Exhibit 10.4
EXECUTION VERSION
31 December 2008 SECURITY TRUST DEED
between
CONSTAR INTERNATIONAL U.K. LIMITED
as a Company
and
CITICORP USA, INC.
CITICORP NORTH AMERICA, INC. CITIBANK, N.A.
WELLS FARGO FOOTHILL, LLC
as Secured Parties
and
CITIBANK, N.A., LONDON BRANCH
as Security Trustee
WEIL, GOTSHAL & MANGES
One South Place London EC2M 2WG
Tel: +44 (0) 20 7903 1000 Fax: +44 (0) 20 7903 0990
www.weil.com
TABLE OF CONTENTS
Page
1 INTERPRETATION 1
2 DECLARATION OF TRUST 2
3 DELEGATION BY SECURITY TRUSTEE 3
4 INVESTMENT BY SECURITY TRUSTEE 3
5 APPLICATION OF PROCEEDS 3
6 SECURITY TRUSTEE' S RIGHTS AND DUTIES 4
7 ADDITIONAL POWERS 9
8 APPOINTMENT AND RESIGNATION OF SECURITY TRUSTEES 9
9 REMUNERATION 10
10 TRANSFERS 12
11 REMEDIES, WAIVERS, AMENDMENTS AND CONSENTS 12
12 PARTIAL INVALIDITY 13
13 PERPETUITY PERIOD 13
14 COUNTERPARTS 13
15 GOVERNING LAW 13
16 JURISDICTION 13
SCHEDULE 1 Form of Accession Undertaking 14
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THIS SECURITY TRUST DEED ( this " Deed" ) is made on 31 December 2008 AMONG:
(1) CONSTAR INTERNATIONAL U.K. LIMITED , a company with limited liability incorporated under the laws of England and Wales with company number 02407933 (" Constar UK" );
(2) CITICORP USA, INC. ( the " Administrative Agent" );
(3) CITICORP USA, INC. ;
(4) CITICORP NORTH AMERICA, INC.
(5) CITIBANK, N.A.
(6) WELLS FARGO FOOTHILL, LLC; and
(7) CITIBANK, N.A., LONDON BRANCH , as trustee for the Secured Parties (the " Security Trustee" ), which expression includes all other persons for the time being the security trustee or trustees for the Secured Parties under this Deed).
WHEREAS (A) The Companies have granted to the Security Trustee certain security in respect of the Secured Obligations owed by the Companies to the Secured Parties under the Loan Documents.
(B) The Security Trustee has agreed to act as the trustee of the Trust Property under this Deed for the benefit of the Secured Parties upon the terms and conditions contained in it.
(C) The Security Trustee intends this Deed to, and it shall, take effect as a deed. 1 INTERPRETATION
1.1 Definitions In this Deed the following terms have the meanings given to them in this Clause 1.1.
" Accession Undertaking" means an undertaking in the form set out in Schedule 1 ( Form of Accession Undertaking ) hereto.
" Companies" means, collectively, Constar UK and any additional company which becomes a party to this Deed and " Company" shall mean any of them as the context may require.
" Debenture" means the debenture dated on or about the date of this Deed and made between Constar UK and the Security Trustee.
" Exposure" means at any time in relation to a Secured Party all amounts which are owing, actually or contingently, at such time by the Companies to such Secured Party under the Loan Documents, whether or not due.
" Facility Agreement" means the facility agreement dated on or about the date of this Deed between the Borrower, the Lenders, Citicorp USA, Inc. as administrative agent and the Security Trustee.
" Trust Property" means:
(a) all assets and rights from time to time transferred, mortgaged, charged, assigned to and/or vested in the Security Trustee under or in connection with any UK Security Document;
(b) the security interests from time to time constituted by or pursuant to or evidenced by the UK Security Documents; (c) all representations, obligations, covenants, warranties or other contractual provisions in favour of the Security Trustee (other than any made or granted solely for its own benefit) made or granted in or pursuant to any of the UK Security Documents;
(d) all sums received or recovered by the Security Trustee under, pursuant to or in connection with this Deed and/or any UK Security Document or the exercise of any of the Security Trustee' s powers under or in connection therewith and which are required to be held by the Security Trustee upon trust on the terms of this Deed and/or any UK Security Document; and (e) all income and other sums at any time received or receivable by the Security Trustee in respect of the Trust Property (or any part thereof). " UK Security Documents" means this Deed, the Debenture and any other document entered into from time to time by any of the Companies pursuant to which each such Company undertakes a liability to the Security Trustee as security trustee for the Secured Parties in respect of any of the Secured Obligations or which creates or evidences a security interest in favour of the Security Trustee as security trustee for the Secured Parties over any of the assets of such Company as security for any of the Secured Obligations or which creates or evidences any right or interest related thereto.
