Exhibit 10.4
GUARANTEE
THIS GUARANTEE is made by deed on the 28 day of April 2005
BY:
SIBERIAN ENERGY GROUP INC., a corporation incorporated under the laws of the
-----------------------------
State of Nevada, United States and whose principal place of business is at 000
Xxxxxxx Xxxxxx, 0xx xxxxx, Xxx Xxxx, XX 00000 ("SEG");
IN FAVOUR OF:
BALTIC PETROLEUM LIMITED, a company incorporated in England and Wales under
--------------------------
company number 05303991 and whose registered office is at 00x Xxxxxxx Xxxxxx
Xxxxxx X0X 0XX, Xxxxxx Xxxxxxx ( "BP");
WHEREAS:
(A) By separate loan facility agreement between Lender and OOO
Zauralneftegaz ("ZNG"), a Russian limited liability company and wholly owned
subsidiary of SEG, of even date herewith, BP has agreed to provide certain loan
facilities to ZNG (the "LOAN AGREEMENT"); and
(B) SEG has agreed to guarantee the obligations of ZNG to BP under the Loan
Agreement pursuant to the terms of this Guarantee.
NOW THIS DEED WITNESSES and SEG hereby agrees as follows:
1. GUARANTEE AND INDEMNITY
SEG irrevocably and unconditionally:
1.1 guarantees to BP punctual performance by ZNG of all its obligations
under the Loan Agreement;
1.2 undertakes with BP that whenever ZNG does not pay any amount when due
under or in connection with the Loan Agreement, SEG shall immediately
on demand pay that amount as if it was the principal obligor; and
1.3 indemnifies BP immediately on demand against any cost, loss or
liability suffered by BP if any obligation guaranteed by it is or
becomes unenforceable, invalid or illegal. The amount of the cost,
loss or liability shall be equal to the amount which BP would
otherwise have been entitled to recover.
2. CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the ultimate balance
of sums payable by ZNG under the Loan Agreement, regardless of any intermediate
payment or discharge in whole or in part.
3. REINSTATEMENT
If any payment by ZNG or any discharge given by BP (whether in respect of the
obligations of ZNG or any security for those obligations or otherwise) is
avoided or reduced as a result of insolvency or any similar event:
(a) the liability of ZNG shall continue as if the payment, discharge,
avoidance or reduction had not occurred; and
(b) BP shall be entitled to recover the value or amount of that security
or payment from ZNG, as if the payment, discharge, avoidance or
reduction had not occurred.
4. WAIVER OF DEFENCES
The obligations of SEG under this Guarantee will not be affected by an act,
omission, matter or thing which, but for this clause, would reduce, release or
prejudice any of its obligations under this Guarantee (without limitation and
whether or not known to BP) including:
(a) any time, waiver or consent granted to, or composition with, ZNG or
any other person;
(b) the release of ZNG or any other person under the terms of any
composition or arrangement with any of its creditors or members;
(c) the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against,
or security over assets of, ZNG or any other person or any
non-presentation or non-observance of any formality or other
requirement in respect of any instrument or any failure to realise the
full value of any security;
(d) any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of ZNG or any other
person;
(e) any amendment (however fundamental) or replacement of the Loan
Agreement or any other document or security;
(f) any unenforceability, illegality or invalidity of any obligation of
any person under the Loan Agreement or any other document or security;
or
(g) any insolvency or similar proceedings.
5. IMMEDIATE RECOURSE
SEG waives any right it may have of first requiring BP (or any trustee or agent
on its behalf) to proceed against or enforce any other rights or security or
claim payment from any person before claiming from SEG under this Guarantee.
This waiver applies irrespective of any law or any provision of the Loan
Agreement to the contrary.
6. APPROPRIATIONS
Until all amounts which may be or become payable by ZNG under or in connection
with the Loan Agreement have been irrevocably paid in full, BP (or any trustee
or agent on its behalf) may:
(a) refrain from applying or enforcing any other moneys, security or
rights held or received by BP (or any trustee or agent on its behalf)
in respect of those amounts, or apply and enforce the same in such
manner and order as it sees fit (whether against those amounts or
otherwise) and SEG shall be entitled to the benefit of the same; and
(b) hold in an interest-bearing suspense account any moneys received from
SEG or on account of SEG's liability under this Guarantee.
7. DEFERRAL OF GUARANTORS' RIGHTS
Until all amounts which may be or become payable by ZNG under or in connection
with the Loan Agreement have been irrevocably paid in full, SEG shall not
exercise any rights which it may have by reason of performance by it of its
obligations under the Guarantee:
(a) to be indemnified by ZNG;
(b) to claim any contribution from any other guarantor of any of ZNG's
obligations under the Loan Agreement; and/or
(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights it may have under the Loan
Agreement or of any other guarantee or security taken pursuant to, or
in connection with, the Loan Agreement.
8. ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by any other
guarantee or security now or subsequently held by BP.
9. NOTICES
Any notice to be given pursuant to the terms of this Agreement shall be given in
writing to the party due to receive such notice at the address set out below or
such other address as may have been notified to the other parties in accordance
with this clause. Notice shall be delivered personally or sent by first class
pre-paid recorded delivery or registered post (air mail if overseas) or by
facsimile transmission to the numbers and parties detailed below and shall be
deemed to be given in the case of delivery personally on delivery and in the
case of posting (in the absence of evidence of earlier receipt) 48 hours after
posting (six days if sent by air mail) and in the case of facsimile transmission
on completion of the transmission provided that the sender shall have received
printed confirmation of transmission.
SEG Attn: Fax:
000 Xxxxxxx Xxxxxx Xxxxx Xxxxxx x0 (000) 000-0000
6th floor
Xxx Xxxx, XX 00000
XXX
BP Attn: Fax:
00x Xxxxxxx Xxxxxx Xxxxx Xxxxxx x00 00 0000 0000
Xxxxxx X0X 0XX
Xxxxxx Xxxxxxx
10. THIRD PARTIES
No term of this agreement shall be enforceable under the Contracts (Rights of
Third Parties) Xxx 0000 by a third party.
11. LAW AND JURISDICTION
This Guarantee shall be governed by and construed in accordance with the laws of
England. Each party irrevocably agrees to submit to the exclusive jurisdiction
of the courts of England and Wales over any claim or matter arising under or in
connection with this Agreement.
IN WITNESS whereof this Guarantee has been duly executed and delivered as a deed
the day and year first above written
EXECUTED AS A DEED by )
SIBERIAN ENERGY GROUP INC.: ) /s/ Xxxxx Xxxxxx
) ---------------------------
Authorised signatory
Xxxxx Xxxxxx
---------------------------
Name