Dated 17 May 2005 SENATORE SHIPPING COMPANY LIMITED NOEMI SHIPPING COMPANY LEVIITED as joint and several Borrowers - and - THE ROYAL BANK OF SCOTLAND plc as Lender
EXHIBIT
10.7
Dated 17
May 2005
XXXXXXXX
SHIPPING COMPANY LIMITED
XXXXX
SHIPPING COMPANY LEVIITED
as joint
and several Borrowers
-
and -
THE
ROYAL BANK OF SCOTLAND plc
as
Lender
Xxxxxx,
Xxxxxx & Xxxxxxxx
London
INDEX
|
Clause
|
Page
|
|
|
1
|
PURPOSE,
DEFINITIONS AND INTERPRETATION
|
1
|
|
2
|
DRAWDOWN | 8 |
|
3
|
INTEREST
AND INTEREST PERIODS
|
9
|
|
4
|
REPAYMENT
AND PREPAYMENT
|
10
|
|
5
|
CONDITIONS
PRECEDENT
|
12
|
|
6
|
REPRESENTATIONS
AND WARRANTIES
|
18
|
|
7
|
UNDERTAKINGS
|
21
|
|
8
|
APPLICATION
OF EARNINGS
|
25
|
|
9
|
EVENTS
OF DEFAULT
|
25
|
|
10
|
FEES
AND EXPENSES
|
28
|
|
11
|
PAYMENTS
AND CALCULATIONS
|
29
|
|
12
|
NO
COUNTERCLAIM, TAXATION
|
29
|
|
13
|
CHANGES
IN CIRCUMSTANCES
|
30
|
|
14
|
INDEMNITIES
|
32
|
|
15
|
SET-OFF
|
32
|
|
16
|
SECURITY
AND APPLICATION
|
33
|
|
17
|
JOINT
AND SEVERAL LIABILITY
|
34
|
|
18
|
COMMUNICATIONS
|
34
|
|
19
|
ASSIGNMENTS
|
35
|
|
20
|
MISCELLANEOUS
|
35
|
|
21
|
LAW
AND JURISDICTION
|
36
|
|
SCHEDULE
MANDATORY COST RATE
|
37 | |
|
APPENDIX
A NOTICE OF DRAWING
|
00 | |
|
XXXXXXXX
X FORM OF MORTGAGE
|
40 | |
|
APPENDIX
C FORM OF GENERAL ASSIGNMENT
|
41 | |
|
APPENDIX
D FORM OF ACCOUNT CHARGE
|
42 | |
|
APPENDIX
E FORM OF MANAGER'S UNDERTAKING
|
43 |
|
APPENDIX
F FORM OF MASTER AGREEMENT SECURITY DEED
|
44 |
|
APPENDIX
G FORM OF FFA TRANSACTION CONFIRMATION
|
45 |
|
APPENDIX
H FORM OF SUBORDINATION LETTER
|
46 |
THIS LOAN AGREEMENT is made on
the 17 day of May 2005
BETWEEN
|
(1)
|
XXXXXXXX SHIPPING COMPANY
LIMITED and XXXXX
SHIPPING COMPANY LIMITED as joint and several Borrowers;
and
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|
(2)
|
THE ROYAL BANK OF SCOTLAND
plc, as Lender.
|
WHEREAS the Lender has agreed
to make available to the Borrowers on a joint and several basis a loan facility
of up to Fifty six million United States Dollars (US$56,000,000) in two (2)
Tranches (as defined below), upon and subject to the terms and conditions
contained in this Agreement.
WHEREBY
IT IS AGREED
1 PURPOSE,
DEFINITIONS AND INTERPRETATION
|
1.1
|
The
purpose of the Loan shall be:
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|
(a)
|
to
enable Borrower A to part finance the payment of the Contract Price of
Ship A from Seller A; and
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(b)
|
to
enable Borrower B to part finance the payment of the Contract Price of
Ship B from Seller B.
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1.2
|
In
this Agreement, unless the context otherwise requires, the following
expressions shall have the following
meanings:
|
"Account Charge" means, in
relation to each Borrower, the deed containing, inter alia, a charge in respect
of its Operating Account executed or to be executed by the relevant Borrower in
favour of the Lender substantially in the form set out in Appendix D (or in such
other form as the Lender may approve or require) and, in the plural, means both
such Account Charges;
"Approved Brokers Panel" means
H Clarkson & Company Limited, Braemer Seascope Limited and Xxxxxxxxx'x
Limited or such other firm or firms of independent sale and purchase shipbrokers
as may from time to time be agreed by the Lender;
"Approved Manager" means, for
the time being, Scorpio Ship Management X.X.X., a company incorporated under the
laws of Monaco and having a place of business at 0, Xxx xx Xxxxxx, XX 00000,
Xxxxxx, or any other company which the Lender may, in its sole and absolute
discretion, approve from time to time as the technical manager of the
Ships;
"Balloon Instalments" means the
Tranche A Balloon Instalment and the Tranche B Balloon Instalment and in the
singular, means either of them;
"Borrower A" means Xxxxxxxx
Shipping Company Limited a corporation organised and existing under the laws of
the Xxxxxxxx Islands and having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Islands MH96960, (and includes
its successors);
"Borrower B" means Xxxxx
Shipping Company Limited a corporation organised and existing under the laws of
Xxxxxxxx Islands and having its registered office at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Xxxxxxxx Islands MH96960 (and includes
its successors);
"Borrowers" means Borrower A
and Borrower B together and, in the singular, means either of them;
"Business Day" means a day
(other than a Saturday or Sunday) on which banks and financial markets in London
are open for business and, in respect of a day on which a payment is required to
be made hereunder, also a day on which banks and financial markets are open for
business in New York City;
"Commitment" means the sum of
Fifty six million Dollars ($56,000,000) to be made available under this
Agreement by the Lender to the Borrowers in two tranches, Tranche A and Tranche
B, subject to the terms and conditions herein contained;
"Contract Price" means, in
relation to Ship A, the contract price payable for Ship A under the Ship A MOA
being the amount of Fifty two million Dollars ($52,000,000) and, in relation to
Ship B, the contract price payable for Ship B under the Ship B MOA being the
amount of Fifty two million Dollars ($52,000,000);
"Credit Support Document" has
the meaning given to that expression in section 14 of the Master
Agreement;
"Credit Support Provider" has
the meaning given to that expression in section 14 of the Master
Agreement;
"Dollars" and "$" means the lawful currency
for the time being of the United States of America;
"Drawdown Date" means, in
relation to each Tranche, the date upon which the Borrowers have requested that
such a Tranche be made pursuant to Clause 2, or (as the context requires) the
date on which such Tranche is actually made to the Borrowers
hereunder;
"Earnings" means, in relation
to each Ship, all moneys whatsoever due or to become due to or for the account
of the Borrower which owns such Ship at any time during the Security Period
arising out of the use or operation of such Ship including (but not limited to)
all freight, hire and passage moneys, compensation payable to the Borrower which
owns such Ship in the event of requisition of such Ship for hire, remuneration
for salvage and towage services, demurrage and detention moneys and damages for
breach (or payments for variation or termination) of any charterparty or other
contract for the employment
of such Ship and all sums recoverable under insurances in respect of loss of
Earnings (and including, if and whenever such Ship is employed on terms whereby
any or all such moneys as aforesaid are pooled or shared with any other person,
that proportion of the net receipts of the relevant pooling or sharing
arrangement which is attributable to such Ship);
"Early Termination Date" has
the meaning given to that expression in section 14 of the Master
Agreement;
"Environmental Claim", "Environmental Incident" and
"Total Loss" have, in
relation to each Ship, the meanings respectively ascribed to such terms in the
Mortgage relating to such Ship;
"Event of Default" means any
one of the events listed in Clause 9.1;
"FFA Transactions" means
commodity swap transactions in respect of forward freight
arrangements;
"Final Drawdown Date" means 30
June 2005;
2
"Financial Indebtedness" means,
in relation to any person (a) monies borrowed or raised by such person, (b) any
liability of such person under any debenture, bond, note or other security, (c)
any liability of such person under acceptance credit facilities, financial
leases, deferred purchase consideration arrangements or any other agreement or
instrument having the commercial effect of a borrowing or raising of money by
such person and (d) any guarantee, indemnity or other assurance against
financial loss given by such person in respect of any of the
foregoing;
"General Assignment" means, in
relation to each Ship, the general assignment of Earnings, insurances and
requisition compensation in respect of such Ship executed or to be executed by
the relevant Borrower in favour of the Lender substantially in the form set out
in Appendix C (or in such other form as the Lender may approve or require) and
in the plural, means both the General Assignments;
"Indebtedness" means, in
relation to any person, any obligation (whether present or future, actual or
contingent, secured or unsecured, as principal or surety or otherwise) for the
payment or repayment of money;
"Interest Period" means, in
relation to the Loan (or any part thereof), a period the commencement and length
of which shall be determined in accordance with the provisions of Clause
3.3;
"ISM Code" means in relation to
its application to each Borrower, each Ship and their operation:
|
|
(a)
|
'The
International Management Code for the Safe Operation of Ships and for
Pollution Prevention', currently known or referred to as the 'ISM Code',
adopted by the Assembly of the International Maritime Organisation by
Resolution A.741(18)
on 4 November 1993 and incorporated on 19 May 1994 into chapter IX of the
International Convention for the Safety of Life at Sea 1974 (SOLAS 1974);
and
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|
