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Deed Of Continuing Inter-company Cross Guarantee

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Sectors: Energy
Governing Law: The United Kingdom
Effective Date: July 15, 1994
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DATED 15th July, 1994 1994


HORIZON SEISMIC INC.


and


EXPLORATION HOLDINGS LIMITED


and


HORIZON EXPLORATION LIMITED


- --------------------------------------------------------------------------------


DEED OF CONTINUING INTER-COMPANY
CROSS GUARANTEE AND INDEMNITY


- --------------------------------------------------------------------------------


in favour of


SIMON-HORIZON LIMITED


SIMON PETROLEUM TECHNOLOGY LIMITED


and


SIMON ENGINEERING PLC


SIMMONS & SIMMONS 14 DOMINION STREET LONDON EC2M 2RJ (Ref: 5A/P.37800/AZM/2566m)


2


T H I S D E E D is made the 15th day of July, 1994


- -------------------------------


BETWEEN:


(1) THE COMPANIES whose names, registration numbers and registered offices
are specified in the Schedule hereto (the "Companies") of the one
part; and


(2) SIMON-HORIZON LIMITED, registration number 467924, a company
incorporated in England and Wales with registered office at Horizon
House, Azalea Drive, Swanley, Kent, BR8 8JR SIMON PETROLEUM TECHNOLOGY
LIMITED registration number 2720413, a company incorporated in England
and Wales with registered office at Ty'n-y-Coed, Llanrhos, Llandudno,
North Wales; and SIMON ENGINEERING PLC registration number 52665, a
company incorporated in England and Wales with registered office at
Simon House, Bird Hall Lane, Stockport, Cheshire SK3 ORJ (hereinafter
together called the "Beneficiaries" and each a "Beneficiary" which
expression shall include their respective successors and assigns) of
the other part.


WHEREAS:


(A) By an Agreement of even date herewith (the "Agreement") made between
the Beneficiaries and Horizon Exploration Limited ("HEL") HEL is to
enter into the Charterparty by way of sub-demise referred to in
Recital (B) below with Simon-Horizon Limited ("Simon") and certain
other arrangements with the Beneficiaries in relation to the m.v.
"SIMON LABRADOR" registered under the Bahamian flag at the port of
Nassau under Official Number 715224 (the "Ship") upon the terms and
conditions therein mentioned.


(B) By a Charterparty by way of Sub-Demise (the "Charterparty") of even
date herewith and made between Simon (1) and HEL (2) Simon has agreed
to let and DEL has agreed to take the Ship on demise charter upon the
terms and conditions therein mentioned.


(C) By the Agreement HEL has agreed with the Beneficiaries (inter alia) to
procure that certain works be carried out to the Ship and equipment be
installed thereon at the expense of HEL upon the terms and conditions
therein mentioned.


(D) The execution and delivery of this Deed of Inter-Company
Cross-Guarantee and Indemnity by the Companies is one of the
conditions precedent (inter alia) to Simon letting and demising the
Ship to HEL pursuant to the Charterparty.


- 2 - 3 IT IS AGREED as follows:


1. INTERPRETATION


1.1 In this Deed of Continuing Inter-Company Cross Guarantee and
Indemnity, unless the context otherwise requires or unless otherwise
defined herein, words and expressions defined in the Charterparty and
used herein shall have the same meaning where used in this Deed.


1.2 In this Deed, unless the context otherwise requires:


"Deed" means this Deed of Continuing Inter-Company Cross Guarantee and
Indemnity;


"Guarantee" includes each separate or independent stipulation or
agreement by the Companies and each one of them contained in this
Deed;


"Guaranteed Indebtedness" means the Indebtedness of HEL to the
Beneficiaries guaranteed pursuant to Clause 2.1 and indemnified
pursuant to Clause 2.2;


"Guaranteed Liabilities" means the Liabilities of HEL to the
Beneficiaries, the discharge of which is guaranteed pursuant to Clause
2.1 and indemnified pursuant to Clause 2.2;


"Guarantors" means the Companies and each of them;


"Incapacity" means in relation to a person the death, bankruptcy,
unsoundness of mind, insolvency, liquidation, dissolution, winding-up,
administration, receivership, amalgamation, reconstruction or other
incapacity of that person whatsoever (and, in the case of a
partnership, includes the termination or change in the composition of
the partnership);


"Indebtedness" means any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or
future, actual or contingent;


"Liabilities" means all obligations and liabilities whatsoever,
whether express or implied, whether as principal or surety, whether
present or future, actual or contingent, whether joint or several in
whatever style, name or form and in whatever currency denominated.


