or sold securities forming part of the same issue and being of an identical type and description to those to be delivered by him to the Defaulting Party, the cost of such purchase or the proceeds of such sale, as the case may be, (taking into account all reasonable costs, fees and expenses that would be incurred in connection therewith) shall (together with any amounts owing pursuant to paragraph 6.1) be treated as the Offer Value or Bid Value, as the case may be, of the amount of securities to be delivered which is equivalent to the amount of the securities so bought or sold, as the case may be, for the purposes of this paragraph 10, so

 

  

16

  

that where the amount of securities to be delivered is more than the amount so bought or sold as the case may be, the Offer Value or Bid Value as the case may be, of the balance shall be valued in accordance with paragraph 10.4.

 

	
10.6

	
Any reference in this paragraph 10 to securities shall include any asset other than cash provided by way of Collateral.

 

	
10.7

	
Other costs, expenses and interest payable in consequence of an Event of Default

 

The Defaulting Party shall be liable to the Non-Defaulting Party for the amount of all reasonable legal and other professional expenses incurred by the Non-Defaulting Party in connection with or as a consequence of an Event of Default, together with interest thereon at the one-month London Inter Bank Offered Rate as quoted on a reputable financial information service ("LIBOR") as of 11.00 am, London Time, on the date on which it is to be determined or, in the case of an expense attributable to a particular transaction and where the parties have previously agreed a rate of interest for the transaction, that rate of interest if it is greater than LIBOR. The rate of LIBOR applicable to each month or part thereof that any sum payable pursuant to this paragraph 10.7 remains outstanding is the rate of LIBOR determined on the first Business Day of any such period of one month or any part thereof. Interest will accrue daily on a compound basis and will be calculated according to the actual number of days elapsed.

 

	
11.

	
TRANSFER TAXES

 

Borrower hereby undertakes promptly to pay and account for any transfer or similar duties or taxes chargeable in connection with any transaction effected pursuant to or contemplated by this Agreement, and shall indemnify and keep indemnified Lender against any liability arising as a result of Borrower's failure to do so.

 

	
12.

	
LENDER'S WARRANTIES

 

Each Party hereby warrants and undertakes to the other on a continuing basis to the intent that such warranties shall survive the completion of any transaction contemplated herein that, where acting as a Lender:

 

	
  

	
(a)

	
it is duly authorised and empowered to perform its duties and obligations under this Agreement;

 

	
  

	
(b)

	
it is not restricted under the terms of its constitution or in any other manner from lending Securities in accordance with this Agreement or from otherwise performing its obligations hereunder;

 

	
  

	
(c)

	
it is absolutely entitled to pass full legal and beneficial ownership of all Securities provided by it hereunder to Borrower free from all liens, charges and encumbrances; and

 

	
  

	
(d)

	
it is acting as principal in respect of this Agreement or, subject to paragraph 16, as agent and the conditions referred to in paragraph 16.2 will be fulfilled in respect of any Loan which it makes as agent.

 

  

17

  

 

	
13.

	
BORROWER'S WARRANTIES

 

Each Party hereby warrants and undertakes to the other on a continuing basis to the intent that such warranties shall survive the completion of any transaction contemplated herein that, where acting as a Borrower:

 

	
  

	
(a)

	
it has all necessary licenses and approvals, and is duly authorised and empowered, to perform its duties and obligations under this Agreement and will do nothing prejudicial to the continuation of such authorisation, licences or approvals;

 

	
  

	
(b)

	
it is not restricted under the terms of its constitution or in any other manner from borrowing Securities in accordance with this Agreement or from otherwise performing its obligations hereunder;

 

	
  

	
(c)

	
it is absolutely entitled to pass full legal and beneficial ownership of all Collateral provided by it hereunder to Lender free from all liens, charges and encumbrances; and

 

	
  

	
(d)

	
it is acting as principal in respect of this Agreement.

 

	
14.

	
EVENTS OF DEFAULT

 

	
14.1

	
Each of the following events occurring in relation to either Party (the "Defaulting Party", the other Party being the "Non-Defaulting Party") shall be an Event of Default for the purpose of paragraph 10 but only (subject to sub-paragraph (v) below) where the Non-Defaulting Party serves written notice on the Defaulting Party:-

 

	
  

	
(i)

	
Borrower or Lender failing to pay or repay Cash Collateral or deliver Collateral or redeliver Equivalent Collateral or Lender failing to deliver Securities upon the due date;

 

	
  

	
(ii)

	
Lender or Borrower failing to comply with its obligations under paragraph 5;

 

	
  

	
(iii)

	
Lender or Borrower failing to comply with its obligations under paragraph 6.1;

 

	
  

	
(iv)

	
Borrower failing to comply with its obligations to deliver Equivalent Securities in accordance with paragraph 8;

 

	
  

	
(v)

	
an Act of Insolvency occurring with respect to Lender or Borrower, an Act of Insolvency which is the presentation of a petition for winding up or any analogous proceeding or the appointment of a liquidator or analogous officer of the Defaulting Party not requiring the Non-Defaulting Party to serve written notice on the Defaulting Party;

 

	
  

	
(vi)

	
any representation or warranty made by Lender or Borrower being incorrect or untrue in any material respect when made or repeated or deemed to have been made or repeated;

 

	
  

	
(vii)

	
Lender or Borrower admitting to the other that it is unable to, or it intends not to, perform any of its obligations under this Agreement and/or in respect of any Loan;

 

  

18

  

 

	
  

	
(viii)

	
Lender (if applicable) or Borrower being declared in default or being suspended or expelled from membership of or participation in, any securities exchange or association or suspended or prohibited from dealing in securities by any regulatory authority;

 

	
  

	
(ix)

	
any of the assets of Lender or Borrower or the assets of investors held by or to the order of Lender or Borrower being transferred or ordered to be transferred to a trustee (or a person exercising similar functions) by a regulatory authority pursuant to any securities regulating legislation, or

 

	
  

	
(x)

	
Lender or Borrower failing to perform any other of its obligations under this Agreement and not remedying such failure within 30 days after the Non-Defaulting Party serves written notice requiring it to remedy such failure.

 

	
14.2

	
Each Party shall notify the other (in writing) if an Event of Default or an event which, with the passage of time and/or upon the serving of a written notice as referred to above, would be an Event of Default, occurs in relation to it.

 

	
14.3

	
The provisions of this Agreement constitute a complete statement of the remedies available to each Party in respect of any Event of Default.

 

	
14.4

	
Subject to paragraph 9.3 and 10.7, neither Party may claim any sum by way of consequential loss or damage in the event of failure by the other party to perform any of its obligations under this Agreement.

 

	
15.

	
INTEREST ON OUTSTANDING PAYMENTS

 

In the event of either Party failing to remit sums in accordance with this Agreement such Party hereby undertakes to pay to the other Party upon demand interest (before as well as after judgment) on the net balance due and outstanding, for the period commencing on and inclusive of the original due date for payment to (but excluding) the date of actual payment, in the same currency as the principal sum and at the rate referred to in paragraph 10.7. Interest will accrue daily on a compound basis and will be calculated according to the actual number of days elapsed.

 

	
16.

	
TRANSACTIONS ENTERED INTO AS AGENT

 

	
16.1

	
Power for Lender to enter into Loans as agent

 

Subject to the following provisions of this paragraph, Lender may (if so indicated in paragraph 6 of the Schedule) enter into Loans as agent (in such capacity, the "Agent") for a third person (a "Principal"), whether as custodian or investment manager or otherwise (a Loan so entered into being referred to in this paragraph as an "Agency Transaction").

 

	
16.2

	
Conditions for agency loan

 

A Lender may enter into an Agency Transaction if, but only if:-

 

	
  

	
(i)

	
it specifies that Loan as an Agency Transaction at the time when it enters into it;

 

  

19

  

 

	
  

	
(ii)

	
it enters into that Loan on behalf of a single Principal whose identity is disclosed to Borrower (whether by name or by reference to a code or identifier which the Parties have agreed will be used to refer to a specified Principal) at the time when it enters into the Loan or as otherwise agreed between the Parties; and

 

	
  

	
(iii)

	
it has at the time when the Loan is entered into actual authority to enter into the Loan and to perform on behalf of that Principal all of that Principal's obligations under the agreement referred to in paragraph 16.4(ii).