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(b)
|
all
further resolutions, circulars, codes, guidelines, regulations and
recommendations which are now or in the future issued by or on behalf of
the International Maritime Organisation or any other entity with
responsibility for implementing the ISM Code, including without
limitation, the 'Guidelines on implementation or administering of the
International Safety Management (ISM) Code by Administrations' produced by
the International Maritime Organisation pursuant to Resolution A.788(19)
adopted on 25 November 1995,
|
as the
same may be amended, supplemented or replaced from time to time;
"ISM Code Documentation"
includes the document of compliance (DOC) and safety management certificate
(SMC) issued by a Classification Society in accordance with the ISM Code in
relation to each Ship within the periods specified by the ISM Code;
"ISM SMS" means the safety
management system which is required to be developed, implemented and maintained
under the ISM Code;
"ISPS Code" means the
International Ship and Port Facility Security Code adopted by the International
Maritime Organisation (as the same may be amended, supplemented or superseded
from time to time);
"ISSC" means a valid and
current International Ship Security Certificate issued under the ISPS
Code;
"Jacob-Scorpio Tanker Pool Limited
Pool" means the pool of vessels operating under the name of, and known
as, the "Jacob-Scorpio Tanker Pool Limited";
3
"Lender" means The Royal Bank
of Scotland plc, a company incorporated in Scotland having its registered office
at 00 Xx. Xxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX, Xxxxxxxx acting through the Shipping
Business Centre at 0-00 Xxxxx Xxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx or through
any other branch notified to the Borrowers from time to time pursuant to Clause
18.3 (and includes all persons directly or indirectly deriving title under it
whether by assignment, amalgamation, operation of law or
otherwise);
"Loan" means the principal
amount of the Tranches or (as the context requires) the principal amount thereof
for the time being outstanding under this Agreement;
"Manager's Undertaking" means,
in relation to each Ship, an undertaking executed or to be executed by the
Approved Manager in respect of such Ship in the form set out in Appendix E (or
in such other form as the Lender may approve or require) and, in the plural,
means both such Manager's Undertakings;
"Mandatory Cost Rate" means the
percentage rate, which represents the cost to the Lender, relative to the Loan,
of compliance with the requirements of the Bank of England,
the Financial Services Authority or any other regulatory authority, as
determined by the Lender in accordance with the formula detailed in the Schedule
hereto;
"Margin" means, in relation to
each Tranche, zero point seven zero per cent (0.70%) per annum;
"Master Agreement" means the
Master Agreement (on the 1992 ISDA (Multicurrency - Crossborder) form as
modified) dated 13 April 2005 as supplemented by a supplemental agreement dated
13 April 2005 and as further supplemented by a supplemental agreement of even
date herewith made between the Lender and the Borrowers, and includes all
transactions from time to time entered into and confirmations from time to time
exchanged under the Master Agreement and any amending, supplementing or
replacement agreements made from time to time;
"Master Agreement Liabilities"
means, at any relevant time, all liabilities actual or contingent, present or
future, of the Borrowers to the Lender under the Master Agreement;
"Master Agreement Security
Deed" means the deed containing, inter alia, a charge in respect of the
Master Agreement executed or to be executed by the Borrowers in favour of the
Lender substantially in the form set out in Appendix G (or in such other form as
the Lender may approve or require);
"MOAs" means the Ship A MOA and
the Ship B MOA and, in the singular, means either of them;
"Mortgage" means, in relation
to each Ship, the first preferred Xxxxxxxx Islands ship mortgage over such Ship
executed or to be executed by the relevant Borrower in favour of the Lender
substantially in the form set out in Appendix B (or in such other form as the
Lender may approve or require) and in the plural, means both
Mortgages;
"Notice of Drawing" means a
notice in the form set out in Appendix A (or in such other form as the Lender
may approve or require);
"Operating Accounts" means, for
the time being, in relation to Borrower A, an account to be opened in the name
of Borrower A with the Lender designated "SENASHI - USD1" and, in relation to
Borrower B, an account to be opened in the name of Borrower B with the Lender
designated "NOESHI - USD1" (or in each case such other account with any other
branch of the Lender or with a bank or financial institution other than the
Lender (whether associated with the Lender or not) substituted therefor pursuant
to this Agreement) and in the singular, means either of them;
4
"Original Financial Statements"
means, the audited accounts and financial statements of the Borrower for the
financial year ended 31 December 2005;
"Permitted Security Interests"
means:
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(a)
|
Security
Interests created by the Security
Documents;
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(b)
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liens
for unpaid master's and crew's wages in accordance with usual maritime
practice;
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(c)
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liens
for salvage;
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(d)
|
liens
arising by operation of law for not more than 2 months' prepaid hire under
any charter in relation to either Ship not prohibited by this
Agreement;
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(e)
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liens
for master's disbursements incurred in the ordinary course of trading and
any other lien arising by operation of law or otherwise in the ordinary
course of the operation, repair or maintenance of the Ships, provided such
liens do not secure amounts more than 30 days overdue (unless the overdue
amount is being contested by the Borrower in good faith by appropriate
steps) and subject, in the case of liens for repair or maintenance, to
Clause 7.1(n) of the relevant
Mortgage;
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(f)
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any
Security Interest created in favour of a plaintiff or defendant in any
proceedings or arbitration as security for costs and expenses where the
relevant Borrower is actively prosecuting or defending such proceedings or
arbitration in good faith; and
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(g)
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Security
Interests arising by operation of law in respect of taxes which are not
overdue for payment or in respect of taxes being contested in good faith
by appropriate steps and in respect of which appropriate reserves have
been made;
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"RBS LIBOR" means, for an
Interest Period, the rate per annum at which deposits in Dollars in an amount
approximately equal to the Loan (or any part thereof) are (or would have been)
offered by the Lender to leading banks in the London Interbank Dollar Market at
or about 11.00a.m. (London time) on the second Business Day prior to the
commencement of such Interest Period for a period equal to such Interest Period
and for delivery on the first Business Day thereof;
"Receiving Bank" means American
Express Bank Limited, 3 World Financial Centre, 23rd Floor, New York, NY 10285 -
2300 USA, or such branch or other bank as may from time to time be notified by
the Lender to the Borrowers;
"Relevant Interest Rate" means
RBS LIBOR or, in the case where a Transaction is to be, or has been, entered
into under the Master Agreement and the Borrowers have not made an election
pursuant to Clause 3.5(b), TELERATE;
"Repayment Date" means each of
the dates specified in Clause 4.1;
"Repayment Instalments" means
the repayment instalments specified in Clause 4.1 and, in the singular, means
any of them;
"Security Documents" means (a)
the General Assignments, the Manager's Undertakings, the Mortgages, the Account
Charges, the Subordination Letter, the Credit Support Documents and the Master
Agreement Security Deed and (where the context so permits) this Agreement and
(b) any other agreement or document that may be executed at any
time by any of the Borrowers or any other person as security for all or any part
of the Loan, interest thereon, Master Agreement Liabilities and any other moneys
payable to the Lender under or in connection with this Agreement and/or the
Master Agreement and/or any of the documents referred to in this
definition;
5
"Security Interest" means a
mortgage, charge (whether fixed or floating), pledge, lien, hypothecation,
encumbrance, assignment, trust arrangement, title retention or other distress,
execution, attachment, arrangement or process of any kind having the effect of