" VAT" means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature.
1.2 Interpretation
(a) Unless otherwise defined in this Deed, terms defined and references construed in the Facility Agreement or the Debenture have the same meanings in this Deed and the construction rules set out in Section 1.5 ( Certain Terms ) of the Facility Agreement shall apply to this Deed as though they were set out in full in this Deed except that references to " this Agreement" shall be construed as references to this Deed. The Administrative Agent undertakes to deliver a copy of any amendment to the Facility Agreement to the Security Trustee and unless and until the Security Trustee receives such amendment, it shall be entitled to assume that no such amendment has been made.
(b) The terms of the other Loan Documents and of any side letters between the parties thereto in relation to the Loan Documents are incorporated into this Deed to the extent required for any purported disposition of the Trust Property to be a valid disposition in accordance with Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. 1.3 Third Party Rights A person who is not a party to this Deed has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Deed.
1.4 Effect as a Deed This Deed is intended to take effect as a deed notwithstanding the fact that a party may only execute this Deed under hand.
2 2 DECLARATION OF TRUST
The Security Trustee declares that it shall hold the Trust Property on trust for the Secured Parties on the terms contained in this Deed. Each of the parties to this Deed agrees that the Security Trustee shall have those duties, obligations and responsibilities expressly specified in this Deed and the UK Security Documents (and no others shall be implied) and, without limiting the foregoing, each of the Secured Parties authorises, ratifies, confirms and approves the Security Trustee' s entering into the Debenture. In exercising its rights, powers and discretions under the UK Security Documents, the Security Trustee shall act subject to and in accordance with this Deed. If there is any conflict between the provisions of this Deed and the other UK Security Documents, the provisions of this Deed shall prevail. The rights, power and discretions conferred upon the Security Trustee by this Deed shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Trustee by general law or otherwise.
3 DELEGATION BY SECURITY TRUSTEE
The Security Trustee may at any time and from time to time upon notice to the Administrative Agent delegate by power of attorney or in any other manner to any person or persons all or any of the rights, powers and discretions which are for the time being exercisable by the Security Trustee under this Deed or any of the UK Security Documents. Any such delegation may be made upon such terms and conditions (including power to sub-delegate) as the Security Trustee may think fit. The Security Trustee shall not be in any way liable or responsible to the Companies, any Secured Party or any other person for any claim, loss or damage arising from any act, default, omission or misconduct on the part of any such delegate or sub-delegate except in the case of fraud, wilful misconduct or gross negligence on the part of the Security Trustee in the appointment of such delegate or sub-delegate.
4 INVESTMENT BY SECURITY TRUSTEE
Pending appropriation and distribution under Clause 5 ( Application of Proceeds ), the Security Trustee shall place any sum received, recovered or held by it in respect of the Trust Property in a suspense account and shall invest an amount equal to the balance from time to time standing to the credit of that suspense account in any of the investments authorised by paragraph (o) of Clause 6.2 ( Supplemental Provisions Relating to Security Trustee ) with power from time to time in its absolute discretion to vary any such investments. The income from those investments shall be credited to the relevant suspense account when received by the Security Trustee. 5 APPLICATION OF PROCEEDS
5.1 Order of Application The Security Trustee shall appropriate and distribute all sums received, recovered or held by it in respect of the Trust Property as set out in Section 2.13 ( Payments and Computations ) of the Facility Agreement (but without prejudice to the right of the Secured Parties (or any of them) to recover any shortfall from the Companies).