1.3 Clause headings are inserted for convenience of reference only and
shall be ignored in the interpretation of this Deed.


1.4 In this Deed, unless the context otherwise requires:


(a) references to Clauses are to be construed as references to the
clauses of this Deed;


- 3 - 4
(b) references to (or to any specifies provision of) this Deed or
any other document shall be construed as references to this
Deed, that provision or that document as in force for the time
being and as amended in accordance with the terms thereof, or,
as the case may be, with the agreement of the relevant parties
and (where such consent is, by the terms of this Deed or the
relevant document, required to be obtained as a condition to
such amendment being permitted) the prior written consent of
the Beneficiaries or any of them;


(c) words importing the plural shall include the singular and vice
versa;


(d) references to a person shall be construed as references to an
individual, firm, company, corporation, unincorporated body of
persons or any Government Entity; and


(e) references to statutory provisions shall be construed as
references to those provisions as replaced, amended or
reenacted from time to time.


2. GUARANTEE


In consideration of Simon chartering the Ship to HEL pursuant to the Charterparty and of each of the Beneficiaries entering into the Agreement and of other good and valuable consideration (the adequacy whereof is hereby acknowledged by the Guarantors and each of them) the Guarantors jointly and severally agree:


2.1 As a primary obligation and not merely as a surety, they hereby
guarantee:


(a) the full, due and punctual performance of all obligations of
HEL to the Beneficiaries howsoever arising, including, without
limitation, procuring the fulfillment of all the works and
supply of equipment to the Ship as contemplated by the
Agreement; and


(b) payment when due of all moneys due on any account whatsoever
by HEL to the Beneficiaries or to any of them, howsoever
arising, together with all other Indebtedness or Liabilities
whatsoever of HEL to the Beneficiaries or to any of them,
howsoever arising, whether under the Agreement the
Charterparty, any of the Relevant Documents or otherwise


so that in case of either (a) or (b), if HEL shall default, each of
the Guarantors shall itself be liable fully to perform the same or
make the relevant payment.


2.2 Unconditionally and irrevocably as a primary obligation to indemnify
the Beneficiaries on a full and unqualified indemnity basis and hold
the Beneficiaries harmless against any breach, default or failure by
HEL duly and punctually to perform and observe the terms,


- 4 - 5
conditions, covenants or obligations on its part contained in the
Charterparty, the Agreement or any of the other Relevant Documents.


2.3 The Guarantee and the rights of the Beneficiaries under it shall not
be affected or prejudiced by the Beneficiaries or any of them holding
or taking any other or further securities or guarantees or by any
Beneficiary varying, releasing, exchanging, enforcing or omitting or
neglecting to enforce any such securities or guarantees (including
this Guarantee in whole or in part and against one Guarantor or more
than one Guarantor or by the introduction of any new Guarantor) or by
the Beneficiaries giving time for payment or granting any other
indulgence to or making any other arrangements with or accepting any
composition from the Guarantors or any of them or any person liable on
any securities or guarantees or indemnities held or to be held by the
Beneficiaries or by any other act or thing (including the invalidity
or unenforceability of any guarantee herein contained) which (apart
from this provision) would or might afford an equitable defense to a
surety. Each of the Guarantors agrees that the Beneficiaries shall
have no duty to any of the Guarantors in the enforcement or
realization of any such security, suretyship or indemnity and, in
particular, but without prejudice to the foregoing, the Beneficiaries
shall owe no duty to any of the Guarantors in the conduct of any
enforcement of any security over any of the assets of HEL or any other
Guarantor or any co-surety and each of the Guarantors' liability
hereunder shall not be reduced by the sale of any such assets at an
undervalue.