 

	
16.3

	
Notification by Lender of certain events affecting the principal

 

Lender undertakes that, if it enters as agent into an Agency Transaction, forthwith upon becoming aware:-

 

	
  

	
(i)

	
of any event which constitutes an Act of Insolvency with respect to the relevant Principal; or

 

	
  

	
(ii)

	
of any breach of any of the warranties given in paragraph 16.5 or of any event or circumstance which has the result that any such warranty would be untrue if repeated by reference to the then current facts;

 

it will inform Borrower of that fact and will, if so required by Borrower, furnish it with such additional information as it may reasonably request.

 

	
16.4

	
Status of agency transaction

 

	
  

	
(i)

	
Each Agency Transaction shall be a transaction between the relevant Principal and Borrower and no person other than the relevant Principal and Borrower shall be a party to or have any rights or obligations under an Agency Transaction. Without limiting the foregoing, Lender shall not be liable as principal for the performance of an Agency Transaction, but this is without prejudice to any liability of Lender under any other provision of this clause; and

 

	
  

	
(ii)

	
all the provisions of the Agreement shall apply separately as between Borrower and each Principal for whom the Agent has entered into an Agency transaction or Agency Transactions as if each such Principal were a party to a separate agreement with Borrower in all respects identical with this Agreement other than this paragraph and as if the Principal were Lender in respect of that agreement;

 

PROVIDED THAT

 

if there occurs in relation to the Agent an Event of Default or an event which would constitute an Event of Default if Borrower served written notice under any sub-clause of paragraph 14, Borrower shall be entitled by giving written notice to the Principal (which notice shall be validly given if given to Lender in accordance with paragraph 21) to declare that by reason of that event an Event of Default is to be treated as occurring in relation to the Principal. If Borrower gives such a notice then an Event of Default shall be treated as occurring in relation to the Principal at the time when the notice is deemed to be given; and

  

20

  

if the Principal is neither incorporated in nor has established a place of business in Great Britain, the Principal shall for the purposes of the agreement referred to in paragraph 16.4(ii) be deemed to have appointed as its agent to receive on its behalf service of process in the courts of England the Agent, or if the Agent is neither incorporated nor has established a place of business in Great Britain, the person appointed by the Agent for the purposes of this Agreement, or such other person as the Principal may from time to time specify in a written notice given to the other Party.

 

The foregoing provisions of this paragraph do not affect the operation of the Agreement as between Borrower and Lender in respect of any transactions into which Lender may enter on its own account as principal.

 

	
16.5 

	
Warranty of authority by Lender acting as agent

 

Lender warrants to Borrower that it will, on every occasion on which it enters or purports to enter into a transaction as an Agency Transaction, have been duly authorised to enter into that Loan and perform the obligations arising under such transaction on behalf of the person whom it specifies as the Principal in respect of that transaction and to perform on behalf of that person all the obligations of that person under the agreement referred to in paragraph 16.4(ii).

 

	
17.

	
TERMINATION OF THIS AGREEMENT

 

Each Party shall have the right to terminate this Agreement by giving not less than 15 Business Days' notice in writing to the other Party (which notice shall specify the date of termination) subject to an obligation to ensure that all Loans which have been entered into but not discharged at the time such notice is given are duly discharged in accordance with this Agreement.

 

	
18.

	
SINGLE AGREEMENT

 

Each Party acknowledges that, and has entered into this Agreement and will enter into each Loan in consideration of and in reliance upon the fact that, all Loans constitute a single business and contractual relationship and are made in consideration of each other. Accordingly, each Party agrees:

 

	
  

	
(i)

	
to perform all of its obligations in respect of each Loan, and that a default in the performance of any such obligations shall constitute a default by it in respect of all Loans; and

 

	
  

	
(ii)

	
that payments, deliveries and other transfers made by either of them in respect of any Loan shall be deemed to have been made in consideration of payments, deliveries and other transfers in respect of any other Loan.

 

	
19.

	
SEVERANCE

 

If any provision of this Agreement is declared by any judicial or other competent authority to be void or otherwise unenforceable, that provision shall be severed from the Agreement and the remaining provisions of this Agreement shall remain in full force and effect.  The Agreement shall, however, thereafter be amended by the Parties in such

  

21

  

reasonable manner so as to achieve as far as possible, without illegality, the intention of the Parties with respect to that severed provision.

 

	
20.

	
SPECIFIC PERFORMANCE

 

Each Party agrees that in relation to legal proceedings it will not seek specific performance of the other Party's obligation to deliver or redeliver Securities, Equivalent Securities, Collateral or Equivalent Collateral but without prejudice to any other rights it may have.

 

	
21.

	
NOTICES

 

	
21.1

	
Any notice or other communication in respect of this Agreement may be given in any manner set forth below to the address or number or in accordance with the electronic messaging system details set out in paragraph 4 of the Schedule and will be deemed effective as indicated:

 

	
  

	
(i)

	
if in writing and delivered in person or by courier, on the date it is delivered;

 

	
  

	
(ii)

	
if sent by telex, on the date the recipient's answerback is received;

 

	
  

	
(iii)

	
if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender's facsimile machine);

 

	
  

	
(iv)

	
if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or

 

	
  

	
(v)

	
if sent by electronic messaging system, on the date that electronic message is received,

 

unless the date of that delivery (or attempted delivery) or the receipt, as applicable, is not a Business Day or that communication is delivered (or attempted) or received, as applicable, after the Close of Business on a Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Business Day.

 

	
21.2

	
Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it.

 

	
22.

	
ASSIGNMENT

 

Neither Party may charge assign or transfer all or any of its rights or obligations hereunder without the prior consent of the other Party.

 

	
23.

	
NON-WAIVER

 

No failure or delay by either Party (whether by course of conduct or otherwise) to exercise any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any right, power or privilege preclude any other or

  

22

  

further exercise thereof or the exercise of any other right, power or privilege as herein provided.

 

	
24.

	
GOVERNING LAW AND JURISDICTION

 

	
24.1

	
This Agreement is governed by, and shall be construed in accordance with, English law.

 

	
24.2

	
The courts of England have exclusive jurisdiction to hear and decide any suit, action or proceedings, and to settle any disputes, which may arise out of or in connection with this Agreement (respectively, "Proceedings" and "Disputes") and, for these purposes, each party irrevocably submits to the jurisdiction of the courts of England.

 

	
24.3

	
Each party irrevocably waives any objection which it might at any time have to the courts of England being nominated as the forum to hear and decide any Proceedings and to settle any Disputes and agrees not to claim that the courts of England are not a convenient or appropriate forum.

 

	
24.4

	
Each of Party A and Party B hereby respectively appoints the person identified in paragraph 5 of the Schedule pertaining to the relevant Party as its agent to receive on its behalf service of process in the courts of England. If such an agent ceases to be an agent of Party A or party B, as the case may be, the relevant Party shall promptly appoint, and notify the other Party of the identity of its new agent in England.

 

 

	
25.

	
TIME

 

Time shall be of the essence of the Agreement.

 

	
26.

	
RECORDING

 

The Parties agree that each may record all telephone conversations between them.

 

	
27.

	
WAIVER OF IMMUNITY

 

Each Party hereby waives all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, attachment (both before and after judgement) and execution to which it might otherwise be entitled in any action or proceeding in the courts of England or of any other country or jurisdiction relating in any way to this Agreement and agrees that it will not raise, claim or cause to be pleaded any such immunity at or in respect of any such action or proceeding.

 

	
28.

	
MISCELLANEOUS

 

	
28.1

	
This Agreement constitutes the entire agreement and understanding of the Parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto.

 

	
28.2

	
The Party (the "Relevant Party") who has prepared the text of this Agreement for execution (as indicated in paragraph 7 of the Schedule) warrants and undertakes to the other Party that such text conforms exactly to the text of the standard form Global Master Securities Lending Agreement posted by the International Securities Lenders Association on its website on 7 May 2000 except as notified by the Relevant Party to the other Party in writing prior to the execution of this Agreement.