conferring security;
"Security Period" means the
period commencing on the date of this Agreement and terminating on the date upon
which all moneys payable or to become payable at any time and from time to time
pursuant to the terms of this Agreement and/or any of the Security Documents
shall have been paid and discharged in full;
"Seller A" means
Schiffahrtsgesellschaft Xxxxxxx Xxxxx mbH & Co. KG, a company organised and
existing under the laws of Germany having its registered office at Xxxxxxxxxx 0,
00000 Xxxxxxx;
"Seller B" means
Schiffahrtsgesellschaft Xxxxx Xxxxx mbH & Co. KG, a company organised and
existing under the laws of Germany having its registered office at Xxxxxxxxxx 0,
00000 Xxxxxxx;
"Sellers" means Seller A and
Seller B and, in the singular, means either of them;
"Ship A" means the 2004 built
crude and product tanker of about 72,700 dwt currently named "XXXXXXX XXXXX" and
registered in the name of Seller A in the German International Ship Registry and
parallel registered under Liberian flag to be purchased by Borrower A pursuant
to the Ship A MOA and registered in the name of Borrower A under the Xxxxxxxx
Islands flag with the name "XXXXXXXX";
"Ship B" means the 2004 built
crude and product tanker of about 72,700 dwt currently tamed "XXXXX XXXXX" and
registered in the name of Seller B in the German International Ship Registry and
parallel registered under Liberian flag to be purchased by Borrower B pursuant
to the Ship B MOA and registered in the name of Borrower B under the Xxxxxxxx
Islands flag with the name "XXXXX";
"Ship A MOA" means the
memorandum of agreement dated 21 March 2005 entered into between Borrower A and
Seller A in respect of the sale by Seller A to, and the purchase by Borrower A
of, Ship A;
"Ship B MOA" means the
memorandum of agreement dated 21 March 2005 entered into between Borrower B and
Seller B in respect of the sale by Seller B to, and the purchase by Borrower B
of, Ship B;
"Ships" means Ship A and Ship B
and, in the singular, means either of them;
"Subordinated Lender" means
Simon Financial Limited, a corporation organised and existing under the laws of
the Republic of Liberia and having its registered office. at 00 Xxxxx Xxxxxx,
Xxxxxxxx, the Republic of Liberia;
"Subordination Letter" means a
letter of subordination to be executed by the Subordinated Lender in favour of
the Lender substantially in the form set out in Appendix H (or in such other
form as the Lender may approve or require);
"Subsidiary" means a body
corporate from time to time of which another (a) has direct or indirect control,
or (b) owns directly or indirectly more than fifty (50) per cent, of the share
capital or similar right of ownership (and in this definition "control" means
the power to direct the management and the policies of a body corporate, whether
through the ownership of voting capital, by contract or otherwise);
6
"Taxes" includes all present
and future income, corporation or value-added taxes and all stamp and other
taxes and levies, imposts, deductions, duties, charges and withholdings
whatsoever together with interest thereon and penalties with respect thereto, if
any, and charges, fees or other amounts made on or in respect thereof (and
references to "Taxation" shall be construed accordingly);
"TELERATE" means, for an
Interest Period:
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(a)
|
the
rate per annum equal to the offered quotation for deposits in Dollars for
a period equal to, or as near as, possible equal to, the relevant Interest
Period which appears on Telerate. Page 3750 at or about 11.00 a.m. (London
time) on the second Business Day prior to the commencement of that
Interest Period (and, for the purposes of this Agreement, "Telerate Page
3750" means the display designated as "page 3750" on the Telerate Service
or such other page as may replace Page 3750 on that service for the
purpose of displaying rates comparable to that rate or on such other
service as may be nominated by the British Bankers' Association as the
information vendor for the purpose of displaying British Bankers'
Association Interest Settlement Rates for Dollars);
or
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(b)
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if
no rate is quoted on Telerate Page 3750, the rate per annum determined by
the Lender to be the rate per annum which leading banks in the London
Interbank Market offer for deposits in Dollars in the London Interbank
Market at or about 11.00 a.m. (London time) on the second Business Day
prior to the commencement of that Interest Period for a period equal to
that Interest Period and for delivery on the first Business Day of
it;
|
"Termination Amount" shall have
the meaning given to such term in Clause 7.3(a) of this Agreement;
"Tranche A" means that part of
the Commitment in the amount of Twenty eight million Dollars ($28,000,000) to be
advanced, subject to the terms of this Agreement, by the Lender to the
Borrowers and as the context may require, the outstanding principal amount
thereof from time to time hereunder;
"Tranche A Balloon Instahneuit"
has the meaning given to such term in Clause 4.1(a);
"Tranche A Maturity Date" means
the date falling one hundred and twenty (120) months after the Drawdown Date of
Tranche A;
"Tranche B" means that part of
the Commitment in the amount of Twenty eight million Dollars ($28,000,000) to be
advanced, subject to the terms of this Agreement, by the Lender to the Borrowers
and as the context may require, the outstanding principal amount thereof from
time to time hereunder;
"Tranche B Balloon Instalment"
has the meaning given to such term in Clause 4.1(b);
"Tranche B Maturity Date" means
the date falling one hundred and twenty (120) months after the Drawdown Date of
Tranche B;
"Tranches" means together,
Tranche A and Tranche B and, in the singular, means either of them;
and
"Transaction" means a
Transaction as defined in the introductory paragraph of the Master
Agreement.
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1.3
|
In
this Agreement, references to periods of "months" shall mean a period beginning in
one calendar month and ending in the relevant calendar month on the day
numerically corresponding to the day of the calendar month in which such
period started, provided that (a) if such period started on the last
Business Day in a calendar month, or if there is no such numerically
corresponding day, such period shall end on the last Business Day in the
relevant calendar month and (b) if such numerically corresponding day, is
not a Business Day, such period shall end on the next following Business
Day in the same calendar month, or if there is no such Business Day, such
period shall end on the preceding Business Day (and "month" and "monthly" shall be construed
accordingly).
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7
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1.4
|
In
this Agreement:
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|
(a)
|
Clause
headings are inserted for convenience only and shall not affect the
construction of this Agreement and unless otherwise specified, all
references to Clauses and Appendices are to Clauses of, and Appendices to,
this Agreement;
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(b)
|
unless
the context otherwise requires, words denoting the singular number shall
include the plural and vice versa;
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(c)
|
references
to persons include bodies corporate and
unincorporate;
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(d)
|
references
to assets include property, rights and assets of every
description;
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(e)
|
references
to any document are to be construed as references to such document as
amended or supplemented from time to time;
and
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(f)
|
references
to any enactment include re-enactments, amendments and extensions
thereof.
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2
|
DRAWDOWN
|
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2.1
|
Subject
to the terms of this Agreement, and in reliance (inter alia) on the
representations and warranties of the Borrowers set out in Clauses 6.1,
6.2 and 6.3 and the representations and warranties of the Borrowers and
the other parties to the Security Documents set out in the Security
Documents, the Lender agrees to make available to the Borrowers a loan
facility in an amount up to Fifty six million Dollars ($56,000,000) to be
divided into two tranches being Tranche A and Tranche B for the purposes
described in Clause 1.1.
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2.2
|
The
Borrowers may make a request for the advance of each Tranche by sending to
the Lender a duly completed Notice of Drawing (which shall be irrevocable)
to be received by the Lender not later than 11.00 a.m. (London time) two
(2) Business Days prior to the relevant Drawdown Date, provided that each
Tranche may only be advanced on a Business Day on or prior to the Final
Drawdown Date (or such later date as the Lender, in its sole and absolute
discretion, shall agree).
