DATED 1st June 2006 GULFMARK REDERI AS (as borrower) - and - DnB NOR Bank ASA and others (as banks) - and - DnB NOR Bank ASA (as mandated lead arranger) - and - DnB NOR Bank ASA (as agent and security trustee) US$30,000,000 SECURED REDUCING REVOLVING...
DATED
1st
June
2006
GULFMARK
REDERI AS
(as
borrower)
-
and -
DnB
NOR Bank ASA
and
others
(as
banks)
-
and -
DnB
NOR Bank ASA
(as
mandated lead arranger)
-
and -
DnB
NOR Bank ASA
(as
agent and security trustee)
_________________________________________
US$30,000,000
SECURED
REDUCING
REVOLVING LOAN
FACILITY
AGREEMENT
_________________________________________
XXXXXXXXXX
XXXXXXX
Xxx,
Xx. Xxxx'x Xxxxxxxxxx
Xxxxxx
XX0X 0XX
Tel:
000 0000 0000
Fax:
000 0000 0000
Ref:
1313
CONTENTS
|
1
|
Definitions
and Interpretation
|
1
|
|
2
|
The
Facility and its Purpose
|
21
|
|
3
|
Conditions Precedent and Subsequent
|
27
|
|
4
|
Representations
and Warranties
|
31
|
|
5
|
Repayment,
Prepayment and Currency Option
|
35
|
|
6
|
Interest
|
38
|
|
7
|
Fees
|
40
|
|
8
|
Security
Documents
|
40
|
|
9
|
Agency
and Trust
|
00
|
|
00
|
Xxxxxxxxx
|
00
|
|
00
|
Earnings
|
67
|
|
12
|
Events Of Default
|
68
|
|
13
|
Set-Off
and Lien
|
72
|
|
14
|
Assignment and
Sub-Participation
|
74
|
|
15
|
Payments,
Mandatory Prepayment, Reserve Requirements and Illegality
|
76
|
|
16
|
Communications
|
80
|
|
17
|
General
Indemnities
|
81
|
|
18
|
Miscellaneous
|
84
|
|
19
|
Law and Jurisdiction
|
88
|
|
SCHEDULE
1
|
90
|
|
|
The
Banks, the Commitments and the Proportionate Shares
|
90
|
|
|
SCHEDULE
2
|
91
|
|
|
The
Vessels
|
91
|
|
SCHEDULE
3
|
92
|
|
Form
of Transfer Certificate
|
92
|
|
SCHEDULE
4
|
95
|
|
Form
of Drawdown Notice
|
95
|
|
SCHEDULE
5
|
97
|
|
Calculation
of the Mandatory Cost
|
97
|
|
SCHEDULE
6
|
100
|
|
Form
of Compliance Certificate
|
100
|
|
SCHEDULE
7
|
102
|
|
Calculation
of Effective Interest
|
102
|
LOAN
FACILITY AGREEMENT
Dated:
1st
June 2006
BETWEEN:-
|
(1)
|
GULFMARK
REDERI AS,
a
company incorporated according to the law of Norway whose principal
place
of business is at Xxxxxxxxxxx 0, 0000 Xxxxxxx, Xxxxxx (the
"Borrower");
and
|
|
(2)
|
the
banks and financial institutions listed in Schedule 1, each acting
through
its office at the address indicated against its name in Schedule
1
(together "the
Banks"
and each a "Bank");
and
|
|
(3)
|
DnB
NOR Bank ASA acting
as mandated lead arranger (in that capacity the "MLA");
and
|
|
(4)
|
DnB
NOR Bank ASA
acting as agent and security trustee through its office at Lars Xxxxxxxxxx
00, XX Xxx 0000, XX-0000 Xxxxxx, Xxxxxx (in that capacity the
"Agent").
|
WHEREAS:-
Each
of
the Banks has agreed to
advance
to the Borrower its respective Commitment of an aggregate principal amount
not
exceeding thirty million Dollars ($30,000,000) for the general corporate
purposes of the Borrower.
IT IS AGREED
as
follows:-
| 1 |
Definitions
and Interpretation
|
1.1 Definitions
In
this
Agreement:-
|
1.1.1
|
"Accounts"
means the consolidated financial accounts of the Guarantor to be
provided
to the Agent pursuant hereto.
|
|
1.1.2
|
"Address
for Service"
means c/o Gulf Offshore N.S. Limited of 00 Xxxxxxxxx Xxxx, Xxxxxx,
Xxxxxx,
XX00 0XX, Xxxxxxx or, in relation to any of the Security Parties,
such
other address in England and Wales as
|
1
that
Security Party may from time to time designate by no fewer than ten (10)
Business Days' written notice to the Agent.
|
1.1.3
|
"Administration"
has the meaning given to it in paragraph 1.1.3 of the ISM
Code.
|
|
1.1.4
|
"Advance
Date",
in relation to any Drawing, means the date on which that Drawing
is
advanced by the Banks to the Borrower pursuant to
Clause 2.
|
|
1.1.5
|
"Agent's
Spot Rate of Exchange"
means the Agent's spot rate of exchange for the purchase of the relevant
currency with the Base Currency in the London foreign exchange market
at
or about 11.00 a.m. on a particular
day.
|
|
1.1.6
|
"Approved
Brokers"
means X. Xxxxxxxx & Co. Ltd, Xxxxxxx Xxxxxx & Xxxxx Shipbrokers
Ltd, Fearnley AS, X. X. Xxxxxx AS and Seabrokers
Group.
|
|
1.1.7
|
"Assignments"
means the first priority assignments of the Insurances and Requisition
Compensation of the Vessels to be made between the Borrower and the
Agent
referred to in Clause 8.1.2 (each an "Assignment").
|
|
1.1.8
|
"Assigned
Property"
means the Insurances and the Requisition
Compensation.
|
1.1.9 "Base
Currency"
means
Dollars.
|
1.1.10
|
"Base
Currency Amount"
means the amount specified in the Drawdown Request or, if the amount
requested is not denominated in the Base Currency, that amount converted
into the Base Currency at the Agent's Spot Rate of Exchange on the
date
which is three (3) Business Days before the Advance Date adjusted
to
reflect any repayment (other than a repayment arising from a change
of
currency) or prepayment.
|
|
1.1.11
|
"Borrower's
Obligations"
means all of the liabilities and obligations of the Borrower to the
Finance Parties under or pursuant to the Borrower's Security Documents,
whether actual or contingent, present
|
2
or
future, and whether incurred alone or jointly or jointly and severally with
any
other and in whatever currency, including (without limitation) interest,
commission and all other charges and expenses.
|
1.1.12
|
"Borrower's
Security Documents"
means those of the Security Documents to which the Borrower is or
is to be
a party.
|
|
1.1.13
|
"Break
Costs"
means all documented costs, losses, premiums or penalties incurred
by any
of the Finance Parties in the circumstances contemplated by Clause
17.4 or
as a result of any of them receiving any prepayment of all or any
part of
the Facility (whether pursuant to Clauses 5.2 and 5.3 or otherwise)
or any
other payment under or in relation to the Security Documents on a
day
other than the due date for payment of the sum in question, and includes
(without limitation) any losses or costs incurred in liquidating
or
re-employing deposits from third parties acquired to effect or maintain
the Facility, and any liabilities, expenses or losses incurred by
any of
the Finance Parties in terminating or reversing, or otherwise in
connection with, any interest rate and/or currency swap, transaction
or
arrangement entered into by any of the Finance Parties with any member
of
the Group to hedge any exposure arising under this Agreement, or
in
terminating or reversing, or otherwise in connection with, any open
position arising under this
Agreement.
|
|
1.1.14
|
"Business
Day"
means a day (other than a Saturday or Sunday) on which banks are
open for
general business in London, New York City and Bergen and which is
a TARGET
Day.
|
|
1.1.15
|
"Commitment"
means, in relation to each Bank, the amount of the Facility which
that
Bank agrees to advance to the Borrower as its several liability as
indicated against the name of that Bank in Schedule 1, as reduced
from time to time in accordance with Clause 2.4, or, where the context
permits, the amount of the Facility advanced by that Bank and remaining
outstanding.
|
3
|
1.1.16
|
"Commitment
Commission"
means the commitment commission to be paid by the Borrower to the
Agent on
behalf of the Banks pursuant to Clause
7.
|
|
1.1.17
|
"Commitment
Termination Date"
means the date falling one month prior to the Termination
Date.
|
|
1.1.18
|
"Communication"
means any notice, approval, demand, request or other communication
from
one party to this Agreement to any other party to this
Agreement.
|
|
1.1.19
|
"Communications
Address"
means 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, 00000, the
United
States of America (fax no: x0 000 000 0000 marked for the attention
of Xx
X. Xxxxxxx, email:
xx.xxxxxxx@xxxxxxxx.xxx).
|
|
1.1.20
|
"Company"
means at any given time the company responsible for a Vessel's compliance
with (i) the ISM Code under paragraph 1.1.2 of the ISM Code and/or
(ii)
the ISPS Code (as the case may be).
|
|
1.1.21
|
"Compliance
Certificate"
means a certificate to be delivered by the Borrower to the Agent
substantially in the form of Schedule
6.
|
|
1.1.22
|
"Currency
of Account"
means, in relation to any payment to be made to a Finance Party pursuant
to any of the Security Documents, the currency in which that payment
is
required to be made by the terms of the relevant Security
Document.
|
|
1.1.23
|
"Default
Rate"
means the rate which is the aggregate of LIBOR, any Mandatory Cost,
the
Margin and two per centum (2%) per
annum.
|
|
1.1.24
|
"Determination
Date"
means
|
(a) the
last
day of each calendar quarter during the Facility Period;
(b) after
the
occurrence of an Event of Default which is continuing, any date designated
by
the Agent upon at least
4
three
(3)
Business Days' prior written notice to the Borrower; and
(c) each
Advance Date.
|
1.1.25
|
"DOC"
means in relation to the ISM Company, a valid Document of Compliance
issued for the ISM Company by the Administration under paragraph
13.2 of
the ISM Code.
|
|
1.1.26
|
"Dollars"
"US$"
and "$"
each means available and freely transferable and convertible funds
in
lawful currency of the United States of
America.
|
|
1.1.27
|
"Drawdown
Notice"
means a notice complying with Clause 2.3 in the form set out in Schedule
4.
|
|
1.1.28
|
"Drawing"
means a part (or, if requested and available, all) of the Facility
advanced by the Banks to the Borrower in accordance with Clause
2.
|
|
1.1.29
|
"Earnings",
in relation to a Vessel, means all hires including (without limitation)
all time charter hire and bareboat charter hire, freights, pool income
and
other sums payable to or for the account of the Borrower in respect
of
that Vessel including (without limitation) all remuneration for salvage
and towage services, demurrage and detention moneys, contributions
in
general average, compensation in respect of any requisition for hire
and
damages and other payments (whether awarded by any court or arbitral
tribunal or by agreement or otherwise) for breach, termination or
variation of any contract for the operation, employment or use of
that
Vessel.
|
|
1.1.30
|
"Earnings
Account"
means a bank account to be opened in the name of the Borrower with
the
Agent and designated "Vessel Net Earnings Account".
|
|
1.1.31
|
"EBITDA"
means, for any twelve month period ending on a Determination Date,
the
consolidated profit on ordinary activities of the Group before
Taxes:
|
5
(a) adjusted
to exclude interest received or receivable and other similar income to the
extent not already excluded;
(b) before
the depreciation of fixed assets but after excluding any loss or gain arising
on
the disposal of fixed assets or shares;
(c) before
the deduction of Interest Expense for such period;
(d) before
any charge for the amortisation of goodwill, merger differences, acquisition
costs or any other intangible asset; and
(e) before
adding or deducting extraordinary or exceptional items (to include, for the
avoidance of doubt, any redundancy costs and foreign exchange profits and losses
in relation to the funding of the business) in each case for such
period.
|
1.1.32
|
"Encumbrance"
means any mortgage, charge, pledge, lien, assignment, hypothecation,
preferential right, option, title retention or trust arrangement
or any
other agreement or arrangement which, in any of the aforementioned
instances, has the effect of creating
security.
|
|
1.1.33
|
"Environmental
Affiliate"
means an agent or employee of the Borrower or a person in a contractual
relationship with the Borrower in respect of the Vessel owned by
it
(including without limitation, the operation of or the carriage of
cargo
of such Vessel).
|
|
1.1.34
|
"Environmental
Approvals"
means any present or future permit, licence, approval, ruling, variance,
exemption or other authorisation required under the applicable
Environmental Laws.
|
|
1.1.35
|
"Environmental
Claim"
means any and all enforcement, clean-up, removal, administrative,
governmental, regulatory or judicial actions, orders, demands or
investigations instituted or completed pursuant to any Environmental
Laws
or Environmental Approvals together with any claims made by any third
person relating to damage, contribution, loss or injury resulting
from any
Environmental Incident.
|
|
1.1.36
|
"Environmental
Incident"
means:
|
6
|
(a)
|
any
release of Environmentally Sensitive Material from a Vessel;
or
|
|
(b)
|
any
incident in which Environmentally Sensitive Material is released
from a
vessel other than a Vessel and which involves a collision between
a Vessel
and such other vessel or some other incident of navigation or operation,
in either case, in connection with which the relevant Vessel is actually
or potentially liable to be arrested, attached, detained or injuncted
and/or where any guarantor, any manager (or any sub-manager of such
Vessel) or any of its officers, employees or other persons retained
or
instructed by it (or such sub-manager) are at fault or allegedly
at fault
or otherwise liable to any legal or administrative action;
or
|
|
(c)
|
any
other incident in which Environmentally Sensitive Material is released
otherwise than from such Vessel and in connection with which that
Vessel
is actually or potentially liable to be arrested and/or where any
guarantor, any manager (or any sub-manager of the relevant Vessel)
or any
of its officers, employees or other persons retained or instructed
by it
(or such sub-manager) are at fault or allegedly at fault or otherwise
liable to any legal or administrative
action.
|
|
1.1.37
|
"Environmental
Laws"
means all present and future laws, regulations, treaties and conventions
of any applicable jurisdiction
which:
|
|
(a)
|
have
as a purpose or effect the protection of, and/or prevention of harm
or
damage to, the environment;
|
|
(b)
|
relate
to the carriage of Environmentally Sensitive Material or to actual
or
threatened releases of Environmentally Sensitive
Material;
|
|
(c)
|
provide
remedies or compensation for harm or damage to the environment;
or
|
|
(d)
|
relate
to Environmentally Sensitive Materials or health or safety
matters.
|
7
|
1.1.38
|
"Environmentally
Sensitive Material"
means (i) oil and oil products and (ii) any other waste, pollutant,
contaminant or other substance (including any liquid, solid, gas,
ion,
living organism or noise) that may be harmful to human health or
other
life or the environment or a nuisance to any person or that may make
the
enjoyment, ownership or other territorial control of any affected
land,
property or waters more costly for such person to a material
degree.
|
1.1.39 "EURIBOR"
means:
(a) the
applicable Screen Rate; or
(b) (if
no
Screen Rate is available for the relevant Interest Period) the arithmetic mean
of the rates (rounded upwards to four decimal places) as supplied to the Agent
at its request quoted by the Reference Banks to leading banks in the European
interbank market,
|
at
11.00 a.m. (Brussels time) on the Quotation Day for the offering
of
deposits in euro in an amount comparable to the Loan (or any relevant
part
of the Loan) and for a period comparable to the relevant Interest
Period.
|
|
1.1.40
|
"euro"
and "€"
means the single currency of the Participating Member
States.
|
|
1.1.41
|
"Event
of Default"
means any of the events set out in
Clause 12.2.
|
|
1.1.42
|
"Execution
Date"
means the date on which this Agreement is executed by each of the
parties
hereto.
|
|
1.1.43
|
"Facility"
means the reducing revolving credit facility made available by the
Banks
to the Borrower pursuant to this
Agreement.
|
|
1.1.44
|
"Facility
Outstandings"
at any time means the total of all Drawings made at that time, to
the
extent not reduced by repayments, prepayments or voluntary
reductions.
|
8
|
1.1.45
|
"Facility
Period"
means the period beginning on the Execution Date and ending on the
date
when the whole of the Indebtedness has been repaid in full and the
Borrower has ceased to be under any further actual or contingent
liability
to the Finance Parties under or in connection with the Security
Documents.
|
|
1.1.46
|
"Fee
Letter"
means a letter or letters from the Agent to the Borrower setting
out
certain fees payable to the Agent in connection with the
Facility.
|
|
1.1.47
|
"Final
Balloon Payment"
means an amount of twenty million Dollars ($20,000,000), less any
voluntary cancellation pursuant to Clause 2.4.2 or any mandatory
prepayment pursuant to Clause 2.4.3 or Clause 2.4.4, which shall
be
payable on the Termination Date.
|
|
1.1.48
|
"Finance
Parties"
means the Banks, the MLA and the
Agent.
|
|
1.1.49
|
"Financial
Indebtedness"
means any indebtedness of any person for or in respect
of:
|
|
(a)
|
moneys
borrowed or raised;
|
|
(b)
|
amounts
raised under any acceptance credit
facility;
|
|
(c)
|
amounts
raised pursuant to any note purchase facility or the issue of bonds,
notes, debentures, loan stock or similar
instruments;
|
|
(d)
|
amounts
raised pursuant to any issue of shares of the relevant person which
are
expressed to be redeemable;
|
|
(e)
|
the
amount of any liability in respect of leases or hire purchase contracts
which would, in accordance with GAAP, be treated as finance or capital
leases;
|
|
(f)
|
all
reimbursement obligations whether contingent or not in respect of
amounts
paid under a letter of credit or similar
instrument;
|
|
(g)
|
all
interest rate, currency swap and similar agreements obliging the
making of
payments, whether periodically or upon the
|
9
happening
of a contingency (and the value of such indebtedness shall be the xxxx-to-market
valuation of such transaction at the relevant time);
|
(h)
|
amounts
raised under any other transaction (including, without limitation,
any
forward sale or purchase agreement) having the commercial effect
of a
borrowing; and
|
|
(i)
|
any
guarantee of indebtedness falling within paragraphs (a) to (i)
above.
|
|
1.1.50
|
"First
Reduction Date"
means the date falling sixty six (66) calendar months after the Execution
Date.
|
|
1.1.51
|
"GAAP"
means either IFRS or the generally accepted accounting principles
in the
United States of America.
|
|
1.1.52
|
"Group"
means GulfMark Offshore, Inc. and each of its
Subsidiaries.
|
|
1.1.53
|
"Guarantee"
means the guarantee and indemnity to be made by the Guarantor in
favour of
the Agent referred to in
Clause 8.1.3.
|
|
1.1.54
|
"Guarantor"
means GulfMark Offshore, Inc., a company incorporated according to
the law
of the State of Delaware whose principal place of business is
at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx, 00000, the
United States of America.
|
|
1.1.55
|
"IFRS"
means International Financial Reporting Standards issued and/or adopted
by
the International Accounting Standards
Board.
|
|
1.1.56
|
"Indebtedness"
means the Facility Outstandings; all other sums of any nature including
costs (together with all interest on any of those sums) which from
time to
time may be payable by the Borrower to the Finance Parties pursuant
to the
Security Documents; any damages payable as a result of any breach
by the
Borrower of any of the Security Documents; and any damages or other
sums
payable as a result of any of the obligations of the Borrower under
or
pursuant to any of the Security Documents being disclaimed by a liquidator
or any other person, or,
|
10
where
the
context permits, the amount thereof for the time being outstanding.
|
1.1.57
|
"Insurances",
in relation to a Vessel, means all policies and contracts of insurance
(including but not limited to hull and machinery, all entries in
protection and indemnity or war risks associations) which are from
time to
time taken out or entered into in respect of or in connection with
that
Vessel or her increased value and (where the context permits) all
benefits
thereof, including all claims of any nature and returns of
premium.
|
|
1.1.58
|
"Interest
Expense"
means the interest paid by any member of the Group on the Total Debt
in
the twelve month period ending on a Determination
Date.
|
|
1.1.59
|
"Interest
Payment Date"
means each date for the payment of interest in accordance with
Clause 6.
|
|
1.1.60
|
"Interest
Period"
means each interest period selected by the Borrower or agreed by
the Banks
pursuant to Clause 6.
|
|
1.1.61
|
"ISM
Code"
means the International Ship Management Code for the Safe Operation
of
Ships and for Pollution Prevention.
|
|
1.1.62
|
"ISM
Company"
means, at any given time, the company responsible for a Vessel's
compliance with the ISM Code under paragraph 1.1.2 of the ISM
Code.
|
|
1.1.63
|
"ISPS
Code"
means the International Ship and Port Security Code as adopted by
the
Conference of Contracting Governments to the Safety of Life at Sea
Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2
of
the Safety of Life at Sea Convention
1974.
|
|
1.1.64
|
"law"
or "Law"
means any law, statute, treaty, convention, regulation, instrument
or
other subordinate legislation or other legislative or quasi-legislative
rule or measure, or any order or decree of any government, judicial
or
public or other body or authority, or any directive, code of
|
11
practice,
circular, guidance note or other direction issued by any competent authority
or
agency (whether or not having the force of law).
|
1.1.65
|
"LIBOR"
means:
|
(a) the
applicable Screen Rate; or
(b) (if
no
Screen Rate is available for any Interest Period or for any currency in which
the Facility is to be denominated during that Interest Period) the arithmetic
mean of the rates (rounded upwards to four decimal places) as supplied to the
Agent at its request quoted by the Reference Banks to leading banks in the
London interbank market,
|
at
11.00 a.m. (London time) on the Quotation Day for the offering of
deposits
in the currency in which the Facility is to be denominated during
the
relevant Interest Period in an amount comparable to the Facility
(or any
relevant part of the Facility) and for a period comparable to the
relevant
Interest Period.
|
|
1.1.66
|
"Majority
Banks"
means any one or more Banks whose combined Proportionate Shares exceed
sixty six and two thirds per centum
(66⅔%).
|
|
1.1.67
|
"Manager"
means GulfMark Offshore, Inc. or any entity within the
Group.
|
|
1.1.68
|
"Mandatory
Cost"
means for each Bank to which it applies, the cost imputed to that
Bank of
compliance with the mandatory liquid asset requirements of the Bank
of
England and/or the banking supervision or other costs imposed by
the
Financial Services Authority, determined in accordance with Schedule
5 (Calculation of the Mandatory
Cost).
|
|
1.1.69
|
"Margin"
shall be calculated on, and effective from each Determination Date
in
accordance with the following grid based on the ratio of (a) the
Guarantor's average Total Debt over the twelve (12) month period
terminating on the relevant Determination Date to (b) the Guarantor's
consolidated EBITDA determined on the relevant Determination
Date:
|
12
|
Total
Debt/EBITDA
|
Applicable
Margin
|
|
|
Less
than 2.5
|
0.70%
p.a.
|
|
|
Equal
to or greater than 2.5
|
||
|
but
less than 5.0
|
0.80%
p.a.
|
|
|
Equal
to or greater than 5.0
|
0.90%
p.a.
|
|
1.1.70
|
"Material
Adverse Effect"
means a material adverse change in, or a material adverse effect
on:
|
|
(a)
|
the
financial condition, assets, prospects or business of any Security
Party
or on the consolidated financial condition, assets, prospects or
business
of the Group;
|
|
(b)
|
the
ability of any Security Party to perform and comply with its obligations
under any Security Document or to avoid any Event of
Default;
|
|
(c)
|
the
validity, legality or enforceability of any Security Document;
or
|
|
(d)
|
the
validity, legality or enforceability of any security expressed to
be
created pursuant to any Security Document or the priority and ranking
of
any such security.
|
1.1.71 "Material
Subsidiary"
means
any Subsidiary of the Guarantor whose net asset value represents ten per cent
(10%) or more of the net asset value of the Group, as indicated by the financial
statements to be delivered to the Agent pursuant to Clause 10.2.1.
|
1.1.72
|
"Maximum
Facility Amount"
means an amount not exceeding thirty million Dollars ($30,000,000),
subject
to any reductions effected in accordance with Clauses 2.4, 15.7 and
15.8.
|
|
1.1.73
|
"Mortgages"
means the first priority ship mortgages together with collateral
declaration of pledge thereto over each of the Vessels made or
|
13
to
be
made between the Borrower and the Agent referred to in Clause 8.1.1 (each a
"Mortgage").
|
1.1.74
|
"Mortgagees'
Insurances"
means all policies and contracts of mortgagees' interest insurance,
mortgagees' additional perils (oil pollution) insurance and any other
insurance from time to time taken out by the Mortgagee in relation
to the
Vessel.
|
1.1.75 "Net
Earnings"
means
the Earnings less any Operating Commissions.
