Exhibit 10.26
EXECUTION COPY
--------------
Document 7.05
CREDIT AGREEMENT
dated as of October 31, 2001
among
XXXXXX XXXXXXX LLC
as Shipowner,
GOVCO INCORPORATED
as Primary Lender,
CITIBANK, N.A.,
as Alternate Lender,
CITIBANK INTERNATIONAL PLC
as Facility Agent
and
CITICORP NORTH AMERICA, INC.,
as Primary Lender Agent
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.............................................................4
1.01. Defined Terms.....................................................................................4
1.02. Principles of Construction.......................................................................11
SECTION 2 THE CREDIT FACILITY...................................................................................11
2.01. Amount...........................................................................................11
2.02. Availability.....................................................................................12
2.03. Advances and Minimum Amount of Utilizations......................................................12
2.04. Floating Rate Note; Relationship of Floating Rate Note and the Bonds............................12
2.05. Trigger Event....................................................................................12
2.06. Liquidation Fee..................................................................................13
2.07. Cancellation.....................................................................................13
SECTION 3 MAKING OF ADVANCES....................................................................................13
3.01. Borrowing Procedures.............................................................................13
SECTION 4 TERMS OF THE CREDIT FACILITY..........................................................................13
4.01. Principal Repayment..............................................................................13
4.02. Interest Payment.................................................................................13
4.03. Prepayment.......................................................................................15
4.04. Recapture........................................................................................16
4.05. Limit of United States Guarantee.................................................................16
SECTION 5 CONDITIONS PRECEDENT..................................................................................17
5.01. Conditions Precedent to Lender's Obligations Under this Agreement................................17
5.02. Conditions Precedent to Each Advance Under this Agreement........................................18
SECTION 6 FEES AND EXPENSES.....................................................................................18
6.01. Fees.............................................................................................18
6.02. Taxes............................................................................................19
6.03. Expenses.........................................................................................20
6.04. Additional or Increased Costs....................................................................20
SECTION 7 PAYMENTS..............................................................................................21
7.01. Method of Payment................................................................................21
7.02. Application of Payments; Subordination of Lenders' Rights........................................23
SECTION 8 REPRESENTATIONS AND WARRANTIES BY THE SHIPOWNER.......................................................23
8.01. Representations and Warranties...................................................................23
8.02. Covenants of the Shipowner.......................................................................25
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SECTION 9 EVENTS OF DEFAULT.....................................................................................27
9.01. Events of Default................................................................................27
SECTION 10 GOVERNING LAW AND JURISDICTION.......................................................................28
10.01. Governing Law...................................................................................28
10.02. Submission to Jurisdiction......................................................................28
10.03. Service of Process..............................................................................29
10.04. Waiver of Security Requirements.................................................................30
10.05. No Limitation...................................................................................30
SECTION 11 MISCELLANEOUS........................................................................................30
11.01. Computations....................................................................................30
11.02. Notices.........................................................................................30
11.03. Disposition of Indebtedness.....................................................................32
11.04. Disclaimer......................................................................................33
11.05. No Waiver; Remedies Cumulative..................................................................33
11.06. Currency........................................................................................33
11.07. Severability....................................................................................34
11.08. Amendment or Waiver.............................................................................34
11.09. Indemnification.................................................................................34
11.10. No Proceedings..................................................................................34
11.11. Setoff..........................................................................................34
11.12. Benefit of Agreement............................................................................35
11.13. Waiver of Jury Trial............................................................................35
11.14. Execution in Counterparts.......................................................................35
11.15. Conflicts with Indenture........................................................................35
11.16. Entire Agreement................................................................................35
SECTION 12 ARRANGEMENTS AMONG THE AGENTS AND THE LENDERS........................................................36
12.01. Appointment.....................................................................................36
12.02. Rights of Facility Agent........................................................................36
12.03. Duties..........................................................................................37
12.04. Limitation on Obligations of Facility Agent.....................................................37
12.05. Indemnification by Lenders......................................................................37
12.06. Limitation on Responsibility....................................................................38
12.07. No Claims on Employees of Facility Agent........................................................38
12.08. Banking Business................................................................................38
12.09. Resignation or Termination of Facility Agent....................................................38
12.10. Successor to Facility Agent.....................................................................38
12.11. Discharge of Obligations........................................................................39
12.12. Responsibilities of Lenders.....................................................................39
12.13. Agency Division.................................................................................39
12.14. Primary Lender Agent............................................................................39
12.15. Facility Agent Only Agent for the Lenders.......................................................39
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LIST OF EXHIBITS
EXHIBIT A......... Bond Purchase Agreement
EXHIBIT B......... Form of Bond
EXHIBIT C......... Certificate Authorizing Advances
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THIS CREDIT AGREEMENT, dated as of October 31, 2001, by and among
XXXXXX XXXXXXX LLC, a Delaware limited liability company (the "Shipowner"),
GOVCO INCORPORATED, a Delaware corporation (the "Primary Lender"), CITIBANK,
N.A., a national banking association (the "Alternate Lender"), CITIBANK
INTERNATIONAL plc, a bank organized under the laws of England, as Facility Agent
for both the Primary Lender and the Alternate Lender and their respective
successors and assigns (in such capacity, the "Facility Agent"), and CITICORP
NORTH AMERICA, INC., a Delaware corporation, as administrative agent for the
Primary Lender and its commercial paper holders (in such capacity, the "Primary
Lender Agent").
BACKGROUND
WHEREAS:
(A) by this Agreement, the Lenders have agreed to establish a
credit facility (the "Credit Facility") in the aggregate amount of up to
Eighty-One Million Dollars ($81,000,000), pursuant to which (i) the Primary
Lender may, in its discretion, subject to the terms and conditions hereof,
extend financing to the Shipowner for the manufacture, construction,
fabrication, financing and purchase by the Shipowner of the Vessel, for the
payment of related Construction Period Interest and for the payment of the
Guarantee Fees and (ii) if the Primary Lender chooses at any time not to extend
any such financing for the Vessel, then, subject to the terms and conditions
hereof, the Alternate Lender shall, before the fourth Payment Date, extend such
financing or any undisbursed portion thereof;
(B) the establishment of the Credit Facility is made in reliance
upon the commitment of the United States to guarantee under Title XX xx xxx
Xxxxxxxx Xxxxxx Xxx, 0000, as amended, the payment of the unpaid interest on,
and the unpaid balance of, the principal of the Floating Rate Note, including
interest accruing between the date of an Indenture Default under the Floating
Rate Note and the payment in full of the Guarantee;
(C) a condition to the Lenders' extension of the Credit Facility
under this Agreement is the Facility Agent's timely receipt of Certificates
Authorizing Advances and the issuance of the Guarantee of the Floating Rate
Note; and
(D) the Credit Facility may be utilized by the Shipowner in
accordance with the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1 DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.01. Defined Terms. For the purposes of this Agreement, unless
otherwise defined herein, the following terms shall have the following meanings:
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"Accelerated Repayment" shall have the meaning set forth in Section
4.02(b) of this Agreement.
"Act" shall mean the Merchant Marine Act, 1936, as amended, and in
effect on each Closing Date.
"Advance Date" shall mean, in relation to any Advance, the Business Day
on which the applicable Lender shall make such Advance.
"Advances" shall have the meaning set forth in Section 2.03 of this
Agreement.
"Affiliate" or "Affiliated" shall mean any Person directly or
indirectly controlling, controlled by, or under common control with, another
Person.
"Agents" shall mean the Facility Agent and the Primary Lender Agent
collectively.
"Agreement" or "Credit Agreement" shall mean this Credit Agreement
dated as of October 31, 2001 among the Agents, the Shipowner, the Primary Lender
and the Alternate Lender, including any attachment thereto, as the same may be
amended, modified or supplemented in accordance with the application provisions
thereof.
"Alternate Lender" shall mean Citibank, N.A., a national banking
association, and its successors and permitted assigns under Section 11.03.
"Applicable Interest Rate" shall mean
(a) with respect to any portion of the Credit Facility that is funded
by the Primary Lender through its issuance of commercial paper notes and so long
as the Primary Lender is the holder of the indebtedness related to such funded,
the sum of (i) the Primary Lender's weighted average cost (defined below)
related to the issuance of commercial paper notes and other short-term
borrowings or the sale of participation interests (collectively, "Commercial
Paper"), which in each case have been allocated by the Primary Lender to the
Note, which rate includes related issuance costs incurred by the Primary Lender
plus (ii) 0.30% per annum, as calculated by the Indenture Trustee for each
Interest Period based on the weighted average cost of Commercial Paper specified
in a written notice sent by the Facility Agent to the Indenture Trustee, the
Shipowner and the Secretary at least five (5) Business Days prior to each
Interest Payment Date on which the interest so calculated is payable. The
Applicable Interest Rate shall, based on such notice, be specified in a written
notice sent by the Indenture Trustee to the Shipowner, the Facility Agent and
the Secretary at least four (4) Business Days prior to each Interest Payment
Date on which the interest so calculated is payable. For purposes of the
foregoing, the Primary Lender's "weighted average cost" of Commercial Paper
shall consist of (i) the actual interest or discount paid to purchasers of
Commercial Paper, (ii) the costs associated with the issuance of the Commercial
Paper and (iii) other borrowings the Primary Lender may incur, including the
amount to fund small or odd dollar amounts that are not easily accommodated in
the commercial paper market; and
(b) with respect to any portion of the Credit Facility that is funded by the
Alternate Lender or to the extent that a portion of the Credit Facility held by
the Primary Lender is
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assigned to the Alternate Lender or to any other assignee, then, from and after
the applicable Advance Date or the effective date of such assignment, as the
case may be, a rate per annum equal to LIBOR plus 0.30%; provided, however,
that, if the Indenture Trustee shall have received notice from the Alternate
Lender or assignee that such Alternate Lender or assignee shall have determined,
prior to the commencement of any Interest Period that: (A) Dollar deposits of
sufficient amount and maturity for funding an Advance are not available to such
Lender in the London Interbank Market in the ordinary course of business; or
(B) by reason of circumstances affecting the relevant market, adequate and fair
means do not exist for ascertaining the rate of interest to be applicable to the
Floating Rate Note; or (C) the relevant rate of interest referred to in the
definition of LIBOR which is to be used to determine the rate of interest for
the Floating Rate Note does not cover the funding cost to such Lender of funding
or maintaining the Floating Rate Note; or (D) such Lender is unable to establish
LIBOR for the relevant Interest Period; then, in any such event, the Indenture
Trustee shall give notice to the Shipowner and the Secretary of such condition
and interest shall, effective as of the date of such notice and so long as such
condition shall exist, accrue during each applicable Interest Period at the
Federal Funds Rate plus 0.30%; provided, further, however that if, in the
applicable Lender's reasonable judgment, it becomes unlawful at any time for
such Lender to make or maintain fundings under the Floating Rate Note based upon
LIBOR, the Facility Agent on behalf of the Lender shall so notify the Indenture
Trustee and the Secretary, who shall give notice to the Shipowner of such
determination and, effective, as of the date of such notice and so long as such
condition shall exist, interest shall thereafter accrue during each applicable
Interest Period at the Federal Funds Rate plus 0.30%.
Notwithstanding any other provision hereof or the Indenture, the Applicable
Interest Rate shall not include the Post Maturity Interest Rate described in
Section 4.02(b).
"Authorization Agreement" shall mean the Authorization Agreement,
Contract No. MA-13673, dated the Closing Date, between the Secretary and the
Indenture Trustee, whereby the Secretary authorizes the Guarantee of the United
States of America to be endorsed on the Floating Rate Note, as the same is
originally executed, or as modified, amended or supplemented in accordance with
the applicable provisions thereof.
"Available Amount" shall have the meaning set forth in Section 2.01 of
this Agreement.
"Bond Purchase Agreement" shall mean a Bond Purchase Agreement
substantially in the form of Exhibit A hereto.
"Bonds" shall mean each bond issued by the Shipowner substantially in
the form of Exhibit 2B to the Indenture, appropriately completed.
"Breakage Fees" shall mean, with respect to any prepayment of the
Floating Rate Note to the extent that (i) the Floating Rate Note (or the portion
so prepaid) is being funded by the Alternate Lender and (ii) such prepayment is
other than on an Interest Payment Date, such amounts as such Alternate Lender
has specified by written notice to the Indenture Trustee and the Shipowner as
the amount necessary (in the reasonable judgment of the Alternate Lender) to
compensate such Alternate Lender for any loss, expense or liability (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or redeployment of deposits from third parties or in
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connection with obtaining funds to maintain any funding under the Floating Rate
Note) which such Alternate Lender reasonably determines is attributable to such
prepayment.
"Business Day" shall mean any day on which dealings in Dollar deposits
are carried on in the London interbank market and on which commercial banks in
London and New York City are open for domestic and foreign exchange business.
"Certificate Authorizing Advances" shall mean, with respect to an
Advance, a certificate from the Secretary authorizing such Advance in the form
of Exhibit C hereto.
"Xxxxxx Offshore" means Xxxxxx Offshore Inc., a Delaware corporation.
"Xxxxxx Offshore Financial Statements" shall have the meaning set forth
in Section 8.01(h) of this Agreement.