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2.3
|
Subject
to the terms of this Agreement, the Lender shall advance each Tranche to
the Borrowers on the relevant Drawdown Date as
follows:
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(a)
|
in
the case of Tranche A, by paying the proceeds thereof to the Operating
Account of Borrower A for immediate payment to Seller A towards
satisfaction of the Contract Price payable under the Ship A
MOA;
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(b)
|
in
the case of Tranche B, by paying the proceeds thereof to the Operating
Account of Borrower B for immediate payment to Seller B towards
satisfaction of the Contract Price payable under the Ship B
MOA;
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and the
Borrowers hereby unconditionally and irrevocably authorise the Lender to make
such payments on their behalf.
8
3
INTEREST AND INTEREST PERIODS
|
3.1
|
Subject
to the terms of this Agreement, the rate of interest applicable to each
Tranche (or any part thereof) for each Interest Period relating thereto
shall be the rate per annum determined by the Lender to be the aggregate
of (a) the Margin and (b) the Mandatory Cost Rate and (c) the Relevant
Interest Rate.
|
|
3.2
|
Subject
to the terms of this Agreement, the Borrowers shall pay interest in
respect of each Tranche for each Interest Period relating thereto in
arrears on the last day of such Interest Period, provided that where such
Interest Period is of a duration of longer than three months, accrued
interest in respect of the Loan (or such part) shall be paid quarterly
during such Interest Period and on the last day of such Interest
Period.
|
|
3.3
|
The
duration of each Interest Period shall be three (3), six (6) or twelve
(12) months as notified by the Borrowers to the Lender not later than
11.00 a.m. (London time) two (2) Business Days prior to the commencement
of such Interest Period (or such other period as the Lender, in its sole
and absolute discretion, may agree), provided
that:
|
|
(a)
|
the
first Interest Period in relation to each Tranche shall commence on its
respective Drawdown Date and each subsequent Interest Period shall
commence on the expiry of the preceding Interest Period relating
thereto;
|
|
(b)
|
if
the Borrowers fail to select an Interest Period then, subject as provided
in this Clause 3.3, the Borrowers shall be deemed to have selected an
Interest Period of three (3)
months;
|
|
(c)
|
the
selection of Interest Periods under this Clause 3.3 shall be made in such
manner as to ensure that the expiry of an Interest Period in respect of an
amount of a Tranche equal to the repayment instalment which is then due to
be repaid under Clause 4.1 in relation to such Tranche shall coincide with
each Repayment Date relating to such Tranche (and, for this purpose alone,
shall Interest Periods of different lengths be selected in relation to
each Tranche); and
|
|
(d)
|
the
Lender, in its sole and absolute discretion, is satisfied that deposits in
Dollars for a period equal to such Interest Period will be available to
the Lender in the London Interbank Dollar Market at the commencement of
such Interest Period and, if the Lender is not so satisfied, such Interest
Period shall be of such duration as the Lender and the Borrowers shall
agree (or, in the absence of such agreement, as the Lender shall
specify).
|
|
3.4
|
In
the event that the Lender does not receive on the due date any sum due
under this Agreement or any of the Security Documents to which the
Borrowers are a party (or any agreement entered into by either of the
Borrowers in connection herewith or therewith), the Borrowers shall pay to
the Lender on demand interest on such sum from and including the due date
therefor to the date of actual payment (as well after as before judgment)
at the rate per annum determined by the Lender to be, if such sum is
principal; one per cent. (1%) above the higher of the rates set out at (a)
and (b) below and, if such sum is other than principal, one per cent. (1%)
above the rate set out at (b)
below:
|
|
(a)
|
the
rate (inclusive of the Margin) applicable to such overdue principal
immediately prior to the due date (and in any event only for the unexpired
part of any Interest Period relative to such overdue principal) together
with the Mandatory Cost Rate;
|
|
(b)
|
the
Margin plus the rate per annum at which deposits in Dollars in an amount
equal to such overdue amount are offered by the Lender to leading banks in
the London Interbank Dollar Market on call or for successive periods of
any duration up to three months, as the Lender may determine from time to
time together with the Mandatory Cost Rate. Such interest rate shall be
determined on the commencement of each such period. If the Lender
determines that Dollar deposits are not being made available by it to
leading banks in the London Interbank Dollar Market in the ordinary course
of business, such interest rate shall be determined by reference to the
cost of funds to the Lender from such other sources as the Lender may from
time to time determine.
|
9
Any such
interest which is not paid when due shall be compounded at the end of each such
Interest Period or other period as the case may be (both before and after any
notice of demand by the Lender under Clause 9.2).
Such a
default rate of interest will not apply to any late payment if and so long as
any delay to such payment is due solely to technical problems within the
Lender's payment system beyond the control of the Borrowers.
|
3.5
|
|
|
(a)
|
In
the event that a Transaction is to be entered into under the Master
Agreement then (subject to Clause 3.5(b) below) the Relevant Interest Rate
for each and every Interest Period applicable to that part of the Loan the
subject of the Transaction (commencing with the first Interest Period
relating to such Transaction) shall be
TELERATE.
|
|
(b)
|
The
Borrowers may elect for the Relevant Interest Rate for each and every
Interest Period applicable to that part of the Loan the subject of a
Transaction (commencing with the first Interest Period relating to such
Transaction) to be RBS LIBOR rather than TELERATE provided that such
election (which shall be irrevocable) is notified in writing by the
Borrowers to the Lender not later than 11.00 a.m. (London time) three (3)
Business Days prior to the commencement of such first Interest Period (or
such other period as the Lender, in its sole and absolute discretion, may
agree).
|
4
REPAYMENT AND PREPAYMENT
|
4.1
|
|
|
(a)
|
The
Borrowers shall repay Tranche A by (i) forty (40) consecutive quarterly
instalments each to be in the amount of Four hundred and fifty thousand
Dollars ($450,000), the first such instalment to be repaid three months
after the Drawdown Date in respect of such Tranche and the fortieth and
final of such instalments to be repaid on the Tranche A Maturity Date and
(ii) a balloon instalment to be in the amount of Ten million Dollars
($10,000,000) (the "Tranche A Balloon
Instalment"), such Tranche A Balloon Instalment to be repaid on the
Tranche A Maturity Date.
|
|
(b)
|
The
Borrowers shall repay Tranche B by (i) forty (40) quarterly instalments
each to be in the amount of Four hundred and fifty thousand Dollars
($450,000), the first such instalment to be repaid three (3) months after
the Drawdown Date in respect of such Tranche and the fortieth and final of
such instalments to be repaid on the Tranche B Maturity Date and (ii) a
balloon instalment to be in the amount of Ten million Dollars
($10,000,000) (the "Tranche B Balloon
Instalment"), such Tranche B Balloon Instalment to be repaid on the
Tranche B Maturity Date.
|
|
4.2
|
The
Borrowers may prepay the whole or any part of a Tranche on any Business
Day, provided that:
|
|
(a)
|
the
Lender shall have received from the Borrowers not less than fourteen (14)
days' prior written notice (which shall be irrevocable) of their intention
to make such prepayment and specifying the amount and date on which such
prepayment is to be made and the Tranche against which such payment is to
be applied;
|
|
(b)
|
the
amount of any such partial prepayment shall be not less than Five hundred
thousand Dollars ($500,000) (or a higher integral multiple of Five hundred
thousand Dollars ($500,000));
|
10
|
(c)
|
no
amount prepaid under this Agreement may be
reborrowed;
|
|
(d)
|
each
prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid and all other sums payable thereon under
the terms of this Agreement and, if such prepayment is not made on the
last day of an Interest Period relating to the amount prepaid, together
with any sums payable pursuant to Clause 14.1(d) but without premium or
other payment;
|
|
(e)
|
each
partial prepayment of a Tranche under this Agreement shall (unless the
Lender otherwise agrees in writing prior to the date of any relevant
repayment) be applied against the.instalments of such Tranche in inverse
order of maturity.