 

  

23

  

 

	
28.3

	
No amendment in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the Parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.

 

	
28.4

	
The obligations of the Parties under this Agreement will survive the termination of any Loan.

 

	
28.5

	
The warranties contained in paragraphs 12, 13, 16 and 28.2 will survive termination of this Agreement for so long as any obligations of either of the Parties pursuant to this Agreement remain outstanding.

 

	
28.6

	
Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.

 

	
28.7

	
This Agreement (and each amendment in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original.

 

	
28.8

	
A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any terms of this Agreement, but this does not affect any right or remedy of a third party which exists or is available apart from that Act.

 

EXECUTED by the PARTIES

 

	
SIGNED BY

	
)

	/s/ Svein Skarstein  
	  	
)

	General Manager  
	
DULY AUTHORISED FOR AND

	
)

	  
	
ON BEHALF OF

	
)

	
DnB NOR Bank ASA

 

 

 

	
SIGNED BY

	
)

	/s/ Michael Delouche  
	MICHAEL DELOUCHE, PRESIDENT  	
)

	  
	
DULY AUTHORISED FOR AND

	
)

	  
	
ON BEHALF OF

	
)

	
Siem Industries Inc

 

  

24

  

SCHEDULE

 

	
1.

	
Collateral

 

	
1.1

	
The securities, financial instruments and deposits of currency set out in the table below with a cross marked next to them are acceptable forms of Collateral under this Agreement.

 

	
1.2

	
Unless otherwise agreed between the Parties, the Market Value of the Collateral delivered pursuant to paragraph 5 by Borrower to Lender under the terms and conditions of this Agreement shall on each Business Day represent not less than the Market Value of the Loaned Securities together with the percentage contained in the row of the table below corresponding to the particular form of Collateral, referred to in this Agreement as the "Margin".

 

	  	
Security/Financial Instrument/Deposit of Currency

	
Mark "X" if acceptable form of Collateral

	
Valuation

(%)

	
Margin

(%)

 

	  	
Cash

	
x

	
100

	
15

 

	  	
Equities

	
x

	
50 - 90

	
15

 

	  	
Norwegian Gvt. Bonds

	
x

	
90

	
15

 

	  	
Letters of Credit

	
x

	
100

	
15

 

 

	
1.3

	
Basis of Margin Maintenance:

        

Paragraph 5.4 (aggregation) shall apply

 

	
1.4

	
Paragraph 5.6 (netting of obligations to deliver Collateral and redeliver Equivalent Collateral) shall not apply

 

	
2.

	
Base Currency

 

The Base Currency applicable to this Agreement is NOK

 

	
3.

	
Places of Business

 

Oslo

 

	
4.

	
Designated Office and Address for Notices

 

	
(A)

	
Designated office of Party A:

 

Address for notices or communications to Party A:

 

  

25

  

 

	  	
Address:

	
Stranden 21, 0021 OSLO

 

	  	
Attention:

	
Securities Finance

 

	  	
Facsimile No:

	
22949030

 

	  	
Telephone No:

	
22483333

 

Electronic Messaging System Details: sec.lending@dnbnor.no

 

	
(B)

	
Designated office of Party B:

 

Address for notices or communications to Party B:

 

Address: P.O.Box 10718 George Town, Grand Cayman, KY1-1006 Cayman Islands

 

Attention:

 

Facsimile No:

 

Telephone No:

 

Electronic Messaging System Details:

 

	
5.

	
(A)

	
Agent of Party A for Service of Process

 

Name:

 

Address:

 

	
  

	
(B)

	
Agent of Party B for Service of Process

 

Name:

 

Address:

 

	
6.

	
Agency

 

	  	
-

	
Paragraph 16 may apply to Party A*

	
o

 

	  	
-

	
Paragraph 16 may apply to Party B*

	
o

  

 

	
7.

	
Party Preparing this Agreement

 

Party A

 

	
8.

	
Taxes

 

All amounts payable under the Agreement shall be paid free and clear of, and without any deduction or withholding for, any taxes or duties of any kind, unless deduction or withholding is required by law, in which case the party making the payment shall operate the withholding or deduction as required by law and increase the payment such that the net amount received by the other party equals the amount it would have received had no withholding or deduction been operated.

  

26

  

The Borrower gives the following warranty and indemnification to DnB NOR Bank when borrowing securities from DnB NOR Bank:

 

If borrowing securities from DnB NOR Bank, not registered with the Norwegian Central Securities Depository (Verdipapirsentralen (VPS) ASA), the Borrower undertakes and warrants that it will either (i) hold on to such securities for its own account, (ii) sell them on a stock exchange or regulated market, or, (iii) to the extent the Borrower holds a license as a bank or an investment firm, on-lend them in accordance with this paragraph. If the Borrower is licensed as a bank or an investment firm and on-lends securities borrowed from DnB NOR Bank to any client, the Borrower undertakes and warrants that it will either hold on to such securities on behalf of its client or sell them on a stock exchange or regulated market on behalf of the client. Granting a client any right to on-lend, or otherwise dispose of securities borrowed from DnB NOR Bank will constitute a breach of this obligation on the hand of the Borrower. If a claim is related to a claim from tax authorities or similar authority, and to the extent such claim is related to the Borrower's breach of the above obligations, or otherwise arises in connection with the Borrower’s lending of securities under the Agreement, the Borrower undertakes to indemnify and hold DnB NOR Bank, DnB NOR Bank’s employees, directors as well as other group companies in the DnB NOR (ASA) group (hereinafter the Indemnified parties) harmless against all claims that may be directed against the Indemnified parties. The Borrower’s liability also includes expenses the Indemnified parties incur in connection with the making, defending and processing of the claim, such as expenses incurred in engaging necessary external (including legal) assistance, court costs, etc.

 

	
9.

	
Miscellaneous

 

To the extent Party A and Party B enter into framework agreements governing securities loan arrangements related to convertible bonds issued by issuers where Party B is a shareholder, and in the case of conflict between any applicable framework agreement and this Agreement, such framework agreements shall prevail.

 

EXECUTED by the PARTIES

 

	
SIGNED BY

	
)

	/s/ Svein Skarstein  
	  	
)

	General Manager
	
DULY AUTHORISED FOR AND

	
)

	  
	
ON BEHALF OF

	
)

	
DnB NOR Bank ASA

  

27

  

 

	
SIGNED BY

	
)

	/s/ Michael Delouche  
	MICHAEL DELOUCHE, PRESIDENT  	
)

	  
	
DULY AUTHORISED FOR AND

	
)

	  
	
ON BEHALF OF

	
)

	
Siem Industries Inc

 

 

	 28a11-12_ex10point3.htm

Exhibit C

 

 

20 June 2010

 

 

 

SUBSEA 7 INC.

 

and

 

ACERGY S.A.

 

and

 

SIEM INDUSTRIES INC.

 

 

_________________________________

 

RELATIONSHIP AGREEMENT

 

__________________________________

 

 

  

  

  

CONTENTS

 

	
1.

	
Definitions

	
1

 

	
2.

	
Standstill

	
3

 

	
3.

	
Lock-up

	
4

 

	
4.

	
Representation on Autumn Board

	
5

 

	
5.

	
Election of Independent Directors

	
7

 

	
6.

	
Summer undertaking

	
8

 

	
7.

	
Non-solicitation

	
8

 

	
8.

	
Warranties

	
8

 

	
9.

	
Consent

	
9

 

	
10.

	
Termination

	
10

 

	
11.

	
Confidentiality

	
10

 

	
12.

	
Assignment

	
11

 

	
13.

	
Invalidity

	
11

 

	
14.

	
Waivers, rights and remedies

	
11

 

	
15.

	
Entire agreement

	
12

 

	
16.

	
Notices

	
12

 

	
17.

	
Counterparts

	
13

 

	
18.

	
No partnership

	
13

 

	
19.

	
Costs and expenses

	
13

 

	
20.

	
Third party rights

	
13

 

	
21.

	
Enforcement

	
13

 

	
22.

	
Governing law and jurisdiction

	
14

 

	
23.