"Closing Date" shall mean the date on which the Lenders fund the
initial Advance or Advances.
"Commencement Date" shall mean the earlier of (i) the 1st or 15th day
of a month occurring after the Delivery Date or (ii) February 15, 2004.
"Commercial Paper" shall have the meaning set forth in the definition
of Applicable Interest Rate.
"Construction Period" shall mean the period from the date hereof to the
Delivery Date.
"Construction Period Interest" shall mean all interest that accrues on
the Outstanding Principal during the Construction Period.
"CP Fixed Period" shall mean, for any Advance or portion thereof funded
through the Primary Lender's issuance of Commercial Paper, (i) a period of days
commencing on the Advance Date for such Advance or portion thereof and ending
any number of days thereafter not exceeding one hundred eighty (180) days as
shall be selected by the Shipowner, and (ii) thereafter a period of days
commencing on the last day of the prior CP Fixed Period and ending any number of
days thereafter not exceeding one hundred eighty (180) days as shall be selected
by the Shipowner; provided that:
(i) any CP Fixed Period which would otherwise end on a date
which is not a Business Day shall end on the next succeeding Business
Day;
(ii) any CP Fixed Period which commences before an Interest
Payment Date and would otherwise end on a date later than such Interest
Payment Date must end no later than such Interest Payment Date;
(iii) in the event the Primary Lender assigns its interest in
an Advance or any portion thereof to the Alternate Lender during the CP
Fixed Period relating thereto, then the Facility Agent shall
immediately notify the Indenture Trustee and the Secretary of
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such fact and such CP Fixed Period shall end on the date on which the
Primary Lender shall so assign such Advance or portion thereof; and
(iv) if a Trigger Event has occurred, all outstanding CP Fixed
Periods shall immediately terminate on the next succeeding Business Day
and all CP Fixed Periods thereafter occurring shall be a period of one
(1) Business Day.
"Credit Facility" shall have the meaning set forth in Whereas Clause
(A) of this Agreement.
"Credit Facility Amount" shall have the meaning set forth in Section
2.01 of this Agreement.
"Delivery Date" shall mean the date on which the Vessel has been
delivered to and accepted by the Shipowner.
"Depository Agreement" shall mean the Depository Agreement, Contract
No. MA-13676, dated the Closing Date, among the Shipowner, US Bank National
Association, as Securities Intermediary, and the Secretary, as the same is
originally executed, or amended, modified or supplemented in accordance with the
applicable provisions thereof.
"Disposition of Indebtedness" shall have the meaning set forth in
Section 11.03 of this Agreement.
"Dollars," "U.S. Dollars," "U.S.D.," "U.S." or "$" shall mean the
lawful currency of the United States of America.
"Eurodollar Reserve Percentage" shall mean with respect to any Interest
Period or Post Maturity Period the reserve percentage applicable to Citibank,
N.A. during such period under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) (or if more than
one such percentage shall be so applicable, the daily average of such
percentages for those days in such period during which such reserve shall be so
applicable) for determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or marginal reserve requirement) for
Citibank, N.A. in respect of liabilities or assets consisting of or including
Eurocurrency Liabilities as that term is used in Regulation D of the Board of
Governors of the Federal Reserve System as in effect from time to time.
"Event of Default" shall have the meaning set forth in Section 9.01 of
this Agreement.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day for such
transactions received by Citibank, N.A. from three Federal funds brokers of
recognized standing selected by it as specified by written notice from the Agent
to the Shipowner, the Indenture Trustee and the
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Secretary delivered on each Monday (or if such day is not a Business Day, on
the next succeeding Business Day) for the preceding calendar week.
"Final Advance Date" shall have the meaning set forth in Section 2.02
of this Agreement.
"Financing Offer" shall mean that certain letter agreement between
Citicorp North America, Inc., Citibank, N.A. and the Shipowner dated as of
December 21, 2000 in contemplation of the financing arrangements evidenced by
this Agreement.
"Floating Rate Note" shall mean a note substantially in the form of
Exhibit 2 to the Indenture, appropriately completed.
"Governmental Authority" shall mean the government of any country, any
agency, department or other administrative authority or instrumentality thereof,
and any local or other governmental authority within any such country.
"Guarantee" or "Guarantees" shall mean the guarantee of the Floating
Rate Note by the United States of America pursuant to Title XI of the Act, as
provided in the Authorization Agreement.
"Guarantee Commitment" shall mean the Commitment to Guarantee
Obligations, Xxxxxxxx Xx. XX-00000, dated as of the Closing Date, executed by
the Secretary and accepted by the Shipowner with respect to the Guarantees, as
originally executed or as modified, amended or supplemented in accordance with
the applicable provisions thereof.
"Guarantee Fees" shall mean the amounts described in the Guarantee
Commitment payable to the Secretary in consideration for the commitment therein
described and payable as provided in such Guarantee Commitment.
"Guaranteed Interest" shall mean the interest payable on the
outstanding principal amount of the Floating Rate Note to the extent set forth
therein.
"Holder" shall mean each holder of a Floating Rate Note.
"Indemnified Amounts" shall have the meaning set forth in Section 11.09
of this Agreement.
"Indenture" shall mean the Trust Indenture dated as of the Closing
Date, between the Shipowner, and the Indenture Trustee, as the same is
originally executed, or as modified, amended or supplemented in accordance with
the applicable provisions thereof.
"Indenture Default" shall have the meaning specified in Article VI of
Exhibit 1 to the Indenture.
"Indenture Trustee" shall mean US Bank National Association, and any
successor trustee permitted under the Indenture.
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"Interest Payment Date" shall mean each date on which interest on the
principal of the Floating Rate Note is due and payable in accordance with the
terms thereof.
"Interest Period" shall mean, with respect to any Advance or portion
thereof, (i) the period commencing on the Advance Date relating thereto and
extending up to, but not including, the next Interest Payment Date; and (ii)
thereafter, the period commencing on each Interest Payment Date and extending up
to, but not including, the next Interest Payment Date; provided, that, in the
event the Primary Lender assigns its interest to the Alternate Lender in an
Advance or any portion thereof on a date other than an Interest Payment Date,
then, upon written notice from the Facility Agent to the Indenture Trustee of
such event, (i) such Interest Period shall end on the date on which the Primary
Lender shall so assign such Advance or such portion thereof and (ii) a new
Interest Period with respect to such Advance or such shall commence on such date
and shall end on the next Interest Payment Date.
"Lender" shall mean either the Primary Lender or the Alternate Lender,
as the case may be.
"Lenders" shall mean, collectively, the Primary Lender and the
Alternate Lender.
"LIBOR" (a) in relation to any Interest Period, shall mean the rate of
interest per annum (rounded upward, if necessary, to the nearest 1/16 of 1%)
quoted by the principal London office of Citibank, N. A., at approximately 11:00
a.m. (London time) on the Quotation Date for the offering to leading banks in
the London interbank market of U.S. Dollar deposits for a period and in an
amount comparable to such Interest Period and the principal amount upon which
interest is to be paid during such Interest Period; and (b) in relation to any
Post Maturity Period, shall have the meaning as set forth in Section 4.02(b) of
this Agreement.
"Lien" shall mean any lien, lease, mortgage, pledge, hypothecation,
preferential arrangement relating to payments, or other encumbrance or security
interest.
"Liquidation Fee" shall mean an amount determined by the Facility Agent
and notified to the Indenture Trustee in writing as the amount owed under this
Agreement in connection with any prepayment of an Advance or portion thereof
funded by the Primary Lender on any date other than the last day of a CP Fixed
Period or in connection with any termination of a CP Fixed Period prior to its
originally scheduled duration pursuant to clause (iv) or (v) of the proviso
contained in the definition thereof, which amount shall be equal to (x) the
amount of yield that the Primary Lender is required to pay to holders of its
Commercial Paper during the Liquidation Period on an amount of commercial paper
having an aggregate issue price equal to the amount of the Shipowner's
prepayment or the outstanding principal amount of the Floating Rate Note
previously allocated to the CP Fixed Period whose duration has been shortened
less (y) the amount of the estimated investment earnings, as determined by the
Facility Agent and specified by written notice to the Indenture Trustee, on such
prepayment amount or such outstanding principal amount during the Liquidation
Period.
"Liquidation Period" means the period (i) commencing on the date on
which a prepayment is made or a CP Fixed Period has been terminated prior to its
scheduled duration pursuant to clause (iii) or (iv) of the proviso contained in
the definition thereof and (ii)
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continuing to the earliest date on which the Primary Lender's total amount of
Commercial Paper related to the funding of the Floating Rate Note can be reduced
(without prepayment thereof) by an amount equal to the amount of the Shipowner's
prepayment or to the outstanding principal amount of the Floating Rate Note
previously allocated to the CP Fixed Period whose duration has been shortened
less (y) the amount of the estimated investment earnings, as determined by the
Facility Agent and specified by written notice to the Indenture Trustee, on such
prepayment amount or such outstanding principal amount during the Liquidation
Period.
"Long Term Benchmark Rate" shall mean, as of any date of determination,
an interest rate per annum determined by the Indenture Trustee as equivalent to
the yield obtained through linear interpolation of the yields of most recently
issued United States Treasury securities having maturities of ten (10) and
thirty (30) years, respectively, as determined by reference to the yields as
indicated by Telerate Access Service (page 8003 or the relevant page at the date
of determination indicating such yields) or, if such data cease to be available,
any publicly available sources of similar market data selected by the Indenture
Trustee at approximately 10:00 a.m. (New York City time) on the date of
determination.
"Mandatory Note Redemption Date" shall mean the fifteenth (15) Day
after a Trigger Event has occurred.
"Maturity" shall mean the date on which the principal of, or interest
on, the Floating Rate Note becomes due and payable as therein provided, whether
on a Payment Date, at the Stated Maturity or by prepayment, repayment,
redemption or declaration of acceleration or otherwise.
"Mortgage" means the first preferred ship mortgage on the Vessel,
Contract No. MA-13675, by the Shipowner in favor of the Secretary, as originally
executed, modified, amended or supplemented.
"Other Taxes" shall have the meaning set forth in Section 6.02(a) of
this Agreement.
"Outstanding Principal" shall mean, with respect to the Floating Rate
Note at any time, the outstanding principal amount thereof.
"Payment Date" shall mean the date which is six months after the
Commencement Date, the anniversary of the Commencement Date, and each
anniversary of either such date to and including the date the Advances are paid
in full.
"Payment Default" shall mean a default in the payment of the whole or
any part of the principal or interest on any of the Floating Rate Notes when the
same shall become due and payable, whether by reason of Maturity, redemption,
acceleration or otherwise, or any default referred caused by a recession of a
payments, and continuation of any such default for a period of 30 days.
"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
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"Post Maturity Period" shall have the meaning set forth in Section
4.02(b) of this Agreement.
"Primary Lender" shall mean Govco Incorporated and any substitute
Primary Lender permitted under Section 11.03.
"Quotation Date" shall have the meaning set forth in Section 4.02(b) of
this Agreement.
"Redemption" shall mean with respect to the redemption of the Floating
Rate Note, the repayment or prepayment of the Floating Rate Note as applicable.
"Redemption Date" shall mean a date fixed for the prepayment, repayment
or redemption of the Floating Rate Note by or pursuant to Section 4 of this
Agreement, Article Fourth of the Indenture, or Article III of Exhibit 1 to the
Indenture.
"Redemption Price" shall mean, the price at which the Floating Rate
Note is to be prepaid, repaid, or redeemed pursuant to Section 4 of this
Agreement, Article Fourth of the Indenture, or Article III of Exhibit 1 to the
Indenture.
"Secretary" shall mean the Secretary of Transportation or any official
or official body from time to time duly authorized to perform the duties and
functions of the Secretary of Transportation under Title XI of the Act
(including the Maritime Administrator, the Acting Maritime Administrator, and to
the extent so authorized, the Deputy Maritime Administrator, the Acting Deputy
Maritime Administrator and other officials of the Maritime Administration).
"Secretary's Note" shall mean a promissory note issued and delivered by
the Shipowner to the Secretary described in Article Third of the Security
Agreement and shall also mean any promissory note issued in substitution for and
replacement thereof pursuant to the Security Agreement.
"Security Agreement" shall mean the security agreement, dated the
Closing Date, executed by the Shipowner and the Secretary relating to the
security in respect to the Guarantees, as originally executed or as modified,
amended or supplemented in accordance with the applicable provisions thereof.
"Shipowner" shall mean Xxxxxx Xxxxxxx LLC, a Delaware limited liability
company, together with its successors and assigns, provided that, in the event
the Secretary assumes any obligations of the Shipowner as contemplated by the
provisions of Section 6.09 of Exhibit 1 to the Indenture, the term "Shipowner"
as used in this Agreement shall not include the Secretary.
"Shipowner Documents" shall mean the Security Agreement, the Mortgage,
the Title XI Reserve Fund and Financial Agreement, the Depository Agreement and
the Secretary's Note.
"Shipyard" shall mean AMFELS, Inc.