5.2 Timing of Distributions Distributions by the Security Trustee shall be made at such times as the Security Trustee in its absolute discretion determines to be as soon as reasonably practical, having regard to all relevant circumstances. 5.3 Distribution Deemed to be Made Gross As between the Secured Parties, a Secured Party shall be deemed to have received from the Security Trustee any amount which the Security Trustee is at any time required by law to deduct or withhold on account of tax from any
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distribution made by the Security Trustee to that Secured Party under this Deed. However, this shall not prejudice any right which that Secured Party may have against the Companies under the Loan Documents or any other person (whether under a grossing-up clause or otherwise) but, as between the Secured Parties, any such indebtedness shall rank after all other Secured Obligations. 5.4 Basis of Distribution For the purpose of any distribution by the Security Trustee, the Security Trustee may fix a date as at which the amount of the Secured Obligations is to be calculated. Any such date must not be more than 10 days before the proposed date of the relevant distribution. For the purposes of determining the amount of any payment to be made pursuant to Clause 5.1 ( Order of Application ) to any Secured Party, the Security Trustee shall be entitled to call for a certificate of the amount, currency and nature of any Secured Obligation due, owing or incurred to the relevant Secured Party at the date fixed by the Security Trustee for such purpose and as to such other matters as the Security Trustee may deem necessary or desirable to enable it to make a distribution. The Security Trustee shall be entitled to rely on any such certificate. 5.5 Unwinding Any appropriation or distribution which later transpires to have been, or is agreed by the Security Trustee to have been, invalid, or which has to be refunded, shall be refunded and shall be deemed never to have been made provided that the Security Trustee shall be under no obligation to make such repayment or refund unless it has first received the requisite amount from the recipient of such invalid or refundable appropriation or distribution.
6 SECURITY TRUSTEE' S RIGHTS AND DUTIES
6.1 Rights and Duties
(a) The Security Trustee shall have only those duties, obligations and responsibilities expressly specified in this Deed and the UK Security Documents and shall not have any implied duties, obligations or responsibilities. In performing or carrying out its duties, obligations and responsibilities, the Security Trustee shall be considered to be acting only in a mechanical and administrative capacity (save as expressly provided in this Deed or the UK Security Documents) and shall not have or be deemed to have any duty, obligation or responsibility to or relationship of trust or agency with the Companies. (b) The Security Trustee shall act solely in accordance with any instructions given to it by the Administrative Agent and shall assume that (i) any instructions received by it from the Administrative Agent are duly given by or on behalf of the Secured Parties (or the requisite proportion of them) in accordance with the terms of the Loan Documents and (ii) unless it has received actual written notice of revocation, that any instructions or directions given by the Administrative Agent have not been revoked and no revocation of any such instructions by the Administrative Agent shall affect any action taken by the Security Trustee in reliance upon such instruction or direction prior to actual receipt of the notice of revocation. The Security Trustee shall carry out all dealings with the Secured Parties through the Administrative Agent. (c) If the Administrative Agent in issuing any instruction breaches any rights or restrictions set out in the Loan Documents this shall not invalidate the instruction unless the Administrative Agent informs the Security Trustee in relation to the instruction made or given by it before the Security Trustee commences to act on such instruction that such instruction was invalid and should not be acted on. If the Security Trustee is so informed after it has commenced to act on an instruction the validity of any action taken shall not be affected but the Security Trustee shall take no further action in accordance with such instruction, except to the extent that it has become legally obliged to do so;
4 (d) The Security Trustee shall not be obliged to take any action or proceedings under or in relation to any Loan Document unless it has received a request or instruction from the Administrative Agent and shall not be responsible for any delay or failure to take any such action or proceedings;
(e) The Security Trustee is a party to the UK Security Documents solely for the purpose of being a beneficiary of the Trust Property and the Security Trustee assumes none of the obligations of the other Secured Parties under the UK Security Documents as a result thereof.
6.2 Supplemental Provisions Relating to Security Trustee Notwithstanding that the Security Trustee may be entitled to remuneration, the Security Trustee shall have all the rights, powers, discretions, privileges and immunities which gratuitous trustees have or may have in England and, by way of supplement to the Trustee Act 1925 and the Trustee Act 2000, it is expressly declared as follows:
(a) The Security Trustee may execute each of the UK Security Documents and all such further documents as may be approved by the Lenders or the Administrative Agent for execution by the Security Trustee.
(b) The Security Trustee may, acting in good faith, rely on any communication, certificate, legal opinion or other document believed by it to be genuine.
(c) The Security Trustee may, acting in good faith, rely as to any matter of fact which might reasonably be expected to be within the knowledge of the relevant Company or a statement by or on behalf of the relevant Company.
(d) The Security Trustee may, acting in good faith, accept as sufficient evidence a certificate signed by any person believed by it to be a director or otherwise authorised officer or agent of the relevant Company to the effect that any particular dealing, transaction, step or thing is, in the opinion of the person so