	
Agent for service of process

	
14

 

Schedule 1

 

Schedule 2

  

  

  

 

THIS AGREEMENT is made on 20 June 2010

 

BETWEEN

 

	
(1)

	
Subsea 7 Inc., a company incorporated in the Cayman Islands with registered number MC - 115107 and with registered office address as PO Box 309, Ugland House, South Church Street, George Town, Grand Cayman, KY1-1104, Cayman Islands (Spring);

 

	
(2)

	
Acergy S.A., a société anonyme having its registered office in Luxembourg, 412F route d’Esch, L-2086 Luxembourg, Grand Duchy of Luxembourg, registered with the Registre de Commerce et des Sociétés de Luxembourg under no: B 43 172 (Autumn); and

 

	
(3)

	
Siem Industries Inc., a company incorporated in the Cayman Islands, with registered number CR – 1248 and with registered office address as PO Box 309, Ugland House, South Church Street, George Town, Grand Cayman, KY1-1104, Cayman Islands (Summer).

 

WHEREAS

 

	
(A)

	
Spring and Autumn have, contemporaneously with entering into this agreement, entered into a combination agreement, dated the same date as this agreement, governing the proposed combination of Spring and Autumn.

 

	
(B)

	
This agreement sets out certain matters agreed between the parties in relation to the relationship between them.

 

In consideration for the respective obligations of the parties hereto under this agreement the parties hereby agree as follows

 

	
1.

	
Definitions

 

	
1.1

	
In this agreement:

 

	
Affiliate

	
means with respect to any person, any other person directly or indirectly controlling, controlled by or under direct or indirect control with such person, provided that for the purpose of this definition “control” (and with correlative meanings, “controlled by” and “under common control with”), as used with respect to any person, shall mean the possession of the power to direct or cause the direction of the management and policies of such person through the ownership of voting securities or otherwise (and for the purposes of this agreement Kristian Siem shall be deemed to be an Affiliate of Summer);

 

	
Aggregate Percentage Shareholdings

 

	
has the meaning given in clause 4.6;

	
Autumn Articles

	
means the articles of incorporation of Autumn from time to 

 

 

  

1

  

 

	
 

	

time;

 

	
Autumn Board

	
means the board of directors of Autumn from time to time;

 

	
Autumn Shares

	
means the common shares of US$2.00 each in the capital of Autumn;

 

	
Combination Agreement

	
means the agreement entered into on the same date as this agreement between Spring and Autumn governing the proposed combination of Spring and Autumn;

 

	
Equity Interests

	
means beneficial holdings in ordinary shares, securities convertible or exchangeable for ordinary shares, or an option to acquire such securities or ordinary shares;

 

	
Existing Framework Agreement

 

	
means the framework agreement dated 29 September 2009 between Summer, DnB Nor Bank ASA and ABG Sundal Collier Norge ASA;

	
Independent Director

	
has the meaning given in the Combination Agreement;

 

	
Lock-up Period

	
means the period of 6 months commencing on Completion;

 

	
Minimum Interest

	
means an interest in at least 10% of the Outstanding Autumn Shares;

 

	
Outstanding Autumn Shares

 

	
means the total number of issued Autumn Shares as of the applicable time, excluding any Autumn Shares held in treasury;

	
Percentage Shareholding

	
means the number of Autumn Shares held beneficially by a person expressed as a percentage of the total number of Outstanding Autumn Shares at the applicable time;

 

	
Proceedings

	
has the meaning given in clause 22.2;

 

	
Restricted Shares

	
has the meaning given in clause 3.1;

 

	
Standstill Period

	
means the period of 30 months commencing on the date of this agreement;

 

	
Summer Limited Recourse Exchangeable Bonds

 

	
means the USD 275 million zero coupon secured limited recourse exchangeable bonds 2007/2017 issued by Summer;

	
Summer Nominee

	
means a person nominated by Summer for appointment to the Autumn Board in accordance with clause 4; and

 

 

  

2

  

 

	
Threshold Interest

	
means a beneficial holding in Autumn Shares representing at least 80% of the Percentage Shareholding of Summer and its Affiliates on Completion.

 

 

	
1.2

	
In this agreement, terms defined in the Combination Agreement shall have the same meaning in this agreement unless otherwise defined above or the context otherwise provides.

 

	
1.3

	
In this agreement:

 

	
  

	
(A)

	
headings are inserted for ease of reference only and shall not affect the interpretation of this agreement;

 

	
  

	
(B)

	
references to clauses are to be construed as references to the clauses of this agreement unless otherwise stated;

 

	
  

	
(C)

	
words importing the plural shall include the singular and vice versa and words importing the masculine gender shall include the feminine and vice versa;

 

	
  

	
(D)

	
references to any statutes, statutory provisions, code or rule include any regulation, statute, statutory provision, code or rule which amends, extends, consolidates or replaces the same, or which has been amended, extended, consolidated or replaced by the same, and shall include any orders, regulations, instruments, other subordinate legislation, codes or rules made under the relevant provision from time to time;

 

	
  

	
(E)

	
references to a person shall be construed so as to include any individual, firm, company or other body corporate, trust, government, state or agency of a state, local or municipal authority or government body or any joint venture, association or partnership (whether or not having a separate legal personality);

 

	
  

	
(F)

	
a reference to a day (including within the phrase Business Day) shall mean a period of 24 hours running from midnight to midnight;

 

	
  

	
(G)

	
a reference to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept of thing shall in respect of any jurisdiction other than England be treated as a reference to any analogous term in that jurisdiction; and

 

	
  

	
(H)

	
the rule known as the ejusdem generis rule shall not apply and general words shall not be given a restrictive meaning by reason of that fact they are accompanied by words indicating a particular class of acts, matters or things.

 

	
2.

	
Standstill

 

	
2.1

	
For the duration of the Standstill Period, Summer shall not, and shall procure that its Affiliates shall not, without the prior consent of Spring and Autumn (in the period prior to Completion) or Autumn (in the period after Completion), as applicable, acquire any 

 

  

3

  

Equity Interests in Spring or Autumn which would increase directly or indirectly the aggregate number of Autumn Shares beneficially held by Summer and its Affiliates to more than 24.9% of the Outstanding Autumn Shares after Completion.  For the purposes of this clause 2 only (and not, for the avoidance of doubt, any other provision of this agreement), the acquisition by  or holdings of Summer and/or its Affiliates of any convertible bonds under (i) the Spring Convertible Bonds; (ii) the Acergy S.A. USD500,000,000 2.50 per cent. Convertible Note Issue 2013; and (iii) any bonds issued by Spring or Autumn convertible into shares in Spring or Autumn (as applicable) after the date hereof, in each case shall not be counted towards the restriction on acquiring or holding Equity Interests in Spring or Autumn until the conversion thereof.

 

	
2.2

	
If, during the Standstill Period, any Affiliate of Summer acquires any Equity Interests in Spring or Autumn which increases directly or indirectly the aggregate number of Autumn Shares beneficially held by Summer and its Affiliates to more than 24.9% of the Outstanding Autumn Shares, then Summer shall, on request by Autumn, promptly sell such number of Equity Interests so as to reduce such aggregate number of Autumn Shares beneficially held by Summer and its Affiliates to not more than 24.9% of the Outstanding Autumn Shares.  For the avoidance of doubt, neither Summer nor any Affiliate shall be required to sell any Equity Interests pursuant to this clause 2.2 if its Percentage Shareholding in Autumn has increased as a result of any reduction in the number of Outstanding Autumn Shares at the relevant time.

 

	
2.3

	
The restrictions in clauses 2.1 and 2.2 above shall cease to apply immediately following the announcement of a bona fide offer by a third party for the acquisition of control of either Spring or Autumn.

 

	
2.4

	
For the avoidance of doubt, the provisions of Clause 7 of the Confidentiality and Standstill Agreement shall cease to apply from the date of this agreement.

 

	
3.

	
Lock-up

 

	
3.1

	
For the duration of the Lock-up Period, Summer shall not, and shall procure that its Affiliates shall not transfer, dispose of, or agree to transfer or dispose of any Autumn Shares beneficially held by it which would result in the aggregate number of Autumn Shares beneficially held by Summer and its Affiliates falling below 80% of the number of Autumn Shares beneficially held by Summer and its Affiliates immediately after Completion (such number of shares being the Restricted Shares).