"Short Term Construction Period Benchmark Rate" shall mean, as of any
date of determination, an interest rate per annum equivalent to either (a) if
and so long as the Note is funded by the Primary Lender through its issuance of
commercial paper notes, then the Fed AA
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Composite Rate calculated by the Federal Reserve Bank for commercial paper with
a designated maturity of thirty (30) days as reported on Telerate Access Service
(page 120 or the relevant page at the date of determination) or, if such data
cease to be available, any publicly available sources of similar market data
representing an average rate of AA-rated commercial paper with comparable
maturities, at approximately 10:00 a.m. (New York City time) on the date of
determination, or (b) if the Note has been funded by the Alternate Lender, then
the higher of (i) the Applicable Interest Rate most recently quoted by the Agent
or (ii) the rate of interest per annum equal to the arithmetic mean of the
offered rates, if any, for deposits in Dollars having a maturity of six months
commencing on the second succeeding Business Day and appearing on Telerate Page
3750 or any equivalent successor to the relevant page as of approximately 10:00
a.m. (New York City time) on the date of determination, or, if no such offered
rates appear on such Telerate Page 3750, then the rate per annum equal to the
arithmetic mean of the rates five selected money center banks were offering to
prime banks in the London Interbank Market at or about 11:00 a.m. (London time)
on the date of such determination for deposits in Dollars for a six-month period
to commence on the second succeeding Business Day.
"Short Term Post-Construction Period Benchmark Rate" shall mean, as of
any date of determination, an interest rate per annum equivalent to either (a)
if and so long as the Note is funded by the Primary Lender through its issuance
of commercial paper notes, then the Fed AA Composite Rate calculated by the
Federal Reserve Bank for commercial paper with a designated maturity of thirty
(30) days as reported on Telerate Access Service (page 120 or the relevant page
at the date of determination) or, if such data cease to be available, any
publicly available sources of similar market data representing an average rate
of AA-rated commercial paper with comparable maturities, at approximately 10:00
a.m. (New York City time) on the date of determination, or (b) if the Note has
been funded by the Alternate Lender, then the higher of (i) the Applicable
Interest Rate most recently quoted by the Agent or (ii) the rate of interest per
annum equal to the arithmetic mean of the offered rates, if any, for deposits in
Dollars having a maturity of six months commencing on the second succeeding
Business Day and appearing on Telerate Page 3750 or any equivalent successor to
the relevant page as of approximately 10:00 a.m. (New York City time) on the
date of determination, or, if no such offered rates appear on such Telerate Page
3750, then the rate per annum equal to the arithmetic mean of the rates which
five selected money center banks were offering to prime banks in the London
Interbank Market at or about 11:00 a.m. (London time) on the date of such
determination for deposits in Dollars for a six-month period to commence on the
second succeeding Business Day.
"Stated Maturity" shall mean the date determinable as set forth in the
Floating Rate Note as the final date on which the principal of such Note is due
and payable.
"Taxes" shall have the meaning set forth in Section 6.02(a) of this
Agreement.
"Title XI Reserve Fund and Financial Agreement" shall mean that certain
Title XI Reserve Fund and Financial Agreement, Contract No. MA-13675, dated as
of the Closing Date, executed by the Shipowner and the Secretary, as amended,
modified or supplemented in accordance with the applicable provisions thereof.
"Transaction Documents" shall mean this Agreement, the Floating Rate
Note, the Financing Offer and all other instruments, agreements and documents
executed and/or delivered
10
by or on behalf of the Shipowner in connection with the foregoing, provided,
however, that the term Transaction Documents shall not include the Shipowner
Documents.
"Trigger Event" shall have the meaning set forth in Section 2.05 of
this Agreement.
"United States" shall mean the United States of America.
"Unpaid Amount" shall have the meaning set forth in Section 4.02(b) of
this Agreement.
"Vessel" shall mean the ultra-premium xxxx-up drilling rig of the KFELS
MOD V "B" design currently under construction pursuant to the construction
contract with the Shipyard.
1.02. Principles of Construction.
(a) The meanings set forth for defined terms in this Agreement shall be
equally applicable to both the singular and plural forms of the terms defined.
(b) The headings of the Sections in this Agreement are included for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
(c) In the computation of time periods from one specified date to a
later specified date, the word "from" shall mean "from and including" and the
words "to" and "until" shall each mean "to but excluding".
(d) References to Sections, unless otherwise indicated, shall mean and
be references to the corresponding Sections of this Agreement.
SECTION 2 THE CREDIT FACILITY
2.01. Amount.
(a) The Lenders hereby establish the Credit Facility, upon the terms
and conditions set forth in this Agreement, in favor of the Shipowner in the
maximum aggregate amount of up to Eighty-One Million Dollars ($81,000,000), (as
such amount may be reduced pursuant to paragraph (b) below, the "Credit Facility
Amount"), to enable the Shipowner to finance the manufacture, construction,
fabrication, financing and purchase of the Vessel, Construction Period Interest
and Guarantee Fees. The Primary Lender intends but is not obligated to fund
Advances through the issuance and sale of commercial paper to investors which is
exempt from the registration requirements of the United States Securities Act of
1933, as amended. The Primary Lender may, at its option, elect at any time not
to fund any Advances or any portion thereof, in which case the Alternate Lender
shall, subject to the terms and conditions provided herein and so long as the
Final Advance Date has not occurred, be obligated to fund such Advances or the
undisbursed portion thereof, as applicable up to an amount (the "Available
Amount") equal to the excess of the Credit Facility Amount over the aggregate
cumulative amount of all Advances previously made hereunder.
(b) The Shipowner has the right, upon not less than ten (10) Business
Days' prior written notice to the Facility Agent, to terminate in whole or
reduce ratably in part the Credit
11
Facility Amount; provided, that the Shipowner may in no event reduce the Credit
Facility Amount to an amount less than the Outstanding Principal.
2.02. Availability. Advances under the Credit Facility may, subject
only to the conditions set forth in Section 5.02, be made on any Business Day up
to and including the Final Advance Date. The "Final Advance Date" shall mean the
earliest of (i) the fourth Payment Date, (ii) the date on which the Shipowner
has issued Bonds under the Indenture to refinance the Floating Rate Note or
(iii) the date on which the Available Amount has been reduced to zero.
2.03. Advances and Minimum Amount of Utilizations. From and after the
Closing Date and upon satisfaction of the conditions set forth in Section 5.02,
advances shall be made from the Primary Lender (or if the Primary Lender fails
to make such advances, then from the Alternate Lender through the Facility
Agent) to the Shipowner ("Advances") in accordance with Section 3.01.
Notwithstanding anything in this Agreement to the contrary, the Shipowner may
not request an Advance for an amount (a) less than the smaller of (i) One
Million Dollars ($1,000,000) or (ii) the Available Amount.
2.04. Floating Rate Note; Relationship of Floating Rate Note and the
Bonds.
(a) The Shipowner agrees that to evidence its obligation to repay all
Advances made hereunder and to pay interest accrued thereon, it shall issue and
deliver to the Facility Agent the Floating Rate Note. Such Floating Rate Note
shall (i) be in the form of Exhibit 2A to the Indenture; (ii) bear the
Secretary's Guarantee, and (iii) be valid and enforceable as to its principal
amount at any time to the extent of the aggregate amounts then disbursed and
outstanding thereunder. At its option, and from time to time, the Shipowner may
refinance any portion, or all, of the indebtedness under the Floating Rate Note
through the issuance of one or more Bonds, provided that, the refinancing by the
issuance of a Bond or Bonds does not occur later than the earliest of (i) the
fourth Payment Date or, (ii) if after a Trigger Event occurs, fifteen (15)
Business Days thereafter, and, provided further that, except in the case of the
Trigger Event, each refinancing is in a minimum amount of $5,000,000 and the
Shipowner shall have paid any amount payable under Section 4.04(a)(iv) or any
other provision hereof in connection therewith.
(b) The failure of the Shipowner to repay the Floating Rate Note within
fifteen (15) Business Days after a Trigger Event pursuant to this Section 2.04,
unless waived in writing by the Secretary, shall constitute an Indenture Default
without further notice to the Shipowner or the Lenders being required under the
Indenture or this Agreement.
2.05. Trigger Event. If (i) during the Construction Period, the Short
Term Construction Period Benchmark Rate shall exceed 13%; (ii) after the
Construction Period, the Short Term Post-Construction Period Benchmark Rate
shall exceed 10.25%; or (iii) at any time, the Long Term Benchmark Rate shall
exceed 8.30% (each individually being referred to herein as a "Trigger Event"),
the Shipowner shall, without prior notice or demand from the Secretary, repay
the Floating Rate Note in full through the issuance of a Bond or Bonds and the
Floating Rate Note shall be mandatorily prepayable in accordance with Section
4.03 within fifteen (15) Business Days of the Trigger Event.
12
2.06. Liquidation Fee. If any of the Outstanding Principal is paid on
any date other than an Interest Payment Date or if an Interest Period, pursuant
to the proviso contained in the definition thereof, ends on any date which is
not an Interest Payment Date, then the Shipowner shall pay to the Facility
Agent, for the benefit of the Primary Lender, the Liquidation Fee, if any, owed
on account of such termination. In addition, if the Commencement Date occurs on
a date which is not otherwise an Interest Payment Date, then the Shipowner shall
pay to the Facility Agent, for the benefit of the Primary Lender, the
Liquidation Fee, if any, owed on account of such change in Interest Payment
Dates. Any such Liquidation Fee shall be due and payable on demand.
2.07. Cancellation. The Shipowner may cancel at any time all or any
part of the Available Amount of the Credit Facility, provided that (i) thirty
(30) days' prior irrevocable written notice is given to the Facility Agent, the
Indenture Trustee, and the Secretary and (ii) the Shipowner shall have paid to
the Lenders any commitment fees accrued and unpaid under Section 6.01 and all
other amounts due and payable under this Agreement and the Floating Rate Note as
of the proposed date of cancellation. In the absence of an Indenture Default,
the Lenders shall not for any reason cancel at any time any part of the
Available Amount of the Credit Facility.
SECTION 3 MAKING OF ADVANCES
3.01. Borrowing Procedures. Upon the Facility Agent's receipt of a
Certificate Authorizing Advance at least five (5) Business Days prior to the
proposed advance date setting forth the proposed amount of such Advance, the
Primary Lender may, and if the Primary Lender elects not to, the Alternate
Lender shall, disburse funds to the Shipowner in accordance with the terms of
such request and subject to the terms of this Agreement; provided that, if the
Certificate Authorizing Advance does not specify an Advance Date, then the
Advance Date shall be the fifth Business Day (or such earlier or later Business
Day as is requested by the Shipowner and is acceptable to the Facility Agent and
the applicable Lender) following the Facility Agent's receipt of such
Certificate Authorizing Advance. Promptly following each Advance, the Facility
Agent shall transmit to the Indenture Trustee written confirmation that the
Advance was made and the amount thereof, together with a copy of the related
Certificate Authorizing Advance and a copy of Exhibit A to the Floating Rate
Note, updated to reflect such Advance and other information described in such
Exhibit A.
SECTION 4 TERMS OF THE CREDIT FACILITY
4.01. Principal Repayment. The Shipowner shall repay the Outstanding
Principal in three successive semi-annual installments of $2,250,000, commencing
on the first Payment Date, with each such installment to be payable on a Payment
Date and a payment of the remaining Outstanding Principal payable on the earlier
of the date on which the Shipowner has issued Bonds under the Indenture to
refinance the Floating Rate Note or the fourth Payment Date.
4.02. Interest Payment.
(a) On each Interest Payment Date, the Shipowner shall pay to the Indenture
Trustee for the benefit of the Lenders, interest on the Outstanding Principal,
calculated at an interest rate
13
per annum equal to the Applicable Interest Rate therefor, as determined for each
successive Interest Period. The Indenture Trustee will calculate the Applicable
Interest Rate based on information provided (i) by the Administrative Agent to
the Facility Agent if the Primary Lender is the Lender, or (ii) by the Facility
Agent if the Alternate Lender is the Lender. From time to time, the
Administrative Agent or Facility Agent will confirm the Primary Lender's
weighted average cost of Commercial Paper for the relevant Interest Period, CP
Rate, LIBOR, the Federal Funds Rate and the Applicable Interest Rate to the
Indenture Trustee. In the event that the Primary Lender funds any Advances under
the Credit Facility and subsequently assigns the outstanding amounts thereof to
the Alternate Lender or another party, the interest rate on the Advances so
assigned shall be determined pursuant to clause (a) of the definition of
"Applicable Interest Rate" for the period prior to the effective date of such
assignment and pursuant to clause (b) of such definition for all periods after
such date. Interest on the Advances shall be paid on each Interest Payment Date.
(b) The Shipowner shall pay to the Facility Agent for the benefit of
the Person entitled to any Unpaid Amount, on demand, interest on such Unpaid
Amount (to the extent permitted by applicable law) for each Post Maturity Period
at an interest rate per annum (the "Post-Maturity Interest Rate") equal to two
percent (2%) above the interest rate otherwise then applicable under Section
4.02(a); provided, that if such Unpaid Amount consists of principal on the
Floating Rate Note as to which Guaranteed Interest continues to accrue, the
Post-Maturity Interest Rate on such Unpaid Amount shall be limited to the
incremental amount of additional interest required to be paid under this Section
4.02(b) and shall equal two percent (2.0%) per annum. In the absence of an
Indenture Default, any interest which shall have accrued under this Section
4.02(b) in respect of an Unpaid Amount shall be due and payable and shall be
paid by the Shipowner on demand on such dates as the Person to whom such Unpaid
Amount is owed may specify by written notice to the Shipowner, or if there is an
Indenture Default, any interest which shall have accrued under this Section
4.02(b) in respect of an Unpaid Amount shall be due and payable immediately and
shall be paid by the Shipowner without demand and any payment by, or on behalf
of, the Shipowner hereunder shall be governed by Section 7.02 and the provisions
of the last paragraph of Section 9.01.