|
|
4.3
|
In
the event of an arm's length sale of either of the Ships the subject of a
Mortgage to a party unconnected to the Borrowers or in the event of a
Total Loss of either of the Ships the subject of a Mortgage, the Borrower
shall only be obliged to prepay the Tranche relative to such Ship (with
the balance of the sale or Total Loss proceeds being released to the
Borrowers) if:
|
|
(a)
|
the
Borrowers and all other parties to the Security Documents are in
compliance with all their covenants and undertakings in this Agreement and
the Security Documents; and
|
|
(b)
|
no
Event of Default (or event which, with the giving of notice and/or lapse
of time or other applicable condition, might constitute an Event of
Default) shall have occurred and is continuing;
and
|
|
(c)
|
the
security maintenance covenant set out in Clause 7.3 will be met in
relation to the remaining Ship immediately following such prepayment;
and
|
|
(d)
|
such
prepayment is made in accordance with sub-clauses (c), (d) and (e) of
Clause 4.2 immediately upon the completion of such sale or (subject to
Clause 9.1(m)) the receipt of the insurance proceeds in respect of such
Total Loss.
|
|
4.4
|
If
for any reason any part of the Loan is not drawn down under this Agreement
but nonetheless a Transaction has been entered into under the Master
Agreement then, subject to Clause 4.6, the Lender shall be entitled but
not obliged to amend, supplement, cancel, net out, terminate, liquidate,
transfer or assign all or any part of the rights, benefits and obligations
created by the Master Agreement and/or to obtain or re-establish any hedge
or related trading position in any manner and with any person the Lender
decides, and in the event of the Lender exercising any part of its
entitlement aforesaid the Borrowers' continuing obligations under the
Master Agreement shall, unless agreed otherwise by the Lender, be
calculated so far as the Lender considers it practicable by reference to
the repayment schedule for the Loan taking into account the fact that less
than the full amount of the Loan has been
advanced.
|
|
4.5
|
In
the case of a prepayment of all or part of the Loan or a Tranche under
this Agreement then, subject to Clause 4.6, the Lender shall be entitled
but not obliged to amend, supplement, cancel, net out, transfer or assign
all or such part of the rights, benefits and obligations created by the
Master Agreement which equate or relate to the part of the Loan or Tranche
so prepaid and/or to obtain or re-establish any hedge or related trading
position in any manner and with any person the Lender decides, and in the
case of a partial prepayment and the Lender exercising any part of its
entitlement as aforesaid the Borrowers' continuing obligations under the
Master Agreement shall, unless agreed otherwise by the Lender, be
calculated so far as the Lender considers it practicable by reference to
the amended repayment schedule for the Loan taking account of the fact
that less than the full amount of the Loan remains
outstanding.
|
11
|
4.6
|
If:
|
|
(a)
|
less
than the full amount of the Loan or a Tranche remains outstanding
following a prepayment under this Agreement;
or
|
|
(b)
|
less
than the full amount of the Loan is drawndown under this
Agreement,
|
and the
Lender agrees, following a written request of the Borrowers, that the Borrowers
may be permitted to maintain all or part of a Transaction in an amount not
wholly matched with or linked to all or part of the Loan, the Borrowers shall
within ten (10) days of being notified by the Lender of such requirement provide
the Lender with, or procure the provision to the Lender of, such additional
security as shall in the opinion of the Lender be adequate to secure the
performance of such Transaction, which additional security shall take such form,
be constituted by such documentation, and be entered into between such parties,
as the Lender may approve or require, and each document comprising such
additional security shall constitute a Credit Support Document.
|
4.7
|
The
Borrowers shall on the first written demand of the Lender indemnify the
Lender in respect of all loss, cost and expense (including the fees of
legal advisers) incurred or sustained by the Lender as a consequence of or
in relation to the effecting of any matters or transactions referred to in
Clauses and 4.6.
|
|
4.8
|
Without
prejudice to or limitation of the obligations of the Borrowers under
Clause 4.7, in the event that the Lender exercises any of its rights under
Clauses 4.4 or 4.5 and such exercise results in all or part of a
Transaction being terminated such termination shall be treated under the
Master Agreement in the same manner as if it were a Terminated Transaction
(as defined in section 14 of the Master Agreement) effected by the Lender
after an Event of Default by the Borrowers, and, accordingly, the Lender
shall be permitted to recover from the Borrowers a payment for early
termination calculated in accordance with the provisions of section
6(e)(i) of the Master Agreement.
|
5
CONDITIONS PRECEDENT
|
5.1
|
The
obligation of the Lender to advance any of the Tranches to the Borrowers
shall be subject to the condition that the Lender shall have received the
following documents and evidence
in all respects in form and substance satisfactory to the Lender and its
legal advisers on or before the date of this
Agreement:
|
|
(a)
|
copies
of the Memorandum and Articles of Association (or equivalent documents)
(and all amendments thereto) of each of the Borrowers and any other
documents required to be filed or registered or issued under the laws of
their respective countries of incorporation to establish their
incorporation and/or good standing;
|
|
(b)
|
copies
of resolutions passed at separate meetings of the board of directors and
shareholders of each of the Borrowers evidencing approval of such of this
Agreement, the relevant MOA, the Master Agreement and the Security
Documents to which each is a party and authorising appropriate officers or
attorneys to execute the same and to sign all notices required to be given
hereunder or thereunder on its behalf or other evidence of such approvals
and authorisations as shall be acceptable to the Lender (or, in the case
of the MOA, ratifying the execution
thereof);
|
|
(c)
|
the
original of any power of attorney issued in favour of any person executing
this Agreement, the Master Agreement or any of the Security Documents on
behalf of the Borrowers;
|
|
(d)
|
a
list specifying the directors and officers of each of the Borrowers
(together with their specimen signatures) and specifying the authorised
and issued share capital of each of the
Borrowers;
|
12
|
(e)
|
copies
of all governmental and other consents, licences, approvals and
authorisations as may be necessary to authorise the performance by the
Borrowers of their respective obligations under those of this Agreement,
the relevant MOA, the Master Agreement and the Security Documents to which
each is a party and the execution, validity and enforceability of this
Agreement, the Master Agreement and the Security
Documents;
|
|
(f)
|
a
statement in writing from a person satisfactory to the Lender confirming
the identity of the legal and beneficial owner of the shares in each
of the Borrowers and of the ultimate beneficial owner or owners of the
shares in each of the Borrowers;
|
|
(g)
|
the
Master Agreement Security Deed and the Subordination Letter duly executed
and delivered by the parties thereto together with such evidence as the
Lender and its legal advisers shall require in relation to the due
authorisation and execution by the Subordinated Lender of the
Subordination Letter;
|
|
(h)
|
a
written confirmation from the Borrowers as to which individuals are
authorised to give verbal and/or written instructions to the Lender on
behalf of the Borrowers in respect of the selection of any Interest Period
pursuant to Clause 3.3 of this
Agreement;
|
|
(i)
|
evidence
that the agent for service of process named in Clause 21.5 has accepted
its appointment for the purposes of this Agreement and the Security
Documents;
|
|
(j)
|
favourable
legal opinions from lawyers appointed by the Lender on such matters
concerning the laws of the Xxxxxxxx Islands and such other relevant
jurisdictions as the Lender may
require;
|
|
(k)
|
evidence
that the Lender has received the arrangement fees payable and due pursuant
to Clause 10.1; and
|
|
(l)
|
such
documents and evidence as the Lender shall require in relation to each
Borrower based on applicable law and regulations, and the Lender's own
internal guidelines, relating to the Lender's knowledge of its
customers;
|
each of
the documents specified in sub-clauses (a), (b), (d) and (e) above shall be
certified as a true and up-to-date copy by a Director or Secretary (or
equivalent officer) of the relevant Borrower as the case may be.