 

	
3.2

	
If at any time or times in the period of 6 months commencing on the expiry of the Lock-up Period, Summer or its Affiliates wishes to transfer or dispose of any Restricted Shares, such transfers or disposals shall be carried out in consultation with Autumn and Summer shall use all reasonable endeavours to dispose of or transfer such Autumn Shares in a manner that does not disrupt the market for the issued capital of Autumn.  All transaction expenses relating to such transfers or disposals of Autumn Shares by Summer or its Affiliates pursuant to this clause 3.2 shall be borne by Summer, but for the avoidance of doubt any expenses in relation to any US registration will be borne by Autumn.

 

  

4

  

 

	
3.3

	
Nothing in clause 3.1 or 3.2 shall prevent Summer or its Affiliates from:

 

	
  

	
(A)

	
accepting or giving an undertaking to accept an offer for Autumn Shares made to all or substantially all the shareholders of Autumn;

 

	
  

	
(B)

	
lending Autumn Shares under the Existing Framework Agreement;

 

	
  

	
(C)

	
granting security over Autumn Shares in relation to the provision of finance (whether debt, equity or other type of finance);

 

	
  

	
(D)

	
transferring the legal and/or beneficial interest in any Autumn Shares between Summer and its Affiliates, provided that if the transferee ceases to be an Affiliate of Summer, then Summer must procure that such Autumn Shares are promptly transferred back to Summer or to an Affiliate of Summer and provided that Summer shall procure that any such Affiliate to whom Autumn Shares are transferred in accordance with this sub-clause 3.3 (D) complies with the restrictions of this clause 3;

 

	
  

	
(E)

	
disposing of Autumn Shares pursuant to a court order, arbitral award or judgment or as otherwise required by law or regulation;

 

	
  

	
(F)

	
effecting any transfer or disposal pursuant to a compromise or arrangement (including without limitation, mergers, divisions, share repurchases or redemptions or other similar reorganisations) between Autumn and/or its shareholders, or any class of them, in accordance with Luxembourg law; or

 

	
  

	
(G)

	
transferring any of its Autumn Shares to any holder of any Summer Limited Recourse Exchangeable Bonds to the extent Summer is required to or has elected to deliver Autumn Shares to any such holder pursuant to the terms of the Summer Limited Recourse Exchangeable Bonds.

 

	
4.

	
Representation on Autumn Board

 

	
4.1

	
It is agreed that, with effect from Completion, and subject at all times to the majority of the directors of the Autumn Board being comprised of (i) Independent Directors for the duration of the Standstill Period and (ii) “independent directors” (as determined in accordance with the Autumn Articles) thereafter:

 

	
  

	
(A)

	
for as long as Summer (together with its Affiliates) has a Threshold Interest, Summer may, by notice in writing to Autumn, from time to time nominate two persons for appointment to the Autumn Board  (the Summer Nominees) (who shall always be deemed not to be Independent Directors).  For the purposes of this clause 4.1(A) and this agreement, Kristian Siem is the first Summer Nominee, it being understood that at the date of this agreement Summer has not exercised its right to nominate a second Summer Nominee but reserves the right to do so at any time.  If, when Summer first exercises its right to nominate a second Summer Nominee, one of the Designated Spring Directors who was not independent when appointed as an Autumn director at Completion remains 

 

  

5

  

a director of Autumn, Summer will, if it so elects, support the removal of such Designated Spring Director to provide a vacancy for the second Summer Nominee and in such circumstances the second Summer Nominee shall not be appointed to the Autumn Board until such Designated Spring Director has resigned (or otherwise been removed) from the Autumn Board. Following his resignation, the Autumn Board may re-appoint such Designated Spring Director as a new director of Autumn provided always that the penultimate paragraph of this clause 4.1 is followed with the references to “Summer Nominee” being deemed references to such Designated Spring Director; and

 

	
  

	
(B)

	
for so long as Summer (together with its Affiliates) has an interest below the Threshold Interest but at least the Minimum Interest, Summer may, by notice in writing to Autumn, from time to time nominate one person (a Summer Nominee) for appointment to the Autumn Board.

 

If the appointment of a Summer Nominee to the Autumn Board in accordance with this clause 4 would result in a majority of the Autumn Board ceasing to be comprised of Independent Directors in the Standstill Period or “independent directors” (as determined in accordance with the Autumn Articles) thereafter, before such Summer Nominee is elected to the Autumn Board, another Independent Director or “independent director” (as applicable) (in each case who shall be selected by the Autumn Board) must at the same time be elected to the Autumn Board and Summer undertakes to vote in favour of any resolution at a general meeting of Autumn to elect such person as an Independent Director or independent director (as applicable) of Autumn.

 

If a shareholder of Autumn, not being an Affiliate of Summer, gains representation on the Autumn Board, such representative shall be deemed to be an Independent Director for the purposes of this agreement.

 

	
4.2

	
Autumn shall take all necessary or reasonably required actions within its control in order to ensure that any Summer Nominee nominated pursuant to clause 4.1 is promptly and duly appointed to the Autumn Board (whether by board resolution or otherwise). If a resolution of the Autumn shareholders is required for the appointment of any Summer Nominee to the Autumn Board, Autumn shall take all necessary or reasonably required actions within its control to ensure that such Summer Nominee is appointed at a general meeting of Autumn promptly following the nomination pursuant to clause 4.1. In the event that the nominated Summer Nominee is not appointed to the Autumn Board at the general meeting, Summer is entitled to nominate another person in accordance with clause 4.1, and this clause 4.2 shall apply to such further nomination.

 

	
4.3

	
If a Summer Nominee has not been appointed to the Autumn Board within 3 months after the nomination pursuant to clause 4.1, provided the failure to appoint such Summer Nominee does not arise from a Designated Spring Director not leaving the Autumn Board, the restrictions under clauses 2, 3 and 5.2 shall cease to apply.

 

	
4.4

	
If any Summer Nominee appointed to the Autumn Board is required under the Autumn Articles or by law to submit himself for re-appointment as a director of Autumn at any general meeting of Autumn, the Autumn Board shall include a resolution for the re-

 

  

6

  

appointment of such Summer Nominee as a director of Autumn in the notice of such general meeting sent to the shareholders of Autumn and Autumn shall take all necessary or reasonably required actions within its control to ensure the approval of such re-appointment.  In the event that any such Summer Nominee is not re-appointed as a director of Autumn, Summer may nominate another person for appointment to the Autumn Board in accordance with clause 4.1.  For the avoidance of doubt, if such other person is not appointed to the Autumn Board within 3 months of the general meeting of Autumn at which the Summer Nominee was proposed to be re-appointed, the restrictions under clauses 2, 3 and 5.2 shall cease to apply.

 

	
4.5

	
Summer shall be entitled at any time to cause any Summer Nominee appointed to the Autumn Board to vacate his office as a director of Autumn by procuring his resignation and nominating another person as a Summer Nominee in accordance with clause 4.1.

 

	
4.6

	
If at any time Summer’s holdings (when aggregated with those of its Affiliates) in Autumn Shares falls below the Threshold Interest and at such time there are two Summer Nominees on the Autumn Board, Summer shall procure that one Summer Nominee on the Autumn Board resigns from his position on the Autumn Board.  For the avoidance of doubt, Summer shall not be required to procure the resignation of a Summer Nominee from the Autumn Board at any time when there is only one Summer Nominee on the Autumn Board, notwithstanding any change in Summer’s shareholding in Autumn.

 

	
4.7

	
Summer shall procure that a resignation from any Summer Nominee from his position on the Autumn Board in accordance with clause 4.5 and 4.6 is on such terms that such Summer Nominee does not seek compensation for loss of office and waives all claims that he may have against Autumn in connection therewith.  If any Summer Nominee refuses to resign in accordance with clause 4.5 and 4.6, the parties shall take all necessary or reasonably required actions within their control to ensure that such Summer Nominee is removed from the Autumn Board as soon as practicable.