1.1.76 "NIBOR"
means
the Norwegian interbank offered rate being the rate per annum equal to the
offered quotation for deposits in amounts equal to that Drawing (and for periods
equal to the Interest Period of that Drawing) appearing on Reuters Screen page
NIBR, published by Reuters through its monitor service or any equivalent
successor to such service at or about 12:00 p.m. (Oslo time) on the applicable
Quotation Day or if no such rate is available, the arithmetic mean (rounded
upwards to the nearest 1/16 of one per cent) of the rate per annum at which
the
Agent is able to acquire NOK in the amount and for the Interest Period equal
to
such Drawing in the Norwegian interbank market at or about 12:00 p.m. (Oslo
time) on the applicable Quotation Day.
1.1.77 "Norwegian
Kroner"
means
the lawful currency of the Kingdom of Norway.
1.1.78 "Obligatory
Insurances"
means
the insurances and entries referred to in Clause 10.3.1 and, where applicable,
those referred to in Clauses 10.3.2, 10.3.5 and/or 10.4.12.
1.1.79 "Optional
Currency"
means
any of Dollars, Sterling, Euro and Norwegian Kroner.
1.1.80 "Operating
Commissions"
means
any commissions or fees payable by the Borrower in respect of any of the Vessels
to any agents in respect of the chartering of the Vessels.
14
|
1.1.81
|
"Participating
Member State"
means any member state of the European Community that adopts or has
adopted the euro as its lawful currency in accordance with legislation
of
the European Community relating to Economic and Monetary
Union.
|
|
1.1.82
|
"Party"
means a party to this Agreement.
|
|
1.1.83
|
"Permitted
Liens"
means (i) any Encumbrance which has the prior written approval of
the
Agent or (ii) any Encumbrances that arise either by operation of
law or in
the ordinary course of the business of the relevant Security Party
which
are discharged in the ordinary course of
business.
|
|
1.1.84
|
"Potential
Event of Default"
means any event which, with the giving of notice and/or the passage
of
time and/or the satisfaction of any materiality test, would constitute
an
Event of Default.
|
|
1.1.85
|
"Pre-Approved
Classification Society"
means any of Det norske Veritas, Lloyds Register of Shipping, American
Bureau of Shipping (ABS), Germanischer Xxxxx or Bureau
Veritas.
|
|
1.1.86
|
"Proceedings"
means any suit, action or proceedings begun by any of the Finance
Parties
arising out of or in connection with the Security
Documents.
|
|
1.1.87
|
"Proportionate
Share"
means, for each Bank, the percentage that its Commitment bears to
the
aggregate Commitments of all Banks from time to time, being initially
the
percentage indicated against the name of that Bank in Schedule
1.
|
1.1.88 "Quotation
Day"
means,
in relation to any period for which an interest rate is to be determined
:
(a) (if
the
currency is sterling) the first day of that period;
(b) (if
the
currency is euro) two TARGET Days before the first day of that period; or
15
(c) (for
any
other currency) two Business Days before the first day of that
period,
unless
market practice differs in the relevant interbank market for a currency, in
which case the Quotation Day will be determined by the Agent in accordance
with
market practice in that interbank market.
|
1.1.89
|
"Reference
Banks"
means the office of DnB NOR Bank ASA at Lars Xxxxxxxxxx 00, XX Xxx
0000,
XX-0000 Xxxxxx, Xxxxxx and The Royal Bank of Scotland plc at 0 Xxxxx
Xxxxx, Xxxxxxxx XX00 0XX, Xxxxxxxx or such other banks as may be
appointed
by the Agent in consultation with the
Borrower.
|
|
1.1.90
|
"Requisition
Compensation",
in relation to a Vessel, means all compensation or other money which
may
from time to time be payable to the Borrower as a result of that
Vessel
being requisitioned for title or in any other way compulsorily acquired
(other than by way of requisition for hire).
|
1.1.91 "Screen
Rate"
means:
|
(a)
|
in
relation to LIBOR, the British Bankers' Association Interest Settlement
Rate for the relevant currency and period;
and
|
|
(b)
|
in
relation to EURIBOR, the percentage rate per annum determined by
the
Banking Federation of the European Union for the relevant period;
and
|
|
(c)
|
in
relation to NIBOR, Reuters screen page
NIBR,
|
|
displayed
on the appropriate page of the Reuters screen. If the agreed page
is
replaced or the service ceases to be available, the Agent may specify
another page or service displaying the appropriate rate after consultation
with the Borrower and the Banks.
|
1.1.92 "Security
Documents"
means
this Agreement, the Assignments, the Mortgages, the Guarantee or (where the
context permits) any one or more of them, and any other agreement or document
which may at any
16
time
be
executed as security for the payment of all or any part of the
Indebtedness.
1.1.93 "Security
Parties"
means,
at any relevant time, the Borrower, the Guarantor and any other party who may
at
any time during the Facility Period be liable for, or provide security for,
all
or any part of the Indebtedness, and "Security
Party"
means
any one of them.
1.1.94 "SMC"
means a
valid safety management certificate issued for a Vessel by or on behalf of
the
Administration under paragraph 13.7 of the ISM Code.
1.1.95 "SMS"
means,
in relation to each Vessel, a safety management system for that Vessel developed
and implemented in accordance with the ISM Code and including the functional
requirements, duties and obligations required by the ISM Code.
1.1.96 "Sterling"
means
the lawful currency of England.
1.1.97 "Subsequent
Reduction Dates"
means
each date falling at consecutive six monthly intervals after the previous
Subsequent Reduction Date which in the case of the first Subsequent Reduction
Date shall be six months after the First Reduction Date.
1.1.98 "Subsidiary"
means a
subsidiary undertaking, as defined in section 736 Companies Xxx 0000, or any
analogous definition under any other relevant system of law.
1.1.99 "TARGET"
means
the Trans-European Automated Real-time Gross Settlement Express Transfer payment
system.
1.1.100 "TARGET
Day"
means
any day on which TARGET is open for the settlement of payments in
euro.
1.1.101 "Taxes"
means
all taxes, levies, imposts, duties, charges, fees, deductions and withholdings
(including any related interest and penalties) and any restrictions or
conditions resulting in any charge, other than taxes on the overall net income
of a Finance Party or branch thereof, and "Tax"
and
"Taxation"
shall
be interpreted accordingly.
17
|
1.1.102
|
"Termination
Date"
means the seventh anniversary of the Execution
Date.
|
|
1.1.103
|
"Threshold
Amount"
means one million Dollars ($1,000,000) or its equivalent in any other
currency.
|
|
1.1.104
|
"Total
Assets"
means the amount which is equal to the total consolidated assets
of the
Guarantor as shown in the Guarantor's latest audited consolidated
balance
sheet less the goodwill (if any) of the Guarantor as shown in the
Guarantor's latest audited balance
sheet.
|
|
1.1.105
|
"Total
Debt"
means the aggregate of:-
|
(a) the
amount calculated in accordance with GAAP shown as each of "long term debt",
"short term debt" and "current portion of long term debt" on the latest
consolidated balance sheet of the Guarantor; and
(b) the
amount of any liability in respect of any lease or hire purchase contract
entered into by the Guarantor or any of its Subsidiaries which would, in
accordance with GAAP, be treated as a finance or capital lease.
|
1.1.106
|
"Total
Loss",
in relation to a Vessel, means:-
|
(a) an
actual, constructive, arranged, agreed or compromised total loss of that Vessel;
or
(b) the
requisition for title, compulsory acquisition, nationalisation or expropriation
of that Vessel by or on behalf of any government or other authority (other
than
by way of requisition for hire); or
(c) the
capture, seizure, arrest, detention or confiscation of that Vessel, unless
the
Vessel is released and returned to the possession of the Borrower within thirty
(30) days after the capture, seizure, arrest, detention or confiscation in
question.
|
1.1.107
|
"Total
Shareholders Equity"
means the aggregate of the amount paid up on the issued share capital
of
any relevant entity and the amount
|
18
standing
to the credit of its capital and revenue reserves (including any share premium
account or capital redemption reserve but excluding any revaluation reserve,)
plus or minus the amount standing to the credit or debit (as the case may be)
of
its profit and loss account.
|
1.1.108
|
"Transfer
Certificate"
means a certificate materially in the form set forth in Schedule
3 signed
by a Bank and a Transferee
whereby:-
|
(a) such
Bank
seeks to procure the transfer to such Transferee of all or a part of such Bank's
rights and obligations under this Agreement upon and subject to the terms and
conditions set out in Clause 14; and
(b) such
Transferee undertakes to perform the obligations it will assume as a result
of
delivery of such certificate to the Agent as is contemplated in Clause
14.
|
1.1.109
|
"Transfer
Date"
means, in relation to any Transfer Certificate, the date for the
making of
the transfer specified in the schedule to such Transfer
Certificate.
|
1.1.110 "Transferee"
means a
bank or other financial institution to which a Bank seeks to transfer all or
part of such Bank's rights and obligations under this Agreement.
1.1.111 "Trust
Property"
means:-
(a) the
benefit of Clause 8 and the covenants contained in Clause 9.3;
and
(b) all
benefits arising under (including, without limitation, all proceeds of the
enforcement of) each of the Security Documents (other than this Agreement),
with
the exception of any benefits arising solely for the benefit of the
Agent.
1.1.112 "Valuation"
means
in relation to a Vessel the average of the written valuations of that Vessel
expressed in Dollars prepared by two of the Approved Brokers (or such other
firms of reputable independent shipbrokers as may be acceptable to the Majority
Banks), to be
19
nominated
by the Borrower. Such valuations shall be prepared at the Borrower's expense
(unless otherwise stated in this Agreement), without a physical inspection,
on
the basis of a sale for prompt delivery for cash at arm's length on a charter
free basis between a willing buyer and a willing seller.
|
1.1.113
|
"Vessels" means,
subject to Clause 2.10, those vessels listed in Schedule 2 (each
a "Vessel").
|
1.2 Interpretation
In
this
Agreement:-
|
1.2.1
|
words
denoting the plural number include the singular and vice
versa;
|
|
1.2.2
|
words
denoting persons include corporations, partnerships, associations
of
persons (whether incorporated or not) or governmental or
quasi-governmental bodies or authorities and vice
versa;
|
|
1.2.3
|
references
to Recitals, Clauses, Schedules and Appendices are references to
recitals
and clauses of, and schedules and appendices to, this Agreement;
|
|
1.2.4
|
references
to this Agreement include the Recitals, the Schedules and the
Appendices;
|
|
1.2.5
|
the
headings and contents page(s) are for the purpose of reference only,
have
no legal or other significance, and shall be ignored in the interpretation
of this Agreement;
|
|
1.2.6
|
references
to any document (including, without limitation, to all or any of
the
Security Documents) are, unless the context otherwise requires, references
to that document as amended, supplemented, novated or replaced from
time
to time;
|
|
1.2.7
|
references
to statutes or provisions of statutes are references to those statutes,
or
those provisions, as from time to time amended, replaced or
re-enacted;
|
20
|
1.2.8
|
references
to any of the Finance Parties include its successors, transferees
and
assignees;
|
|
1.2.9
|
references
to times of day are unless otherwise stated to London time;
and
|
|
1.2.10
|
unless
the contrary intention appears, a reference to a month or months
is a
reference to a period starting on one day in a calendar month and
ending
on the numerically corresponding day in the next calendar month or
the
calendar month in which it is to end, except
that:
|
(i) if
the
numerically corresponding day is not a Business Day, the period will end on
the
next Business Day in that month (if there is one) or the preceding Business
Day
(if there is not);
(ii) if
there
is no numerically corresponding day in that month, that period will end on
the
last Business Day in that month; and
(iii) notwithstanding
sub-paragraph (i) above, a period which commences on the last Business Day
of a
month will end on the last Business Day in the next month or the calendar month
in which it is to end, as appropriate.
| 2 |
The
Facility and its Purpose
|
|
2.1
|
Agreement
to lend Subject
to the terms and conditions of this Agreement, and in reliance on
each of
the representations and warranties made or to be made in or in accordance
with each of the Security Documents, each of the Banks agrees to
advance
to the Borrower its Commitment of an aggregate principal amount not
exceeding the Maximum Facility Amount to be used by the Borrower
for the
purposes referred to in the
Recital.
|
|
2.2
|
Drawings
Subject
to satisfaction by the Borrower of the conditions set out in
Clause 3.1 (in respect of the first Drawing), or Clause 3.2 (in
respect of all subsequent Drawings) and subject to Clause 2.3, and
provided that the maximum aggregate amount of the Facility Outstandings
at
any given time during the Facility Period shall not exceed the Maximum
Facility Amount, each Drawing shall be advanced to the Borrower,
in each
case by the Agent transferring the amount of the Drawing to such
account
as the Borrower shall notify to the Agent
|
21
in
the
relevant Drawdown Notice by such same day method of funds transfer as the Agent
shall select.
|
2.3
|
Advance
of Drawings
Each Drawing shall be advanced in the Base Currency. Each Drawing
shall be
advanced on a Business Day, provided that the Borrower shall have
given to
the Agent not more than ten and not fewer than three Business Days'
notice
in writing materially in the form set out in Schedule 4 of the required
Advance Date of the Drawing in question and provided that the requested
Drawing would not cause a breach of Clause 2.5. Each Drawdown Notice
once
given shall be irrevocable and shall constitute a warranty by the
Borrower
that:-
|
|
2.3.1
|
all
conditions precedent to the advance of the Drawing requested in that
Drawdown Notice will have been satisfied on or before the Advance
Date
requested;
|
|
2.3.2
|
no
Event of Default or Potential Event of Default has occurred or will
then
have occurred; and
|
|
2.3.3
|
no
Event of Default or Potential Event of Default will result from the
advance of the Drawing in question.
|
The
Agent
shall promptly notify each Bank of the receipt of each Drawdown Notice,
following which each Bank will make its Proportionate Share of the amount of
the
requested Drawing available to the Borrower through the Agent on the Advance
Date requested.
2.4 Facility
Reduction
|
2.4.1
|
The
aggregate amount of the Facility available to the Borrower for drawing
under this Agreement shall be thirty million Dollars ($30,000,000)
during
the period from the Execution Date until the First Reduction Date.
On the
First Reduction Date and on each of the Subsequent Reduction Dates
the
amount of the Facility available for drawing shall be reduced by
two
million five hundred thousand Dollars ($2,500,000), which shall leave
the
Final Balloon Payment as being payable on the Termination Date. On
the
Termination Date the Facility available shall be reduced to zero.
Subject
to the proviso hereto, the mandatory reductions in the amount of
the
Facility available for drawing
|
22
required
pursuant to this Clause will be made in the amounts and at the times specified
whether or not the Maximum Facility Amount is reduced pursuant to Clause 2.4.2,
Clause 2.4.3, Clause 2.4.4, Clause 15.7 or Clause 15.8. PROVIDED
ALWAYS THAT
any
mandatory reductions pursuant to Clause 2.4.2 (voluntary reductions), Clause
2.4.3 (sale) or Clause 2.4.4 (Total Loss) shall be applied to the remaining
mandatory reductions hereunder on a pro rata basis.
|
2.4.2
|
The
Borrower may voluntarily cancel the Maximum Facility Amount in whole
or in
part in an amount of not less than five million Dollars ($5,000,000)
and
shall be in integral multiples of one million Dollars ($1,000,000),
provided that it has first given to the Agent not fewer than five
(5)
Business Days' prior written notice expiring on a Business Day (the
"Cancellation
Date")
of its desire to reduce the Maximum Facility Amount. Such notice,
once
received by the Agent, shall be irrevocable and shall oblige the
Borrower
to make payment of all interest and Commitment Commission accrued
on the
amount so cancelled up to and including the Cancellation Date together
with any Break Costs in respect of such cancelled amount if the
Cancellation Date is not an Interest Payment Date. Any such reduction
in
the Maximum Facility Amount:
|
(a) shall
not
be reversed; and
(b) shall
be
applied against the Final Balloon Payment, and the Final Balloon Payment shall
be reduced by the same amount as any such reduction of the Maximum Facility
Amount.
2.4.3 In
the
event of a sale or disposal of a Vessel, if the aggregate Valuation of the
remainder of the Vessels is less than one hundred and seventy five per cent
(175%) of the Maximum Facility Amount, then the whole of the net sales proceeds
shall be applied as a mandatory prepayment and the Maximum Facility Amount
shall
be reduced by an amount equal to such prepayment. Such reduction shall be made
on the date of such sale or disposal. If the aggregate Valuation of the
remainder of the Vessels is between one hundred and seventy five per cent (175%)
and two hundred per cent (200%) of the Maximum Facility Amount, then no
prepayment shall be required and there shall be no reduction to the Maximum
Facility
23
Amount
until such time as seven million five hundred thousand Dollars ($7,500,000)
has
been released under this Clause 2.4.3 when aggregated with those amounts
similarly released under Clause 2.4.4, whereupon the whole of any further net
sales proceeds shall be applied as a mandatory prepayment and the Maximum
Facility Amount shall be reduced by an amount equal to such prepayment. If
the
aggregate Valuation of the remainder of the Vessels is above two hundred per
cent (200%) of the Maximum Facility Amount then no prepayment shall be required
and there shall be no reduction to the Maximum Facility Amount. In each case,
the Valuations used shall be that attached to the then most recently delivered
Compliance Certificate. Any such prepayment shall oblige the Borrower to make
payment of all interest and Commitment Commission accrued on the amount so
reduced up to and including the date of reduction together with any Break Costs
in respect of such reduced amount if the date of such reduction is not an
Interest Payment Date. Any such reduction in the Maximum Facility Amount:
(a) shall
not
be reversed; and
(b) shall
be
applied against the Final Balloon Payment, and the Final Balloon Payment shall
be reduced by the same amount as any such reduction of the Maximum Facility
Amount.
|
2.4.4
|
In
the event that a Vessel becomes a Total Loss, on the earlier to occur
of
(a) the date of receipt of the proceeds of the Total Loss and (b)
the date
falling one hundred and eighty (180) days after the occurrence of
the
Total Loss (the "Reduction
Date"),
if the aggregate Valuation of the remainder of the Vessels is less
than
one hundred and seventy five per cent (175%) of the Maximum Facility
Amount then the whole of any total loss proceeds shall be applied
as a
mandatory prepayment and the Maximum Facility Amount shall be reduced
by
an amount equal to such prepayment. If the aggregate Valuation of
the
remainder of the Vessels is between one hundred and seventy five
per cent
(175%) and two hundred per cent (200%) of the Maximum Facility Amount,
then no prepayment shall be required and there shall be no reduction
to
the Maximum Facility Amount until such time as seven million five
hundred
thousand Dollars
|
24
($7,500,000)
has been released under this Clause 2.4.4 when aggregated with those amounts
similarly released under Clause 2.4.3, whereupon the whole of any further total
loss proceeds shall be applied as a mandatory prepayment and the Maximum
Facility Amount shall be reduced by an amount equal to such prepayment. If
the
aggregate Valuation of the remainder of the Vessels is above two hundred per
cent (200%) of the Maximum Facility Amount, then no prepayment shall be required
and there shall be no reduction to the Maximum Facility Amount. In each case,
the Valuation used shall be that attached to the then most recently delivered
Compliance Certificate. Any such prepayment shall oblige the Borrower to make
payment of all interest and Commitment Commission accrued on the amount so
reduced up to and including the date of reduction together with any Break Costs
in respect of such reduced amount if the date of such reduction is not an
Interest Payment Date. Any such reduction in the Maximum Facility Amount:
(a) shall
not
be reversed; and
(b) shall
be
applied against the Final Balloon Payment, and the Final Balloon Payment shall
be reduced by the same amount as any such reduction of the Maximum Facility
Amount.