As used herein, "Unpaid Amount" means a portion of principal, accrued
interest, fees or other amounts owing to either Agent or any Lender under this
Agreement or the Floating Rate Note which is not paid in full when and as due
and payable, whether at Stated Maturity, by acceleration or otherwise, or any
sum due and payable by the Shipowner to either Agent or any Lender under any
judgment of any court or arbitral tribunal in connection with this Agreement
which is not paid on the date of such judgment. "Post Maturity Period" shall
mean with respect to the period from the date an Unpaid Amount was due until
such amount shall have been paid in full, each successive period, the first of
which shall start on the date such Unpaid Amount was due (or the date of any
such judgment or arbitral award, if earlier) and each other of which shall start
on the last day of the preceding period, and the duration of each of which shall
be one day, or if LIBOR applies, then from and including the Quotation Date for
such Post Maturity Period to but excluding the next Quotation Date or such other
duration selected by the Person to whom such Unpaid Amount is due, provided,
however, that in the case of any Accelerated Repayment, the first such Post
Maturity Period applicable thereto shall be of a duration equal to the unexpired
portion of its then applicable Interest Period; and provided, further, that in
the case of Post Maturity Periods of one day, interest which accrues during such
Post Maturity Period shall not
14
begin to bear interest unless and until it remains unpaid at the end of the then
applicable Interest Period. "Accelerated Repayment" shall mean any part of the
principal of the Floating Rate Note which became due and payable on a day other
than its Payment Date. "Quotation Date" in relation to any Post Maturity Period
means the day on which quotations would ordinarily be given by Citibank, N.A. in
the London interbank market for dollar deposits for delivery on the first day of
that period, provided, however, that if, for any such Post Maturity Period,
quotations would ordinarily be given on more than one date, the Quotation Date
for that period shall be the last of those dates.
4.03. Prepayment.
(a) The Shipowner may from time to time prepay all or part of the
Outstanding Principal evidenced by the Floating Rate Note, provided that: (i)
any partial prepayment shall be in a minimum principal amount of One Million
Dollars ($1,000,000,) unless otherwise required by the Indenture; (ii) the
Shipowner shall have given the Facility Agent and the Indenture Trustee prior
written notice of the prepayment (which notice shall be given not less than five
(5) days nor more than sixty (60) days prior to the date of prepayment); (iii)
the Shipowner shall have paid in full all amounts due under this Agreement as of
the date of such prepayment, including, without limitation, interest which has
accrued to the date of prepayment on the amount prepaid and all other amounts
payable hereunder relating to the prepayment; (iv) any amount prepaid hereunder
may not be reborrowed; and (v) if the Primary Lender shall have funded the
Advance, pursuant to Section 2.01, which is to be prepaid, then Shipowner shall
pay to the Facility Agent, for the benefit of the Primary Lender, on demand, the
Liquidation Fee, if any, owed on account of such prepayment.
(b) The Floating Rate Note shall be mandatorily prepayable under the
circumstances and at the times set forth in the Indenture. Without limiting the
foregoing, (i) the Shipowner shall, upon issuance of any Bonds, prepay the
Outstanding Principal of the Floating Rate Note in full and (ii) if a Trigger
Event has occurred, or if a Mandatory Note Redemption Date has otherwise
occurred under the Indenture, then the Outstanding Principal of the Floating
Rate Note shall be due and payable in full on such Mandatory Note Redemption
Date. Any amounts so prepaid or repaid may not be reborrowed and each such
mandatory prepayment shall be accompanied by all interest which has accrued to
the date of prepayment on the amount prepaid, any Liquidation Fees payable on
account of such prepayment and any compensation owing to the Lenders on account
of such prepayment under Section 4.04.
(c) Upon delivery to the Shipowner and the Secretary of the instrument
satisfying and discharging the Indenture contemplated by Section 12.01 of the
Exhibit 1 to the Indenture, all of the Shipowner's indebtedness, liabilities and
obligations under this Agreement (including, without limitation, any payment
obligations under the Financing Offer incorporated into Section 6.01 of this
Agreement) shall become immediately due and payable without demand upon, or
notice to, the Shipowner.
(d) Notwithstanding any other provision to the contrary herein, the
Shipowner or the Secretary (after the Secretary's assumption of the Floating
Rate Note pursuant to Section 6.09 of Exhibit 1 to the Indenture) may from time
to time prepay all or part of the principal amount of the Floating Rate Note
without any prepayment penalty or premium in accordance with Article
15
III of Exhibit 1 to the Indenture except that the Shipowner (but not the
Secretary) may be obligated as a result of such prepayment to make any payments
provided for under Section 4.03(a) above or Section 4.04 below.
4.04. Recapture.
(a) The Shipowner shall pay to the Facility Agent for the benefit of
the applicable Lender, within five (5) Business Days after a written request of
such Lender, such amounts as shall be sufficient (in the reasonable judgment of
such Lender) to compensate such Lender for any loss, expense or liability
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or redeployment of deposits from third parties or in
connection with obtaining funds to make or maintain any Advance) which such
Lender reasonably determines is attributable to:
(i) any failure to make scheduled payments on a Payment Date or
any payment due in connection with any Redemption; or
(ii) any failure by the Shipowner to borrow any Advance for
which a Certificate Authorizing Advance has been issued; or
(iii) any revocation of a notice of prepayment given pursuant to
Section 4.03(a); or
(iv) subject to Section 4.03(d), any prepayment of the Floating
Rate Note (including, without limitation, due to the issuance of any
Bonds) to the extent that (i) such Floating Rate Note (or the portion
so prepaid) is being funded by the Alternate Lender and (ii) such
prepayment is other than on an Interest Payment Date.
Any such written request shall set forth in reasonable detail the basis of the
calculation of such loss, expense or liability.
(b) Without prejudice to any other provision hereof (and at the
Shipowner's expense), the Facility Agent and the Alternate Lender shall use such
reasonable efforts as each shall determine in its sole discretion to minimize
any loss, expense or liability under this Section 4.04; provided that neither
the Facility Agent nor any Lender shall be obligated to take any actions under
this Section 4.04(b) if the Facility Agent or such Lender has determined, in its
sole discretion, that such actions would cause it to incur any material costs or
expenses or would otherwise be disadvantageous to it in any material respect,
provided, further that nothing in the foregoing proviso shall relieve the
Alternate Lender of its commitment to fund all Advances hereunder.
4.05. Limit of United States Guarantee. The Guarantee of the United
States extends only to the principal and interest owed under the Floating Rate
Note and only to the extent specified therein.
16
SECTION 5 CONDITIONS PRECEDENT
5.01. Conditions Precedent to Lender's Obligations Under this
Agreement. The obligations of the Lenders under this Agreement shall be subject
to the delivery to the Facility Agent of the documents indicated below on or
before the Closing Date: -
(i) Agreement and the Floating Rate Note. This Agreement fully
executed by the parties hereto in form and substance satisfactory to
the Agents and the Lenders, which shall be in full force and effect and
the Floating Rate Note fully executed by the Shipowner, with the
Guarantee thereon endorsed by, or on behalf of, the United States.
(ii) Existence. Certificates of Formation and Certificates of
good standing issued by the Secretary of State of Delaware for the
Shipowner, evidencing the full power, authority and legal right of the
Shipowner to own its property and to carry on its business as now
conducted, together with a certified copy of the Shipowner's limited
liability company agreement.
(iii) Authority. Certificates of director's resolutions or other
evidence in form and substance satisfactory to the Agents of the
authority of the Shipowner to execute, deliver, perform and observe the
terms and conditions of this Agreement, the Floating Rate Note and the
Indenture and evidence of authority (including specimen signatures) for
each Person who, on behalf of the Shipowner signed this Agreement, the
Floating Rate Note and/or the Indenture, as applicable, or will
otherwise act as representatives of the Shipowner in the operation of
the Credit Facility.
(iv) Governmental and Other Authorizations. Copies, certified as
true copies by duly authorized officers of the Shipowner, of each
consent, license, authorization or approval of, and exemption by, any
Governmental Authority and any governmental authorities within the
United States or elsewhere (except for consents, licenses,
authorizations, approvals or exemptions required in the ordinary course
of business from governmental authorities in connection with the
operation of the Vessel), which are necessary or advisable (i) for the
execution, delivery, performance and observance by the Shipowner of
this Agreement, the Floating Rate Note and the Indenture and (ii) for
the validity, binding effect and enforceability of this Agreement, the
Floating Rate Note and the Indenture as against the Shipowner or, if no
such consent, license, authorization, approval or exemption is
necessary, a written certification from the Shipowner to such effect.
(v) Legal Opinions. (1) Opinion of legal counsel for the
Shipowner concerning this Agreement, the Floating Rate Note and the
Indenture and (2) Opinion of the Chief Counsel of the Maritime
Administration dated the Closing Date, signed by or on behalf of such
Chief Counsel, addressed to the Agents and the Lenders to the effect
that the Guarantees and the Authorization Agreement have been duly
authorized, executed and delivered by the United States of America, and
constitute legal, valid and binding obligations of the United States of
America enforceable in accordance with their respective terms.
17
(vi) Guarantee Commitment. A copy of the fully executed
Guarantee Commitment, which shall be in full force and effect until
completion of the Closing.
(vii) Authorization Agreement. The fully executed Authorization
Agreement, which shall be in full force and effect.
(viii) Indenture. The fully executed Indenture which shall be in
full force and effect.
(ix) No Proceedings Letter. A letter from the Secretary in the
form of Exhibit B hereto agreeing to be bound by the covenants set
forth in Section 11.10 hereof regarding the filing of certain
proceedings against the Primary Lender.
(x) Fees and Expenses. All "Up-Front Fees" described in the
Financing Offer and all accrued fees and out-of-pocket expenses due and
payable to the Facility Agent or its counsel in accordance with the
terms of the Financing Offer shall have been fully paid or provisions
satisfactory to the Facility Agent shall have been made for payment of
such amounts concurrently with the making of the initial Advance.
(xi) No Restrictions. No law, regulation, ruling or other
action of any Governmental Authority shall be in effect or shall have
occurred, the effect of which would be to restrain, prevent or
otherwise impose any materially adverse conditions on any party's
ability to fulfill its obligations under this Agreement.
5.02. Conditions Precedent to Each Advance Under this Agreement.
Notwithstanding any other provision of this Agreement, the agreement of the
Primary Lender to fund any Advance under this Agreement and any obligations of
the Alternate Lender to fund any Advances under this Agreement (including in
each case the initial Advance) shall be subject only to the following condition
precedent being satisfied as of the related Advance Date:
(a) Certificate Authorizing Advance The Facility Agent shall have
received from the Secretary a Certificate Authorizing Advance on which
certificate the Lenders and the Agents may conclusively rely.
SECTION 6 FEES AND EXPENSES
6.01. Fees. The Shipowner shall pay or cause to be paid: (i), on the
Closing Date, to the Primary Lender Agent, the "Up-Front Fee" in the amount
described in the Financing Offer; (ii) quarterly in arrears, with the first
quarterly payment to be made on the last day of the quarter in which the date of
this Agreement falls, and on the date the Floating Rate Note is repaid in full,
to the Facility Agent for the benefit of the Alternate Lender, the Commitment
Fee at the rate described in the Financing Offer based on the average daily
Available Amount outstanding during the Interest Period then ending and
calculated on the basis of a 360 day year and actual days elapsed; and (iii) to
the Person entitled thereto such other fees, expenses and other amounts as are
set forth in the Financing Offer in each case when and as due in accordance with
the terms thereof, which payment terms are incorporated herein by this
reference.
18
6.02. Taxes.
(a) The Shipowner agrees to pay all amounts owing by it under this
Agreement or the Floating Rate Note free and clear of and without deduction for
any and all present and future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding in the case of
any Lender, taxes imposed on its income and franchise taxes imposed on it in
lieu of income taxes and property by either (i) the jurisdiction under the laws
of which the Lender is organized or any political subdivision thereof, or (ii)
the jurisdiction of the Lender's applicable lending office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). In addition, the Shipowner agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or under the Floating Rate
Note or from the execution, delivery, or registration of, or otherwise with
respect to, this Agreement or the Floating Rate Note (hereinafter referred to as
"Other Taxes").