2.4 The Beneficiaries shall be at liberty but not bound to resort for
their own benefit to any other means of payment at any time and in any
order they think fit without thereby diminishing the liability of any
of the Guarantors and the Beneficiaries may enforce any of the
guarantees herein contained either for the payment of the ultimate
balance after resorting to other means of payment (including any other
of such guarantees) or for the balance due at any time notwithstanding
that any such other means of payment have not been resorted to and in
each case without entitling any of the Guarantors to any benefit from
such other means of payment so long as any Guaranteed Indebtedness or
Guaranteed Liabilities remain due or owing or payable or undischarged.


2.5 The bankruptcy, winding-up, liquidation, dissolution administration,
receivership or insolvency of any one or more of the Guarantors shall
not affect or determine the liability of the other Guarantors or any
of them under this Deed. All dividends, compositions and moneys
received by the Beneficiaries or any of them from any Guarantor
subject to such Incapacity or from any other company, person or estate
capable of being applied by the Beneficiaries in reduction of the
indebtedness, liabilities or obligations of any of any such Guarantor
shall be regarded for all purposes as payments in gross and the
Beneficiaries shall be entitled to prove in the bankruptcy,
winding-up, liquidation, dissolution, receivership or insolvency of
any such Guarantor in respect of the whole of such Guarantor's
obligations to the Beneficiaries and without any right on the part of
any other Guarantor to be subrogated to the Beneficiaries or any of
them in respect of any such proof to the intent that this Guarantee
shall apply to and secure the whole of any ultimate


- 5 - 6
balance which shall remain due to the Beneficiaries or any of them
from each of the Guarantors.


2.6 Any settlement or discharge between the Beneficiaries and any of the
Guarantors shall be subject to the condition that no security or
payment to the Beneficiaries by any of the Guarantors or any other
person shall be avoided, invalidated, reduced, repaid or surrendered
by virtue of any provisions or enactments relating to bankruptcy,
winding-up, liquidation, dissolution, administration, receivership or
insolvency for the time being in force and if any such security or
payment shall be so avoided or reduced the Beneficiaries shall be
entitled to recover the value or amount thereof from such Guarantor
subsequently just as if such settlement or discharge had not occurred.


2.7 The Guarantee shall take effect as a guarantee of the whole and every
part of the Guaranteed Indebtedness and the Guaranteed Liabilities and
none of the Guarantors shall be entitled as against the Beneficiaries
to any right of proof in the bankruptcy, winding-up, liquidation,
dissolution or insolvency of any other Guarantor or any other surety
or other right of a surety (including any right of contribution from
any other surety) discharging, in whole or in part, his liability in
respect of the principal debt or to share in any security, suretyship
or indemnity held or money received by any Beneficiary on account of
the obligations of such Guarantor or any other surety or to have or
exercise any rights as surety (including any such right of
contribution as aforesaid) in competition with the Beneficiaries
unless and until the whole of the Guaranteed Indebtedness and the
Guaranteed Liabilities shall have first been completely discharged and
satisfied nor until the Guaranteed Indebtedness and Guaranteed
Liabilities shall have been discharged and satisfied in full shall any
of the Guarantors take any step to enforce any right or claim against
any other Guarantor in respect of any moneys paid by such first
Guarantor to the Beneficiaries hereunder or to exercise any other
rights, claims or remedies of any kind which may accrue howsoever to
any of the Guarantors in respect either of the amount so payable or so
paid (including any such right of contribution as aforesaid) or of any
other moneys for the time being due or owing to any of the Guarantors
from any other Guarantor or any other surety or otherwise, provided
that in the event of the bankruptcy, winding-up, liquidation,
dissolution or insolvency of any of the Guarantors or any other surety
each other Guarantor shall, if so directed by the Beneficiaries, but
not otherwise, prove for (to the fullest extent permitted by law) the
whole or any part of the moneys due or owing to it from such other
Guarantor or any
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