|
2.4.5
|
To
the extent that repayments or prepayments made by the Borrower to
the
Agent in accordance with this Agreement reduce the Facility Outstandings
to less than the Maximum Facility Amount, the Borrower shall again
be
entitled to make Drawings up to the Commitment Termination Date in
accordance with and subject to the terms of this Agreement. Any part
of
the Facility which is undrawn on the Commitment Termination Date
shall be
automatically cancelled.
|
|
2.4.6
|
Simultaneously
with each reduction of the Maximum Facility Amount in accordance
with
Clause 2.4.1, Clause 2.4.2, Clause 2.4.3 or Clause 2.4.4, (as the
case may
be), the Commitment of each Bank will reduce so that the Commitments
of
the Banks in respect of the reduced Maximum Facility Amount remain
in
accordance with their respective Proportionate
Shares.
|
25
|
2.5
|
Restrictions
on Drawings
The Borrower shall not be entitled to make more than one Drawing
on any
Business Day and no more than five (5) Drawings may be outstanding
at any
one time during the Facility Period. Each Drawing shall be of an
amount of
not less than four million Dollars ($4,000,000) and shall be in integral
multiples of one million Dollars ($1,000,000), or the equivalent
in an
Optional Currency. If at any time during the Facility Period the
Facility
Outstandings exceed the Maximum Facility Amount then available or
if a
proposed Drawing added to the Facility Outstandings would result
in the
Maximum Facility Amount being exceeded then the Borrower shall immediately
pay to the Agent on behalf of the Banks such amounts as will ensure
that
the Facility Outstandings are equal to or less than the Maximum Facility
Amount then available.
|
|
2.6
|
Termination
Date No
Bank shall be under any obligation to advance all or any part of
its
Commitment after the Commitment Termination
Date.
|
|
2.7
|
Several
obligations The
obligations of the Banks under this Agreement are several. The failure
of
a Bank to perform its obligations under this Agreement shall not
affect
the obligations of the Borrower to any Finance Party nor shall any
Finance
Party be liable for the failure of another Bank to perform any of
its
obligations under or in connection with this
Agreement.
|
|
2.8
|
Application
of Facility Without
prejudice to the obligations of the Borrower under this Agreement,
no
Finance Party shall be obliged to concern itself with the application
of
the Facility by the Borrower.
|
|
2.9
|
Loan
facility and control accounts The
Agent will open and maintain such loan facility account or such other
control accounts as the Agent shall in its discretion consider necessary
or desirable in connection with the Facility.
|
|
2.10
|
Substitute
Vessels
It
is agreed and acknowledged that the Borrower may request amendments
to the
list of Vessels set out at Schedule 2. Any such request shall be
considered by the Banks acting reasonably, and subject
to:
|
2.10.1 the
Banks
being satisfied that the replacement vessels are:
(i) offshore
PSVs or AHTSs of the Borrower's usual standard and quality;
26
(ii) registered
in an acceptable registry and classed with a Pre-Approved Classification
Society;
(iii) built
no
earlier than 1996 and being no more than two (2) years older than the Vessel
it
is to replace;
(iv) have
a
Valuation no less than eighty per cent (80%) of the Valuation of the Vessel
to
be replaced;
2.10.2 the
Borrower, as owner of the replacement vessel, granting security over such
replacement vessel equivalent to the other Security Documents; and
2.10.3 the
Agent
receiving such conditions precedent (including but not limited to corporate
papers and legal opinions) as it may reasonably require,
the
Banks
shall consent to such substitutions and the definition of "Vessels"
shall
be amended accordingly.
| 3 |
Conditions Precedent and Subsequent
|
|
3.1
|
Conditions
Precedent
-
First
Drawing Before
any Bank shall have any obligation to advance the first Drawing under
the
Facility, the Borrower shall pay to the Agent the relevant fees referred
to in Clause 7 and deliver or cause to be delivered to or to the
order of
the Agent the following documents and
evidence:-
|
|
3.1.1
|
Evidence
of incorporation Such
evidence as the Agent may reasonably require that each Security Party
was
duly incorporated in its country of incorporation and remains in
existence
and, where appropriate, in good standing, with power to enter into,
and
perform its obligations under, those of the Security Documents to
which it
is, or is intended to be, a party, including (without limitation)
a copy,
certified by a director or an officer of the Security Party in question
as
true, complete, accurate and unamended, of all documents establishing
or
limiting the constitution of each Security Party.
|
|
3.1.2
|
Corporate
authorities A
copy, certified by a director or any duly authorised officer of the
Security Party in question as true, complete, accurate and neither
amended
nor revoked, of a resolution of the directors
|
27
of
each
Security Party (together, where appropriate, with signed waivers of notice
of
any directors' meetings) approving, and authorising or ratifying the execution
of, those of the Security Documents to which that Security Party is or is
intended to be a party and all matters incidental thereto.
|
3.1.3
|
Officer's
certificate A
certificate (i) signed by a duly authorised officer or representative
of
each of the Security Parties setting out the names of the directors
and
officers of that Security Party and (ii) issued by each Security
Party's
company registry confirming due incorporation and valid existence
and
(when such information is maintained by the registry) the names of
its
directors and shareholders.
|
|
3.1.4
|
Power
of attorney The
power of attorney (notarially attested and legalised, if necessary,
for
registration purposes) of each of the Security Parties under which
any
documents are to be executed or transactions undertaken by that Security
Party.
|
|
3.1.5
|
The
Security Documents The
Security Documents, together with all notices and other documents
required
by any of them, duly executed.
|
|
3.1.6
|
Drawdown
Notice A
duly completed Drawdown Notice.
|
|
3.1.7
|
Process
agent A
letter from Gulf Offshore N.S. Limited accepting their appointment
by each
of the Security Parties as agent for service of Proceedings pursuant
to
the Security Documents.
|
|
3.1.8
|
Legal
opinions Confirmation
satisfactory to the Agent that all legal opinions required by the
Agent
and the Finance Parties will be given substantially in the form required
by the Agent and the Finance
Parties.
|
|
3.1.9
|
Consents
A
certificate from the Borrower that all (if any) consents, licences,
approvals and authorisations of, or registrations with or declarations
to,
any governmental authority, bureau or agency which may be required
in
connection with the Security Documents have been made or obtained
and
remain in full force and effect.
|
28
|
3.1.10
|
Fee
Letter The
Fee Letter duly signed and payment of all fees that have fallen due
thereunder.
|
|
3.1.11
|
Accounts
The
audited consolidated accounts for the Guarantor for the year ended
2005.
|
|
3.1.12
|
Evidence
of Borrower's title Evidence
that on the date of the Drawing (i) the Vessels are registered under
the
flag stated in Schedule 2 in the ownership of the Borrower and (ii)
the
relevant Mortgages will be capable of being immediately registered
against
the Vessels with first priority.
|
|
3.1.13
|
Evidence
of insurance Evidence
that the Vessels are insured in the manner required by the Security
Documents and that letters of undertaking will be issued in the manner
required by the Security Documents, together with a written opinion
on the
Insurances from an insurance adviser appointed by the
Agent.
|
|
3.1.14
|
Confirmation
of class A Certificate
of Confirmation of Class for hull and machinery confirming that the
Vessels are classed with the highest class applicable to vessels
of her
type with a Pre-Approved Classification
Society.
|
|
3.1.15
|
Vessel
Documents Photocopies,
certified as true, accurate and complete by an authorised signatory
of the
Borrower, of:
|
(i) current
SMC of each of the Vessels; and
(ii) each
ISM
Company's current DOC,
|
in
each case together with all addenda, amendments or
supplements.
|
|
3.2
|
Conditions
Precedent
-
Subsequent
Drawings Before
any Bank shall have any obligation to advance any subsequent Drawings
under the Facility, the Borrower shall deliver or cause to be delivered
to
the order of the Agent:
|
3.2.1 Officer's
certificate
A
certificate signed by a duly authorised officer of each Security Party dated
no
later than five (5) Business Days before the date of the Drawing confirming
that
none of the documents and evidence delivered to the Agent pursuant to Clauses
3.1.1, 3.1.2, 3.1.3 and 3.1.4
29
has
been
amended, modified or revoked in any way since its delivery to the Agent.
3.2.2 Drawdown
Notice
Drawdown
Notice.
3.3 Conditions
Subsequent
The
Borrower undertakes to deliver or to cause to be delivered to the Agent on,
or,
in respect of Clause 3.3.1 not later than ten (10) days, or in respect of Clause
3.3.2 not later than fifteen (15) Business Days, or such other period as the
Agent may have consented to after the first Advance Date the following
additional documents and evidence:-
|
3.3.1
|
Letters
of undertaking
Letters of undertaking in respect of the Insurances as required by
the
Security Documents together with copies of the relevant policies
or cover
notes or entry certificates duly endorsed with the interest of the
Agent.
|
|
3.3.2
|
Evidence
of Borrower's title
Certificates of ownership and encumbrance (or equivalent) issued
by the
Registrar of Ships (or equivalent official) of the relevant Vessel's
flag
state confirming that (a) the Vessels are permanently registered
under
that flag in the ownership of the Borrower (b) the Mortgages have
been
registered with first priority against the Vessels and (c) there
are no
further Encumbrances registered against the
Vessels.
|
|
3.4
|
No
waiver If
the Banks in their sole discretion agree to advance any part of the
Facility to the Borrower before all of the documents and evidence
required
by Clause 3.1 or Clause 3.2 (as the case may be) have been delivered
to or
to the order of the Agent, the Borrower undertakes to deliver all
outstanding documents and evidence to or to the order of the Agent
no
later than the date agreed by the Agent and the Borrower and the
advance
of any part of the Facility shall not be taken as a waiver of the
Agent's
right to require production of all the documents and evidence required
by
Clause 3.1 or Clause 3.2 (as the case may
be).
|
|
3.5
|
Form
and content All
documents and evidence delivered to the Agent pursuant to this Clause
shall:-
|
|
3.5.1
|
be
in form and substance reasonably acceptable to the Agent;
|
30
|
3.5.2
|
be
accompanied, if required by the Agent, by translations into the English
language, certified in a manner acceptable to the Agent acting reasonably;
|
|
3.5.3
|
if
required for registration purposes, be certified, notarised, legalised
or
attested in a manner acceptable for
registration.
|
| 4 |
Representations
and Warranties
|
The
Borrower represents and warrants to each of the Finance Parties at the Execution
Date and (by reference to the facts and circumstances then pertaining) at the
date of each Drawdown Notice, at each Advance Date and at each Interest Payment
Date as follows (except that the representation and warranty contained at Clause
4.17 shall only be made on the first Advance Date and that the representation
and warranty contained at Clause 4.9 shall only be made on the Execution Date)
:-
|
4.1
|
Incorporation
and capacity Each
of the Security Parties is a body corporate duly constituted, organised
and validly existing and (where applicable) in good standing under
the law
of its country of incorporation, in each case with perpetual
corporate existence and the power to xxx and be sued, to own its
assets
and to carry on its business, and all of the corporate shareholders
(if
any) of each Security Party are duly constituted and existing under
the
laws of their countries of incorporation with perpetual corporate
existence and the power to xxx and be sued, to own their assets and
to
carry on their business and are acting on their own
account.
|
|
4.2
|
Solvency
None
of the Security Parties is insolvent or in liquidation or administration
or subject to any other insolvency procedure, and no receiver,
administrative receiver, administrator, liquidator, trustee or analogous
officer has been appointed in respect of any of the Security Parties.
For
this purpose a Security Party will be deemed insolvent if it is unable
to
pay its debts within the meaning of S.123 of the Insolvency Xxx
0000.
|
|
4.3
|
Binding
obligations The
Security Documents when duly executed and delivered will constitute
the
legal, valid and binding obligations of the Security Parties enforceable
in accordance with their respective terms subject to applicable laws
regarding creditors' rights in
general.
|
31
|
4.4
|
Satisfaction
of conditions All
acts, conditions and things required to be done and satisfied and
to have
happened prior to the execution and delivery of the Security Documents
in
order to constitute the Security Documents the legal, valid and binding
obligations of the Security Parties in accordance with their respective
terms have been done, satisfied and have happened in compliance with
all
applicable laws.
|
|
4.5
|
Registrations
and consents All
(if any) consents, licences, approvals and authorisations of, or
registrations with or declarations to, any governmental authority,
bureau
or agency which may be required in connection with the execution,
delivery, performance, validity or enforceability of the Security
Documents have been obtained or made and remain in full force and
effect
and the Borrower is not aware of any event or circumstance which
could
reasonably be expected adversely to affect the right of any of the
Security Parties to hold and/or obtain renewal of any such consents,
licences, approvals or
authorisations.
|
|
4.6
|
Disclosure
of material facts The
Borrower is not aware of any material facts or circumstances which
have
not been disclosed to the Agent and which might, if disclosed, have
reasonably been expected to adversely affect the decision of a person
considering whether or not to make facilities of the nature contemplated
by this Agreement available to the
Borrower.
|
|
4.7
|
No
material litigation There
is no action, suit, arbitration or administrative proceeding nor
any
contemplated action, suit, arbitration or administrative proceeding
pending or to its knowledge about to be pursued before any court,
tribunal
or governmental or other authority which is not covered by adequate
insurance which would, or would be likely to, have a Material Adverse
Effect.
|
|
4.8
|
No
breach of law or contract The
execution, delivery and performance of the Security Documents will
not
contravene any contractual restriction or any law binding on any
of the
Security Parties or on any shareholder (whether legal or beneficial)
of
any of the Security Parties, or the constitutional documents of any
of the
Security Parties, nor result in the creation of, nor oblige any of
the
Security Parties to create, any Encumbrance over all or any of its
assets,
with the exception of the Encumbrances created by or pursuant to
the
Security Documents and Permitted
Liens.
|
32
|
4.9
|
No
deductions
To
the best of its knowledge belief and without undue enquiry, none
of the
Security Parties is required to make any deduction or withholding
from any
payment which it may be obliged to make to any of the Finance Parties
under or pursuant to the Security
Documents.
|
|
4.10
|
Use
of Facility
The Facility will be used for the purpose specified in the
recital.
|
|
4.11
|
Material
Adverse Change
There has been no change in the business, assets, operations or condition
(financial or otherwise) of any of the Security Parties or in the
facts
and information regarding such entities as represented to date which
constitutes a Material Adverse
Effect.
|
|
4.12
|
No
default
None of the Security Parties is in default of its obligations under
any
other financing documents to which it is a party to an extent or
in a
manner which might have a Material Adverse Effect on the business
or
condition (financial or otherwise) of that Security Party and no
Event of
Default is continuing or might reasonably be expected to result from
the
advance of any Drawing.
|
|
4.13
|
Pari
passu ranking
The payment obligations of each of the Security Parties under the
Security
Documents to which it is a party rank at least pari passu with the
claims
of all its other unsecured and unsubordinated creditors, except for
obligations mandatorily preferred by law applying to companies
incorporated in the relevant Security Party's country of incorporation
or
otherwise applicable to that Security
Party.
|
|
4.14
|
No
Immunity
In
any proceedings taken in any of the Security Parties' respective
jurisdictions of incorporation in relation to any of the Security
Documents, none of the Security Parties will be entitled to claim
for
itself or any of its assets immunity from suit, execution, attachment
or
other legal process.
|
|
4.15
|
Governing
Law and Judgments
In
any proceedings taken in any of the Security Parties' jurisdiction
of
incorporation or organisation in relation to any of the Security
Documents
in which there is an express choice of the law, the submission to
that
jurisdiction of a particular country as the governing law thereof,
that
choice of law and any judgment or (if applicable) arbitral award
obtained
in that country will be recognised and
enforced.
|
33
|
4.16
|
Validity
and Admissibility in Evidence
As
at the date hereof, all acts, conditions and things required to be
done,
fulfilled and performed in order (a) to enable each of the Security
Parties lawfully to enter into, exercise its rights under and perform
and
comply with the obligations expressed to be assumed by it in the
Security
Documents, (b) to ensure that the obligations expressed to be assumed
by
each of the Security Parties in the Security Documents are legal,
valid
and binding and (c) to make the Security Documents admissible in
evidence
in the jurisdictions of incorporation or organization of each of
the
Security Parties, have been done, fulfilled and
performed.
|
|
4.17
|
No
Filing or Stamp Taxes Under
the laws of the Security Parties' respective jurisdictions of
incorporation or organisation in force at the date hereof, it is
not
necessary that any of the Security Documents be filed, recorded or
enrolled with any court or other authority in its jurisdiction of
incorporation or organisation (other than the Registrar of Companies
for
England and Wales, or the maritime registry in Norway, to the extent
applicable) or that any stamp, registration or similar tax be paid
on or
in relation to any of the Security
Documents.
|
|
4.18
|
Accounts
The
first set of Accounts and all other annual financial statements relating
to the Group required to be delivered, were prepared in accordance
with
GAAP, give (in conjunction with the notes thereto) a true and fair
view of
(in the case of annual financial statements) or fairly represent
(in the
case of quarterly accounts) the financial condition of the Group
at the
date as of which they were prepared and the results of the Group’s
operations during the financial period then
ended.
|
|
4.19
|
Ownership
and Security
Each of the Security Parties is the legal and beneficial owner of
all
assets and other property which it purports to charge, mortgage,
pledge,
assign or otherwise secure pursuant to each Security Document and
those
Security Documents to which it is a party create and give rise to
valid
and effective Security having the ranking expressed in those Security
Documents.
|
4.20 Money
Laundering Any
amount borrowed hereunder, and the performance of the obligations of the
Security Parties under the Security Documents, will be for the account of
members of the Group and will not involve any breach by any of them of any
law
or regulatory measure relating to "money laundering" as defined
34
in
Article 1 of the Directive (91/308/EEC) of the Council of the European
Communities.
| 5 |
Repayment,
Prepayment
and Currency Option
|
|
5.1
|
Repayment
Each
Drawing shall be repaid by the Borrower to the Agent on behalf of
the
Banks on the last day of its Interest Period unless the Borrower
selects a
further Interest Period for that Drawing in accordance with Clause
6,
provided that the Borrower shall not be permitted to select such
further
Interest Period if an Event of Default or Potential Event of Default
has
occurred and shall then be obliged to repay such Drawing on the last
day
of its then current Interest Period. The Borrower shall on the Termination
Date repay to the Agent as agent for the Banks all Facility
Outstandings.
|
|
5.2
|
Prepayment
The
Borrower may prepay the Facility Outstandings in whole or in part
in
integral multiples of one million Dollars ($1,000,000) (or as otherwise
may be agreed by the Agent), each such prepayment to be of a minimum
amount of five million Dollars ($5,000,000), provided that it has
first
given to the Agent not fewer than five (5) days prior written notice
expiring on a Business Day of its intention to do so. Any notice
pursuant
to this Clause 5.2 once given shall be irrevocable and shall oblige
the
Borrower to make the prepayment referred to in the notice on the
Business
Day specified in the notice, together with all interest accrued on
the
amount prepaid up to and including that Business
Day.
|
|
5.3
|
Mandatory
Prepayment If
at any time the Facility Outstandings shall exceed the Maximum Facility
Amount the Borrower shall immediately prepay to the Agent on behalf
of the
Banks such amounts as will ensure that the Facility Outstandings
do not
exceed the Maximum Facility Amount and shall pay to the Banks all interest
accrued on the amount prepaid up to and including the date on which
such
prepayment occurred.
|
|
5.4
|
Prepayment
indemnity If
the Borrower shall make a prepayment on a Business Day other than
the last
day of an Interest Period, it shall pay to the Agent on behalf of
the
Banks such amount which is necessary to compensate the Banks for
any Break
Costs incurred by the Agent or any of the Banks as a result of the
prepayment in question.
|
35
|
5.5
|
Application
of prepayments Any
prepayment by the Borrower in an amount less than the Indebtedness
shall
be applied in satisfaction or reduction first of any costs and other
expenses outstanding; secondly of all interest accrued with respect
to the
outstanding Drawings; and thirdly of the outstanding
Drawings.
|
|
5.6
|
Reborrowing
of prepayments Any
amount prepaid pursuant to this Agreement, which for the avoidance
of
doubt shall exclude any amount prepaid pursuant to Clause 2.4.2,
Clause
2.4.3 or Clause 2.4.4, may be reborrowed in accordance with Clause
2.2.
|
|
5.7
|
Selection
of currency The
Borrower may from time to time select in a written notice to the
Agent
given not later than 11.00am on the Quotation Day for the relevant
Interest Period that the Facility shall be denominated for the next
Interest Period (which may include the first Interest Period) in
an
Optional Currency.
|
|
5.8
|
Unavailability
of a currency If:
|
5.8.1 a
Bank
notifies the Agent that the Optional Currency requested is not readily available
to it in the amount required; or
5.8.2 a
Bank
notifies the Agent that to make an advance in that Optional Currency would
contravene a law or regulation applicable to it,
the
Agent
will promptly give notice to the Borrower to that effect. In this event any
Bank
that gives notice pursuant to this Clause 5.8 will be required to
participate in the Facility during the relevant Interest Period in the Base
Currency (in an amount equal to that Bank's proportion of the Base Currency
Amount) and its participation will be treated as a separate Facility denominated
in the Base Currency during that Interest Period.