(b) The Shipowner further agrees:
(i) that, if the Shipowner is prevented by operation of law from
paying any such Taxes or Other Taxes, or if any such Taxes or Other
Taxes are required to be deducted or withheld from any amount otherwise
payable by the Shipowner to either Agent or any Lender under this
Agreement or the Floating Rate Note, then the Shipowner will pay to
such Agent or such Lender, as applicable, an additional amount
sufficient to enable such Person to receive the same amount that it
would have received on an after-tax basis if such Taxes or Other Taxes
had been payable or if such deduction or withholding had not been
required;
(ii) that the Shipowner shall, at the request of the affected
Lender or either Agent, execute and deliver to such Lender such further
instruments as may be necessary or desirable to effect the payment of
the increased amounts as provided for in subsection (i) above,
provided, however, that the Shipowner may not amend the Floating Rate
Note without the prior written consent of the Secretary;
(iii) that the Shipowner shall hold the Agents and the Lenders
harmless from and against the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 6.02) and any and
all liabilities (including, without limitation, penalties, interest and
expenses) arising from, or with respect to, any Taxes or Other Taxes
(whether or not properly or legally asserted) and whether paid, or
payable, by the Shipowner, either Agent, any Lender or any other
Person;
(iv) that, at the request of the Facility Agent, the Shipowner
shall provide the Facility Agent within the later of thirty (30)
calendar days after such request or thirty (30) calendar days after the
payment of such Taxes or Other Taxes, a document evidencing the payment
of such Taxes or Other Taxes by the Shipowner; and
19
(v) that each payment under this Section 6.02 shall be made
within thirty (30) Business Days from the date the Facility Agent makes
written demand therefor. Each demand for payment by the Facility Agent
under this Section 6.02(b)(v) for amounts paid or incurred by a Lender
or Agent shall be accompanied by a certificate (with accompanying
documentation supporting the demand) showing in reasonable detail the
basis for and the calculation of the amounts demanded, which
certificate, in the absence of manifest error, shall be conclusive and
binding for all purposes.
(c) Each Lender which is organized under the laws of a jurisdiction
other than the United States or any state therein shall, prior to the date such
Lender becomes a party hereto, furnish to the Facility Agent and the Shipowner,
such properly completed and duly signed forms and/or certificates as may be
necessary or advisable under United States law to claim any reduction of or
exemption from any Taxes or Other Taxes which the Shipowner may be required to
withhold from any payments owed under this Agreement or the Floating Rate Note
or with respect to which the Shipowner may be required to provide
indemnification under this Section 6.02. If any such Lender which is organized
under the laws of a jurisdiction other than the United States or any state
therein fails to furnish such forms and, as a result thereof, the Borrower is
required to pay withholding Taxes for the account of such Lender then,
notwithstanding the first sentence of Section 6.02(a), the Borrower shall be
permitted to withhold such Taxes from any amounts paid to such Lender under this
Agreement or the Floating Rate Note.
(d) Notwithstanding anything to the contrary contained herein, the
agreements in this Section 6.02 shall survive the termination of this Agreement
and the payment of the Floating Rate Note and all other amounts due hereunder.
6.03. Expenses. The Shipowner agrees, whether or not the transactions
hereby contemplated shall be consummated, to pay, or reimburse the Agents and
the Lenders promptly upon demand for the payment of all reasonable and duly
documented costs and expenses arising in connection with the preparation,
printing, execution, delivery, registration, implementation, amendment,
modification of or waiver or consent under this Agreement, the Floating Rate
Note, the Indenture and the Financing Offer, including, without limitation, the
reasonable and duly documented out-of-pocket expenses of the Agents and the
Lenders (incurred in respect of telecommunications, mail or courier service,
travel and the like), and the fees and expenses of counsel for the Agents and
the Lenders. The Shipowner shall also pay all of the costs and expenses
(including, without limitation, the fees and expenses of counsel) incurred by or
charged to the Agents and the Lenders in connection with the enforcement of this
Agreement, the Floating Rate Note, the Indenture or the Financing Offer or the
protection or preservation of any right or claim of the Facility Agent or any
Lender arising out of this Agreement, the Floating Rate Note, the Indenture or
the Financing Offer.
6.04. Additional or Increased Costs.
(a) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to a Lender of agreeing to make or making, funding or maintaining the
20
Advances or the Credit Facility, then the Shipowner shall from time to time,
upon demand by a Lender, pay to such Lender additional amounts sufficient to
compensate such Lender for such increased cost.
(b) If a Lender determines that compliance with any law or regulation
or any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) affects or would affect the
amount of capital required to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder and other
commitments of this type, then, upon demand by such Lender, the Shipowner shall
immediately pay to the Facility Agent, for the benefit of such Lender, from time
to time as specified by the Facility Agent, additional amounts sufficient to
compensate such Lender or such corporation in the light of such circumstances,
to the extent that such Lender reasonably determines such increase in capital to
be allocable to the existence of its commitment to lend hereunder.
(c) Each demand for payment by the Facility Agent under this Section
6.04 shall be accompanied by a certificate showing in reasonable detail the
basis for the calculation of the amounts demanded, which certificate, in the
absence of manifest error, shall be conclusive and binding for all purposes.
(d) Notwithstanding anything to the contrary contained herein, the
agreements in this Section 6.04 shall survive the termination of this Agreement
and the payment of the Floating Rate Note and all other amounts due hereunder.
(e) Each Lender shall take such reasonable steps as it shall determine
to minimize amounts demanded under this Section 6.04; provided that no Lender
shall be obligated to take any actions under this Section 6.04 if such Lender
has determined, that such actions would cause it to incur any material costs or
expenses or would otherwise be disadvantageous to it in any material respect. In
the event that a Lender transfers the booking office of the Credit Facility or
the Floating Rate Note to minimize amounts demanded under this Section 6.04, any
costs and expenses incurred in such transfer shall be paid by the Shipowner on
demand by such Lender.
(f) The Facility Agent on behalf of each Lender shall notify the
Shipowner of any event occurring after the date of this Agreement which entitles
such Lender to compensation pursuant to this Section 6.04, as promptly as
practicable, and in any event within ninety (90) days after it has knowledge of
such event and has determined that a request for compensation hereunder shall be
made. The Shipowner shall not be obligated to reimburse any Lender for any loss
or cost incurred more than ninety (90) days prior to delivery of notice to the
Shipowner by the Lender requesting compensation under this Section 6.04.
SECTION 7 PAYMENTS
7.01. Method of Payment.
(a) (i) All payments to be made by the Shipowner under this Agreement
and the Floating Rate Note shall be made without set-off or counterclaim in
Dollars in immediately
21
available and freely transferable funds no later than 11:00 A.M. (New York City
time) on the date on which due. Except as provided in Section 7.01(a)(ii), all
payments to be made by the Shipowner or the Agents hereunder shall be made to
(A) the Primary Lender (for the account of Govco Incorporated, its successors
and assigns), (B) the Alternate Lender (for the account of Citibank, N.A., its
successors and assigns), (C) the Facility Agent (for the account of Citibank
International plc, its successors and assigns), (D) the Administrative Agent
(for the account of Citicorp North America, Inc., its successors and assigns),
or (E) any other Lender (for the account of such Lender, its successors and
assigns), in each case to the Facility Agent (for the account of Citibank
International plc, its successors and assigns) at Citibank, N.A., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, DDA. Account No. 00000000, Attn: Loans Agency.
Re Xxxxxx Xxxxxxx LLC. Upon receipt thereof by the Facility Agent, the Facility
Agent shall forthwith forward such funds to the party entitled thereto pursuant
to the written instructions provided by such party to the Facility Agent in
accordance with Section 11.02 and (ii) the Shipowner shall pay the principal and
the Applicable Interest Rate on the Floating Rate Note to the Indenture Trustee
and all other amounts due under this Agreement directly to the Person entitled
thereto, in each case, by wire transfer in same day and immediately available
and freely transferable funds. Wire transfer instructions shall be provided to
the Shipowner. Until further notice, wire instructions for the Indenture Trustee
are as follows:
Beneficiary Name: US Bank Trust
Reference to Beneficiary: 47300414
Obl: Attn: Xxxxx Xxxxxxxxx
Reference: Xxxxxx
(b) Except as otherwise provided herein, whenever any payment would
otherwise fall due on a day which is not a Business Day, the due date for
payment shall be the immediately succeeding Business Day, and interest and fees
shall be computed in accordance with Section 11.01.
(c) Whenever a sum is required to be paid to the Facility Agent under
this Agreement for the account of another Person, the Facility Agent shall not
be obligated to make such sum available to such other Person unless and until
the Facility Agent shall have established to its satisfaction that it has
actually received payment of such sum. Notwithstanding the foregoing, unless it
has received actual notice to the contrary, the Facility Agent may (but shall
not be obligated to) assume on the date of any Advance or any other payment
required to be made by any Lender hereunder that such Lender has made available
to the Facility Agent such Advance or other payment and the Facility Agent may
(but shall not be required to) make available to the Shipowner on such date a
corresponding amount in reliance upon such assumption. Additionally, the
Facility Agent may (but shall not be obligated to) assume on the date of any
payment required to be made by the Shipowner hereunder that the Shipowner has
made available to the Facility Agent such payment and the Facility Agent may
(but shall not be required to) make available to the Lenders on such date a
corresponding amount in reliance upon such assumption. If and to the extent that
either (i) the Lender shall not in fact have made such Advance or other payment
available to the Facility Agent and the Facility Agent has made available a
corresponding amount to the Shipowner in reliance on the above-described
assumptions or (ii) the Shipowner has not in fact made such payment and the
Facility Agent has made available a corresponding amount to the Lender in
reliance on the above-described
22
assumptions, then, in either such case, such Lender agrees to repay to the
Facility Agent forthwith on demand such corresponding amount together with an
amount sufficient to indemnify the Facility Agent against any cost or loss it
may have suffered or incurred by reason of its having paid out such sum prior to
receipt thereof.
7.02. Application of Payments; Subordination of Lenders' Rights. In the
absence of an Indenture Default, the Agents and the Lenders shall apply payments
received by it under this Agreement and the Floating Rate Note (whether at
Stated Maturity, by reason of acceleration, prepayment or otherwise), in the
following order of priority: (i) Guaranteed Interest; (ii) installments of
principal due under the Floating Rate Note; (iii) interest due other than the
amount described in clause (i) above; (iv) all amounts due under Section 6.01;
and (v) all other amounts due under this Agreement and not otherwise provided
for in this Section 7.02. Upon the occurrence of an Indenture Default, the
Lender shall hold any payments it receives after an Indenture Default from, or
on behalf of, the Shipowner under this Agreement (including payments under
Section 6.01 and payments in respect of any claims pertaining to this Agreement,
including, without limitation, claims for fraud, misrepresentation,
misappropriation of funds or willful misconduct) and any related agreement
(excluding payments received from the Secretary to pay Guaranteed Interest on or
principal of the Floating Rate Note) and shall promptly deliver such payments to
the Secretary (without deduction for any setoff or counterclaim of either Agent
or any Lender) if the Secretary has been required to honor the Guarantee. All
such amounts received during an Indenture Default and delivered to the Secretary
in accordance with the preceding sentence shall be applied first to pay, satisfy
and discharge all amounts owed by the Shipowner to the Secretary under the
Secretary's Note and the Mortgage and then, if any remain, to pay, satisfy and
discharge any and all amounts owed to the Agents and the Lenders.
SECTION 8 REPRESENTATIONS AND WARRANTIES BY THE SHIPOWNER
8.01. Representations and Warranties. The Shipowner represents and
warrants to the Lender that, as of the Closing Date:
(a) Existence and Authority. The Shipowner is duly organized, validly
existing and in good standing under the laws of the State of Delaware, has been
duly qualified to do business in, and is in good standing as a foreign
corporation in each jurisdiction in which the conduct of its business or the
ownership of its properties requires it to be so qualified, except where failure
to be so qualified would not result in a material adverse effect on the
Shipowner's business, financial condition, prospects, operations or its ability
to repay the Advances, and has full power, authority and legal right to own its
properties and conduct its business as it is presently now conducted.
The Shipowner has full power, authority and legal right (i) to execute
and deliver this Agreement, the Floating Rate Note and the Indenture, (ii) to
perform and observe the terms and provisions of each of said documents to be
performed or observed by it, (iii) to consummate the transactions contemplated
thereby and (iv) to own its properties (including, without limitation, the
Vessel) and to conduct its business as presently conducted and as proposed to be
conducted.
23
(b) Government and Other Authorizations. All consents, licenses,
authorizations and approvals of, filings with, and exemptions by, any
Governmental Authority and any other Persons that are necessary or advisable:
(i) for the execution, delivery, performance and observance by the Shipowner of
this Agreement, the Floating Rate Note, the Indenture and any other Transaction
Documents to which it is a party and (ii) for the validity, binding effect and
enforceability as against the Shipowner of this Agreement, the Floating Rate
Note, the Indenture and the other Transaction Documents to which it is a party
have been obtained and are in full force and effect. Neither the Indenture nor
the Floating Rate Note is required to be qualified under the Trust Indenture Act
of 1939 or otherwise to be registered under any securities laws.