 

	
4.8

	
Where a Summer Nominee appointed to the Autumn Board receives information in a capacity other than in his position on the Autumn Board, which imposes on him a duty of confidentiality, he shall not be obliged to disclose that information to Autumn.  This clause 4.8 is without prejudice to any obligation on a Summer Nominee appointed to the Autumn Board to disclose any conflict of interest under applicable laws and regulations, including the governance code applicable to Autumn from time to time.

 

	
4.9

	
The rights granted pursuant to this clause 4 are personal to Summer only and are not rights attached to any Autumn Shares held by Summer.  None of the rights granted under this clause 4 may be assigned or transferred to any other person other than any Affiliates of Summer.

 

	
4.10

	
Summer acknowledges and agrees that any decisions made by the Autumn Board (including the Summer Nominees appointed to the Autumn Board) shall be in accordance with the fiduciary duties of the directors.

 

  

7

  

 

	
4.11

	
The parties acknowledge that no director that has been appointed to the Autumn Board shall use any information obtained through his position on the Autumn Board for any commercial purpose other than:

 

	
  

	
(A)

	
for Autumn’s business; and

 

	
  

	
(B)

	
in the case of the Summer Nominees appointed to the Autumn Board, in connection with Summer’s and its Affiliate’s shareholding in Autumn (but always subject to any applicable laws and regulations).

 

	
5.

	
Election of Independent Directors

 

	
5.1

	
Following Completion and for the remainder of the Standstill Period, whenever the Autumn Board proposes a candidate for election as a new director of Autumn at a general meeting of Autumn and such candidate is proposed by the Autumn Board as an independent director, the Autumn Board shall either:

 

	
  

	
(A)

	
make such proposal on the basis that such candidate satisfies the definition of Independent Director; or

 

	
  

	
(B)

	
if the Autumn Board determines that such candidate should be proposed as an independent director notwithstanding that he or she does not satisfy the definition of Independent Director, then the Autumn Board shall provide the shareholders of Autumn, in the notice for the relevant general meeting, with the reasons as to why the Autumn Board proposes such candidate despite such non-compliance.

 

	
5.2

	
Following Completion, for the remainder of the Standstill Period Summer undertakes to either abstain from voting or to vote against (in its discretion) any resolution at a general meeting of Autumn to elect a person that has been proposed as a new director of Autumn if the election of such person would mean that a majority of the Autumn Board would cease to be comprised of Independent Directors, except that Summer shall at all times be free to vote in favour or against or abstain from voting (in its discretion) in respect of any resolution at a general meeting of Autumn to elect or re-elect a person as a director of Autumn where:

 

	
  

	
(A)

	
that person has been nominated by Summer in accordance with clause 4; or

 

	
  

	
(B)

	
the Autumn Board has proposed such person as a director of Autumn or has recommended that shareholders vote in favour of the election or re-election of such person as a director of Autumn.

 

	
5.3

	
Any candidate appointed to the Autumn Board shall be deemed to be an Independent Director for the purposes of this agreement if that person was proposed by the Autumn Board in accordance with clause 5.1(B).  Each member of the Autumn Board appointed at the Effective Time in accordance with the Combination Agreement shall be deemed to be an Independent Director for the purposes of this agreement if that person is 

 

  

8

  

referred to as an “Independent Director” in clause 4 of the Combination Agreement, unless such person is nominated as a Summer Nominee.

 

	
5.4

	
Following Completion and for the remainder of the Standstill Period, the Autumn Board shall insert the provisions included at Schedule 2 to this agreement in the then current terms of reference for the Autumn nominations committee as adopted by the Autumn Board from time to time.

 

	
6.

	
Summer undertaking

 

	
6.1

	
Summer irrevocably and unconditionally undertakes in favour of Spring and Autumn that it will exercise all voting rights attaching to its shareholding in Spring at the relevant time by voting (either in person or by proxy):

 

	
  

	
(A)

	
in favour of the resolutions (whether or not amended and whether put on a show of hands or poll) in relation to the proposed combination of Spring and Autumn and the Scheme to be proposed at the Spring General Meeting and the Court Meeting or any adjournment thereof; and

 

	
  

	
(B)

	
against any shareholder resolution relating to any proposal, agreement or action made in opposition to the proposed combination of Spring and Autumn and the Scheme or the transactions contemplated thereby.

 

	
6.2

	
Nothing in clause 6.1 shall prevent Summer voting in favour of any resolution or other motion to adjourn the Spring General Meeting and the Court Meeting to a date not later than the date on which a quorate general meeting of Autumn to seek the Autumn  Shareholder Approval is validly convened and held and Autumn shareholders vote on resolutions relating to the Autumn Shareholder Approval.

 

	
6.3

	
The undertakings in clause 6.1 above shall cease to apply immediately following the announcement of an offer by a third party for the acquisition of control of either Spring or Autumn which represents an offer on better terms than the Scheme.

 

	
7.

	
Non-solicitation

 

Summer undertakes that, from the date hereof until the Effective Time, neither it nor any of its Affiliates or their respective officers, directors or employees shall solicit or initiate any Acquisition Proposal relating to Spring.

 

	
8.

	
Warranties

 

	
8.1

	
Summer warrants to Spring and Autumn that:

 

	
  

	
(A)

	
Schedule 1 sets out all Equity Interests held by Summer and its Affiliates in Spring and Autumn at the date of this agreement and Summer confirms that (except in respect of the Equity Interests marked with a ** in Schedule 1 lent out under the Existing Framework Agreement) it is the registered holder of (or is 

 

  

9

  

otherwise able to control the exercise of the voting rights attaching to) the Spring Shares against its and its Affiliates names therein; and

 

	
  

	
(B)

	
at the date of this agreement neither it nor any of its Affiliates owns any Equity Interest or has any other legal or beneficial interest in any other security conferring voting rights in either Spring or Autumn other than as set out in (A) above.

 

Notwithstanding any other provisions of this agreement, for the purposes of clauses 2, 4 and 6, shares in Spring (marked with a * in Schedule 1) (or shares derived therefrom) which have been lent to Lehman Brothers International (Europe) to be on-lent to third parties shall be deemed not to be shareholdings or Equity Interests held by Summer or its Affiliates to the extent Summer or its Affiliates (as applicable) are unable at the relevant time to control the voting rights attaching to such Equity Interests.

 

	
8.2

	
Each party hereto warrants to the other parties hereto that:

 

	
  

	
(A)

	
it is a legal entity duly organised or formed, validly existing and in good standing (insofar as such term applies as a legal concept in the jurisdiction of incorporation of such party) under the laws of its jurisdiction of organisation or formation, and has all requisite power and capacity, and is duly and validly authorised, to execute and deliver this agreement and to perform its obligations hereunder, and no other actions or proceedings are necessary to authorise the execution and delivery by it of this agreement and the performance of its obligations hereunder.  This agreement constitutes its legal, valid and binding obligations, and is enforceable against it in accordance with its terms; and

 

	
  

	
(B)

	
the execution and delivery of this agreement by it does not, and the performance of this agreement by it will not result in or constitute a violation of any obligation, instrument, permit, concession, franchise, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to it or by which it is bound or affected.

 

	
9.

	
Consent

 

Summer consents to any public disclosure made by Spring or Autumn incorporating references to this agreement and to its and/or its Affiliates’ ownership of Equity Interests in Spring and Autumn as described in this agreement, in each case where such references are required by any Applicable Laws; provided that Summer shall have a reasonable opportunity to review and comment on such disclosure prior to the making of such disclosure.  Summer understands that, if the Scheme is proposed, this agreement may be made available for inspection prior to the Effective Time and that particulars of it will be contained in the Scheme Document and the Prospectus. Summer undertakes to provide Spring and Autumn with any further information in relation to its and any of its Affiliates’ interests in Spring or Autumn as Spring or Autumn may reasonably require in order to comply with:

  

10

  

 

	
  

	
(A)

	
the requirements of any relevant securities exchange or applicable regulatory or governmental body to which Spring or Autumn is subject, wherever situated, and whether or not the requirement for such information has the force of law; and

 

	
  

	
(B)

	
any other legal or regulatory requirements for inclusion of such information in the Scheme Document (or any other document required in connection with the Scheme) and the Prospectus.