5.9 Change
of currency If
the
Facility is to be denominated in different currencies during two successive
Interest Periods:
5.9.1 the
following provisions shall apply:
(a) if
the
currency for the second Interest Period is an Optional Currency, the amount
of
the Facility in that Optional Currency will be calculated by the Agent as the
amount of that Optional Currency equal to the Base Currency Amount of the
Facility at the
36
Agent's
Spot Rate of Exchange two (2) Business Days before the first day of the second
Interest Period;
(b) if
the
currency for the second Interest Period is the Base Currency, the amount of
the
Facility will be equal to the Base Currency Amount;
(c) the
Borrower shall repay the Facility on the last day of the first Interest Period
in the currency in which it was denominated for that Interest Period;
and
(d) the
Banks
shall re-advance the Facility in the new currency in accordance with Clause
5.10;
5.9.2 the
Agent
shall:
(a) apply
the
amount to be readvanced by the Banks under Clause 5.9.1(d) (or so much of that
amount as is necessary) in or towards the purchase of an amount in the currency
in which the Facility is outstanding for the first Interest Period;
and
(b) use
the
amount it purchases in or towards satisfaction of the Borrower's obligations
under Clause 5.9.1(c);
5.9.3 if
the
amount purchased by the Agent under Clause 5.9.2(a) is less than the amount
required to be repaid by the Borrower, the Agent shall promptly notify the
Borrower and the Borrower shall, on the last day of the first Interest Period,
pay an amount to the Agent (for the account of the Banks) (in the currency
of
the Facility for the first Interest Period) equal to the
difference;
5.9.4 if
any
part of the amount to be readvanced by the Banks under Clause 5.9.1(d) is not
needed to purchase the amount required to be repaid by the Borrower, the Agent
shall promptly notify the Borrower and pay the Borrower on the last day of
the
first Interest Period that part of that amount (in the new
currency).
5.10 Same
Optional Currency during successive Interest Periods If
the
Facility is to be denominated in the same Optional Currency during two
successive Interest
37
Periods,
the Agent shall calculate the amount of the Facility in the Optional Currency
for the second of those Interest Periods (by calculating the amount of Optional
Currency equal to the Base Currency Amount of the Facility at the Agent's Spot
Rate of Exchange two (2) Business Days before the first day of the second
Interest Period) and (subject to Clause 5.10.2):
(i) if
the
amount calculated is less than the existing amount of the Facility in the
Optional Currency during the first Interest Period, promptly notify the Borrower
and the Borrower shall pay to the Agent (for the account of the Banks), on
the
last day of the first Interest Period, an amount equal to the difference;
or
(ii) if
the
amount calculated is more than the existing amount of the Facility in the
Optional Currency during the first Interest Period, if no Event of Default
is
continuing, each Bank shall, on the last day of the first Interest Period,
pay
to the Borrower through the Agent its participation in an amount equal to the
difference;
|
5.11
|
Agent's
calculations All
calculations made by the Agent under this Clause 5 will take into
account
any repayment or prepayment of the Facility to be made on the last
day of
the first Interest Period.
|
| 6 |
Interest
|
|
6.1
|
Interest
Periods
The period during which any Drawing shall be outstanding pursuant
to this
Agreement shall be divided into consecutive Interest Periods of one,
three
or six months' duration, as selected by the Borrower by written notice
to
the Agent not later than 3:00 p.m. on the fourth Business Day before
the
beginning of the Interest Period in question, or such other duration
as
may be agreed by the Banks in their discretion. No more than three
one (1)
month Interest Periods may be selected by the Borrower in each twelve
(12)
month period during the Facility
Period.
|
|
6.2
|
Beginning
and end of Interest Periods The
first Interest Period in respect of each Drawing shall begin on the
Advance Date of that Drawing and shall end on the last day of the
Interest
Period selected in accordance with Clause 6.1. Any subsequent Interest
Period selected in respect of each Drawing shall commence
|
38
on
the
day following the last day of its previous Interest Period and shall end on
the
last day of its current Interest Period selected in accordance with Clause
6.1.
However, in respect of any Drawings outstanding on the Termination Date, the
Interest Period applicable to such Drawings shall end on the Termination
Date.
|
6.3
|
Interest
rate
During each Interest Period, interest shall accrue on each Drawing
at the
rate determined by the Agent to be the aggregate of (a) the Margin
(b)
LIBOR (or, if the Facility is denominated in Euro, EURIBOR, or, if
the
Facility is denominated in NOK, NIBOR) and (c), if applicable, the
Mandatory Cost determined at or about 11.00 a.m. (London time) on
the
second Business Day prior to the beginning of the Interest Period
relating
to that Drawing. The effective interest rate is as is more fully
described
in Schedule 7.
|
|
6.4
|
Accrual
and payment of interest During
the Facility Period, interest
shall accrue from day to day, shall be calculated on the basis of
a 360
day year (or, for any period when the Facility is denominated in
Sterling
on the basis of a 365 day year) and the actual number of days elapsed
(or,
in any circumstance where market practice differs, in accordance
with the
prevailing market practice) and shall be paid by the Borrower to
the Agent
on behalf of the Banks on the last day of each Interest Period and
additionally, during any Interest Period exceeding six months, on the
last day of each successive six month period after the beginning of
that Interest Period.
|
|
6.5
|
Ending
of Interest Periods If
any Interest Period would end on a day which is not a Business Day,
that
Interest Period shall end on the next succeeding Business Day (unless
the
next succeeding Business Day falls in the next calendar month, in
which
event the Interest Period in question shall end on the immediately
preceding Business Day).
|
6.6 Default
Rate If
an
Event of Default shall occur, the whole of the Indebtedness shall, from the
date
of the occurrence of the Event of Default, bear interest up to the date of
actual payment (both before and after judgment) at the Default Rate, compounded
at such intervals as the Agent shall in its reasonable discretion determine,
which interest shall be payable from time to time by the Borrower to the Agent
on behalf of the Banks on demand.
39
6.7 Absence
of quotations
If LIBOR
or, if applicable, EURIBOR or NIBOR is to be determined by reference to the
Reference Banks but a Reference Bank does not supply a quotation by 11.00 am
(London time) in respect of LIBOR, 11.00 am (Brussels time) in respect of
EURIBOR or 12.00 pm (Oslo time) in respect NIBOR, the applicable LIBOR, EURIBOR
or NIBOR shall be determined on the basis of the quotations obtained from such
other banks as may be appointed by the Agent in consultation with the Borrower.
|
6.8
|
Determinations
conclusive Each
determination of an interest rate made by the Agent in accordance
with
Clause 6 shall (save in the case of manifest error or on any question
of law) be final and conclusive.
|
| 7 |
Fees
|
|
7.1
|
The
Borrower shall pay to the Agent for distribution to the Banks Commitment
Commission at the rate of forty per centum (40%) of the applicable
Margin
on any undrawn and uncancelled part of the Facility. The Commitment
Commission will accrue from day to day on the basis of a 360 day
year and
the actual number of days elapsed and shall be paid quarterly in
arrears
from 15 March 2006 until the Commitment Termination Date with a pro
rata
payment being due and payable on the Commitment Termination
Date.
|
|
7.2
|
The
Borrower shall pay to the Agent the fees detailed in the Fee
Letter.
|
|
7.3
|
All
fees and commissions hereunder or under the Fee Letter shall be calculated
by reference to, and payable in, the Base
Currency.
|
| 8 |
Security
Documents
|
|
8.1
|
As
security for the repayment of the Indebtedness, the Borrower will
execute
and deliver to the Agent or cause to be executed and delivered to
the
Agent, on or before the first Advance Date, the following Security
Documents in such forms and containing such terms and conditions
as the
Agent requires:-
|
|
8.1.1
|
the
Mortgages
the first priority ship mortgages together with collateral declaration
of
pledge thereto over each of the Vessels executed by the Borrower.
|
40
|
8.1.2
|
the
Assignments
the assignments of the Insurances and Requisition Compensation in
respect
of each of the Vessels executed by the Borrower.
|
|
8.1.3
|
the
Guarantee the
guarantee and indemnity of the Guarantor in favour of the
Agent.
|
| 9 |
Agency
and Trust
|
|
9.1
|
Appointment
Each
of the Finance Parties appoints the Agent its agent for the purpose
of
administering the Facility and the Security Documents and authorises
the
Agent and its directors, officers, employees and agents acting on
the
instructions from time to time of the Majority Banks, and subject
to
Clauses 9.4 and 9.19, to execute the Security Documents on its behalf
and
to exercise all rights, powers, discretions and remedies vested in
the
Banks under or pursuant to the Security Documents, together with
all
powers reasonably incidental to them.
|
|
9.2
|
Authority
Each
of the Finance Parties irrevocably authorises the Agent, acting on
the
instructions from time to time of the Majority Banks (save where
the terms
of any Security Document expressly require the instructions of all
of the
Banks):-
|
|
9.2.1
|
to
give or withhold any consents or approvals; and
|
|
9.2.2
|
to
exercise, or refrain from exercising, any discretions; and
|
|
9.2.3
|
to
collect, receive, release or pay any
money;
|
under
or
pursuant to any of the Security Documents. The Agent shall have no duties or
responsibilities as agent or as security trustee other than those expressly
conferred on it by the Security Documents and shall not be obliged to act on
any
instructions if to do so would, in the opinion of the Agent, be contrary to
any
provision of the Security Documents or to any law, or would expose the Agent
to
any actual or potential liability to any third party.
|
9.3
|
Trust
The
Agent agrees and declares, and each of the Banks acknowledges, that,
subject to the terms and conditions of this Clause, the Agent holds
the
Trust Property on trust for the Banks, in accordance with their respective
Proportionate Shares. Each of the Finance Parties agrees that the
obligations, rights and benefits vested in the Agent in its capacity
as
security trustee shall be performed and exercised in accordance with
this
Clause. The Agent in its capacity as security
|
41
trustee
shall have the benefit of all of the provisions of this Agreement benefiting
it
in its capacity as agent for the Finance Parties, and all the powers and
discretions conferred on trustees by the Trustee Xxx 0000 (to the extent not
inconsistent with this Agreement). In addition:-
|
9.3.1
|
the
Agent (and any attorney, agent or delegate of the Agent) may indemnify
itself or himself out of the Trust Property against all liabilities,
costs, fees, damages, charges, losses and expenses sustained or incurred
by it or him in relation to the taking or holding of any of the Trust
Property or in connection with the exercise or purported exercise
of the
rights, trusts, powers and discretions vested in the Agent or any
other
such person by or pursuant to the Security Documents or in respect
of
anything else done or omitted to be done in any way relating to the
Security Documents other than as a result of its gross negligence
or
wilful misconduct; and
|
|
9.3.2
|
the
Finance Parties acknowledge that the Agent shall be under no obligation
to
insure any property nor to require any other person to insure any
property
and shall not be responsible for any loss which may be suffered by
any
person as a result of the lack or insufficiency of any insurance;
and
|
|
9.3.3
|
the
Agent and the Finance Parties agree that the perpetuity period applicable
to the trusts declared by this Agreement shall be the period of eighty
years from the Execution Date.
|
9.4 Limitations
on authority Except
with the prior written consent of each of the Banks, the Agent shall not be
entitled to :-
|
9.4.1
|
release
or vary any security given for the Borrower's obligations under this
Agreement; nor
|
|
9.4.2
|
agree
to waive the payment of any sum of money payable by any of the Security
Parties under the Security Documents;
nor
|
|
9.4.3
|
change
the meaning of the expression "Majority
Banks";
nor
|
42
|
9.4.4
|
exercise,
or refrain from exercising, any discretion, or give or withhold any
consent, the exercise or giving of which is, by the terms of this
Agreement, expressly reserved to the Banks;
nor
|
|
9.4.5
|
extend
the due date for the payment of any sum of money payable by any of
the
Security Parties under the Security Documents;
nor
|
|
9.4.6
|
take
or refrain from taking any step if the effect of such action or inaction
may lead to the increase of the obligations of a Bank under any of
the
Security Documents; nor
|
|
9.4.7
|
agree
to change the currency in which any sum is payable under the Security
Documents; nor
|
|
9.4.8
|
agree
to amend this Clause 9.4; nor
|
|
9.4.9
|
agree
to reduce the rate under the definitions of "Margin"
"Commitment
Commission"
or "Default
Rate".
|
|
9.5
|
Liability
Neither
the Agent nor any of its directors, officers, employees or agents
shall be
liable to any of the other Finance Parties for anything done or omitted
to
be done by the Agent under or in connection with the Security Documents
unless as a result of the Agent's wilful misconduct or gross
negligence.
|
|
9.6
|
Acknowledgement
Each
of the Finance Parties (other than the Agent) acknowledges that:-
|
|
9.6.1
|
it
has not relied on any representation made by the Agent or any of
the
Agent's directors, officers, employees or agents or by any other
person
acting or purporting to act on behalf of the Agent to induce it to
enter
into any of the Security Documents;
|
|
9.6.2
|
it
has made and will continue to make without reliance on the Agent,
and
based on such documents and other evidence as it considers appropriate,
its own independent investigation of the financial condition and
affairs
of the Security Parties in connection with the making and continuation
of
the Facility;
|
43
|
9.6.3
|
it
has made its own appraisal of the creditworthiness of the Security
Parties;
|
|
9.6.4
|
the
Agent shall not have any duty or responsibility at any time to provide
it
with any credit or other information relating to any of the Security
Parties unless that information is received by the Agent pursuant
to the
express terms of the Security Documents.
|
Each
of
the Finance Parties (other than the Agent) agrees that it will not assert nor
seek to assert against any director, officer, employee or agent of the Agent
or
against any other person acting or purporting to act on behalf of the Agent
any
claim which it might have against them in respect of any of the matters referred
to in this Clause.
|
9.7
|
Limitations
on responsibility The
Agent shall have no responsibility to any of the Security Parties
or to
any of the other Finance Parties on account of:-
|
|
9.7.1
|
the
failure of any of the Finance Parties or of any of the Security Parties
to
perform any of their respective obligations under the Security Documents;
|
|
9.7.2
|
the
financial condition of any of the Security Parties;
|
|
9.7.3
|
the
completeness or accuracy of any statements, representations or warranties
made in or pursuant to any of the Security Documents, or in or pursuant
to
any document delivered pursuant to or in connection with any of the
Security Documents;
|
|
9.7.4
|
the
negotiation, execution, effectiveness, genuineness, validity,
enforceability, admissibility in evidence or sufficiency of any of
the
Security Documents or of any document executed or delivered pursuant
to or
in connection with any of the Security
Documents.
|
9.8 The
Agent's rights The
Agent
may:-
|
9.8.1
|
assume
that all representations or warranties made or deemed repeated by
any of
the Security Parties in or pursuant to any of the Security Documents
are
true and complete, unless, in its capacity as the Agent, it has acquired
actual knowledge to the contrary;
and
|
44
|
9.8.2
|
assume
that no Event of Default or Potential Event of Default has occurred
unless, in its capacity as the Agent, it has acquired actual knowledge
to
the contrary; and
|
|
9.8.3
|
rely
on any document or Communication believed by it to be genuine;
and
|
|
9.8.4
|
rely
as to legal or other professional matters on opinions and statements
of
any legal or other professional advisers selected or approved by
it;
and
|
|
9.8.5
|
rely
as to any factual matters which might reasonably be expected to be
within
the knowledge of any of the Security Parties on a certificate signed
by or
on behalf of that Security Party;
and
|
|
9.8.6
|
refrain
from exercising any right, power, discretion or remedy unless and
until
instructed to exercise that right, power, discretion or remedy and
as to
the manner of its exercise by the Banks (or, where applicable, by
the
Majority Banks) and unless and until the Agent has received from
the Banks
any payment which the Agent may require on account of, or any security
which the Agent may require for, any costs, claims, expenses (including
legal and other professional fees) and liabilities which it considers
it
may incur or sustain in complying with those
instructions.
|
|
9.9
|
The
Agent's duties The
Agent shall:-
|
|
9.9.1
|
if
requested in writing to do so by a Bank, make enquiry and advise
the Banks
as to the performance or observance of any of the provisions of the
Security Documents by any of the Security Parties or as to the existence
of an Event of Default; and
|
|
9.9.2
|
inform
the Banks promptly of any Event of Default of which the Agent has
actual
knowledge.
|
|
9.10
|
No
deemed knowledge The
Agent shall not be deemed to have actual knowledge of the falsehood
or
incompleteness of any representation or warranty made or deemed repeated
by any of the Security Parties or actual knowledge of the
|
45
occurrence
of any Event of Default or Potential Event of Default unless a Bank or any
of
the Security Parties shall have given written notice thereof to the
Agent.
|
9.11
|
Other
business The
Agent may, without any liability to account to the Banks, generally
engage
in any kind of banking or trust business with any of the Security
Parties
or any of their respective Subsidiaries or associated companies or
with a
Bank as if it were not the Agent.
|
|
9.12
|
Agent's
Indemnity The
Banks shall, promptly on the Agent's request, reimburse the Agent
in their
respective Proportionate Shares, for, and keep the Agent fully indemnified
in respect of:-
|
|
9.12.1
|
all
amounts payable by the Borrower to the Agent pursuant to Clause 17
(other
than under Clauses 17.3 and 17.4) to the extent that those amounts
are not
paid by the Borrower;
|
|
9.12.2
|
all
liabilities, damages, costs and claims sustained or incurred by the
Agent
in connection with the Security Documents, or the performance of
its
duties and obligations, or the exercise of its rights, powers, discretions
or remedies under or pursuant to any of the Security Documents; or
in
connection with any action taken or omitted by the Agent under or
pursuant
to any of the Security Documents, unless in any case those liabilities,
damages, costs or claims arise solely from the Agent's wilful misconduct
or gross negligence.
|
|
9.13
|
Employment
of agents In
performing its duties and exercising its rights, powers, discretions
and
remedies under or pursuant to the Security Documents, the Agent shall
be
entitled to employ and pay agents to do anything which the Agent
is
empowered to do under or pursuant to the Security Documents (including
the
receipt of money and documents and the payment of money) and to act
or
refrain from taking action in reliance on the opinion of, or advice
or
information obtained from, any lawyer, banker, broker, accountant,
valuer
or any other person believed by the Agent in good faith to be competent
to
give such opinion, advice or
information.
|
|
9.14
|
Distribution
of payments The
Agent shall pay promptly to the order of each of the Banks that Bank's
Proportionate Share of every sum of money received by the
|
46
Agent
pursuant to the Security Documents (with the exception of any amounts payable
pursuant to Clause 7 and any amounts which, by the terms of the Security
Documents, are paid to the Agent for the account of the Agent alone or
specifically for the account of one or more of the Finance Parties) and until
so
paid such amount shall be held by the Agent on trust absolutely for that Finance
Party.
|
9.15
|
Reimbursement
The
Agent shall have no liability to pay any sum to another Party until
it has
itself received payment of that sum. If, however, the Agent does
pay any
sum to a Party on account of any amount prospectively due to it pursuant
to Clause 9.14 or otherwise before it has itself received payment of
that amount, and the Agent does not in fact receive payment within
five
Business Days after the date on which that payment was required to
be made
by the terms of the Security Documents, the recipient will, on demand
by
the Agent, refund to the Agent an amount equal to the amount received
by
it, together with an amount sufficient to reimburse the Agent for
the cost
of money for funding the amount in question during the period beginning
on
the date on which that amount was required to be paid by the terms
of the
Security Documents and ending on the date on which the Agent receives
reimbursement.
|
|
9.16
|
Redistribution
of payments Unless
otherwise agreed between the Finance Parties, if at any time a Finance
Party receives or recovers by way of set-off, the exercise of any
lien or
otherwise other than from any assignee or transferee of or sub-participant
in that Bank's Commitment, an amount greater than that Bank's
Proportionate Share of any sum due from any of the Security Parties
under
the Security Documents (the amount of the excess being referred to
in this
Clause as the "Excess
Amount")
then:-
|
|
9.16.1
|
that
Finance Party shall promptly notify the Agent (which shall promptly
notify
each other Finance Party);
|
|
9.16.2
|
that
Finance Party shall pay to the Agent an amount equal to the Excess
Amount
within ten days of its receipt or recovery of the Excess Amount;
and
|
|
9.16.3
|
the
Agent shall treat that payment as if it were a payment by the Security
Party in question on account of the sum owed to the Finance
|
47
Parties
as aforesaid and shall account to the Finance Parties in respect of the Excess
Amount in accordance with the provisions of this Clause.