|
5.2
|
The
obligation of the Lender to advance Tranche A shall be subject to the
condition that the Lender shall have received the following documents and
evidence in all respects in form and satisfactory to the Lender and its
legal advisers on or before the Drawdown Date relating
thereto:
|
|
(a)
|
evidence
that each of the conditions specified in Clause 5.1 have been
satisfied;
|
|
(b)
|
evidence
that the Operating Account in relation to Ship A has been duly opened by
Borrower A and that all board resolutions, mandates, signature cards and
other documents or evidence required in connection with the opening,
maintenance and operation of such Operating Account have been duly
delivered to the Lender;
|
|
(c)
|
to
the extent required by any change in applicable law and regulation or any
changes in the Lender's own internal guidelines since the date on which
the applicable documents and evidence were delivered to the Lender
pursuant to Clause 5.1(1), such further documents and evidence as the
Lender shall require relating to the Lender's knowledge of its
customers;
|
|
(d)
|
a
certified true and up-to-date copy of the Ship A MOA certified by a
Director or Secretary (or equivalent officer) of Borrower
A;
|
13
|
(e)
|
such
evidence as the Lender and its legal advisers shall require in relation to
the due authorisation and execution by Seller A and Borrower A of the Ship
A MOA and all documents to be executed by Seller A and Borrower A pursuant
thereto;
|
|
(f)
|
the
Mortgage, the General Assignment and the Account Charge relating to
Borrower A and Ship A duly executed and delivered by the parties thereto
together with all other items and documents required to be delivered
pursuant to the terms thereof, including (but without limitation)
insurance notices of assignment, acknowledgements and letters of
undertaking pursuant to such General
Assignment;
|
|
(g)
|
evidence
that:
|
|
(i)
|
Ship
A has been unconditionally delivered by Seller A, and accepted by
Borrower A, pursuant to the Ship A MOA together with evidence
that the full Contract Price in respect of Ship A payable to Seller A
under the Ship A MOA (in addition to the part thereof to be financed by
way of Tranche A) has been duly paid or will be paid upon the advance of
Tranche A;
|
|
|
(ii)
|
Ship
A is provisionally registered in the name of Borrower A under the Xxxxxxxx
Islands flag;
|
|
|
(iii)
|
Ship
A is in the absolute and unencumbered ownership of Borrower A save as
contemplated by this Agreement and the relevant' Security
Documents;
|
|
|
(iv)
|
Ship
A maintains the highest classification available to it with American
Bureau of Shipping or such other classification society acceptable to the
Lender in its absolute discretion free of all recommendations and
qualifications of such classification society save those notified and
approved in writing by the Lender;
|
|
|
(v)
|
the
relevant Mortgage has been duly registered against Ship A as a valid first
preferred ship mortgage in accordance with the laws of the Republic of The
Xxxxxxxx Islands;
|
|
|
(vi)
|
Ship
A is insured in accordance with the provisions of the relevant
Mortgage;
|
|
(h)
|
a
valuation (on a charter free basis) of Ship A, dated not earlier than
thirty (30) days prior to the relevant Drawdown Date, from an independent
London sale and purchase shipbroker acceptable to the Lender showing that
the minimum security covenant contained in Clause 7.3 will be complied
with immediately following the advance of Tranche
A;
|
|
(i)
|
in
relation to Ship A, evidence that it will, as from the Drawdown Date
relating to Tranche A, be managed by the Approved Manager on terms
acceptable to the Lender together
with:
|
|
|
(i)
|
the
Manager's Undertaking relative to such Ship duly executed and delivered by
the Approved Manager;
|
|
|
(ii)
|
copies
of the document of compliance (DOC) and safety management certificate
(SMC) referred to in paragraph (a) in the definition of the ISM Code
Documentation certified as true and in effect by Borrower A and the
Approved Manager or, in the event that the DOC and SMC are not legally
required by Borrower A for such Ship at the Drawdown Date, evidence that
those documents have been applied for, accompanied by a statement from a
director or officer of Borrower A and the Approved Manager that neither of
them is aware of any reason why such application may be
refused;
|
14
|
|
(iii)
|
a
copy of the ISSC certified as true and in effect by Borrower A and the
Approved Manager;
|
|
(j)
|
in
relation to Ship A, a letter from Borrower A to the protection and
indemnity association in which such Ship is or is to be entered
instructing it to provide the Lender with a copy of the certificate of
entry of such Ship and any other information relating to the entry of such
Ship in such protection and indemnity
association;
|
|
(k)
|
such
further legal opinions from lawyers appointed by the Lender on such
matters concerning the laws of the Xxxxxxxx Islands and such other
relevant jurisdictions as the Lender may
require;
|
|
(l)
|
a
favourable opinion from an independent insurance consultant acceptable to
the Lender on such matters relating to the insurances for Ship A as the
Lender may require;
|
|
(m)
|
such
evidence as the Lender and its legal advisers shall require that such part
of the acquisition cost of Ship A which has not been funded out of the
proceeds of the Commitment and which has been borrowed by Borrower A is
subordinated to the obligations of Borrower A to the Lender under this
Agreement and the Master Agreement in terms satisfactory to the Lender in
its absolute discretion;
|
|
(n)
|
evidence
that Ship A is free from the bareboat charter the subject of its bareboat
registration under Liberian flag and evidence that Ship A has been deleted
from both the German International Ship Registry and the Liberian Ship
Registry free from all registered encumbrances, or in the alternative,
evidence that Ship A will be so deleted within such period as the Lender
shall require and that, in any event there are no encumbrances registered
against Ship A in either of such registries;
and
|
|
(o)
|
in
relation to Ship A, evidence that it will as from the Drawdown Date
relating to Tranche A, be entered into the Jacob-Scorpio Tanker Pool
Limited Pool and be commercially managed by the commercial managers of the
Jacob-Scorpio Tanker Pool Limited Pool on terms acceptable to the
Lender.
|
|
5.3
|
The
obligation of the Lender to advance Tranche B shall be subject to the
condition that the Lender shall have received the following documents and
evidence in all respects in form and satisfactory to the Lender and its
legal advisers on or before the Drawdown Date relating
thereto:
|
|
(a)
|
evidence
that each of the conditions specified in Clauses 5.1 and 5.2 have been
satisfied;
|
|
(b)
|
evidence
that the Operating Account in relation to Ship B has been duly opened by
Borrower B and that all board resolutions, mandates, signature cards and
other documents or evidence required in connection with the opening,
maintenance and operation of such Operating Account have been duly
delivered to the Lender;
|
|
(c)
|
to
the extent required by any change in applicable law and regulation or any
changes in the Lender's own internal guidelines since the date on which
the applicable documents and evidence were delivered to the Lender
pursuant to Clause 5.1(1), such further documents and evidence as the
Lender shall require relating to the Lender's knowledge of its
customers;
|
|
(d)
|
a
certified true and up-to-date copy of the Ship B MOA certified by a
Director or Secretary (or equivalent officer) of Borrower
B;
|
|
(e)
|
such
evidence as the Lender and its legal advisers shall require in relation to
the due authorisation and execution by Seller B and Borrower B of the Ship
B MOA and all documents to be executed by Seller B and Borrower B pursuant
thereto;
|
15
|
(f)
|
the
Mortgage, the General Assignment and the Account Charge relating to
Borrower B and Ship B duly executed and delivered by the parties thereto
together with all other items and documents required to be delivered
pursuant to the terms thereof, including (but without limitation)
insurance notices of assignment, acknowledgements and letters of
undertaking pursuant to such General
Assignment;
|
|
(g)
|
evidence
that:
|
|
|
(i)
|
Ship
B has been unconditionally delivered by Seller B, and accepted by Borrower
B, pursuant to the Ship B MOA together with evidence that the full
Contract Price in respect of Ship B payable to Seller B under the Ship B
MOA (in addition to the part thereof to be financed by way of Tranche B)
has been duly paid or will be paid upon the advance of Tranche
B;
|
|
|
(ii)
|
Ship
B is provisionally registered in the name of Borrower B under the Xxxxxxxx
Islands flag;
|
|
|
(iii)
|
Ship
B is in the absolute and unencumbered ownership of Borrower B save as
contemplated by this Agreement and the relevant Security
Documents;
|
|
|
(iv)
|
Ship
B maintains the highest classification available to it with American
Bureau of Shipping or such other classification society acceptable to the
Lender in its absolute discretion free of all recommendations and
qualifications of such classification society save those notified and
approved in writing by the Lender;
|
|
|
(v)
|
the
relevant Mortgage has been duly registered against Ship B as a valid first