 

	
10.

	
Termination

 

	
10.1

	
This agreement (except for clause 11 and 19 which shall continue to apply after the termination of this agreement without limitation in time) shall continue in force unless and until any of the following events occur, in which case this agreement shall automatically terminate:

 

	
  

	
(A)

	
the termination of the Combination Agreement for any reason prior to Completion;

 

	
  

	
(B)

	
an acquisition by a person or a group of persons acting in concert at any time prior to Completion of shares in Autumn and/or Spring that (assuming Completion occurred at that time) would result in such person or group of persons holding an aggregate shareholding in Autumn that would be greater than that held legally and/or beneficially by Summer and its Affiliates, whether directly or indirectly, at that time (again assuming that Completion occurred at that time); or

 

	
  

	
(C)

	
an acquisition  by a person or a group of persons acting in concert  at any time after Completion of shares in Autumn that would result in such person or group of persons holding an aggregate shareholding in Autumn that is greater than the shareholding in Autumn held legally and/or beneficially by Summer and its Affiliates, whether directly or indirectly, at that time.

 

	
10.2

	
Any termination of this agreement shall be without prejudice to any provisions hereof which are expressed to continue in force thereafter and shall be without prejudice to any rights or obligations which may have accrued prior to the date on which this agreement terminated in respect of the relevant party.

 

	
11.

	
Confidentiality

 

	
11.1

	
Each party shall treat as confidential all information obtained as a result of entering into or performing this agreement  which relates to:

 

	
  

	
(A)

	
the provisions of this agreement;

 

	
  

	
(B)

	
the negotiations relating to this agreement;

 

	
  

	
(C)

	
the subject matter of this agreement; or

 

  

11

  

 

	
  

	
(D)

	
the other parties.

 

	
11.2

	
Each party shall not disclose any such confidential information to any person other than any of its directors or employees who needs to know such information in order to discharge his duties.

 

	
11.3

	
Notwithstanding the other provisions of this clause 11, a party may disclose any such confidential information:

 

	
  

	
(A)

	
to the extent required by law or any Governmental Entity;

 

	
  

	
(B)

	
to the extent required by any securities exchange or regulatory or governmental body to which that party is subject wherever situated, whether or not the requirement for information has the force of law;

 

	
  

	
(C)

	
 to its professional advisers, auditors and bankers provided they have a duty to keep such information confidential;

 

	
  

	
(D)

	
to the extent the information has come into the public domain through no fault of that party; or

 

	
  

	
(E)

	
to the extent the other parties have given prior written consent  to the disclosure.

 

Any information to be disclosed pursuant to sub-clauses 11.3(A) or 11.3(B) shall be disclosed only after notice to the other parties, to the extent permitted by applicable law.

 

	
11.4

	
The restrictions contained in this clause 11 shall continue to apply after the termination of this agreement without limit in time.

 

	
12.

	
Assignment

 

Unless the parties specifically agree in writing or as set out in this agreement, no person shall assign, transfer or charge all or any of its rights under this agreement nor grant, declare, create or dispose of any right or interest in it.

 

	
13.

	
Invalidity

 

If at any time any provision of this agreement is or becomes illegal, invalid or unenforceable in any respect under the law of any jurisdiction, that shall not affect or impair:

 

	
  

	
(A)

	
the legality, validity or enforceability in that jurisdiction of any other provision of this agreement; or

 

	
  

	
(B)

	
the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this agreement.

 

  

12

  

 

	
14.

	
Waivers, rights and remedies

 

No failure or delay by any party hereto in exercising any right, power, privilege or remedy by law or under or pursuant to this agreement shall impair such right, power, privilege or remedy or operate or be construed as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any right, power, privilege or remedy in connection with this agreement shall preclude any further or other exercise of it or the exercise of any other right or remedy.

 

	
15.

	
Entire agreement

 

	
15.1

	
This agreement constitutes the whole and only agreement between the parties relating to the subject matter of this agreement.

 

	
15.2

	
Each party acknowledges that in entering into this agreement it is not relying upon any pre contractual statement which is not set out in this agreement.

 

	
15.3

	
Except in the case of fraud, no party shall have any right of action against any other party to this agreement arising out of or in connection with any pre contractual statement except to the extent that it is repeated in this agreement.

 

	
15.4

	
For the purposes of this clause 15, “pre contractual statement” means any draft, agreement, undertaking, representation, warranty, promise, assurance or arrangement of any nature whatsoever, whether or not in writing, relating to the subject matter of this agreement made or given by any person at any time prior to this agreement becoming legally binding.

 

	
15.5

	
This agreement may only be varied in writing signed by each of the parties.

 

	
16.

	
Notices

 

	
16.1

	
Any notice or other communication to be given under or in connection with this Agreement (a Notice) shall be in the English language in writing and signed by or on behalf of the party giving it and marked for the attention of the relevant party.  A Notice may be delivered personally, by pre-paid recorded delivery, international courier or email to the address provided in this clause 16.

 

	
16.2

	
A notice shall be deemed to have been received:

 

	
  

	
(A)

	
at the time of delivery if delivered personally;

 

	
  

	
(B)

	
at the time it is sent if sent by email;

 

	
  

	
(C)

	
two Business Days after the time and date of posting if sent by pre-paid recorded delivery; or

 

	
  

	
(D)

	
three Business Days after the time and date of posting if sent by international courier,

 

  

13

  

provided that if deemed receipt of any Notice occurs after 6.00 p.m. or is not on a Business Day, deemed receipt of the Notice shall be 9.00 a.m. on the next Business Day.  References to time in this clause 16 are to local time in the country of the addressee.

 

	
16.3

	
The addresses for service of Notice are:

 

	
Party:

	
Address:

	
Email:

 

	
Spring

	
Subsea7 Inc.

PO Box 309

Ugland House

South Church Street

Grand Cayman

KY1-1104

Cayman Island

For the attention of: Michael Delouche

 

	
Email - mikedelo@swbell.net

 

	  	
cc to:

 

	  
	  	
Subsea 7

Prospect Road

Arnhall Business Park

Westhill

Aberdeenshire

AB32 6FE

For the attention of: Graeme Murray

 

	
Email - Graeme.Murray@Subsea7.com

	
Autumn

	
Acergy M.S. Limited

200 Hammersmith Road

London

W6 7DL

For the attention of Johan Rasmussen

 

	
Email: johan.rasmussen@acergy-group.com

	
Summer

	
Siem Industries Inc.

PO Box 309

Ugland House

South Church Street

George Town

Grand Cayman

KY1-1104

Cayman Islands

For the attention of Michael Delouche

	
Email:

mikedelo@swbell.net

 

or to such other address as any party shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so emailed, personally delivered or mailed.

  

14

  

 

	
17.

	
Counterparts

 

This agreement may be executed in any number of counterparts, and by the parties on separate counterparts, but shall not be effective until each party has executed at least one counterpart. Each counterpart shall constitute an original of this agreement, but all the counterparts shall together constitute but one and the same instrument.

 

	
18.

	
No partnership

 

Nothing in this agreement and no action taken by the parties under this agreement shall constitute a partnership, joint-venture or agency relationship between any of the parties.

 

	
19.

	
Costs and expenses

 

Each party shall pay its own costs and expenses incurred in connection with the negotiation, preparation and implementation of this agreement.

 

	
20.

	
Third party rights

 

The parties to this agreement do not intend that any term of this agreement should be enforceable, by virtue of the Contracts (Rights of Third Parties) Act 1999, by any person who is not a party to this agreement.

 

	
21.

	
Enforcement

 

Each party hereto understands and agrees that money damages would not be a sufficient remedy for any breach of this agreement by it or its Affiliates and that the other parties hereto shall be entitled to specific performance and injunctive relief as remedies for any such breach of this agreement.  Such remedies shall not be deemed to be the exclusive remedies for any breach of this agreement, but shall be in addition to all other remedies available at law.

 

	
22.

	
Governing law and jurisdiction

 

	
22.1

	
This agreement is to be governed by and construed in accordance with English law.  Any matter, claim or dispute arising out of or in connection with this agreement, whether contractual or non-contractual, is to be governed by and determined in accordance with English law.