However,
if a Finance Party has commenced any Proceedings to recover sums owing to it
under the Security Documents and, as a result of, or in connection with, those
Proceedings has received an Excess Amount, the Agent shall not distribute any
of
that Excess Amount to any other Finance Party which had been notified of the
Proceedings and had the legal right to, but did not, join those Proceedings
or
commence and diligently prosecute separate Proceedings to enforce its rights
in
the same or another court.
|
9.17
|
Rescission
of Excess Amount If
all or any part of any Excess Amount is rescinded or must otherwise
be
restored to any of the Security Parties or to any other third party,
the
Finance Parties which have received any part of that Excess Amount
by way
of distribution from the Agent pursuant to Clause 9.16 shall repay
to the
Agent for the account of the Finance Party which originally received
or
recovered the Excess Amount, the amount which shall be necessary
to ensure
that all of the Banks share rateably in accordance with their
Proportionate Shares together with interest on that amount at a rate
equivalent to that (if any) paid by the Finance Party receiving or
recovering the Excess Amount to the person to whom that Finance Party
is
liable to make payment in respect of such amount, and Clause 9.16.3
shall
apply only to the retained amount.
|
|
9.18
|
Proceedings
Each
of the Finance Parties shall notify one another of the proposed
commencement of any Proceedings under any of the Security Documents
prior
to their commencement. No such Proceedings may be commenced without
the
prior written consent of the Majority
Banks.
|
|
9.19
|
Instructions
Where
the Agent is authorised or directed to act or refrain from acting
in
accordance with the instructions of the Banks, or of the Majority
Banks
where applicable, each of the Banks shall provide the Agent with
instructions within five (5) Business Days of the Agent's written
request
or such shorter period as the Agent may reasonably specify. If a
Bank does
not provide the Agent with instructions within that period, (i) that
Bank
shall be bound by the decision of the Agent, (ii) that Bank shall
have no
vote for the purposes of this Clause and (iii) the combined Proportionate
Shares of the other Banks who provided such instructions shall be
deemed
to contribute 100%. Nothing in this Clause shall
|
48
limit
the
right of the Agent to take, or refrain from taking, any action without obtaining
the instructions of the Banks if the Agent in its discretion considers it
necessary or appropriate to take, or refrain from taking, such action in order
to preserve the rights of the Banks under or in connection with the Security
Documents. In that event, the Agent will notify the Banks of the action taken
by
it as soon as reasonably practicable, and the Banks agree to ratify any action
taken by the Agent pursuant to this Clause.
|
9.20
|
Communications
Any
Communication under this Clause shall be given, delivered, made or
served,
in the case of the Agent (in its capacity as Agent, or as one of
the
Banks), and in the case of the other Finance Parties, at the address
indicated in Schedule 1 or such other addresses as shall be duly
notified
in writing to the Agent on behalf of the
Banks.
|
|
9.21
|
Payments
All amounts payable to a Finance Party under this Clause shall be
paid to
such account at such bank as that Finance Party may from time to
time
direct in writing to the Agent.
|
|
9.22
|
Retirement
Subject
to a successor being appointed in accordance with this Clause, the
Agent
may retire as agent and/or security trustee at any time without assigning
any reason by giving to the Borrower and the other Finance Parties
notice
of its intention to do so, in which event the following shall apply:-
|
|
9.22.1
|
with
the consent of the Borrower, not to be unreasonably withheld, the
other
Finance Parties may within thirty days after the date of the Agent's
notice appoint a successor to act as agent and/or security trustee
or, if
they fail to do so with the consent of the Borrower, not to be
unreasonably withheld, the Agent may appoint any other bank or financial
institution as its successor;
|
|
9.22.2
|
the
resignation of the Agent shall take effect simultaneously with the
appointment of its successor on written notice of that appointment
being
given to the Borrower and the other Finance Parties;
|
|
9.22.3
|
the
Agent shall thereupon be discharged from all further obligations
as agent
and/or security trustee but shall remain entitled to the benefit
of the
provisions of this Clause;
|
49
|
9.22.4
|
the
Agent's successor and each of the other parties to this Agreement
shall
have the same rights and obligations amongst themselves as they would
have
had if that successor had been a party to this
Agreement.
|
|
9.23
|
No
fiduciary relationship Except
as provided in Clauses 9.3 and 9.14, the Agent shall not have any
fiduciary relationship with or be deemed to be a trustee of or for
any
other Finance Party and nothing contained in any of the Security
Documents
shall constitute a partnership between any two or more Banks or between
the Agent and any other Finance
Party.
|
|
9.24
|
The
Agent as a Bank The
expression "the
Banks"
when used in the Security Documents includes the Agent in its capacity
as
one of the Banks. The Agent shall be entitled to exercise its rights,
powers, discretions and remedies under or pursuant to the Security
Documents in its capacity as one of the Banks in the same manner
as any
other Bank and as if it were not also the
Agent.
|
|
9.25
|
The
Agent as security trustee
Unless the context otherwise requires, the expression "the
Agent"
when used in the Security Documents includes the Agent acting in
its
capacities both as agent and security
trustee.
|
| 10 |
Covenants
|
The
Borrower covenants with the Finance Parties in the following terms.
|
10.1
|
Negative
covenants
|
The
Borrower will not:-
10.1.1 no
third party rights without
the Majority Banks' prior written consent, create or permit to arise or continue
any Encumbrance on or over all or any part of the Vessels or their respective
Insurances except for Permitted Liens; nor
10.1.2 no
other business
materially change the nature of their business from that of acting as a holding
company as carried on as at the Execution Date and shall procure that there
is
no material change in the nature of the business of the Group as a whole from
that advised to the Agent of the date of this Agreement; nor
50
10.1.3 merger
or amalgamation
without
the prior written consent of the Majority Banks, permit any merger or
amalgamation; nor
10.1.4 no
change in management
permit
anyone other than the Manager to be appointed as commercial or technical
managers of the Vessels, nor permit any material variation of the arrangements
for the commercial or technical management of the Vessels, nor permit the
Manager to sub-contract or delegate a material part of the commercial or
technical management of any Vessel to any third party.
10.2 Positive
covenants
|
10.2.1
|
Financial
statements The
Borrower shall procure that the Guarantor shall supply to the Agent
|
|
(a)
|
as
soon as the same become available, but in any event within one hundred
and
fifty (150) days after the end of each of its financial years, its
audited
consolidated financial statements for that financial
year;
|
|
(b)
|
as
soon as the same become available, but in any event within sixty
(60) days
of the end of its second quarter in each of its financial years,
unaudited
consolidated financial statements for that half
year;
|
|
(c)
|
as
soon as they become available, but in any event within one hundred
and
fifty (150) days after the end of each of its financial years,
consolidated financial forecasts for the following two financial
years.
|
|
10.2.2
|
Requirements
as to financial statements Each
set of financial statements delivered by the Guarantor under Clause
10.2.1:
|
|
(a)
|
shall
be certified by an officer of the Guarantor to the best of its knowledge
and belief as fairly representing its financial condition as at the
date
as at which those financial statements were drawn up;
and
|
51
|
(b)
|
shall
be prepared using GAAP, accounting practices and financial reference
periods consistently applied unless, in relation to any set of financial
statements, the Guarantor notifies the Agent that there has been
a change
in GAAP, the accounting practices or reference periods and the Guarantor's
auditors deliver to the Agent:
|
|
(i)
|
a
description of any change necessary for those financial statements
to
reflect the GAAP, accounting practices and reference periods upon
which
the previous financial statements were prepared;
and
|
|
(ii)
|
sufficient
information, in form and substance as may be reasonably required
by the
Agent, to enable the Agent to make an accurate comparison between
the
financial position indicated in those financial statements and that
indicated in the previous financial statements.
|
|
10.2.3
|
Information:
miscellaneous The
Borrower shall supply to the Agent:
|
|
(a)
|
all
documents dispatched by the Borrower to its creditors generally at
the
same time as they are dispatched;
|
|
(b)
|
promptly
upon becoming aware of them, details of any litigation, arbitration
or
administrative proceedings which are current, threatened or pending
against any Security Party, and which might, if adversely determined,
have
a Material Adverse Effect on the ability of a Security Party to perform
its obligations under the Security Documents or on the validity or
enforceability of any of the Security Documents; and
|
|
(c)
|
promptly,
such further information regarding the financial condition, business
and
operations of any Security Party as the Agent may reasonably request
including, without limitation, cash flow analyses and details of
the
operating costs of each Vessel.
|
52
|
10.2.4
|
Notification
of default
|
|
(a)
|
The
Borrower shall notify the Agent of any Default (and the steps, if
any,
being taken to remedy it) promptly upon becoming aware of its
occurrence.
|
|
(b)
|
Promptly
upon a request by the Agent, the Borrower shall supply to the Agent
a
certificate signed by two of its directors or senior officers on
its
behalf certifying to the best of their knowledge and belief that
no
Default is continuing (or if a Default is continuing, specifying
the
Default and the steps, if any, being taken to remedy
it).
|
10.2.5 "Know
your customer" checks If:
|
(a)
|
the
introduction of or any change in (or in the interpretation, administration
or application of) any law or regulation made after the date of this
Agreement;
|
|
(b)
|
any
change in the status of the Borrower after the date of this Agreement;
or
|
|
(c)
|
a
proposed assignment or transfer by a Bank of any of its rights and
obligations under this Agreement to a party that is not a Bank prior
to
such assignment or transfer,
|
obliges
the Agent or any Bank (or, in the case of (c) above, any prospective new Bank)
to comply with "know your customer" or similar identification procedures in
circumstances where the necessary information is not already available to it,
the Borrower shall promptly upon the request of the Agent or any Bank supply,
or
procure the supply of, such documentation and other evidence as is reasonably
requested by the Agent (for itself or on behalf of any Bank) or any Bank for
itself (or, in the case of (c) above, on behalf of any prospective new Bank)
in
order for the Agent or that Bank (or, in the case of (c) above, any prospective
new Bank) to carry out and be satisfied it has complied with all necessary
"know
your customer" or other similar checks under all applicable laws
53
and
regulations pursuant to the transactions contemplated in the Security
Documents.
10.2.6 Pari
Passu
The
Borrower shall ensure that its obligations under this Agreement shall at all
times rank at least pari passu with all of its other present and future
unsecured and unsubordinated indebtedness with the exception of any obligations
which are mandatorily preferred by any applicable laws to companies generally
and not by contract.
10.2.7 Corporate
Existence
The
Borrower shall ensure that throughout the Facility Period each of the Security
Parties shall (i) remain duly formed and validly existing under the laws of
its
respective jurisdiction of incorporation (ii) remain authorised to do business
in the jurisdiction in which it transacts its business (iii) continue to have
the power to carry on its business as it is now being conducted and to enter
into and perform its obligations under the Security Documents to which it is
a
party and (iv) continue to comply with all laws, statutory, regulatory and
other
requirements relative to its business which could reasonably be expected to
have
a Material Adverse Effect on its business, assets or operations, financial
or
otherwise.
10.2.8 Admissibility
In Evidence
The
Borrower shall obtain all necessary authorisations, consents, approvals,
licences, exemptions, filings, registrations, recordings and notarisations
required or advisable in connection with the admissibility in evidence of the
Security Documents or any of them in Proceedings in England or any other
jurisdiction in which Proceedings have been commenced.
10.2.9 Registration
of Vessels
The
Borrower undertakes to maintain the registration of the Vessels under the flag
indicated in Schedule 2, or such other flag requested by the Borrower and is
consented to by the Banks (such consent not to be unreasonably withheld), for
the duration of the Facility Period.
10.2.10 Classification
The
Borrower shall ensure that each Vessel maintains the highest classification
required for the purpose of the relevant trade of such Vessel which shall be
with a Pre-Approved Classification Society or such
54
other
society as may be acceptable to the Agent, in each case, free from any overdue
recommendations and conditions affecting the class of that Vessel.
10.2.11 Compliance
with Applicable Laws
The
Borrower shall comply with all applicable laws to which it may be
subject.
10.2.12 Inspection
of records
The
Borrower will permit the inspection of its financial records and accounts on
reasonable notice from time to time during business hours by the Agent or its
nominee.
10.2.13 Valuations
The
Borrower will deliver to the Agent:
(a) a
Valuation of each of the Vessels on the due date for delivery of the six monthly
Compliance Certificate (which shall be at the expense of the Borrower);
and
(b) on
such
other occasions as the Agent may reasonably request (which shall be at the
expense of the Agent).
10.2.14 Financial
covenants
Throughout the Facility Period the Borrower shall procure that the Guarantor
shall:-
(i) maintain
a ratio of Total Shareholder Equity to Total Assets of at least thirty five
per
cent. (35%); and
(ii) maintain
a ratio of EBITDA to Interest Expense of no less than 2.25:1.00.
|
10.2.15
|
Compliance
Certificates
The Borrower will produce a Compliance Certificate with each set
of
audited consolidated annual accounts and each set of unaudited
consolidated six monthly accounts.
|
|
10.2.16
|
Additional
security If
and so often as the aggregate of:
|
|
(i)
|
the
Valuations of the Vessels; and
|
|
(ii)
|
the
value of any additional security acceptable to the Agent in its absolute
discretion for the time being provided to the Banks (or to the Agent
on
their behalf) pursuant to this Clause (the "Collateral")
|
55
shall
be
less than one hundred and forty per cent (140%) of the amount of the Base
Currency Amount (each being a "Relevant
Percentage")
the
Borrower will, within thirty days of the request of the Agent to do so, at
the
Borrower's option:-
|
(a)
|
pay
to the Agent or to its nominee a cash deposit in the amount of the
shortfall to be secured in favour of the Banks (or of the Agent on
their
behalf) as additional security for the payment of the Indebtedness;
or
|
|
(b)
|
give
to the Banks (or to the Agent on their behalf) other additional security
as proposed by the Borrower in amount and form acceptable to the
Banks in
their reasonable discretion, acting in good faith; or
|
|
(c)
|
prepay
the amount of the Indebtedness which will ensure that the Collateral
is
not less than the Relevant
Percentage.
|
Clauses 5.3,
5.4, 5.5 and 5.6 shall apply, mutatis
mutandis,
to any
prepayment made pursuant to this Clause and the value of any additional security
provided pursuant to this Clause shall be determined by the Agent in its
discretion after consultation with the Majority Banks. Where the Borrower has
provided additional security pursuant to this Clause, the Borrower may obtain
new Valuations (at the Borrower's expense) on a date falling not earlier than
three (3) months after the date such additional security was provided. If the
aggregate amount of the Collateral reflecting the new Valuations of the Vessels
(the "New
Security Amount")
is
greater than the Relevant Percentage then, provided no Event of Default has
occurred and is continuing, the Agent shall release to the Borrower, upon the
Borrower's written request and at the Borrower's expense, any part of the
additional security as the Borrower shall select with the consent of the Agent
(such consent not to be unreasonably withheld), such that after its release
the
New Security Amount will be at least equal to the Relevant
Percentage.
56
10.3 Vessel
Covenants - Insurance
|
10.3.1
|
The
Borrower covenants to ensure at its own expense throughout the Facility
Period that:
|
|
(a)
|
the
Vessels remain insured against marine risks and war risks on an agreed
value basis for an amount which is the greater from time to time
of (i)
ninety per cent (90%) of the most recent Valuation of the Vessels
and (ii)
an amount which (when aggregated with the amounts for which any other
vessels providing first priority security for the Indebtedness are
insured
for such risks) equals one hundred and twenty per cent (120%) of
the
amount of the Facility Outstandings;
and
|
|
(b)
|
the
Vessels remain entered in a protection and indemnity association
in both
protection and indemnity classes, or remains otherwise insured against
protection and indemnity risks and liabilities (including, without
limitation, protection and indemnity war risks);
and
|
|
(c)
|
the
Vessels remain insured against oil pollution caused by such Vessel
for
such amounts as the Agent may from time to time approve unless that
risk
is covered to the satisfaction of the Agent by each Vessel's protection
and indemnity entry or insurance.
|
|
10.3.2
|
The
Agent agrees that, if and for so long as any Vessel may be laid up
with
the approval of the Agent, the Borrower may at its own expense take
out
port risk insurance on the Vessel in place of hull and machinery
insurance.
|
|
10.3.3
|
The
Borrower undertakes to place the Obligatory Insurances in such markets,
in
such currency, on such terms and conditions, and with such brokers,
underwriters and associations as the Agent shall have previously
approved
in writing. The Borrower shall not alter the terms of any of the
Obligatory Insurances without the prior written consent of the Agent,
and
will supply the Agent from time to time on request with such information
as the Agent may in its discretion require with regard to the Obligatory
|
57
Insurances
and the brokers, underwriters or associations through or with which the
Obligatory Insurances are placed. The Borrower shall reimburse the Agent on
demand for all costs and expenses incurred by the Agent in obtaining from time
to time a report on the adequacy of the Obligatory Insurances from an insurance
adviser instructed by the Agent.
|
10.3.4
|
The
Borrower undertakes duly and punctually to pay all premiums, calls and
contributions, and all other sums at any time payable in connection
with
the Obligatory Insurances, and, at its own expense, to arrange and
provide
any guarantees from time to time required by any protection and indemnity
or war risks association.
|
|
10.3.5
|
The
Borrower will comply in all respects with all terms and conditions
of the
Obligatory Insurances and will make all such declarations to brokers,
underwriters and associations as may be required to enable the Vessels
to
operate in accordance with the terms and conditions of the Obligatory
Insurances. The Borrower will not do, nor permit to be done, any
act, nor
make, nor permit to be made, any omission, as a result of which any
of the
Obligatory Insurances may become liable to be suspended, cancelled
or
avoided, or may become unenforceable, or as a result of which any
sums
payable under or in connection with any of the Obligatory Insurances
may
be reduced or become liable to be repaid or rescinded in whole or
in part.
In particular, but without limitation, the Borrower will not permit
the
Vessels to be employed other than in conformity with the Obligatory
Insurances without first taking out additional insurance cover in
respect
of that employment in all respects to the satisfaction of the Agent,
and
the Borrower will promptly notify the Agent of any new requirement
imposed
by any broker, underwriter or association in relation to any of the
Obligatory Insurances.
|
|
10.3.6
|
The
Borrower will, at least fourteen (14) days (or such shorter period
as the
Agent may from time to time agree) before the expiry of any of the
Obligatory Insurances, notify the Agent of the names of the brokers
and/or
the war risks and protection and indemnity associations proposed
to be
employed by the Borrower for the purposes of the renewal of such
Obligatory Insurances and of the amounts in which such Obligatory
|
58
Insurances
are proposed to be renewed and the risks to be covered and, subject to
compliance with any requirements of the Agent pursuant to this Clause 10.3.6,
that the relevant insurance brokers and/or the approved war risks and protection
and indemnity associations will at least seven (7) days before such expiry
(or
within such shorter period as the Agent may from time to time agree) confirm
in
writing to the Agent whether or not there are likely to be any changes to the
names of the brokers and/or war risks and protection and indemnity associations
and advise when it is expected that such renewals shall be effected in
accordance with the instructions so given provided always that the renewal
is
effected before the relevant current Obligatory Insurances expire.
|
10.3.7
|
The
Borrower shall deliver to the Agent certified copies (and, if required
by
the Agent, the originals) of all policies, certificates of entry
and other
documents relating to the Insurances (including, without limitation,
receipts for premiums, calls or contributions) and shall procure
that
letters of undertaking in such form as the Agent may approve shall
be
issued to the Agent by the brokers through which the Insurances are
placed
(or, in the case of protection and indemnity or war risks associations,
by
their managers). If any Vessel is at any time during the Facility
Period
insured under any form of fleet cover, the Borrower shall procure
that
those letters of undertaking contain confirmation that the brokers,
underwriters or association (as the case may be) will not set off
claims
relating to the Vessel against premiums, calls or contributions in
respect
of any other vessel or other insurance, and that the insurance cover
of
the Vessel will not be cancelled by reason of non-payment of premiums,
calls or contributions relating to any other vessel or other insurance.
Failing receipt of those confirmations, the Borrower will instruct
the
brokers, underwriters or association concerned to issue a separate
policy
or certificate for the Vessel in the sole name of the Borrower or
of the
Borrower's brokers as agents for the
Borrower.
|
|
10.3.8
|
The
Borrower shall promptly provide the Agent with full information regarding
any casualty or other accident or damage to any
Vessel.
|
59
|
10.3.9
|
The
Borrower agrees that, at any time after the occurrence and during
the
continuation of an Event of Default, the Agent shall be entitled
to
collect, xxx for, recover and give a good discharge for all claims
in
respect of any of the Insurances; to compromise all such claims or
refer
them to arbitration or any other form of judicial or non-judicial
determination; and otherwise to deal with such claims in such manner
as
the Agent shall in its discretion think
fit.
|
|
10.3.10
|
Whether
or not an Event of Default shall have occurred or be continuing,
the
proceeds of any claim under any of the Insurances in respect of a
Total
Loss in excess of the Threshold Amount shall be paid to the Agent
and
applied by the Agent in accordance with Clause
13.4.
|
|
10.3.11
|
Following
the occurrence of an Event of Default which shall be continuing,
in the
event of any claim in respect of any of the Insurances (other than
in
respect of a Total Loss), if the Borrower shall fail to reach agreement
with any of the brokers, underwriters or associations for the immediate
restoration of any Vessel, or for payment to third parties, within
such
time as the Agent may stipulate, the Agent shall be entitled to require
payment to itself. In the event of any dispute arising between the
Borrower and any broker, underwriter or association with respect
to any
obligation to make any payment to the Borrower or to the Agent under
or in
connection with any of the Insurances, or with respect to the amount
of
any such payment, the Agent shall be entitled to settle that dispute
directly with the broker, underwriter or association concerned. Any
such
settlement shall be binding on the
Borrower.
|
|
10.3.12
|
The
Agent agrees that any amounts which may become due under any protection
and indemnity entry or insurance shall be paid to the Borrower to
reimburse the Borrower for, and in discharge of, the loss, damage
or
expense in respect of which they shall have become due, unless, at
the
time the amount in question becomes due, an Event of Default shall
have
occurred and be continuing, in which event the Agent shall be entitled
to
receive the amounts in question and to apply them either in reduction
of
the Indebtedness or, at the option of the Agent, to the discharge
of the
liability in respect of which they were
paid.
|
60
|
10.3.13
|
The
Borrower shall not settle, compromise or abandon any claim under
or in
connection with any of the Insurances (other than a claim of less
than the
Threshold Amount arising other than from a Total Loss) without the
prior
written consent of the Agent.
|
|
10.3.14
|
If
the Borrower fails to effect or keep in force the Obligatory Insurances,
the Agent may (but shall not be obliged to) effect and/or keep in
force
such insurances on the Vessels and such entries in protection and
indemnity or war risks associations as the Agent in its discretion
considers desirable, and the Agent may (but shall not be obliged
to) pay
any unpaid premiums, calls or contributions. The Borrower will reimburse
the Agent from time to time on demand for all such premiums, calls
or
contributions paid by the Agent, together with interest at the Default
Rate from the date of payment by the Agent until the date of
reimbursement.
|
|
10.3.15
|
The
Borrower shall comply strictly with the requirements of any legislation
relating to pollution or protection of the environment which may
from time
to time be applicable to the Vessels in any jurisdiction in which
any
Vessel shall trade and in particular (if such Vessel is to trade
in the
United States of America and Exclusive Economic Zone (as defined
in the
Act)) the Borrower shall comply strictly with the requirements of
the
United States Oil Pollution Act 1990 (the "Act").
Before any such trade is commenced and during the entire period during
which such trade is carried on, the Borrower
shall:
|
(a) pay
any
additional premiums required to maintain protection and indemnity cover for
oil
pollution up to the limit available to the Borrower for such Vessel in the
market; and
(b) make
all
such quarterly or other voyage declarations as may from time to time be required
by such Vessel's protection and indemnity association in order to maintain
such
cover, and promptly deliver to the Agent copies of such declarations;
and
(c) submit
such Vessel to such additional periodic, classification, structural or other
surveys which may be required by the Vessel's protection and indemnity insurers
to maintain cover for such trade
61
and
promptly deliver to the Agent copies of reports made in respect of such surveys;
and
(d) implement
any recommendations contained in the reports issued following the surveys
referred to in Clause 10.3.15 (d) within the relevant time limits, and provide
evidence satisfactory to the Agent that the protection and indemnity insurers
are satisfied that this has been done; and
(e) in
addition to the foregoing (if such trade is in the United States of America
and
Exclusive Economic Zone):
(i) obtain
and retain a certificate of financial responsibility under the Act in form
and
substance satisfactory to the United States Coast Guard and provide the Agent
with a copy; and
(ii) procure
that the protection and indemnity insurances do not contain a US Trading
Exclusion Clause or any other analogous provision and provide the Agent with
evidence that this is so; and
(iii) comply
strictly with any operational or structural regulations issued from time to
time
by any relevant authorities under the Act so that at all times the Vessels
fall
within the provisions which limit strict liability under the Act for oil
pollution.