(c) Restrictions. The execution, delivery and performance or observance
by the Shipowner of the terms of, and consummation of the transactions
contemplated by, this Agreement, the Floating Rate Note, the Indenture and the
other Transaction Documents to which the Shipowner is a party do not and will
not conflict with or result in a breach or violation of: (i) its limited
liability company agreement; (ii) any applicable federal or state law of the
United States, or any other ordinance, decree, constitutional provision,
regulation or other requirement of any Governmental Authority (including,
without limitation, any restriction on interest that may be paid by the
Shipowner); or (iii) any order, writ, injunction, judgment or decree of any
court or other tribunal binding or otherwise with jurisdiction over the
Shipowner. Further, the execution, delivery and performance or observance of the
terms of, and consummation by the Shipowner of the transactions contemplated by
this Agreement, the Floating Rate Note, the Indenture and the other Transaction
Documents to which it is a party do not and will not conflict with or result in
a breach of any agreement or instrument to which the Shipowner is a party, or by
which it or any of its revenues, properties or assets may be subject, or result
in the creation or imposition of any Lien upon any of the revenues, properties
or assets of the Shipowner pursuant to any such agreement or instrument (other
than the Liens created by the Shipowner Documents).
(d) Binding Effect. This Agreement, the Indenture, the Floating Rate
Note and any other Transaction Documents to which it is a party have been duly
executed and delivered by the Shipowner. Each of this Agreement, the Floating
Rate Note, the Indenture and such other Transaction Documents constitutes a
direct, general and unconditional obligation of the Shipowner which is legal,
valid and binding upon it and enforceable against it in accordance with its
respective terms, except as limited by bankruptcy, fraudulent transfer,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally. All obligations evidenced by the Floating Rate Note will be entitled
to the benefits of the Guarantees and the Authorization Agreement.
(e) Legal Proceedings. No legal proceedings are pending or, to the best
of the Shipowner's knowledge, threatened before any court, arbitrator, or
governmental agency which might: (i) materially and adversely affect the
Shipowner's condition (financial or otherwise), business, prospects or
operations; (ii) restrain or enjoin or have the effect of restraining or
enjoining the performance or observance by the Shipowner of the terms and
conditions of any of this Agreement, the Indenture, the Floating Rate Note or
any other Transaction Documents; or (iii) in any other manner question the
validity, binding effect or enforceability against the Shipowner of any of this
Agreement, the Indenture, the Floating Rate Note or any other Transaction
Documents.
24
(f) Use of the Vessel. The Vessel will be used for lawful purposes.
(g) No Taxes. There is no Tax imposed on or in connection with (i) the
execution or delivery of this Agreement, the Indenture, the Financing Offer, the
Floating Rate Note or the other Transaction Documents or (ii) the enforcement of
this Agreement, the Indenture, the Financing Offer, the Floating Rate Note or
the other Transaction Documents; provided that no representation is made as to
any withholding of payments for Taxes as to any Lender organized under the laws
of a jurisdiction other than the United States or any state therein and which
does not provide the forms or certificates contemplated by Section 6.02(c).
(h) Xxxxxx Offshore's Financial Statements. Xxxxxx Offshore's Financial
Statements present fairly the consolidated financial condition of Xxxxxx
Offshore and its consolidated subsidiaries at the date of such statements and
the results of consolidated operations for such fiscal year. Xxxxxx Offshore's
Financial Statements have been prepared in accordance with generally accepted
accounting principles in the United States consistently applied. Except as fully
reflected in such Financial Statements, there are no liabilities or obligations
with respect to Xxxxxx Offshore, the Shipowner or any other subsidiary of Xxxxxx
Offshore of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) for the period to which Xxxxxx Offshore's
Financial Statements relate that, either individually or in the aggregate, would
be material to the Shipowner. "Xxxxxx Offshore's Financial Statements" shall
mean the consolidated year-end financial statements of Xxxxxx Offshore and its
subsidiaries furnished to the Facility Agent prior to the date of this
Agreement.
(i) Defaults. No Event of Default has occurred and is continuing and no
event or circumstance has occurred and is continuing which with the passage of
time, the giving of notice or both would constitute an Event of Default.
8.02. Covenants of the Shipowner. The Shipowner covenants that until
all amounts owing under this Agreement and the Floating Rate Note have been paid
in full, the Shipowner will, unless the Agents and the Lenders shall have
consented in writing:
(a) Compliance with Agreements and Applicable Laws. The Shipowner shall
perform each of its obligations under this Agreement and the other Transaction
Documents and comply with all federal, state and local laws and regulations
applicable to it, including those relating to labor matters and environmental
laws, the payment of taxes and other liabilities and the filing of tax returns
with respect thereto.
(b) Maintenance of Existence and Conduct of Business. The Shipowner
shall: (i) do or cause to be done all things necessary to preserve and keep in
full force and effect its existence as a limited liability company and its
rights, licenses, permits, charters, franchises and registrations and (ii)
continue to conduct its business substantially as now conducted or as otherwise
contemplated to be conducted.
(c) Use of Proceeds. The Shipowner shall use the proceeds from each
Advance solely to finance the actual cost of the Vessel, including the
Construction Period Interest and the Guarantee Fees, and shall use the proceeds
from the issuance of any Bond to repay in full amounts owed under the Floating
Rate Note. No proceeds of any Advance will be used to
25
purchase or carry any "margin stock" (as such term is defined in applicable
regulations of the Board of Governors of the Federal Reserve System as in effect
from time to time) or to extend credit to others for the purpose of purchasing
or carrying any margin stock.
(d) Books and Records; Access. The Shipowner shall keep proper books of
record and account in which full and correct entries shall be made of all
financial transactions and the assets and business of the Shipowner in
accordance with generally accepted accounting principles, and shall permit the
Facility Agent or any Affiliate thereof to make or cause to be made inspections
and audits of any such books, records and papers and to make extracts therefrom
and copies thereof from time to time as required in order to assure that the
Shipowner will be in compliance with its obligations under this Agreement and
the other Transaction Documents.
(e) Notice of Defaults. The Shipowner shall promptly, but in no event
later than five (5) Business Days after a responsible officer obtains actual
knowledge of the occurrence of an Indenture Default or an Event of Default (or
event which, with giving of notice or the passage of time, would constitute an
Indenture Default or Event of Default), notify the Facility Agent and the
Indenture Trustee of any such event and forward to the Facility Agent a copy of
any report of such event required by the Transaction Documents.
(f) Financial Reports. Beginning with the fiscal year in which this
Agreement is executed and continuing until all amounts owing under this
Agreement and the Floating Rate Note have been paid in full, the Shipowner shall
cause Xxxxxx Offshore to, concurrently with delivery to the Secretary, furnish
to the Facility Agent a copy of all financial reports furnished to the Secretary
pursuant to the Title XI Reserve Fund and Financial Agreement.
(g) Litigation; Material Events. The Shipowner shall promptly, but in
no event later than five (5) Business Days after a responsible officer obtains
actual knowledge thereof, notify the Facility Agent of the occurrence of any
legal proceedings of the sort described in Section 8.01(e) and of any other
legal proceedings or other event which might be reasonably likely to have a
material adverse effect on the Shipowner's condition (financial or otherwise),
business or operations or its ability to perform its obligations under
Transaction Documents to which the Shipowner is a party.
(h) Other Acts. From time to time, with the prior written consent of
the Secretary, the Shipowner shall do and perform any and all acts and execute
any and all documents as may be necessary or as reasonably requested by the
Facility Agent or the Indenture Trustee in order to effect the purposes of this
Agreement and to protect the interests of the Lenders in the Floating Rate Note
and the interests of the Lenders in the Guarantee.
(i) Successors. The Shipowner shall require that any successor to all
or substantially all of its business as a result of any merger or consolidation
with any other entity; dissolution or termination of legal existence; sale,
lease, transfer or other disposal of any substantial part of its properties or
any of its properties essential to the conduct of its business or operations, as
now or hereafter conducted; any change in control; any agreement to do any of,
or any combination of, the foregoing, to assume all of the Shipowner's
indebtedness, liabilities and obligations under
26
this Agreement and the Floating Rate Note pursuant to documentation in form and
substance satisfactory to the Agents, the Lenders, and the Secretary.
(j) Continuing Accuracy of Representation and Warranties. The Shipowner
shall promptly notify the Facility Agent if at any time any representation or
warranty contained in Section 8.01 of this Agreement shall no longer be true or
accurate, provided, however, the accuracy of any representation or warranty
subsequent to the Closing Date, or the giving of a notice hereunder, shall have
no effect whatsoever on the continued effect of each and every provision of this
Agreement, including, but not limited to, the obligation of the Primary Lender
and the Alternate Lender to extend Advances in accordance with Section 5.02 of
this Agreement.
(k) Mandatory Redemption. In the event that the Floating Rate Note is
required to be redeemed pursuant to paragraph (b)(2) of Article Third of the
Indenture (without giving effect to any amendments after the date hereof), then
the Shipowner shall, at its expense, unless the Secretary has waived in writing
the requirement that the Floating Rate Note be redeemed on such Mandatory Note
Redemption Date, undertake all actions required on its part on or prior to the
Mandatory Note Redemption Date to redeem the Outstanding Principal (and, if
applicable, the Guaranteed Interest) of the Floating Rate Note in full or
otherwise redeem the Floating Rate Note in full. Without limiting the foregoing,
unless the Shipowner has access to immediately available funds with which to
redeem in full the Outstanding Principal (and, if applicable, the Guaranteed
Interest) of the Floating Rate Note, the Shipowner shall (i) cooperate with the
Agents, the Alternate Lender and Xxxxxxx Xxxxx Xxxxxx Inc. (or any Affiliate
thereof which agrees to underwrite Bonds in order to refinance the Floating Rate
Note) in the preparation of a prospectus or placement memorandum relating to
such Bonds, (ii) provide Xxxxxxx Xxxxx Barney Inc. (or any such other Affiliate
thereof which agrees to underwrite the Bonds) with access to its officers and
agents in connection with the issuance of such Bonds, (iii) provide such
information and shall undertake such other actions as may be reasonably
requested by the Agents, the Alternate Lender and/or Xxxxxxx Xxxxx Xxxxxx Inc.
(and/or any such other Affiliate thereof which agrees to underwrite the Bonds)
in order to ensure a timely issuance of Bonds and (iv) unless the Secretary has
waived the requirement that the Floating Rate Note be redeemed on such Mandatory
Note Redemption Date, execute a Bond Purchase Agreement providing for the
issuance and sale of Bonds in an aggregate principal amount equal to or greater
than the Outstanding Principal amount of the Floating Rate Note and providing
for the application of proceeds to prepay the Floating Rate Note or otherwise
redeem such Floating Rate Note in full.
SECTION 9 EVENTS OF DEFAULT
9.01. Events of Default. Upon the occurrence of any of the following
events or conditions (each, an "Event of Default"):
(a) any failure by the Shipowner to pay any amount owed under this
Agreement, but which is not guaranteed by the Secretary, which is not paid
within three (3) Business Days of the date such other amounts became due and
payable hereunder; or
(b) any failure by the Shipowner to comply with its obligations under
Section 8.02(c) or 8.02(e), or any failure by the Shipowner to perform or comply
with its other obligations set forth in this Agreement (exclusive of any events
specified as an Event of Default in any other
27
subsection of this Section 9.01), which failure to comply with its other
obligations, if capable of being cured, remains uncured for a period of thirty
(30) days after written notice thereof has been given to the Shipowner by the
Facility Agent; or
(c) the Shipowner shall be unable to pay its debts when and as they
fall due or shall admit in writing its inability to pay its debts as they fall
due or shall become insolvent; or the Shipowner shall apply for or consent to
the appointment of any liquidator, receiver, trustee or administrator for all or
a substantial part of its business, properties, assets or revenues; or a
liquidator, receiver, trustee or administrator shall be appointed for the
Shipowner and such appointment shall continue undismissed, undischarged or
unstayed for a period of forty-five (45) days, or the Shipowner shall institute
(by petition, application, answer, consent or otherwise) any bankruptcy,
arrangement, readjustment of debt, dissolution, liquidation or similar executory
or judicial proceeding; or a bankruptcy, arrangement, readjustment of debt,
dissolution, liquidation or similar executory or judicial proceeding shall be
instituted against the Shipowner shall remain undismissed, undischarged or
unstayed for a period of forty-five (45) days; or
(d) an Indenture Default has occurred and is continuing and, if such
Indenture Default arises under Section 6.01(a)(2) of the Indenture, the
Secretary's Notice given with respect thereto remains in full force and effect;
then, and in any such event, and at any time thereafter, if such event is
continuing, and if there is no Indenture Default (or if there is an Indenture
Default, only after the Secretary has received all payments due under the
Secretary's Note and the Mortgage), the Facility Agent or any Lender (by written
notice to the Shipowner), shall have the right to institute any judicial or
other proceedings under this Agreement to recover all amounts then owing under
this Agreement. The Lenders agree that so long as an Indenture Default exists,
all amounts received during such period from, or on behalf of, the Shipowner
shall be applied in the manner set forth in Section 7.02. Notwithstanding an
Event of Default, the Lenders may not terminate the Available Amount of the
Credit Facility without the Secretary's consent; provided, however, that the
Shipowner's use of the Available Amount of the Credit Facility shall remain
subject to the requirements of Sections 2.01, 2.02, 2.03, 3.01 and 5.02. Except
as expressly provided above in this Section 9.01, presentment, demand, protest
and all other notices of any kind are hereby expressly waived. Notwithstanding
any other provision of this Agreement, if Section 9.01(d) is applicable, the
Lender may file appropriate claims in connection therewith, but shall apply any
funds collected as a consequence of said filings in accordance with the
provisions of Section 7.02 of this Agreement.