preferred ship mortgage in accordance with the laws of the Republic, of
The Xxxxxxxx Islands;
|
|
|
(vi)
|
Ship
B is insured in accordance with the provisions of the relevant
Mortgage;
|
|
(h)
|
a
valuation (on a charter free basis) of Ship B, dated not earlier than
thirty (30) days prior to the relevant Drawdown Date, from an independent
London sale and purchase shipbroker acceptable to the Lender showing that
the minimum security covenant contained in Clause 7.3 will be complied
with the immediately following the advance of Tranche
15;
|
|
(i)
|
in
relation to Ship B, evidence that it will, as from the Drawdown Date
relating to Tranche B, be managed by the Approved Manager on terms
acceptable to the Lender together
with:
|
|
(i)
|
the
Manager's Undertaking relative to such Ship duly executed and delivered by
the Approved Manager;
|
|
|
(ii)
|
copies
of the document of compliance (DOC) and safety management certificate
(SMC) referred to in paragraph (a) in the definition of the ISM Code
Documentation certified as true and in effect by Borrower B and the
Approved Manager or, in the event that the DOC and SMC are not legally
required by Borrower B for such Ship at the Drawdown Date, evidence that
those documents have been applied for, accompanied by a statement from a
director or officer of Borrower B and the Approved Manager that neither of
them is aware of any reason why such application may be
refused;
|
|
|
(iii)
|
a
copy of the ISSC certified as true and in effect by Borrower B and the
Approved Manager;
|
|
(j)
|
in
relation to Ship B, a letter from Borrower B to the protection and
indemnity association in which such Ship is or is to be entered
instructing it to provide the Lender with a copy of the certificate of
entry of such Ship and any other information relating to the entry of such
Ship in such protection and indemnity
association;
|
16
|
(k)
|
such
further legal opinions from lawyers appointed by the Lender on such
matters concerning the laws of the Xxxxxxxx Islands and other relevant
jurisdictions as the Lender may
require;
|
|
(l)
|
a
favourable opinion from an independent insurance consultant acceptable to
the Lender on such matters relating to the insurances for Ship B as the
Lender may require;
|
|
(m)
|
such
evidence as the Lender and its legal advisers shall require that such part
of the acquisition cost of Ship B which has not been funded out of the
proceeds of the Commitment and which has been borrowed by Borrower B is
subordinated to the obligations of Borrower B to the Lender under this
Agreement and the Master Agreement in terms satisfactory to the Lender in
its absolute discretion;
|
|
(n)
|
evidence
that Ship B is free from the bareboat charter the subject of its bareboat
registration under Liberian flag and evidence that Ship B has been deleted
from both the German International Ship Registry and the Liberian Ship
Registry free from all registered encumbrances, or in the alternative,
evidence that Ship B will be so deleted within such period as the Lender
shall require and that, in any event there are no encumbrances registered
against Ship B in either of such registries;
and
|
|
(o)
|
in
relation to Ship B, evidence that it will as from the Drawdown Date
relating to Tranche B, be entered into the Jacob-Scorpio Tanker Pool
Limited Pool and be commercially managed by the commercial managers of the
Jacob-Scorpio Tanker Pool Limited Pool on terms acceptable to the
Lenders.
|
|
5.4
|
Without
prejudice to any of the other provisions of this Agreement, in the event
that the Lender, in its sole and absolute discretion, advances any of the
Tranches to the Borrowers prior to the satisfaction of all or any of the
conditions referred to in Clauses 5.1, 5.2 and 5.3,
the Borrowers hereby covenant and undertake to satisfy or procure the
satisfaction of such condition or conditions within fourteen (14) days
after the relevant Drawdown Date (or such longer period as the Lender may,
in its sole and absolute discretion, agree or
specify).
|
|
5.5
|
The
obligation of the Lender to advance a Tranche is subject to the following
further conditions:
|
|
(a)
|
that
both at the date of the relevant Notice of Drawing and on the relevant
Drawdown Date:
|
|
|
(i)
|
no
Event of Default (or event which, with the giving of notice and/or lapse
of time or other applicable condition, might constitute an Event of
Default) has occurred and is continuing or might result from the advance
of the relevant Tranche;
|
|
|
(ii)
|
the
representations and warranties of the Borrowers in Clause 6.1 and the
representations and warranties of the Borrowers and other parties to the
Security Documents set out in the Security Documents are true and accurate
as of each such date, as if made on each such date with reference to the
facts then subsisting;
|
|
|
(iii)
|
none
of the circumstances specified in Clause 13.3 has occurred and is
continuing; and
|
|
(b)
|
the
Lender has received, and found to be satisfactory to it in all respects,
such further opinions, consents, agreements and documents in connection
with this Agreement, the Master Agreement and the Security Documents as
the Lender may reasonably request by notice to the Borrowers prior to the
Drawdown Date.
|
17
6
REPRESENTATIONS AND WARRANTIES
|
6.1
|
Each
of the Borrowers hereby jointly represents and warrants to the Lender
that:
|
|
(a)
|
each
Borrower is a body corporate duly organised and validly existing and in
good standing under the laws of the Xxxxxxxx Islands and has an authorised
share capital of $1,500 divided into 1500 shares of $1 each, all of which
shares have been issued fully paid and are in the legal and beneficial
ownership of Simon Financial
Limited;
|
|
(b)
|
each
Borrower has full power and authority to (i) to execute and deliver the
relevant MOA to purchase and pay for the relevant Ship pursuant to that
MOA and register its Ship in its name under the Xxxxxxxx Islands flag,
(ii) to execute and deliver this Agreement, the Master Agreement and the
Security Documents to which it is a party, (iii) to borrow under this
Agreement and (iv) to comply with the provisions of and perform all its
obligations under, this Agreement, the Master Agreement and the Security
Documents to which it is a party;
|
|
(c)
|
each
Borrower has complied with or, where relevant, shall have procured that
the Approved Manager has complied with the ISM Code and the ISPS Code and
all other statutory and other requirements relative to its business and in
particular has obtained and maintains
a valid SMC, DOC and ISSC and, where at the date of this Agreement it is
not required by law to have obtained an SMC and a DOC, it has applied for
an SMC and a DOC and has no reason to believe that such application will
be refused within the period allowed to it to obtain those items to comply
with the ISM Code and neither Borrower has an established place of
business in any part of the United Kingdom or the United States of
America;
|
|
(d)
|
each
Borrower has taken all necessary action to authorise the borrowing of the
Loan and the execution and delivery of this Agreement, the Master
Agreement and the Security Documents to which such Borrower is a party,
and this Agreement, the Master Agreement, and the Security Documents to
which such Borrower is a party, constitute or, as the case may be, will,
upon execution and delivery thereof (and, where applicable, registration
thereof as provided for in this Agreement and the Security Documents),
constitute each Borrower's legal, valid and binding obligations
enforceable against it in accordance with their respective terms, except
as such enforcement may be limited by any relevant bankruptcy, insolvency,
administration or similar laws affecting creditors' rights
generally;
|
|
(e)
|
the
entry into and performance by each Borrower of this Agreement,
the Master Agreement and the Security Documents to it is a party, do not,
and will not during the Security Period, violate in any respect (i) any
law or regulation of any governmental or official authority or body, or
(ii) its constitutional documents, or (iii) any agreement, contract or
other undertaking to which it is a party or which is binding on it or any
of its assets;
|
|
(f)
|
all
consents, licences, approvals and authorisations required in connection
with the entry into, performance, validity and enforceability of the MOAs,
this Agreement, the Master Agreement and the Security Documents have been
obtained and are in full force and
effect;
|
|
(g)
|
save
for such registrations and filings as are referred to in this Agreement
and the Security Documents, it is not necessary for the legality,
validity, enforceability or admissibility in evidence of this Agreement,
the Master Agreement and the Security Documents that any of them or any
document relating thereto be registered, filed, recorded or enrolled with
any court or authority in any relevant jurisdiction or that any stamp,
registration or similar Taxes be paid on or in relation to this Agreement,
the Master Agreement or any of the Security
Documents;
|
18
|
(h)
|
no
action, suit, proceeding, litigation or dispute against either Borrower is
currently taking place or pending or, to either Borrower's knowledge,
threatened nor is there subsisting any judgment or award given against
either Borrower before any court, board of arbitration or other body