10.4 Vessel
Covenants - Operation and Maintenance
The
Borrower covenants with the Agent:
|
10.4.1
|
to
keep the Vessels seaworthy and in a state of complete repair and
in
compliance with the requirements from time to time of all applicable
laws,
conventions and regulations and of her insurers;
and
|
|
10.4.2
|
to
maintain the registration of each Vessel under its current flag or
such
other flag as may be consented to by the Agent with such consent
not to be
unreasonably withheld, to effect and maintain registration of each
|
62
Mortgage
at each Vessel's Ship Registry; and not cause nor permit to be done any act
or
omission as a result of which either of those registrations might be defeated
or
imperilled; and
|
10.4.3
|
to
maintain the Vessels in a condition entitling each Vessel to the
highest
class applicable to vessels of her type with a Pre-Approved Classification
Society free of recommendations and qualifications and not cause
nor
permit to be done any act or omission as a result of which a Vessel
would
no longer be classed by such Pre-Approved Classification Society;
and
|
|
10.4.4
|
to
comply with all laws, conventions and regulations applicable to the
Borrower or to the Vessels and to carry on board each Vessel all
certificates and other documents which may from time to time be required
to evidence such compliance; and
|
|
10.4.5
|
to
procure that all repairs to each Vessel or replacements of parts
or
equipment of each Vessel are effected in such a way as not to diminish
the
value of such Vessel and with replacement parts or equipment the
property
of the Borrower and free of all Encumbrances (other than the Mortgage);
and
|
|
10.4.6
|
to
permit the Agent and all persons appointed by the Agent to board
the
Vessels from time to time during the Facility Period to inspect each
Vessel's state and condition and, if such Vessel shall not be in
a state
and condition which complies with the requirements of this Agreement,
to
effect such repairs as shall in the opinion of the Agent be desirable
to
ensure such compliance, without prejudice to the Agent's other rights
under or pursuant to the Mortgage or this Agreement;
and
|
|
10.4.7
|
immediately
to notify the Agent of any arrest or detention of the Vessels, and
to
cause such Vessel to be released from arrest or detention as quickly
as
possible, and in any event within fifteen (15) Business Days from
the date
of arrest or detention, and immediately to notify the Agent in the
same
manner of the release of such Vessel;
and
|
63
|
10.4.8
|
not
during the Facility Period to sell, agree to sell, or otherwise dispose
of, or agree to dispose of, the Vessels without the prior written
consent
of the Agent; and
|
|
10.4.9
|
in
the event of any requisition or seizure of any Vessel, to take all
lawful
steps to recover possession of the Vessel as soon as it is entitled
to do
so; and
|
|
10.4.10
|
to
give to the Agent from time to time during the Facility Period on
request
such information as the Agent may require with regard to each Vessel's
employment, position and state of repair and, on the Agent's request,
to
supply the Agent with copies of all charterparties and other contracts
of
employment relating to each Vessel and copies of each Vessel's deck
and
engine logs; and
|
|
10.4.11
|
to
comply with all requirements from time to time of each Vessel's
classification society and to give to the Agent from time to time
during
the Facility Period on request copies of all classification certificates
of each Vessel and reports of surveys required by each Vessel's
classification society (the Borrower by its execution of this Agreement
irrevocably authorising the Agent to obtain such information and
documents
from each Vessel's classification society as the Agent may from time
to
time require), and to notify the Agent immediately of any requirement
or
recommendation imposed by each Vessel's classification society;
and
|
|
10.4.12
|
not
during hostilities (whether or not a state of war shall formally
have been
declared and including, without limitation, any civil war) to permit
any
Vessel to be employed in carrying any goods which may be declared
to be
contraband of war or which may render such Vessel liable to confiscation,
seizure, detention or destruction, nor to permit any Vessel to enter
any
area which is declared a war zone by any governmental authority or
by any
Vessel's insurers unless the Agent shall have consented to that employment
or voyage in writing, which consent (if given) shall be conditional
on the
Borrower effecting at its own expense such additional insurances
as the
Agent shall consider necessary or desirable and, if required by the
Agent,
specifically assigning those insurances to the Agent by such documents
as
the Agent may require; and
|
64
|
10.4.13
|
not
without the prior written consent of the Agent to let any Vessel
on any
demise charter which (inclusive of any extension option) is capable
of
exceeding thirty seven (37) months nor to employ any Vessel in any
way
which might impair the security created by the Security Documents;
and
|
|
10.4.14
|
duly
to perform (unless prevented by force majeure), and to take all necessary
steps to enforce the performance by charterers and shippers of, all
charterparties and other contracts of employment and all bills of
lading
and other contracts relating to the Vessels;
and
|
|
10.4.15
|
not
following the occurrence and during the continuation of an Event
of
Default to let any Vessel on charter or renew or extend any charter
or
other contract of employment of any Vessel, nor agree to do so, without
the prior written consent of the Agent;
and
|
|
10.4.16
|
to
pay and discharge when due from time to time all taxes, levies, duties,
fines and penalties imposed on each Vessel, or on the Borrower, its
income, profits, capital gains or any of its property; and
|
|
10.4.17
|
not
at any time during the Facility Period without the prior written
consent
of the Agent (and then subject to such conditions as the Agent may
impose)
to create nor grant nor permit to exist any Encumbrance over any
Vessel or
any of the Assigned Property other than any Permitted Encumbrances
existing from time to time; and
|
|
10.4.18
|
to
notify the Agent immediately the Borrower becomes aware of any legal
proceedings or arbitration involving any Vessel or the Borrower where
the
amount claimed by any party (ignoring any counterclaim or defence
of
set-off) exceeds or may reasonably be expected to exceed the Threshold
Amount; and
|
|
10.4.19
|
to
keep proper books of account in respect of each Vessel and as and
when
required by the Agent to make such books available for inspection
on
behalf of the Agent; and
|
|
10.4.20
|
not
to permit anyone other than the Manager to be appointed as commercial
or
technical managers of any Vessel, nor permit any material variation
of the
arrangements for the commercial or technical
|
65
management
of any Vessel, nor permit the Manager to sub-contract or delegate a material
part of the commercial or technical management of any Vessel to any third party;
and
|
10.4.21
|
to
take all reasonable precautions to prevent any infringements of any
anti
drug legislation in any jurisdiction in which the Vessels shall trade
and
in particular (if any Vessel is to trade in the United States of
America)
to take all reasonable precautions to prevent any infringements of
the
Anti-Drug Abuse Act of 1986 of the United States of America and for
this
purpose to enter into a "Carrier Initiative Agreement" with the United
States' Customs Service and to procure that the same or a similar
agreement is maintained in full force and effect and that the Borrower's
obligations under that agreement are performed in respect of such
Vessel;
and
|
|
10.4.22
|
to
comply, or procure that the operator of the Vessels will comply,
with the
International Management Code for the Safe Operation of Ships and
for
Pollution Prevention adopted by the International Maritime Organisation
(as the same may be amended from time to time) (the "ISM
Code")
or any replacement of the ISM Code and in particular, without limitation,
to:
|
(a) procure
that the Vessels remain for the duration of the Facility Period subject to
a
safety management system developed and implemented in accordance with the ISM
Code; and
(b) maintain
for each Vessel throughout the Facility Period a valid and current SMC and
provide a copy to the Agent; and
(c) procure
that the ISM Company maintains throughout the Facility Period a valid and
current DOC and provide a copy to the Agent; and
(d) notify
the Agent immediately in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the SMC of the Vessel or of the
DOC
of the ISM Company.
66
|
10.4.23
|
to
comply in relation to each Vessel with the ISPS Code or any replacement
of
the ISPS Code and in particular, without limitation,
to:
|
(a) procure
that each Vessel and the company responsible for each Vessel's compliance with
the ISPS Code comply with the ISPS Code; and
(b) maintain
for each Vessel throughout the Facility Period a valid and current International
Ship Security Certificate issued under the ISPS Code ("ISSC")
and
provide a copy to the Agent; and
(c) notify
the Agent immediately in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the ISSC.
|
10.4.24
|
to
comply in relation to each Vessel with Annex VI (Regulations for
the
Prevention of Air Pollution from Ships) to the International Convention
for the Prevention of Pollution from Ships 1973 (as modified in 1978
and
1997) (as the same may be amended from time to time) ("Annex
VI")
or any replacement of Annex VI and in particular, without limitation,
to:
|
(a) procure
that each Vessel's master and crew are familiar with, and that each Vessel
complies with, Annex VI; and
(b) maintain
for each Vessel throughout the Facility Period a valid and current International
Air Pollution Prevention Certificate issued under Annex VI ("IAPPC")
and
provide a copy to the Agent; and
10.4.25 notify
the Agent immediately in writing of any actual or threatened withdrawal,
suspension, cancellation or modification of the IAPPC.
| 11 |
Earnings
|
|
11.1
|
Remittance
of Earnings The
Borrower shall procure that all Net Earnings and any Requisition
Compensation are paid to the Earnings Account or to such other account(s)
as the Agent shall from time to time specify by notice in writing
to the
Borrower to begin as of no later than 30 June 2006 or such later
date as
the Banks shall agree.
|
67
|
11.2
|
Earnings
Account The
Borrower shall maintain the Earnings Account with the Agent for the
duration of the Facility Period free of Encumbrances and rights of
set off
except for Permitted Liens and those Encumbrances and rights of set
off
created by or under the Security Documents.
|
| 12 |
Events Of Default
|
|
12.1
|
The
Agent's rights If
any of the events set out in Clause 12.2 occurs, the Agent may at
its
discretion (and, on the instructions of the Majority Banks,
will):
|
12.1.1 by
notice
to the Borrower declare the Banks to be under no further obligation to the
Borrower under or pursuant to this Agreement and may (and, on the instructions
of the Majority Banks, will) declare all or any part of the Indebtedness
(including such unpaid interest as shall have accrued and any Break Costs
incurred by the Finance Parties) to be immediately payable, whereupon the
Indebtedness (or the part of the Indebtedness referred to in the Agent's notice)
shall immediately become due and payable without any further demand or notice
of
any kind; and/or
12.1.2 declare
that any undrawn portion of the Facility shall be cancelled, whereupon the
same
shall be cancelled and the corresponding Commitment of each Bank shall be
reduced to zero; and/or
|
12.1.3
|
exercise
any rights and remedies in existence or arising under the Security
Documents.
|
|
12.2
|
Events
of Default The
events referred to in Clause 12.1
are:-
|
|
12.2.1
|
payment
default if
the Borrower defaults in the payment of any part of the Indebtedness
when
due PROVIDED
ALWAYS
that if the Borrower can demonstrate to the reasonable satisfaction
of the
Agent that it has given all necessary instructions to effect payment
and
the non-receipt thereof is attributable to an error in the banking
system,
such Event of Default shall only occur two (2) Business Days after
such
payment fell due; or
|
68
|
12.2.2
|
other
default if
any of the Security Parties fails to observe or perform any of the
covenants, conditions, undertakings, agreements or obligations on
its part
contained in any of the Security Documents or shall in any other
way be in
breach of any of the Security Documents and such default (if in the
reasonable opinion of the Majority Banks capable of remedy) is not
remedied within fifteen (15) Business Days after notice of the default
has
been given to the Borrower; or
|
|
12.2.3
|
misrepresentation
or breach of warranty if
any representation, warranty or statement made, deemed to be made,
or
repeated under any of the Security Documents or in any accounts,
certificate, notice instrument, written statement or opinion delivered
by
a Security Party under or in connection with any Security Document
is
incorrect or misleading in any material respect when made, deemed
to be
made or repeated; or
|
|
12.2.4
|
execution
if
a distress or execution or other process of a court or authority
not
covered by insurance is levied on any of the property of any of the
Security Parties before or after final judgment or by order of any
competent court or authority for an amount in excess of one million
Dollars ($1,000,000) or its equivalent in any other currency and
is not
satisfied or stayed (with a view to being contested in good faith)
within
fourteen days of levy or any other applicable cure period (if longer);
or
|
|
12.2.5
|
insolvency
events if
any of the Security Parties:-
|
|
(a)
|
resolves
to appoint, or applies for, or consents to the appointment of, a
receiver,
administrative receiver, trustee, administrator or liquidator of
itself or
of all or part of its assets; or
|
|
(b)
|
is
unable or admits its inability to pay its debts as they fall due;
or
|
|
(c)
|
makes
a general assignment for the benefit of creditors;
or
|
|
(d)
|
ceases
trading or threatens to cease trading;
or
|
69
|
(e)
|
has
appointed an Inspector under the Companies Xxx 0000 or any statutory
provision which the Agent in its discretion considers analogous thereto;
or
|
|
12.2.6
|
insolvency
proceedings if
any proceedings are commenced or threatened, or any order or judgment
is
given by any court, for the bankruptcy, liquidation, winding up,
administration or re-organisation of any of the Security Parties
or for
the appointment of a receiver, administrative receiver, administrator,
liquidator or trustee of any of the Security Parties or of all or
any
material part of the assets of any of the Security Parties or if
any
person appoints or purports to appoint such receiver, administrative
receiver, administrator, liquidator or trustee which proceeding is
not
discharged within fifteen (15) days of its commencement;
or
|
|
12.2.7
|
impossibility
or illegality unless
covered by Clause 15.7, if any event occurs which would, or would
with the
passage of time, render performance of any of the Security Documents
impossible, unlawful or unenforceable by the Banks or the Agent;
or
|
|
12.2.8
|
conditions
subsequent if
any of the conditions set out in Clause 3.3 is not satisfied within
the
time reasonably required by the Agent;
or
|
|
12.2.9
|
revocation
or modification of consents etc. if
any material consent, licence, approval or authorisation which is
now or
which at any time during the Facility Period becomes necessary to
enable
any of the Security Parties to comply with any of their obligations
in or
pursuant to any of the Security Documents is revoked, withdrawn or
withheld, or modified in a manner which the Agent reasonably considers
is,
or may be, prejudicial to the interests of the Banks in a material
manner,
or any material consent, licence, approval or authorisation ceases
to
remain in full force and effect; or
|
|
12.2.10
|
curtailment
of business if
the business of any of the Security Parties is wholly or materially
curtailed by any intervention by or under authority of any government,
or
if all or a substantial part of the undertaking, property or assets
of any
of the Security Parties is seized, nationalised,
|
70
expropriated
or compulsorily acquired by or under authority of any government or any Security
Party disposes or threatens to dispose of a substantial part of its business
or
assets; or
|
12.2.11
|
acceleration
of other indebtedness if
any Financial Indebtedness of any of the Security Parties or any
Material
Subsidiary becomes due or capable of being declared due prior to
its
stated maturity by reason of default on the part of that Security
Party or
Material Subsidiary (as the case may be), or is not repaid or satisfied
on
the due date for its repayment or any such other loan, guarantee
or
indebtedness becomes enforceable save for amounts of less than one
million
Dollars ($1,000,000) in aggregate, or its equivalent in any other
currency; or
|
|
12.2.12
|
reduction
of capital if
any of the Security Parties reduces its authorised or issued or subscribed
capital except as part of a share buy-back, whilst solvent, by the
Borrower; or
|
|
12.2.13
|
challenge
to registration if
the registration of any Vessel or any Mortgage becomes void or voidable
or
liable to cancellation or termination;
or
|
|
12.2.14
|
war
if
the country of registration of any Vessel becomes involved in war
involving another sovereign state (whether or not declared) or civil
war
or is occupied by any other power and the Agent reasonably considers
that,
as a result, the security conferred by the Security Documents is
materially prejudiced; or
|
|
12.2.15
|
material
adverse change etc. if
any thing is done or permitted or omitted to be done by any of the
Security Parties or any Material Subsidiary which in the reasonable
opinion of the Majority Banks has a Material Adverse Effect or if
there
occurs (in the reasonable opinion of the Majority Banks) any material
adverse change in the business, affairs or financial condition of
any of
the Security Parties or any Material Subsidiary from that pertaining
at
the date of this Agreement; or
|
71
|
12.2.16
|
final
judgements
if
any of the Security Parties fails to comply with any non appealable
court
order or fails to pay a final unappealable judgment against it which
remains unsettled for fifteen (15) Business Days;
or
|
|
12.2.17
|
loss
of stock market listing
if
the Guarantor ceases to be listed on NASDAQ or another recognised
stock
exchange for more than fifteen (15) Business Days;
or
|
|
12.2.18
|
similar
event any
event occurs which, under the laws of any jurisdiction, has a similar
or
analogous effect to any of those events mentioned in Clauses 12.2.4,
12.2.5 and 12.2.6; or
|
|
12.2.19
|
environmental
matters
|
|
(a)
|
any
Environmental Claim is pending or made against the Borrower or any
of the
Borrower's Environmental Affiliates or in connection with a Vessel,
where
such Environmental Claim has a Material Adverse Effect, where such
Environmental Claim is not covered by the Insurances.
|
|
(b)
|
any
actual Environmental Incident occurs in connection with a Vessel,
where
such Environmental Incident has a Material Adverse Effect, where
such
Environmental Claim is not covered by the Insurances; or
|
|
12.2.20
|
repudiation
Any Security Party repudiates any Security Document to which it is
a party
or does or causes to be done any act or thing evidencing an intention
to
repudiate any such Security Documents;
or
|
|
12.2.21
|
Change
in ownership or control of the Borrower
There is any change in the beneficial ownership or control of the
Borrower
from that advised to the Agent by the Borrower at the date of this
Agreement.
|
| 13 |
Set-Off
and Lien
|
|
13.1
|
Set-off
The
Borrower irrevocably authorises each of the Finance Parties at any
time
after all or any part of the Indebtedness shall have become due and
payable to set off without notice any liability of the Borrower to
any of
the Finance Parties (whether present or actual, and irrespective
of the
branch or office, currency or
|
72
place
of
payment) against any credit balance from time to time standing on any account
of
the Borrower (whether current or otherwise and whether or not subject to notice)
with any branch of any of the Finance Parties in or towards satisfaction of
the
Indebtedness and, in the name of that Finance Party or the Borrower, to do
all
acts (including, without limitation, converting or exchanging any currency)
and
execute all documents which may be required to effect such
application.
|
13.2
|
Lien
If
an Event of Default has occurred and is continuing, unremedied or
unwaived, each Finance Party shall have a lien on and be entitled
to
retain and realise as additional security for the repayment of the
Indebtedness any cheques, drafts, bills, notes or negotiable or
non-negotiable instruments and any stocks, shares or marketable or
other
securities and property of any kind of the Borrower (or of that Finance
Party as agent or nominee of the Borrower) from time to time held
by that
Finance Party, whether for safe custody or
otherwise.
|
|
13.3
|
Restrictions
on withdrawal Despite
any term to the contrary in relation to any deposit or credit balance
at
any time on any account of the Borrower with any of the Finance Parties,
no such deposit or balance shall be repayable or capable of being
assigned, mortgaged, charged or otherwise disposed of or dealt with
by the
Borrower after an Event of Default has occurred and while such Event
of
Default is continuing unremedied or unwaived, but any Finance Party
may
from time to time permit the withdrawal of all or any part of any
such
deposit or balance without affecting the continued application of
this
Clause.
|
|
13.4
|
Application
Whilst
an Event of Default is continuing unremedied or unwaived, the Borrower
irrevocably authorises the Agent to apply all sums which the Agent
may
receive:-
|
13.4.1 pursuant
to a sale or other disposition of a Vessel or any right, title or interest
in a
Vessel; or
13.4.2 by
way of
payment to the Agent of any sum in respect of the Insurances or Requisition
Compensation of a Vessel; or
13.4.3 otherwise
arising under or in connection with any of the Security Documents
73
in
or
towards satisfaction, or by way of retention on account, of the Indebtedness,
in
such manner as the Agent may in its discretion determine.
| 14 |
Assignment and
Sub-Participation
|
|
14.1
|
Right
to assign Each
of the Banks may assign or transfer all or any of its rights under
or
pursuant to the Security Documents or assign or grant sub-participations
in all or any part of its Commitment (i) to any other branch or affiliate
of that Bank or to another Bank or (ii) with the prior written consent
of
the Agent and the Borrower (which shall not be unreasonably withheld
and
which shall be deemed given if no response shall be received within
ten
(10) Business Days of a request or at any time whilst an Event of
Default
is in existence) to any other bank or financial
institution.
|
|
14.2
|
Borrower's
co-operation The
Borrower will co-operate fully and will procure that the other Security
Parties co-operate fully with the Banks in connection with any assignment,
transfer or sub-participation pursuant to Clause 14.1; will execute
and
procure the execution of such documents as the Banks may require
in
connection therewith; and irrevocably authorises each of the Finance
Parties to disclose to any proposed assignee, transferee or
sub-participant (whether before or after any assignment, transfer
or
sub-participation and whether or not any assignment, transfer or
sub-participation shall take place) all information relating to the
Security Parties, the Facility or the Security Documents which each
such
Finance Party may in its discretion consider necessary or desirable
(subject to any duties of confidentiality applicable to the Banks
generally).
|
|
14.3
|
Rights
of assignee Any
assignee or transferee of a Bank shall (unless limited by the express
terms of the assignment or transfer) take the full benefit of every
provision of the Security Documents benefiting that Bank.