SECTION 10 GOVERNING LAW AND JURISDICTION
10.01. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD
TO ITS PRINCIPLES OF CONFLICTS OF LAW OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).
10.02. Submission to Jurisdiction. Each of the Shipowner and the
Lenders hereby irrevocably agrees that any legal suit, action or proceeding
arising out of or relating to this Agreement, the Financing Offer, or any of the
transactions contemplated hereby, may be instituted by the other parties hereto
in the Federal Courts (or, if such court refuses to take
28
jurisdiction, any New York State Court) sitting in the Borough of Manhattan,
City of New York, State of New York and hereby irrevocably waives, to the
fullest extent permitted by law, any objection which it may have now or
hereafter to the laying of the venue or any objection based on forum non
conveniens, or based on the grounds of jurisdiction with respect to any such
legal suit, action or proceeding and irrevocably submits generally and
unconditionally to the jurisdiction of any such court in any such suit, action
or proceeding. Each of the Shipowner and the Lenders agrees that a judgment,
after exhaustion of all available appeals, in any such action or proceeding
shall be conclusive and binding upon it and may be enforced in any other
jurisdiction by suit upon such judgment, a certified copy of which shall be
conclusive evidence of the judgment. Each of the Shipowner and the Lenders
waives personal service of any summons, complaint, or other process, which
service may be made in accordance with Section 10.03 of this Agreement or by any
other means permitted by New York law.
10.03. Service of Process.
(a) In the case of the courts of the State of New York or of the
Federal courts sitting in the State of New York, the Shipowner hereby
designates, appoints and empowers Xxxx Xxxxxxx, Xxxxxxx Xxxxxx and Xxxxxx, 1370
Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized
agent to accept, receive and acknowledge, for and on behalf of such party, its
properties and revenues, service of any and all process which may be served in
any action, suit or proceeding of the nature referred to above in the State of
New York, which appointment shall be irrevocable until the appointment and
acceptance of a successor authorized agent pursuant to the provisions of Section
10.03(d).
(b) The Shipowner further agrees that such service of process may be
made personally or by mailing or delivering a copy of the summons and complaint
or other legal process in any such legal suit, action or proceeding to the
Shipowner in care of its agent designated above at the aforesaid address, and
such agent is hereby authorized to accept, receive and acknowledge the same for
and on behalf of the Shipowner and to admit service with respect thereto.
Service upon such agent shall be deemed to be personal service on the Shipowner
and shall be legal and binding upon the Shipowner for all purposes
notwithstanding any failure to mail copies of such legal process to the
Shipowner or any failure on the part of the Shipowner to receive the same, and
shall be deemed completed upon the delivery thereof to such agent whether or not
such agent shall give notice thereof to the Shipowner or upon the earliest other
date permitted by applicable law (including, without limitation, the United
States Foreign Sovereign Immunities Act of 1976, as amended).
(c) To the extent permitted by applicable law, the Shipowner further
irrevocably agrees to the service of process of any of the aforementioned courts
in any suit, action or proceeding by the mailing of copies thereof by certified
mail, postage prepaid, return receipt requested, to the Shipowner at the address
referenced in Section 11.02, such service to be effective upon the date
indicated on the postal receipt returned from the Shipowner.
(d) The Shipowner agrees that it will at all times continuously
maintain an agent to receive service of process in the State of New York on
behalf of itself and its properties and revenues, and, in the event that for any
reason its agent designated above shall not serve as its agent to receive
service of process in the State of New York on its behalf, the Shipowner shall
29
promptly appoint a successor satisfactory to the Facility Agent so to serve,
advise the Facility Agent of such appointment, and deliver to the Facility Agent
evidence in writing of the successor agent's acceptance of such appointment. The
foregoing provisions constitute, among other things, a special arrangement for
service between the parties to this Agreement for the purposes of 28 U.S.C. ss.
1608.
10.04. Waiver of Security Requirements. To the extent the Shipowner
may, in any action or proceeding arising out of or relating to this Agreement be
entitled under applicable law to require or claim that the Facility Agent, the
Primary Lender Agent or the Lenders post security for costs or take similar
action, the Shipowner hereby irrevocably waives and agrees not to claim the
benefit of such entitlement.
10.05. No Limitation. Nothing in this Section 10 shall affect the right
of either any Agent or the Lenders to serve process in any manner permitted by
law or to commence legal proceedings or otherwise proceed against the Shipowner
in any jurisdiction; provided, however, that except as provided in Section 9.01,
in the event of an Indenture Default, neither any Agent nor any Lender may
proceed against the Shipowner without the Secretary's consent unless the
Secretary has received full payment under the Secretary's Note.
SECTION 11 MISCELLANEOUS
11.01. Computations. Each determination of an interest rate, fee or
other amounts by the Lender or any other Person pursuant to any provision of
this Agreement, the Financing Offer or the Floating Rate Note, in the absence of
manifest error, shall be conclusive and binding on the Shipowner. All
computations of interest and fees hereunder and under the Floating Rate Note and
the Financing Offer shall be made on the basis of a year of 360 days and actual
days elapsed. The Secretary or the Indenture Trustee may request, and the
applicable Lender shall comply with any such request for, supporting
documentation for information supplied by such Lender to the Secretary or the
Indenture Trustee.
11.02. Notices. Except as otherwise specified, all notices given
hereunder shall be in writing, and shall be given by mail, telecopier, telex or
personal delivery and shall be deemed to be given for the purposes of this
Agreement on the day that such notice is received by the intended recipient
thereof. Unless otherwise specified in a notice delivered in accordance with
this Section 11.02, all notices shall be delivered to the parties hereto and to
the Indenture Trustee and the Secretary at their respective addresses indicated
below:
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To the Facility Agent and the Lenders:
0xx Xxxxx
Xxxxxxxxx Xxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxx
XX00 0XX
Attention: Loans Agency
Fax: 00 00 0000 0000/4484
Telephone: 00 00 0000 0000
With copy to:
Structured Trade Finance
5th Floor
Citigroup Centre
00 Xxxxxx Xxxxxx
Xxxxxx
X00 0XX
Attention: Xxxxxxx Xxxxxxxxxx/Xxxxxx Xxxxx
Fax: 00 00 0000 0000
Telephone: 00 00 0000 0000/4856
To the Primary Lender Agent:
Address: CITICORP NORTH AMERICA, INC.
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
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To the Shipowner:
Address: XXXXXX XXXXXXX LLC
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Secretary:
Address: SECRETARY OF TRANSPORTATION
c/o Maritime Administrator
000 Xxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Office of Ship Financing
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Indenture Trustee:
Address: U.S. BANK NATIONAL ASSOCIATION
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
11.03. Disposition of Indebtedness. Any Lender, as provided in the
Indenture, may sell, assign, transfer, negotiate, or otherwise dispose of all or
any part of its interest in, or all or any part of the Shipowner's indebtedness
under, this Agreement and the Floating Rate Note to any party (collectively, a
"Disposition of Indebtedness"), and any such party shall enjoy all the rights
and privileges of a Lender under this Agreement and the Floating Rate Note to
the extent of the interest assigned thereby; provided, however, that (i) no
Lender may assign any commitment to fund any Advance hereunder without the prior
written consent of the Facility Agent, the Shipowner and the Secretary (which
consent shall not be unreasonably withheld or delayed); (ii) each Disposition of
Indebtedness to any Person shall require the prior written consent of the
Facility Agent (which consent shall not be unreasonably withheld or delayed);
(iii) each Disposition of Indebtedness to any Person (other than to Citibank,
N.A., any Affiliate of Citibank, N.A., any other Alternate Lender previously
approved under this clause (iii), or any substitute Primary Lender which is
managed by the Primary Lender Agent and whose short-term commercial paper rating
is greater than or equivalent to that of the Primary Lender at the time of such
assignment) shall require the prior written consent of the Shipowner and the
Secretary (which consent shall not be unreasonably withheld or delayed); (iv) if
such assignee Lender is organized under the laws of a jurisdiction other than
the United States, then such assignee must deliver to the Facility Agent and the
Shipowner the documents contemplated by Section 6.02(c); (v)
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in the event of any assignment by any Alternate Lender to any other Alternate
Lender, no such assignment shall become effective unless and until the assigning
Alternate Lender shall have paid (or shall have caused its assignee to have
paid) to the Facility Agent a processing and recordation fee of $3,000, which
fee shall compensate the Facility Agent for the costs and expenses of
documenting such assignment and payment of which fee shall relieve the Shipowner
of any obligation to pay such costs and expenses; provided further, however,
that any Lender may pledge or grant participations in all or any part of its
interest in all or any part of the Shipowner's indebtedness under this Agreement
and the Floating Rate Note, without the consent of the Facility Agent or the
Shipowner (w) to any federal reserve bank as security for its obligations to
such federal reserve bank, (x) so long as prior written notice of such
assignment is given to the Facility Agent, the Shipowner and the Secretary, to
any Affiliate of the Lender or to any substitute Primary Lender described in
clause (iii) of this sentence and (y) no such pledge or grant of a participation
described in the foregoing proviso shall relieve the Alternate Lender of its
commitment to fund all Advances hereunder. The Shipowner shall, at the request
of the Facility Agent, execute and deliver to the Facility Agent for the benefit
of the assigning Lender or to any party that such Lender may designate, any such
further instruments as may be necessary or desirable to give full force and
effect to a Disposition of Indebtedness by such Lender.
11.04. Disclaimer. Neither any Agent nor any Lender shall be
responsible in any way for the performance of the Shipyard with respect to the
Vessel, and no claim against the Shipyard or any other Person will affect the
obligations of the Shipowner under this Agreement or the Floating Rate Note.
11.05. No Waiver; Remedies Cumulative. Except as set forth herein, no
failure or delay on the part of any Agent or any Lender in exercising any right,
power or privilege under this Agreement, the Floating Rate Note or the Indenture
or any other Transaction Document and no course of dealing between or among the
Shipowner, the Agents and the Lenders shall operate as a waiver of the rights of
any Agent and/or the Lenders as against the Shipowner under this Agreement; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under the Floating Rate Note or the Indenture preclude the Agents and the
Lenders from exercising against each other any other right, power or privilege
hereunder or thereunder. The rights and remedies expressly provided herein are
cumulative and not exclusive of any rights or remedies which the Agents and the
Lenders would otherwise have under the Transaction Documents. No notice to or
demand on the Shipowner in any case shall entitle the Shipowner to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Agent or any Lender under this Agreement to any
other or further action in any circumstances without notice or demand.
Notwithstanding any other provision to the contrary herein, no provision in this
Agreement or any other related agreement preserves any rights in favor of the
parties against the Secretary in the event that either party fails or delays to
exercise any rights, powers, or privileges under this Agreement, the Floating
Rate Note or the Indenture or engages in any particular course of dealing.
Nothing in this Section 11.05 shall operate to override any limitations set
forth in the Transaction Documents on the rights, powers, remedies or privileges
of any Agent and/or the Lenders.
11.06. Currency. All payments of principal, interest, fees or other
amounts due hereunder and under the Floating Rate Note shall be made in Dollars,
regardless of any law, rule,
33
regulation or statute, whether now or hereafter in existence or in effect in
any jurisdiction, which affects or purports to affect such obligations.
11.07. Severability. To the extent permitted by applicable law, the
illegality or unenforceability of any provision of this Agreement shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement.
11.08. Amendment or Waiver. This Agreement may not be changed,
discharged or terminated without the written consent of the parties hereto, and
no provision hereof may be waived without the written consent of the party to be
bound thereby. There may be no change, discharge, termination or claim of waiver
of the terms of this Agreement without the prior written consent of the
Secretary, who is entitled to enforce his rights under this Agreement as an
intended third party beneficiary to this Agreement. The parties hereto
acknowledge, however, that nothing in this Agreement creates in either the
Shipowner or any Agent or any Lender any right whatsoever against the Secretary.
11.09. Indemnification. Without limiting any other rights that the
Agents and the Lenders may have hereunder or under applicable law, the Shipowner
hereby agrees to indemnify each Agent and each Lender from and against any and
all damages, losses, claims, liabilities and related costs and expenses,
including reasonable attorneys' fees and Advances (all the foregoing being
collectively referred to as "Indemnified Amounts") awarded against or incurred
by such Agent or such Lender arising out of or as a result of this Agreement or
the Floating Rate Note excluding, however, Indemnified Amounts to the extent
determined by a court of competent jurisdiction in a final, non-appealable
order, to have resulted from gross negligence or willful misconduct on the part
of the Facility Agent, the Primary Lender Agent, the Primary Lender or the
Alternate Lender, as the case may be. In the event of an Indenture Default, all
amounts received by the Lender pursuant to such indemnification after an
Indenture Default shall be held and paid in the manner required by Section 7.02.
11.10. No Proceedings. Each of the Shipowner, the Alternate Lender and
the Agents hereby agrees that it will not institute against, or join any other
person in instituting against, the Primary Lender, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding, or any other
proceeding under any federal or state bankruptcy or similar law, so long as any
commercial paper issued by the Primary Lender shall be outstanding or there
shall not have elapsed one year plus one day since the last day on which any
such commercial paper shall have been outstanding.