 

	
22.2

	
The courts of England are to have exclusive jurisdiction to settle any dispute, whether contractual or non-contractual, arising out of or in connection with this agreement.  Any proceeding, suit or action arising out of or in connection with this agreement or the negotiation, existence, validity or enforceability of this agreement (Proceedings) shall be brought only in the courts of England.

 

	
22.3

	
Each party waives (and agrees not to raise) any objection, on the ground of forum non conveniens or on any other ground, to the taking of Proceedings in the courts of England.  Each party also agrees that a judgment against it in Proceedings brought in 

 

  

15

  

England shall be conclusive and binding upon it and may be enforced in any other jurisdiction

 

	
22.4

	
Each party irrevocably submits and agrees to submit to the jurisdiction of the courts of England.

 

	
23.

	
Agent for service of process

 

	
23.1

	
Autumn irrevocably appoints Acergy M.S. Limited of 200 Hammersmith Road, London, W6 7DL, to be its agent for the receipt of Service Documents.  It agrees that any Service Document may be effectively served on it in connection with Proceedings in England and Wales by service on its agent effected in any manner permitted by the Civil Procedure Rules.

 

If Autumn’s agent at any time ceases for any reason to act as such, Autumn shall appoint a replacement agent having an address for service in England or Wales and shall notify Spring and Summer of the name and address of the replacement agent.  Failing such appointment and notification, Spring and Summer shall be entitled by notice to Autumn to appoint a replacement agent to act on behalf of Autumn.  The provisions of this 23.1 applying to service on Autumn’s agent apply equally to service on such a replacement agent.

 

A copy of any Service Document served on Autumn’s agent shall be sent by post to Autumn.  Failure or delay in so doing shall not prejudice the effectiveness of service of the Service Document.

 

	
23.2

	
Spring irrevocably appoints Subsea 7 Engineering Limited, 17th Floor, Quadrant House, Sutton, The Quadrant, Sutton, Surrey, SM2 5AS (for the attention of Graham Sharland) to be its agent for the receipt of Service Documents.  It agrees that any Service Document may be effectively served on it in connection with Proceedings in England and Wales by service on its agent effected in any manner permitted by the Civil Procedure Rules.

 

If Spring’s agent at any time ceases for any reason to act as such, Spring shall appoint a replacement agent having an address for service in England or Wales and shall notify Autumn and Summer of the name and address of the replacement agent.  Failing such appointment and notification, Autumn and Summer shall be entitled by notice to Spring to appoint a replacement agent to act on behalf of Spring.  The provisions of this Clause 23.2 applying to service on Spring’s agent apply equally to service on such a replacement agent.

 

A copy of any Service Document served on Spring’s agent shall be sent by post to Spring.  Failure or delay in so doing shall not prejudice the effectiveness of service of the Service Document.

 

	
23.3

	
Summer irrevocably appoints Siem Capital UK Limited of 30 Charles II Street, London SW1Y 4AE (for the attention of  to be its agent for the receipt of Service Documents. It agrees that any Service Document may be effectively served on it in connection with 

 

  

16

  

Proceedings in England and Wales by service on its agent effected in any manner permitted by the Civil Procedure Rules.

 

If Summer’s agent at any time ceases for any reason to act as such, Summer shall appoint a replacement agent having an address for service in England or Wales and shall notify Autumn and Spring of the name and address of the replacement agent.  Failing such appointment and notification, Autumn and Spring shall be entitled by notice to Summer to appoint a replacement agent to act on behalf of Summer.  The provisions of this Clause 23.3 applying to service on Summer’s agent apply equally to service on such a replacement agent.

 

A copy of any Service Document served on Summer’s agent shall be sent by post to Summer.  Failure or delay in so doing shall not prejudice the effectiveness of service of the Service Document.

  

17

  

 

	
SIGNED

for and on behalf of

SUBSEA 7 INC.

	
)

)

)

	
 

 

/s/ Mel Fitzgerald, /s/ Arild Schultz

..............................................................

 

	
SIGNED

for and on behalf of

ACERGY S.A.

	
)

)

)

	
 

 

/s/ Jean Cahuzac

..............................................................

 

	
SIGNED

for and on behalf of

SIEM INDUSTRIES INC.

	
)

)

)

	
 

 

/s/ Michael Delouche

..............................................................

 

 

  

18

  

Schedule 1

 

Summer shareholdings as at 19 June 2010

 

	
Spring common shares

 

	
Number

	
Legally and/or beneficially owned by Summer

 

	
60,429,045

	
Pledged for share lending under the Existing Framework Agreement comprised of:

 

	  
	
(i) shares pledged but not loaned out

 

	
4,438,500^

	
(ii) shares loaned out **

 

	
561,500^

	
  

 

	
5,000,000^

	
Total legally and/ or beneficially owned by Summer

 

	
65,247,545

	
Lent to Lehman Brothers International (Europe) *

 

	
4,680,000

Note:

 

* not to be considered shareholdings or Equity Interest held by Summer or its Affiliates

 

^ the total number of Spring shares pledged for share lending is 5,000,000 but the exact number loaned out may from time to time vary.

  

19

  

Schedule 2

 

Where the nominations committee considers a candidate for proposal to the board of directors of the Company for a role as an independent director, the nominations committee shall have regard to the following definition of "Independent Director" in making its evaluations:

 

“Independent Director” means a person who:

 

(a)           has not been an employee of Spring, Autumn and/or their respective Affiliates in the last five years;

 

(b)           has not, and has not had within the last three years, a material business relationship with Spring, Autumn and/or their respective Affiliates either directly, or as a partner, a material shareholder, director or senior employee of a body that has such a relationship with Spring, Autumn and/or their respective Affiliates;

 

(c)           is not a direct or indirect shareholder in Spring or Autumn having an interest in excess of 1% of the issued share capital (excluding shares held in treasury) of Spring or Autumn, and is not a director, senior employee or authorised representative of such a direct or indirect shareholder in Spring or Autumn;

 

(d)           has not received and does not receive additional remuneration from Spring, Autumn and/or their respective Affiliates apart from a director’s fee (other than through participation in any share option schemes of Spring, Autumn and/or their respective Affiliates), does not participate in any performance-related pay scheme of Spring, Autumn and/or their respective Affiliates and is not a member of any pension scheme of Spring, Autumn and/or their respective Affiliates;

 

(e)           is not associated with a company that is an adviser or consultant to Spring or Autumn;

 

(f)           is not employed as an executive director or senior employee of another company where any of the executive directors or senior employees of Spring, Autumn and/or their respective Affiliates serve on that company's board of directors;

 

(g)           has no close family ties with any of the advisers, directors or senior employees of Spring or Autumn;

 

(h)           is not a member of the immediate family of any individual who is, or has been during the past five years, employed by Spring, Autumn and/or their respective Affiliates as a director or senior employee; and

 

(i)           has not served on the board of directors of Autumn for more than nine years from the date of first election.

 

For the purposes of this definition, a Person shall be “associated” with a party if such person (i) has a direct or indirect ownership interest of 5% or more in that party; or (ii) is employed by such party as a senior employee.

 

For the purposes of this definition, a person shall be a “material shareholder” of a body if such person has a direct or indirect ownership interest of 5% or more in such body.

 

For the purposes of this definition, a person shall be a “senior employee” of a company if that person receives a basic salary from that company (excluding bonuses and benefits in kind) in excess of £125,000.

 

For the purposes of this definition, a person shall have a “close family tie” with another person if that other person is his/her spouse, parent or child.

  

20

  

For the purposes of this definition, references to an “adviser” or “consultant” to a company shall be construed as references to a person that provides material advisory or consultancy services directly to that company.

 

For the purposes of this definition, a person is an “authorised representative” of another person if that person is authorised to represent that other person.”

 

If the nominations committee proposes such candidate for a role as independent director who does not satisfy the criteria in the definition of "Independent Director" above, then the Board of Directors shall, in the notice of general meeting for the relevant meeting at which such candidate is to be proposed for election by the Board of Directors, disclose to the shareholders the non-compliance with the criteria.

 

 

	 21

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