|
|
14.4
|
Transfer
Certificates
If
any Bank wishes to transfer all or any of its Commitment as contemplated
in Clause 14.1 then such transfer may be effected by the delivery
to the
Agent and the Banks of a duly completed and duly executed Transfer
Certificate in which event, on the later of the Transfer Date specified
in
such Transfer Certificate and the fifth Business Day after the date
of
delivery of such Transfer Certificate to the
Agent:
|
74
14.4.1 to
the
extent that in such Transfer Certificate the Bank which is a party thereto
seeks
to transfer its Commitment in whole, the Borrower and such Bank shall be
released from further obligations towards each other under this Agreement and
their respective rights against each other shall be cancelled other than
existing claims against such Bank for breach of this Agreement (such rights,
benefits and obligations being referred to in this Clause 14.4 as "discharged
rights and obligations");
14.4.2 the
Borrower and the Transferee which is a party thereto shall assume obligations
towards each other and/or acquire rights against each other which differ from
such discharged rights and obligations only insofar as the Borrower and such
Transferee have assumed and/or acquired the same in place of the Borrower and
such Bank;
14.4.3 the
Finance Parties and the Transferee shall acquire the same rights and benefits
and assume the same obligations between themselves as they would have acquired
and assumed had such Transferee been an original party to this Agreement as
a
Bank with the rights, benefits and/or obligations acquired or assumed by it
as a
result of such transfer; and
14.4.4 the
Transferee shall pay to the Agent a transfer fee of three thousand Dollars
($3,000).
|
14.5
|
Power
of Attorney In
order to give effect to each Transfer Certificate, the Finance Parties
(with the exception of the Banks) and the Borrower each hereby irrevocably
and unconditionally appoint the Agent as its true and lawful attorney
with
full power to execute on their respective behalves each Transfer
Certificate delivered to the Agent pursuant to Clause 14.4 without
the
Agent being under any obligation to take any further instructions
from or
give any prior notice to, any of the Finance Parties or, subject
to the
Borrower's rights under Clause 14.1, the Borrower before doing so
and the
Agent shall so execute each such Transfer Certificate on behalf of
the
other Finance Parties (with the exception of the Banks) and the Borrower
immediately on its receipt of the same pursuant to Clause
14.4.
|
|
14.6
|
Notification
The
Agent shall promptly notify the other Finance Parties (with the exception
of the Banks), the Transferee and the Borrower on the execution by
it
|
75
and
the
Banks of any Transfer Certificate together with details of the amount
transferred, the Transfer Date and the parties to such transfer.
| 15 |
Payments,
Mandatory Prepayment, Reserve Requirements and
Illegality
|
|
15.1
|
Payments
All
amounts payable by the Borrower under or pursuant to any of the Security
Documents shall be paid to such accounts at such banks as the Agent
may
from time to time direct to the Borrower and shall be paid in the
relevant
Optional Currency in same day funds. Payments shall be deemed to
have been
received by the Agent on the date on which the Agent receives
authenticated advice of receipt, unless that advice is received by
the
Agent on a day other than a Business Day or at a time of day (whether
on a
Business Day or not) when the Agent in its reasonable discretion
considers
that it is impossible or impracticable for the Agent to utilise the
amount
received for value that same day, in which event the payment in question
shall be deemed to have been received by the Agent on the Business
Day
next following the date of receipt of advice by the
Agent.
|
|
15.2
|
No
deductions or withholdings All
payments (whether of principal or interest or otherwise) to be made
by the
Borrower pursuant to the Security Documents shall, subject only to
Clause
15.3, be made free and clear of and without deduction for or on account
of
any Taxes or other deductions, withholdings, restrictions, conditions
or
counterclaims of any nature, and the Borrower will not claim any
equity in
respect of any payment due from them to the Banks or to the Agent
under or
in relation to any of the Security
Documents.
|
|
15.3
|
Grossing-up
If
at any time any law requires (or is interpreted to require) the Borrower
to make any deduction or withholding from any payment, or to change
the
rate or manner in which any required deduction or withholding is
made, the
Borrower will promptly notify the Agent and, simultaneously with
making
that payment, will pay to the Agent whatever additional amount (after
taking into account any additional Taxes on, or deductions or withholdings
from, or restrictions or conditions on, that additional amount) is
necessary to ensure that, after making the deduction or withholding,
the
Agent and the Banks receive a net sum equal to the sum which they
would
have received had no deduction or withholding been made.
|
76
|
15.4
|
Evidence
of deductions If
at any time the Borrower is required by law to make any deduction
or
withholding from any payment to be made by it pursuant to any of
the
Security Documents, the Borrower will pay the amount required to
be
deducted or withheld to the relevant authority within the time allowed
under the applicable law and will, no later than thirty days after
making
that payment, deliver to the Agent an original receipt issued by
the
relevant authority, or other evidence reasonably acceptable to the
Agent,
evidencing the payment to that authority of all amounts required
to be
deducted or withheld. If
the Borrower makes any deduction or withholding from any payment
under or
pursuant to any of the Security Documents, and a Bank subsequently
receives a refund or allowance from any tax authority which that
Bank at
its sole discretion identifies as being referable to that deduction
or
withholding, that Bank shall, as soon as reasonably practicable,
pay to
the Borrower an amount equal to the amount of the refund or allowance
received, if and to the extent that it may do so without prejudicing
its
right to retain that refund or allowance and without putting itself
in any
worse financial position than that in which it would have been had
the
deduction or withholding not been required to have been made. Nothing
in
this Clause shall be interpreted as imposing any obligation on any
Bank to
apply for any refund or allowance nor as restricting in any way the
manner
in which any Bank organises its tax affairs, nor as imposing on any
Bank
any obligation to disclose to the Borrower any information regarding
its
tax affairs or tax computations. All costs and expenses incurred
by any
Bank in obtaining or seeking to obtain a refund or allowance from
any tax
authority pursuant to this Clause shall be for the Borrower's
account.
|
|
15.5
|
Adjustment
of due dates If
any payment to be made under any of the Security Documents, other
than a
payment of interest on the Facility (to which Clause 6.5 applies),
shall
be due on a day which is not a Business Day, that payment shall be
made on
the next succeeding Business Day (unless the next succeeding Business
Day
falls in the next calendar month in which event the payment shall
be made
on the next preceding Business Day). Any such variation of time shall
be
taken into account in computing any interest in respect of that
payment.
|
|
15.6
|
Change
in law If,
by reason of the introduction of any law, or any change in any law,
or the
interpretation or administration of any law, or in compliance with
any
|
77
request
or requirement from any central bank or any fiscal, monetary or other
authority:-
|
15.6.1
|
any
Finance Party (or the holding company of any Finance Party) shall
be
subject to any Tax with respect to payments of all or any part of
the
Indebtedness; or
|
|
15.6.2
|
the
basis of Taxation of payments to any Finance Party in respect of
all or
any part of the Indebtedness shall be changed;
or
|
|
15.6.3
|
any
reserve requirements shall be imposed, modified or deemed applicable
against assets held by or deposits in or for the account of or loans
by
any branch of any Finance Party or its direct or indirect holding
company;
or
|
|
15.6.4
|
any
ratio (whether cash, capital adequacy, liquidity or otherwise) which
any
Finance Party or its direct or indirect holding company is required
or
requested to maintain shall be affected;
or
|
|
15.6.5
|
there
is imposed on any Finance Party (or on the direct or indirect holding
company of any Finance Party) any other condition in relation to
the
Indebtedness or the Security Documents;
|
and
the
result of any of the above shall be to increase the cost to any Bank (or to
the
direct or indirect holding company of any Bank) of that Bank making or
maintaining its Commitment or its Drawing or to cause any Finance Party to
suffer (in its reasonable opinion) a material reduction in the rate of return
on
its overall capital below the level which it reasonably anticipated at the
Execution Date and which it would have been able to achieve but for its entering
into this Agreement and/or performing its obligations under this Agreement,
the
Finance Party affected shall notify the Agent and, on demand to the Borrower
by
the Agent, the Borrower shall from time to time pay to the Agent for the account
of the Finance Party affected the amount which shall compensate that Finance
Party or the Agent (or the relevant holding company) for such additional cost
or
reduced return. A certificate signed by an authorised signatory of the Agent
or
of the Finance Party affected setting out the amount of that payment and the
basis of
78
its
calculation shall be submitted to the Borrower and shall be conclusive evidence
of such amount save for manifest error or on any question of law.
|
15.7
|
Illegality
and impracticality Notwithstanding
anything contained in the Security Documents, the obligations of
a Bank to
advance or maintain its Commitment shall terminate in the event that
a
change in any law or in the interpretation of any law by any authority
charged with its administration shall make it unlawful for that Bank
to
advance or maintain its Commitment. In such event the Bank affected
shall
notify the Agent and the Agent shall, by written notice to the Borrower,
declare that Bank's obligations to be immediately terminated. If
all or
any part of the Facility shall have been advanced by the Banks to
the
Borrower the portion of the Indebtedness (including all accrued interest)
advanced by the Bank so affected shall be prepaid within thirty days
from
the date of such notice, or sooner if illegality is determined. Clause
5.4
shall apply to either of those prepayments if it is made on a day
other
than the last day of an Interest Period. During that period, the
affected
Bank shall negotiate in good faith with the Borrower to find an
alternative method or lending base in order to maintain the
Facility.
|
|
15.8
|
Changes
in market circumstances If
at any time a Bank determines (which determination shall be final
and
conclusive and binding on the Borrower) that, by reason of changes
affecting the London Interbank market, adequate and fair means do
not
exist for ascertaining the rate of interest on the Facility or any
part
thereof pursuant to this
Agreement:-
|
|
15.8.1
|
that
Bank shall give notice to the Agent and the Agent shall give notice
to the
Borrower of the occurrence of such event;
and
|
|
15.8.2
|
the
Agent shall as soon as reasonably practicable certify to the Borrower
in
writing the effective cost to that Bank of maintaining its Commitment
for
such further period as shall be selected by that Bank and the rate
of
interest payable by the Borrower for that period; or, if that is
not
acceptable to the Borrower,
|
|
15.8.3
|
the
Agent in accordance with instructions from that Bank and subject
to that
Bank's approval of any agreement between the Agent and the Borrower,
will
negotiate with the Borrower in good faith with a view to
|
79
modifying
this Agreement to provide a substitute basis for that Bank’s Commitment which is
financially a substantial equivalent to the basis provided for in this
Agreement.
If,
within thirty days of the giving of the notice referred to in
Clause 15.8.1, the Borrower and the Agent fail to agree in writing on a
substitute basis for such Bank’s Commitment the Borrower will immediately prepay
the amount of such Bank’s Commitment and the Maximum Facility Amount will
automatically decrease by the amount of such Commitment and such decrease shall
not be reversed. Clause 5.4 shall apply to that prepayment if it is made on
a
day other than the last day of an Interest Period.
|
15.9
|
Non-availability
of currency If
a Bank is for any reason unable to obtain the relevant Optional Currency
in the London Interbank market and is, as a result, or as a result
of any
other contingency affecting the London Interbank market, unable to
advance
or maintain its Commitment in the relevant Optional Currency, that
Bank
shall give notice to the Agent and the Agent shall give notice to
the
Borrower and that Bank's obligations to make the Facility available
shall
immediately cease. In that event, if all or any part of the Facility
shall
have been advanced by that Bank to the Borrower, the Agent in accordance
with instructions from that Bank and subject to that Bank's approval
of
any agreement between the Agent and the Borrower, will negotiate
with the
Borrower in good faith with a view to establishing a mutually acceptable
basis for funding the Facility or relevant part thereof from an
alternative source. If the Agent and the Borrower have failed to
agree in
writing on a basis for funding the Facility or relevant part thereof
from
an alternative source by 11.00 a.m. on the second Business Day prior
to
the end of the then current relevant Interest Period, the Borrower
will
(without prejudice to its other obligations under or pursuant to
this
Agreement, including, without limitation, its obligation to pay interest
on the Facility, arising on the expiry of the then relevant Interest
Period) prepay the Indebtedness (or relevant part thereof) to the
Agent on
behalf of that Bank on the expiry of the then current relevant Interest
Period.
|
| 16 |
Communications
|
|
16.1
|
Method
Except for Communications pursuant to Clause 9, which shall be made
or
given in accordance with Clause 9.20, any Communication may be given,
|
80
delivered,
made or served (as the case may be) under or in relation to this Agreement
by
letter or fax and shall be in the English language and sent addressed:-
|
16.1.1
|
in
the case of any of the Finance Parties to the Agent at its address
at the
head of this Agreement (fax no: x00 0000 0000) marked for the attention
of: Credit Administration; and
|
|
16.1.2
|
in
the case of the Borrower to the Communications
Address;
|
or
to
such other address or fax number as the Agent or the Borrower may designate
for
themselves by written notice to the others.
|
16.2
|
Timing
A
Communication shall be deemed to have been duly given, delivered,
made or
served to or on, and received by a party to this Agreement:-
|
|
16.2.1
|
in
the case of a fax when the sender receives one or more transmission
reports showing the whole of the Communication to have been transmitted
to
the correct fax number;
|
|
16.2.2
|
if
delivered to an officer of the relevant party or (in the case of
the
Borrower) left at the Communications Address at the time of delivery
or
leaving; or
|
|
16.2.3
|
if
posted, at 9.00 a.m. on the fifth Business Day after posting by prepaid
first class post.
|
Any
Communication by fax shall be promptly confirmed in writing by post or hand
delivery.
| 17 |
General
Indemnities
|
|
17.1
|
Currency
In
the event of any Finance Party receiving or recovering any amount
payable
under any of the Security Documents in a currency other than the
Currency
of Account, and if the amount received or recovered is insufficient
when
converted into the Currency of Account at the date of receipt to
satisfy
in full the amount due, the Borrower shall, on the Agent's written
demand,
pay to the Agent such further amount in the Currency of Account as
is
sufficient to satisfy in
|
81
full
the
amount due and that further amount shall be due to the Agent on behalf of the
Finance Parties as a separate debt under this Agreement.
|
17.2
|
Costs
and expenses The
Borrower will, within fourteen days of the Agent's written demand,
reimburse the Agent (on behalf of each of the Finance Parties) for
all
reasonable out of pocket expenses including external legal costs
(including stamp duty, Value Added Tax or any similar or replacement
tax
if applicable) of and incidental to:-
|
|
17.2.1
|
the
negotiation, preparation, execution and registration of the Security
Documents (whether or not any of the Security Documents are actually
executed or registered and whether or not all or any part of the
Facility
is advanced);
|
|
17.2.2
|
any
amendments, addenda or supplements to any of the Security Documents
(whether or not completed);
|
|
17.2.3
|
any
other documents which may at any time reasonably be required by any
Finance Party to give effect to any of the Security Documents or
which any
Finance Party is entitled to call for or obtain pursuant to any of
the
Security Documents; and
|
|
17.2.4
|
the
exercise of the rights, powers, discretions and remedies of the Finance
Parties under or pursuant to the Security
Documents.
|
|
17.3
|
Events
of Default The
Borrower shall indemnify the Finance Parties from time to time on
demand
against all losses and costs incurred or sustained by any Finance
Party as
a consequence of any Event of Default, including (without limitation)
any
Break Costs.
|
|
17.4
|
Funding
costs
The Borrower shall indemnify the Finance Parties from time to time
on
demand against all losses and costs incurred or sustained by any
Finance
Party if, for any reason due to a default or other action by the
Borrower,
any Drawing is not advanced to the Borrower after the relevant Drawdown
Notice has been given to the Agent, or is advanced on a date other
than
that requested in the Drawdown Notice, including (without limitation)
any
Break Costs.
|
82
|
17.5
|
Protection
and enforcement The
Borrower shall indemnify the Finance Parties from time to time on
demand
against all losses, costs and liabilities which any Finance Party
may from
time to time sustain, incur or become liable for in or about the
protection, maintenance or enforcement of the rights conferred on
the
Finance Parties by the Security Documents or in or about the exercise
or
purported exercise by the Finance Parties of any of the rights, powers,
discretions or remedies vested in them under or arising out of the
Security Documents, including (without limitation) any losses, costs
and
liabilities which any Finance Party may from time to time sustain,
incur
or become liable for by reason of any Finance Party being mortgagees
of
any Vessel, assignees of any Mortgage and/or a lender to the Borrower,
or
by reason of any Finance Party being deemed by any court or authority
to
be an operator or controller, or in any way concerned in the operation
or
control, of any Vessel. No such indemnity will be given to a Finance
Party
where any such loss, cost or liability has occurred due to gross
negligence or wilful misconduct on the part of that Finance Party;
however
this shall not affect the right of any other Finance Party to receive
any
such indemnity.
|
|
17.6
|
Liabilities
of Finance Parties The
Borrower will from time to time reimburse the Finance Parties on
demand
for all sums which any Finance Party may pay on account of any of
the
Security Parties or in connection with any Vessel (whether alone
or
jointly or jointly and severally with any other person) including
(without
limitation) all sums which any Finance Party may pay or guarantees
which
any Finance Party may give in respect of the Insurances, any expenses
incurred by any Finance Party in connection with the maintenance
or repair
of any Vessel or in discharging any lien, bond or other claim relating
in
any way to any Vessel, and any sums which any Finance Party may pay
or
guarantees which they may give to procure the release of any Vessel
from
arrest or detention.
|
|
17.7
|
Taxes
The
Borrower shall pay all Taxes to which all or any part of the Indebtedness
or any of the Security Documents may be at any time subject and shall
indemnify the Finance Parties on demand against all liabilities,
costs,
claims and expenses incurred in connection therewith, including but
not
limited to any such liabilities, costs, claims and expenses resulting
from
any omission to pay or delay in paying any such Taxes. The indemnity
contained in this Clause shall survive the repayment of the
Indebtedness.
|
83
| 18 |
Miscellaneous
|
|
18.1
|
Waivers
No
failure or delay on the part of any Finance Party in exercising any
right,
power, discretion or remedy under or pursuant to any of the Security
Documents, nor any actual or alleged course of dealing between any
Finance
Party and any of the Security Parties, shall operate as a waiver
of, or
acquiescence in, any default on the part of any Security Party, unless
expressly agreed to do so in writing by the Agent, nor shall any
single or
partial exercise by any Finance Party of any right, power, discretion
or
remedy preclude any other or further exercise of that right, power,
discretion or remedy, or the exercise by a Finance Party of any other
right, power, discretion or remedy.
|
|
18.2
|
No
oral variations No
variation or amendment of any of the Security Documents shall be
valid
unless in writing and signed on behalf of the Agent and the relevant
Security Party.
|
|
18.3
|
Severability
If
at any time any provision of any of the Security Documents is invalid,
illegal or unenforceable in any respect that provision shall be severed
from the remainder and the validity, legality and enforceability
of the
remaining provisions shall not be affected or impaired in any
way.
|
|
18.4
|
Successors
etc. The
Security Documents shall be binding on the Security Parties and on
their
successors and permitted transferees and assignees, and shall inure
to the
benefit of the Finance Parties and their respective successors,
transferees and assignees. The Borrower may not assign or transfer
any of
its rights or duties under or pursuant to any of the Security Documents
without the prior written consent of the
Banks.
|
|
18.5
|
Further
assurance If
any provision of the Security Documents shall be invalid or unenforceable
in whole or in part by reason of any present or future law or any
decision
of any court, or if the documents at any time held by the Finance
Parties
on their behalf are considered by the Banks for any reason insufficient
to
carry out the terms of this Agreement, then from time to time the
Borrower
will promptly, on demand by the Agent, execute or procure the execution
of
such further documents as in the reasonable opinion of the Banks
are
necessary to provide adequate security for the repayment of the
Indebtedness.
|
84
|
18.6
|
Other
arrangements The
Finance Parties may, without prejudice to their rights under or pursuant
to the Security Documents, at any time and from time to time, on
such
terms and conditions as they may in their discretion determine, and
without notice to the Borrower, grant time or other indulgence to,
or
compound with, any other person liable (actually or contingently)
to the
Finance Parties or any of them in respect of all or any part of the
Indebtedness, and may release or renew negotiable instruments and
take and
release securities and hold funds on realisation or suspense account
without affecting the liabilities of the Borrower or the rights of
the
Finance Parties under or pursuant to the Security
Documents.
|
|
18.7
|
Advisers
The Borrower irrevocably authorises the Agent, at any time and from
time
to time during the Facility Period, to consult insurance advisers
on any
matters relating to the Insurances, and from time to time to consult
or
retain advisers or consultants to monitor or advise on any other
claims
relating to the Vessels. The Borrower will provide such advisers
and
consultants with all information and documents which they may from
time to
time reasonably require and will reimburse the Agent on demand for
all
reasonable costs and expenses incurred by the Agent in connection
with the
consultation or retention of such advisers or
consultants.
|
|
18.8
|
Delegation
The
Finance Parties may at any time and from time to time delegate to
any
person any of their rights, powers, discretions and remedies pursuant
to
the Security Documents, other than rights relating to actions to
be taken
by the Majority Banks or the Banks as a group on such terms as they
may
consider appropriate (including the power to
sub-delegate).
|
|
18.9
|
Rights
etc. cumulative Every
right, power, discretion and remedy conferred on the Finance Parties
under
or pursuant to the Security Documents shall be cumulative and in
addition
to every other right, power, discretion or remedy to which they may
at any
time be entitled by law or in equity. The Finance Parties may exercise
each of their rights, powers, discretions and remedies as often and
in
such order as they deem appropriate subject to obtaining the prior
written
consent of the Majority Banks. The exercise or the beginning of the
exercise of any right, power, discretion or remedy shall not be
interpreted as a waiver of the right to exercise any other right,
power,
discretion or remedy either simultaneously or
subsequently.
|
85
|
18.10
|
No
enquiry The
Finance Parties shall not be concerned to enquire into the powers
of the
Security Parties or of any person purporting to act on behalf of
any of
the Security Parties, even if any of the Security Parties or any
such
person shall have acted in excess of their powers or if their actions
shall have been irregular, defective or informal, whether or not
any
Finance Parties had notice thereof.
|
|
18.11
|
Continuing
security The
security constituted by the Security Documents shall be continuing
and
shall not be satisfied by any intermediate payment or satisfaction
until
the Indebtedness shall have been repaid in full and none of the Finance
Parties shall be under any further actual or contingent liability
to any
third party in relation to the Vessels, the Insurances or Requisition
Compensation or any other matter referred to in the Security Documents.