11.11. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, but subject to Section 7.02, if any Unpaid
Amounts are owing by the Borrower at any time, any Agent and/or any Lender may
offset any indebtedness owing from such Agent, such Lender or any Affiliate
thereof to the Shipowner (including all account balances, whether provisional or
final and whether or not collected or available) and may apply such offset
amount toward the payment of such Unpaid Amounts; provided, however, that if an
Indenture Default has occurred and is continuing, any such amounts so received
shall be held and paid in the manner required by Section 7.02.
34
11.12. Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that the Shipowner may not
assign any of its rights or obligations hereunder without the prior written
consent of the Agents, the Secretary and the Lenders and the Lenders may not
assign any of their rights and obligations hereunder except as provided in
Section 11.03.
11.13. Waiver of Jury Trial. Each of the Shipowner, the Agents and the
Lenders hereby waives its respective rights to a trial by jury of any claim or
cause of action based upon or arising out of or related to this Agreement, any
assignment or the transactions contemplated hereby, in any action, proceeding or
other litigation of any type brought by any party against the other parties,
whether with respect to contract claims, tort claims, or otherwise. Each of the
Shipowner, the Agents and the Lenders agrees that any such claim or cause of
action shall be tried by a court trial without a jury. Without limiting the
foregoing, the parties further agree that their respective right to a trial by
jury is waived by operation of this section as to any action, counterclaim or
other proceeding which seeks, in whole or in part, to challenge the validity or
enforceability of this Agreement, any assignment or any provision hereof or
thereof. This waiver shall apply to any subsequent amendments, renewals,
supplements or modifications to this Agreement or any assignment.
11.14. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
Agreement. Delivery of an executed counterpart of a signature page to this
Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.
11.15. Conflicts with Indenture. Notwithstanding the provisions of this
Agreement, in any conflict between this Agreement and the provisions of the
Indenture or the Shipowner Documents, the Indenture and/or the Shipowner
Documents shall govern the agreement between the parties hereto, but only with
respect to the subject matter thereof. Notwithstanding the previous sentence,
any provision in the Indenture (or any other agreement the Shipowner has entered
into with any other Person) purporting to release the Shipowner of any
indebtedness, liability or obligation shall not apply to any indebtedness,
liability or obligation of the Shipowner hereunder and no termination of the
Indenture (or any other agreement the Shipowner has entered into with any other
Person) shall affect the continued effectiveness of this Agreement, which shall
continue in full force and effect until the Credit Facility has been terminated
and all indebtedness, liabilities and obligations of the Shipowner hereunder
have been fully discharged and satisfied, the Floating Rate Note has been paid,
satisfied and discharged in full, and there has elapsed a year and a day from
the last payment received from, or on behalf of, the Shipowner. The parties
hereto acknowledge and agree that the Lenders and the Agents are not
beneficiaries of the Shipowner Documents and certain other documents relating to
the Indenture, and nothing in this Section 11.15 purports to confer any such
rights upon the Lenders or the Agents.
11.16. Entire Agreement. This Agreement, the Financing Offer and the
Floating Rate Note contain the entire agreement among the parties hereto
regarding the Credit Facility. To the extent the terms and provisions of the
Financing Offer are inconsistent herewith, the terms and provisions of this
Agreement shall prevail; provided, that nothing herein shall be deemed to
35
override or release any affiliates of the Shipowner from their respective
obligations under the Financing Offer.
SECTION 12 ARRANGEMENTS AMONG THE AGENTS AND THE LENDERS
12.01. Appointment. Each Lender hereby appoints the Facility Agent to
act as its agent in connection herewith and in connection with the Floating Rate
Note and the Indenture and authorizes the Facility Agent to exercise such
rights, powers and discretions as are specifically delegated to the Facility
Agent by the terms hereof and thereof, together with all such rights, powers and
discretions as are reasonably incidental thereto. Without limiting the
foregoing, all notices to be delivered to, and approvals to be given by, a
Lender under the disbursement procedures described in Section 3.01 hereof shall
be delivered to and given by the Facility Agent on behalf of such Lender.
12.02. Rights of Facility Agent. The Lenders and the Facility Agent
agree that the Facility Agent may:
(i) assume that (a) any representation made by the Shipowner in
connection herewith is true; (b) no event which is or may become an
Event of Default has occurred; (c) the Shipowner is not in breach of or
default under its obligations hereunder; (d) any right, power,
authority or discretion vested herein upon the Lenders or any other
person or group of persons has not been exercised; unless it has, in
its capacity as Facility Agent, notice or actual knowledge to the
contrary;
(ii) engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services may to
it seem necessary, expedient or desirable and rely upon any advice so
obtained;
(iii) rely as to any matters of fact which might reasonably be
expected to be within the knowledge of the Shipowner upon a certificate
signed by or on behalf of the Shipowner;
(iv) rely upon any communication or document believed by it to be
genuine;
(v) refrain from exercising any right, power or discretion vested
in it as Facility Agent hereunder unless and until instructed by a
Lender as to whether or not such right, power or discretion is to be
exercised and, if it is to be exercised, as to the manner in which it
should be exercised; and
(vi) refrain from acting in accordance with any instructions of
any Lender to begin any legal action or proceeding arising out of or in
connection with this Agreement until it shall have received such
security as it may require (whether by way of payment in advance or
otherwise) for all costs, claims, expenses (including legal fees) and
liabilities which it will or may expend or incur in complying with such
instructions.
36
12.03. Duties. The Facility Agent shall:
(i) promptly inform each Lender of the contents of any notice or
document received by it from the Shipowner hereunder;
(ii) promptly notify each Lender of the occurrence of any Event
of Default or any default by the Shipowner in the due performance of or
compliance with its obligations under this Agreement of which the
Facility Agent has notice from any other party hereto;
(iii) save as otherwise provided herein, act as Facility Agent
hereunder in accordance with any instructions given to it by any
Lender, which instructions shall be binding on all of the Lenders; and
(iv) if so instructed by any Lender, refrain from exercising any
right, power or discretion vested in it as Facility Agent hereunder.
12.04. Limitation on Obligations of Facility Agent. Notwithstanding
anything to the contrary expressed or implied herein, the Lenders and the
Facility Agent agree that the Facility Agent shall not:
(i) be bound to inquire as to:
(a) whether or not any representation made by the Shipowner
in connection herewith is true;
(b) the occurrence or otherwise of any event which is or may
become an Event of Default;
(c) the performance by the Shipowner of its obligations
hereunder; or
(d) any breach of or default by the Shipowner or under its
obligations hereunder;
(ii) be bound to account to any Lender for any sum or the profit
element of any sum received by it for its own account;
(iii) be bound to disclose to any other person any information
relating to the Shipowner or any of its agencies if such disclosure
would or might in its opinion constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person; or
(iv) be under any obligations other than those for which express
provision is made herein.
12.05. Indemnification by Lenders. The Alternate Lender shall, from
time to time on demand by the Facility Agent, indemnify the Facility Agent,
against any and all costs, claims, expenses (including legal fees) and
liabilities (collectively, "Liabilities") together with any tax
37
thereon which the Facility Agent may incur, otherwise than by reason of its
own gross negligence or willful misconduct, in acting in its capacity as
facility agent hereunder (including, without limitation, any Liabilities in
anyway relating to or arising out of certifications made with respect to either
(a) the due authorization, execution or delivery of a Floating Rate Note, or (b)
laws and/or regulations of any Governmental Authority, in each case in
connection with any request by the Facility Agent to the Indenture Trustee or
the Secretary for the Secretary to endorse its guarantee on a Floating Rate Note
or for the Indenture Trustee to authenticate a Floating Rate Note).
12.06. Limitation on Responsibility. The Facility Agent accepts no
responsibility to the Lenders for the accuracy and/or completeness of any
information supplied by the Shipowner in connection herewith or for the
legality, validity, effectiveness, adequacy or enforceability of this Agreement,
and the Facility Agent shall be under no liability to the Lenders as a result of
taking or omitting to take any action in relation to this Agreement, save in the
case of its own negligence or willful misconduct.
12.07. No Claims on Employees of Facility Agent. Each Lender agrees
that it will not assert or seek to assert against any director, officer or
employee of the Facility Agent any claim that it might have against it in
respect of the matters referred to in Section 12.06.
12.08. Banking Business. The Lenders agree that the Facility Agent may
accept deposits from, lend money to and generally engage in any kind of banking
or other business with the Shipowner.
12.09. Resignation or Termination of Facility Agent.
(i) The Facility Agent may (after consultation with the Shipowner and
the Lenders) resign its appointment hereunder at any time without assigning any
reason therefor by giving not less than thirty (30) days' prior written notice
to that effect to each of the other parties hereto; provided, that no such
resignation shall be effective until a successor for the Facility Agent is
appointed in accordance with the succeeding provisions of this Section 12;
(ii) The Lenders and the Shipowner may jointly seek the
termination of the appointment of the Facility Agent hereunder at any
time by giving not less than thirty (30) days prior written notice to
that effect to the Facility Agent; provided that no such termination
shall be effective until a successor for the Facility Agent is
appointed in accordance with the succeeding provisions of this Section
12; provided further that any such notice of termination must be signed
by all of the Lenders and the Shipowner; and
(iii) For the avoidance of doubt, the parties hereto agree that
the provisions of this Section 12.09 shall at no time apply to or
restrict the ability of the Primary Lender Agent to resign its position
of Primary Lender Agent.
12.10. Successor to Facility Agent. If the Facility Agent gives notice
of its resignation pursuant to Section 12.09(i) or receives notice of
termination pursuant to Section 12.09(ii), then any reputable and experienced
bank or other financial institution may be appointed as a successor to the
Facility Agent by the Lenders with the consent of the Secretary and Shipowner
38
(which consent of the Shipowner shall not be unreasonably withheld or delayed)
during the period of such notice but, if no such successor is so appointed, the
Facility Agent may appoint such a successor itself with the consent of the
Secretary and Shipowner (which consent of the Shipowner shall not be
unreasonably withheld or delayed).
12.11. Discharge of Obligations. If a successor to the Facility Agent
is appointed under the provisions of Section 12.10, then (i) the retiring
Facility Agent shall be discharged from any further obligation hereunder but
shall remain entitled to the benefits of the provisions of this Section 12 and
(ii) its successor and each of the other parties hereto shall have the same
rights and obligations amongst themselves as they would have had if such
successor had been a party hereto.
12.12. Responsibilities of Lenders. It is understood and agreed by each
Lender that it is, and will continue to be, solely responsible for making its
own independent appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of the Shipowner, the
Secretary and the United States of America and, accordingly, each Lender
warrants to the Facility Agent that it has not relied and will not hereafter
rely on the Facility Agent:
(i) to check or inquire on its behalf into the adequacy, accuracy
or completeness of any information provided by the Shipowner in
connection with this Agreement or the transaction herein contemplated
(whether or not such information has been or is hereafter circulated to
such Lender by the Facility Agent); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of
the Shipowner.
12.13. Agency Division. In acting as Facility Agent for the Lenders,
the Facility Agent's agency division shall be treated as a separate entity from
any other of its divisions or departments and, notwithstanding the foregoing
provisions of this Section 12, in the event that the Facility Agent should act
for the Shipowner in any capacity in relation to any other matter, any
information given by the Shipowner to the Facility Agent in such other capacity
may be treated as confidential by the Facility Agent.
12.14. Primary Lender Agent. Each party hereto (other than the Primary
Lender Agent) acknowledges that the Primary Lender Agent is a party hereto only
in its capacity as agent of the Primary Lender and the Primary Lender's
commercial paper holders.
12.15. Facility Agent Only Agent for the Lenders. The Facility Agent is
not authorized to, nor shall it, act as the agent for the Secretary, the
Indenture Trustee, the Shipowner or any of their successors in interest or
assigns in any of the capacities provided for herein.
[Signature Page Follows]
39
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed and delivered as of the date first above written.
XXXXXX XXXXXXX LLC, CITIBANK, N.A., as Alternate Lender
as Shipowner
By: /s/ XXXX XXXXXXXXX By: /s/ XXXXXX XXXXXXX
------------------------------- ----------------------------
(Signature) (Signature)
Name: Xxxx Xxxxxxxxx Name: Xxxxxx Xxxxxxx
----------------------------- ----------------------------
(Print) (Print)
Title: Senior Vice President Title: Vice President
----------------------------- ----------------------------
(Print) (Print)
GOVCO INCORPORATED, as Primary Lender CITICORP NORTH AMERICA, INC.,
By: CITICORP NORTH AMERICA, INC., as Primary Lender Agent
its attorney-in-fact
By: /s/ XXXXXX XXXXXXX By: /s/ XXXXXX XXXXXXX
------------------------------- ------------------------------
(Signature) (Signature)
Name: Xxxxxx Xxxxxxx Name: Xxxxxx Xxxxxxx
----------------------------- ----------------------------
(Print) (Print)
Title: Vice President Title: Vice President
----------------------------- ----------------------------
(Print) (Print)
CITIBANK INTERNATIONAL PLC,
as Facility Agent
By: /s/ XXXXXXX XXXXXXXXXX
-------------------------------
(Signature)
Name: Xxxxxxx Xxxxxxxxxx
-----------------------------
(Print)
Title: Vice President
-----------------------------
(Print)
40