|
|
18.12
|
Security
cumulative The
security constituted by the Security Documents shall be in addition
to any
other security now or in the future held by the Finance Parties or
any of
them for or in respect of all or any part of the Indebtedness, and
shall
not merge with or prejudice or be prejudiced by any such security
or any
other contractual or legal rights of any of the Finance Parties,
nor
affected by any irregularity, defect or informality, or by any release,
exchange or variation of any such security. Section 93 of the Law
of
Property Xxx 0000 and all provisions which the Agent considers analogous
thereto under the law of any other relevant jurisdiction shall not
apply
to the security constituted by the Security Documents.
|
|
18.13
|
Re-instatement
If
any Finance Party takes any steps to exercise any of its rights,
powers,
remedies or discretions pursuant to the Security Documents and the
result
shall be adverse to the Finance Parties, the Borrower and the Finance
Parties shall be restored to their former positions as if no such
steps
had been taken.
|
|
18.14
|
No
liability None
of the Finance Parties, nor any agent or employee of any Finance
Party,
nor any receiver and/or manager appointed by the Agent, shall be
liable
for any losses which may be incurred in or about the exercise of
any of
the rights, powers, discretions or remedies of the Finance Parties
under
or pursuant to the Security Documents nor liable as mortgagee in
possession for any loss on realisation or for any neglect or default
of
any nature for which a mortgagee in possession might otherwise be
liable
unless such Finance Party’s action constitutes gross negligence or wilful
misconduct.
|
86
|
18.15
|
Rescission
of payments etc. Any
discharge, release or reassignment by any of the Finance Parties
of any of
the security constituted by, or any of the obligations of any Security
Party contained in, any of the Security Documents shall be (and be
deemed
always to have been) void if any act (including, without limitation,
any
payment) as a result of which such discharge, release or reassignment
was
given or made is subsequently wholly or partially rescinded or avoided
by
operation of any law, unless such Finance Party's action constitutes
gross
negligence or wilful misconduct.
|
|
18.16
|
Subsequent
Encumbrances If
the Agent receives notice of any subsequent Encumbrance (other than
any
Encumbrance permitted by the terms of this Agreement) affecting any
Vessel
or all or any part of the Insurances or Requisition Compensation,
the
Agent may open a new account in its books for the Borrower. If the
Agent
does not open a new account, then (unless the Encumbrance is permitted
by
the terms of this Agreement or the Agent gives written notice to
the
contrary to the Borrower) as from the time of receipt by the Agent
of
notice of such subsequent Encumbrance, all payments made to the Agent
shall be treated as having been credited to a new account of the
Borrower
and not as having been applied in reduction of the
Indebtedness.
|
|
18.17
|
Releases
If
any Finance Party shall at any time in its discretion release any
party
from all or any part of any of the Security Documents or from any
term,
covenant, clause, condition or obligation contained in any of the
Security
Documents, the liability of any other party to the Security Documents
shall not be varied or diminished.
|
|
18.18
|
Certificates
Any
certificate or statement signed by an authorised signatory of the
Agent
purporting to show the amount of the Indebtedness (or any part of
the
Indebtedness) or any other amount referred to in any of the Security
Documents shall, save for manifest error or on any question of law,
be
conclusive evidence as against the Borrower of that amount.
|
|
18.19
|
Survival
of representations and warranties The
representations and warranties on the part of the Borrower contained
in
this Agreement shall survive the execution of this Agreement and
the
advance of the Facility or any part thereof.
|
87
|
18.20
|
Counterparts
This
Agreement may be executed in any number of counterparts each of which
shall be original but which shall together constitute the same instrument.
|
|
18.21
|
Third
Party Rights
Notwithstanding the provisions of the Contracts (Rights of Third
Parties)
Xxx 0000, no term of this Agreement is enforceable by a person who
is not
a party to it.
|
| 19 |
Law and Jurisdiction
|
|
19.1
|
Governing
law This
Agreement shall in all respects be governed by and interpreted in
accordance with English law.
|
|
19.2
|
Jurisdiction
For
the exclusive benefit of the Finance Parties, the parties to this
Agreement irrevocably agree that the courts of England are to have
jurisdiction to settle any disputes which may arise out of or in
connection with this Agreement and that any Proceedings may be brought
in
those courts. The Borrower irrevocably waives any objection which
it may
now or in the future have to the laying of the venue of any Proceedings
in
any court referred to in this Clause, and any claim that those Proceedings
have been brought in an inconvenient or inappropriate
forum.
|
|
19.3
|
Alternative
jurisdictions Nothing
contained in this Clause shall limit the right of the Finance Parties
to
commence any Proceedings against the Borrower in any other court
of
competent jurisdiction nor shall the commencement of any Proceedings
against the Borrower in one or more jurisdictions preclude the
commencement of any Proceedings in any other jurisdiction, whether
concurrently or not.
|
|
19.4
|
Service
of process Without
prejudice to the right of the Finance Parties to use any other method
of
service permitted by law, the Borrower irrevocably agrees that any
writ,
notice, judgment or other legal process shall be sufficiently served
on it
if addressed to it and left at or sent by post to the Address for
Service,
and in that event shall be conclusively deemed to have been served
at the
time of leaving or, if posted, at 9.00 a.m. on the third Business
Day
after posting by prepaid first class registered
post.
|
88
IN
WITNESS
of which
the parties to this Agreement have executed this Agreement the day and year
first before written.
89
SCHEDULE
1
The
Banks, the Commitments and the Proportionate Shares
|
The
Banks
|
The
Commitments ($)
|
The
Proportionate Shares (%)
|
|
DnB
NOR BANK ASA
|
$21,600,000
|
72%
|
|
THE
ROYAL BANK OF SCOTLAND PLC
|
$8,400,000
|
28%
|
90
SCHEDULE
2
The
Vessels
|
Owner
|
Country
of Incorporation
|
Vessel
|
Flag
|
|
GulfMark
Rederi AS
|
Norway
|
"NORTH
CHALLENGER"
|
Norway
|
|
GulfMark
Rederi AS
|
Norway
|
"NORTH
TRAVELLER"
|
Norway
|
|
GulfMark
Rederi AS
|
Norway
|
"NORTH
STREAM"
|
Norway
|
|
GulfMark
Rederi AS
|
Xxxxxx
|
"XXXXX
XXXXXXX"
|
Xxxxxx
|
00
SCHEDULE
3
Form
of Transfer Certificate
To:
DnB
NOR
Bank ASA as agent (the "Agent")
The
Royal
Bank of Scotland plc (the "Bank")
TRANSFER
CERTIFICATE
This
transfer certificate relates to a facility agreement (as the same may be from
time to time amended, varied, novated or supplemented, the "Facility
Agreement")
dated
2006 whereby an initial reducing revolving credit facility of up to $30,000,000
was made available to GulfMark Rederi AS by a group of banks on whose behalf
the
Agent acts as agent and security trustee.
| 1 |
Terms
defined in the Facility Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms "Existing Bank"
and
"Transferee" are defined in the schedule to this transfer certificate
.
|
| 2 |
The
Existing Bank (i) confirms that the details in the Schedule hereto
under
the heading "Existing Bank's
Commitment"
accurately summarises its Commitment in the Facility Agreement and
(ii)
requests the Transferee to accept and procure the transfer to the
Transferee of the portion of such Commitment specified in the Schedule
hereto by counter-signing and delivering the Transfer Certificate
to the
Agent at its address for the service of Communications specified
in the
Facility Agreement.
|
| 3 |
The
Transferee requests the Agent and the Bank to accept this Transfer
Certificate as being delivered to the Agent and the Bank pursuant
to and
for the purposes of clause 14.4 of the Facility Agreement so as to
take
effect in accordance with the terms thereof on the Transfer Date
or on
such later date as may be determined in accordance with the terms
thereof.
|
| 4 |
The
Transferee confirms that it has received a copy of the Facility Agreement
together with such other information as it has required in connection
with
this transaction and that it has not relied and will not in the future
rely on the Existing Bank or any other party to the Facility Agreement
to
check or enquire on its behalf into the legality, validity,
|
92
effectiveness,
adequacy, accuracy or completeness of any such information and further agrees
that it has not relied and will not rely on the Existing Bank or any other
party
to the Facility Agreement to access or keep under review on its behalf the
financial condition, creditworthiness, condition, affairs, status or nature
of
the Borrower or any other party to the Facility Agreement.
| 5 |
Execution
of this Transfer Certificate by the Transferee constitutes its
representation to the Transferor and all other parties to the Facility
Agreement that it has power to become a party to the Facility Agreement
as
a Bank (as defined in the Facility Agreement) on the terms herein
and
therein set out and has taken all steps to authorise execution and
delivery of this Transfer Certificate.
|
| 6 |
The
Transferee undertakes with the Existing Bank and each of the other
parties
to the Facility Agreement that it will perform in accordance with
their
terms all those obligations which by the terms of the Facility Agreement
will be assumed by it after delivery of this Transfer Certificate
to the
Agent and the Bank and satisfaction of the conditions (if any) subject
to
which the Transfer Certificate is expressed to take
effect.
|
| 7 |
The
Existing Bank makes no representation or warranty and assumes no
responsibility with respect to the legality, validity, effectiveness,
adequacy or enforceability of the Facility Agreement or any document
relating thereto and assumes no responsibility for the financial
condition
of the Borrower or for the performance and observance by the Borrower
of
any of their obligations under the Facility Agreement or any document
relating thereto and any and all such conditions and warranties,
whether
express or implied by law or otherwise, are hereby
excluded.
|
| 8 |
The
Existing Bank gives notice that nothing in this transfer certificate
or in
the Facility Agreement (or any document relating thereto) shall oblige
the
Existing Bank to (i) accept a re-transfer from the Transferee of
the whole
or any part of its rights, benefits and/or obligations under the
Facility
Agreement transferred pursuant hereto or (ii) support any losses
directly
or indirectly sustained or incurred by the Transferee for any reason
whatsoever including, without limitation, the non-performance by
the
Borrower or any other party to the Facility Agreement (or any document
relating thereto) of its obligations under any such document. The
Transferee acknowledges the absence of any such obligation as is
referred
to in (i) or (ii) above.
|
93
| 9 |
This
Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and interpreted in accordance with
English
law.
|
THE SCHEDULE
| 1 |
Existing
Bank:
|
| 2 |
Transferee:
|
| 3 |
Transfer
Date:
|
| 4 |
Existing
Bank's Commitment1:Portion
Transferred
|
[Transferor
Bank] [Transferee
Bank]
By: By:
Date: Date:
DnB
NOR Bank ASA
As
agent
for and on behalf of itself,
the
Borrower and the other Finance Parties (with the exception of the
Banks):-
By:
……………………………………
Date:
[ ]
The
Royal Bank of Scotland plc
By:
……………………………………
Date:
[ ]
1
Details
of the Bank's Commitment should not be completed after the Termination
Date.
94
SCHEDULE
4
Form
of Drawdown Notice
|
To:
|
DnB
NOR Bank ASA
|
From: GULFMARK
REDERI AS
[Date]
Dear
Sirs,
Drawdown
Notice
We
refer
to the Revolving Credit Facility Agreement dated
2006
made between, amongst others, ourselves and yourselves ("the
Agreement").
Words
and
phrases defined in the Agreement have the same meaning when used in this
Drawdown Notice.
Pursuant
to Clause 2.3 of the Agreement, we irrevocably request that the Banks
advance a Drawing of
[ ] to us on
200[ ], which is a Business Day, by paying the amount of the Drawing to
[ ].
We
warrant that the representations and warranties contained in Clause 4 of the
Agreement other than those in clause 4.9 [and clause 4.17]2
are true
and correct at the date of this Drawdown Notice and will be true and correct
on
200[ ]; that no Event of Default nor Potential Event of Default has
occurred and is continuing, and that no Event of Default or Potential Event
of
Default will result from the advance of the Drawing requested in this Drawdown
Notice.
[We
further confirm and certify that no material adverse change has occurred since
the Execution Date in the business, assets, operations, condition (financial
or
otherwise) or prospects of the Borrower or its subsidiaries or in the facts
and
information regarding such entities as represented to date3 ].
2
To be in
subsequent Drawdown Notices only.
3
To be in
first Drawdown Notice only.
95
We
select
the period of [ ] months as the [first]
Interest Period in respect of the Drawing.
Yours
faithfully
.......................
For
and
on behalf of
GULFMARK
REDERI AS
96
SCHEDULE
5
Calculation
of the Mandatory Cost
|
1
|
The
Mandatory Cost is an addition to the interest rate to compensate
the Banks
for the cost of compliance with (a) the requirements of the Bank
of
England and/or the Financial Services Authority (or, in either case,
any
other authority which replaces all or any of its functions) or (b)
the
requirements of the European Central
Bank.
|
|
2
|
On
the first day of each Interest Period (or as soon as possible thereafter)
the Agent shall calculate, as a percentage rate, a rate (the "Additional
Cost Rate")
for each Bank, in accordance with the paragraphs set out below. The
Mandatory Cost will be calculated by the Agent as a weighted average
of
the Banks' Additional Cost Rates (weighted in proportion to the percentage
participation of each Bank in the Loan) and will be expressed as
a
percentage rate per annum.
|
|
3
|
The
Additional Cost Rate for any Bank lending from a Facility Office
in a
Participating Member State will be the percentage notified by that
Bank to
the Agent. This percentage will be certified by that Bank in its
notice to
the Agent to be its reasonable determination of the cost (expressed
as a
percentage of that Bank's participation in all loans made from that
Facility Office) of complying with the minimum reserve requirements
of the
European Central Bank in respect of loans made from that Facility
Office.
|
|
4
|
The
Additional Cost Rate for any Bank lending from a Facility Office
in the
United Kingdom will be calculated by the Agent as
follows:
|
per cent. per annum.
E
x
0.01300
|
Where
E is the rate of charge payable by a Bank to the Financial Services
Authority under the Fees Rules in respect of the relevant financial
year
of the Financial Services Authority (calculated for this purpose
by the
Agent as being the average of the Fee Tariffs applicable to that
Bank for
that financial year).
|
5 For
the
purposes of this Schedule:
|
(a)
|
"Eligible
Liabilities and
"Special
Deposits"
have the meanings given to them from time to time under or pursuant
to the
Bank of England Act 1998 or (as may be appropriate) by the Bank of
England;
|
97
|
(b)
|
"Facility
Office"
means the office notified by a Bank to the Agent in writing on or
before
the date it becomes a Bank as the office through which it will perform
its
obligations under the Agreement;
|
|
(c)
|
"Fee
Rules"
means the rules on periodic fees contained in the FSA Supervision
Manual
or such other law or regulation as may be in force from time to time
in
respect of the payment of fees for the acceptance of
deposits;
|
|
(d)
|
"Fee
Tariffs"
means the fee tariffs specified in the Fees Rules under the activity
group
A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required
pursuant to the Fee Rules but taking into account any applicable
discount
rate); and
|
|
(e)
|
"Participating
Member State"
means any member state of the European Communities that adopts or
has
adopted the euro as its lawful currency in accordance with legislation
of
the European Union relating to European Monetary
Union;
|
|
(f)
|
"Parties"
means any party to the Agreement, including its successors in title
permitted assigns and permitted transferees;
and
|
|
(g)
|
"Tariff
Base"
has the meaning given to it in, and will be calculated in accordance
with,
the Fees Rules.
|
|
6
|
If
requested by the Agent, each Bank shall, as soon as practicable after
publication by the Financial Services Authority, supply to the Agent,
the
rate of charge payable by that Bank to the Financial Services Authority
pursuant to the Fees Rules in respect of the relevant financial year
of
the Financial Services Authority (calculated for this purpose by
that Bank
as being the average of the Fee Tariffs applicable to that Bank for
that
financial year).
|
|
7
|
Each
Bank shall supply any information required by the Agent for the purpose
of
calculating its Additional Cost Rate. In particular, but without
limitation, each Bank Shall supply the following information on or
prior
to the date on which it becomes a
Bank:
|
(a) the
jurisdiction of its Facility Office; and
(b) any
other
information that the Agent may reasonably require for such purpose.
Each
Bank
shall promptly notify the Agent of any change to the information provided by
it
pursuant to this paragraph.
98
|
8
|
The
percentages of each Bank for the purpose of E above shall be determined
by
the Agent based upon the information supplied to it pursuant to paragraphs
6 and 7 above and on the assumption that, unless the Bank notifies
the
Agent to the contrary, each Bank's obligations in relation to cash
ratio
deposits and Special Deposits are the same as those of a typical
bank from
its jurisdiction of incorporation with a Facility Office in the same
jurisdiction as in its Facility
Office.
|
|
9
|
The
Agent shall have no liability to any person if such determination
results
in an Additional Cost Rate which over or under compensates any Bank
and
shall be entitled to assume that the information provided by any
Bank
pursuant to paragraphs 3, 6 and 7 above is true and correct in all
respects.
|
|
10
|
The
Agent shall distribute the additional amounts received as a result
of the
Mandatory Cost to the Banks on the basis of the Additional Cost Rate
for
each Bank based on the information provided by each Bank pursuant
to
paragraphs 3, 6 and 7 above.
|
|
11
|
Any
determination by the Agent pursuant to this Schedule in relation
to a
formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable
to a Bank shall, in the absence of manifest error, be conclusive
and
binding on all Parties.
|
|
12
|
The
Agent may from time to time, after consultation with the Borrower
and the
Banks determine and notify to all Parties any amendments which are
required to be made to this Schedule in order to comply with any
change in
law, regulation or any requirements from time to time imposed by
the Bank
of England, the Financial Services Authority or the European Central
Bank
(or, in any case, any other authority which replaces all or any of
its
functions) and any such determination shall, in the absence of manifest
error, be conclusive and binding on all
Parties.
|
99
SCHEDULE
6
Form
of Compliance Certificate
To: DnB
NOR
Bank ASA (the "Agent")
From: GulfMark
Rederi AS
Date:
[Ÿ]
Dear
Sirs,
We
refer
to an agreement (the "Agreement")
dated
[ ]
2006 and made between (inter alia) (1) ourselves as borrower (2) the banks
and
financial institutions listed in Schedule 1 of the Agreement as banks and (3)
the Agent as the agent and security trustee (as from time to time amended,
varied, novated or supplemented).
Terms
defined or construed in the Agreement have the same meanings and constructions
in this Certificate.
We
attach
the relevant calculation details applicable on the last day of our financial
[year][quarter] ending [Ÿ]
(the
"Relevant
Period")
which
confirm that:-
|
1.
|
The
Guarantor's Total Shareholder Equity is
[ ], and the
Guarantor's Total Assets are
[ ]. As such
the ratio of Total Shareholder Equity to Total Assets is
[ ].
|
|
2.
|
The
Guarantor's EBITDA is
[ ] and the
Guarantor's Interest Expense is
[ ]. As such
the Guarantor's ratio of EBITDA to Interest Expense is
[ ].
|
|
3.
|
We
attach Valuations for each of the Vessels showing an aggregate Valuation
of [ ]. As such
the
aggregate of:
|
|
(a)
|
the
Valuations of the Vessels; and
|
|
(b)
|
the
value of any additional security acceptable to the Agent in its absolute
discretion for the time being provided to the Banks (or to the Agent
on
their behalf) pursuant to
Clause 10.2.16,
|
is
[ ]% of the Maximum Facility Amount.
100
Signed: ………………………………….
Duly
authorised representative of
GULFMARK
REDERI AS
101
SCHEDULE
7
Calculation
of Effective Interest
The
Norwegian Financial Agreements Act of 25 June 1999 (the "Financial
Agreements Act")
contains a number of detailed and mandatory requirements concerning inter alia
information, which has to be documented within a contractual relationship,
irrespective of whether the client of the financial institution is a consumer
or
a professional or commercial organisation.
One
important aspect of The Financial Agreements Act is that the Banks are required
to confirm to the Borrower the effective
annual interest rate.
A
calculation of the effective annual interest rate is subject to both a fixed
nominal interest rate and a fixed utilisation rate. Since the interest is based
on LIBOR and such rate may vary, and a Drawing may be subject to varying
Interest Periods, the Agent cannot state one effective annual interest rate
for
the Facility Period. According to regulations issued under the Financial
Agreement Act, it is however deemed sufficient that the Borrower is informed
of
and has agreed to a representative sample in respect of the calculation of
the
effective annual interest rate. An illustration of the calculation, subject
to
the following theoretical assumptions, will be:
Total
facility amount: USD
30,000,000
LIBOR,
6
months: 5.309%
p.a.
Margin: As
defined in this Agreement
Fees: As
specified in a separate Fee Letter
Drawdown
Date: 8
June
2006
Effective
annual interest rate, based on the above-mentioned assumptions, is calculated
to
6.375% p.a.
Above
calculations are intended as examples only.
By
our
signature to this Agreement we, GulfMark Rederi AS, hereby confirm that we
understand and accept the basis of calculation of the effective annual interest
rate and the contents of the samples, which form a part of the
Agreement.
102
|
SIGNED
by
duly
authorised for and on behalf
of
DnB
NOR Bank ASA
(as
Agent, MLA, Issuer and Bank)
in
the presence of:- Xxxx Xxxxxxxx
|
)
)
)
)
)
|
/s/
M.A. Xxxxxxx
/s/
Xxxx Xxxxxxxx
Xxxxxxxxxx
Xxxxxxx
One,
St. Paul’s Churchyard
London
EC4M 8SH
|
|
SIGNED
by
duly
authorised for and on behalf
of
THE
ROYAL BANK OF SCOTLAND PLC
(as
Bank)
in
the presence of:- Xxxx Xxxxxxxx
|
)
)
)
)
)
|
/s/
Xxx Xxxx
/s/
Xxxx Xxxxxxxx
Xxxxxxxxxx
Xxxxxxx
One,
St. Paul’s Churchyard
London
EC4M 8SH
|
|
SIGNED
by
X. Xxxxxxxx
duly
authorised for and on behalf
of
GULFMARK
REDERI AS
in
the
presence of:-
|
)
)
)
)
)
|
/s/
Xxxxx Xxxxxxxx
/s/
Xxxx Xxx Xxxxx
Xxxx
Xxx Xxxxx
00000
Xxxxxxxx Xxx., Xxx. 000
Xxxxxxx,
XX 00000
|
103