which, in either case, could or might result in any material adverse
change in the business or condition' (financial or otherwise) of either
Borrower other than such proceedings which are being contested in good
faith by appropriate legal proceedings and particulars of which have been
provided to the Lender;
|
|
(i)
|
neither
Borrower is in default under the Master Agreement or any other agreement
by which it is bound and no Event of Default (or event which, with the
giving of notice and/or lapse of time or other applicable condition might
constitute an Event of Default) has occurred and is continuing nor will
such a default or Event of Default (or such event) result from the
purchase of either Ship, the entry by the Borrowers into this Agreement,
the Master Agreement and the Security Documents to which each Borrower is
a party, the making of the Loan to the Borrowers or the performance by
each Borrower of any of its obligations under this Agreement, the Master
Agreement and the Security Documents to which it is a
party;
|
|
(j)
|
all
financial and other information furnished by or on behalf of the Borrowers
in connection with the negotiation of this Agreement and the Security
Documents or delivered to the Lender pursuant to this Agreement or any of
the Security Documents was true and accurate when given and there are no
other facts or matters the omission of which would have made any statement
or information contained therein
misleading;
|
|
(k)
|
all
payments made or to be made by the Borrowers under or pursuant to this
Agreement, the Master Agreement and the Security Documents to which it is
a party may be made free and clear of, and without deduction or
withholding for or on account of, any
Taxes;
|
|
(l)
|
the
copies of the MOAs delivered to the Lender prior to the date of this
Agreement are true and complete copies thereof constituting valid, binding
and enforceable obligations of the Sellers and the Borrowers respectively
in accordance with their terms and no amendments thereto or variations
thereof have been (or will be) agreed nor has any action been taken by
such parties which, would in any way render either MOA inoperative or
unenforceable;
|
|
(m)
|
there
are no commissions, rebates, premiums or other payments in connection with
the MOAs or the purchase by the Borrowers of the Ships, other than as
disclosed to the Lender in writing on or prior to the date of this
Agreement;
|
|
(n)
|
each
Borrower's place of business and offices are located, and the corporate
documents and records of the Borrower are kept at Trust Company Complex,
Ajeltake Road, Ajeltake Island, Majuro, Maxxxxxx Xxxxxxx
XX00000;
|
|
(o)
|
at
the date of this Agreement, neither Borrower is liable under or in respect
of any Financial Indebtedness other than (i) under the MOAs, this
Agreement, the Master Agreement and the Security Documents to which it is
a party, (ii) such Financial Indebtedness as shall have been notified to,
and approved by, the Lender on or prior to the date of this Agreement and
(iii) to the Subordinated Lender;
|
|
(p)
|
each
Borrower has paid all Taxes applicable to, or imposed on or in relation to
it, its business or its Ship; and
|
|
(q)
|
each
Borrower confirms that it is acting for its own account and that the
borrowing of the Loan and the performance and discharge of its obligations
and liabilities under this Agreement and other arrangements effected or
contemplated by this Agreement will not involve or lead to contravention
of any law, official, requirement or other regulatory measure
or procedure implemented to combat "money laundering" (as defined in
Article 1 of the Directive (91/308/EEC) of the Council of the European
Community).
|
19
|
6.2
|
The
Borrowers hereby further jointly and severally represent to the Lender
that on the Drawdown Date relating to Tranche
A:
|
|
(a)
|
Ship
A will have been unconditionally delivered by Seller A to and accepted by
Borrower A pursuant to the Ship A MOA and the full Contract Price payable
under the Ship A MOA (in addition to the part thereof to be financed by
way of Tranche A) will have been duly paid to Seller
A;
|
|
(b)
|
Ship
A will be provisionally registered in the name of Borrower A under the
Xxxxxxxx Islands flag;
|
|
(c)
|
Ship
A will be in the absolute and unencumbered ownership of Borrower A save a
contemplated by this Agreement and the Security
Documents;
|
|
(d)
|
Ship
A will maintain the highest classification available to it with American
Bureau of Shipping or such other classification society acceptable to the
Lender free of all recommendations and qualifications of such
classification society save for those notified to, and approved in writing
by the Lender;
|
|
(e)
|
Ship
A will be operationally seaworthy;
|
|
(f)
|
Ship
A will comply with all relevant laws, regulations and requirements
(statutory or otherwise) as are applicable to (i) ships under the Xxxxxxxx
Islands flag and (ii) engaged in the same or a similar service as Ship A
is or is to be engaged;
|
|
(g)
|
the
Mortgage in relation to Ship A will have been duly registered against Ship
A as a valid first preferred Xxxxxxxx Islands ship mortgage in accordance
with the laws of the Republic of The Xxxxxxxx
Islands;
|
|
(h)
|
Ship
A will be insured in accordance with the provisions of the Mortgage
relating thereto and the requirements in respect of insurances will have
been complied with;
|
|
(i)
|
Ship
A will be managed by the Approved Manager on terms acceptable to the
Lender;
|
|
(j)
|
the
Approved Manager will be in compliance with the ISM Code and will have
obtained and continues to maintain a valid DOC and will have applied for
an SMC in relation to Ship A and the Borrowers will be in compliance with
all statutory and other requirements relative to their
business;
|
|
(k)
|
Ship
A will comply with the ISPS Code.
|
|
6.3
|
The
Borrowers hereby further jointly and severally represent to the Lender
that on the Drawdown Date relating to Tranche
B:
|
|
(a)
|
Ship
B will have been unconditionally delivered by Seller B to and accepted by
Borrower B pursuant to the Ship B MOA and the full Contract Price payable
under the Ship B MOA (in addition to the part thereof to be financed by
way of Tranche B) will have been duly paid to Seller
B;
|
|
(b)
|
Ship
B will be provisionally registered in the name of Borrower B under the
Xxxxxxxx Islands flag;
|
|
(c)
|
Ship
B will be in the absolute and unencumbered ownership of Borrower B save a
contemplated by this Agreement and the Security
Documents;
|
20
|
(d)
|
Ship
B will maintain the highest classification available to it with American
Bureau of Shipping or such other classification society acceptable to the
Lender free of all recommendations and qualifications of such
classification society save for those notified to, and approved in writing
by the Lender;
|
|
(e)
|
Ship
B will be operationally seaworthy;
|
|
(f)
|
Ship
B will comply with all relevant laws, regulations and requirements
(statutory or otherwise) as are applicable to (i) ships under the Xxxxxxxx
Islands flag and (ii) engaged in the same or a similar service as Ship B
is or is to be engaged;
|
|
(g)
|
the
Mortgage in relation to Ship B will have been duly registered against Ship
B as a valid first preferred Xxxxxxxx Islands ship mortgage in accordance
with the laws of the Republic of The Xxxxxxxx
Islands;
|
|
(h)
|
Ship
B will be insured in accordance with the provisions of the Mortgage
relating thereto and the requirements in respect of insurances will have
been complied with;
|
|
(i)
|
Ship
B will be managed by the Approved Manager on terms acceptable to the
Lender;
|
|
(j)
|
the
Approved Manager will be in compliance with the ISM Code and will have
obtained and continues to maintain a valid DOC and will have applied for
an SMC in relation to Ship B and the Borrowers will be in compliance with
all statutory and other requirements relative to their
business;
|
|
(k)
|
Ship
B will comply with the ISPS Code.
|
|
6.4
|
The
representations and warranties of the Borrowers set out in Clauses 6.1,
6.2 and 6.3 shall survive the execution of this Agreement and the advance
of Loan hereunder and the representations and warranties set out in Clause
6.1 shall be deemed to be repeated at the commencement of each Interest
Period, with respect to the facts and circumstances existing at each such
time, as if made at each such time.
|
|
7
|
UNDERTAKINGS
|
|
7.1
|
Each
of the Borrowers jointly and severally undertakes that, as and from the
date of this Agreement and throughout the Security Period, it will comply
in full with the following
undertakings:
|
|
(a)
|
each
Borrower will send (or procure that there is sent) to the
Lender:
|
|
|
(i)
|
as
soon as possible, but in no event later than one hundred and fifty (150)
days after the end of each financial year of such Borrower, the audited
accounts and financial statements for such
year;
|
|
|
(ii)
|
as
soon as possible, but in no event later than sixty (60) days after the end
of each of the first three financial quarters of each financial year of
such Borrower, unaudited accounts and financial statements for such
financial quarter;
|
|
(b)
|
each
set of accounts and financial statements delivered to the Lender pursuant
to Clause (a)(i) shall be certified as to their correctness by DCA XXX of
00 Xxxxxx Xx Xxxxxxxxxxx, XX Xx. 000, 00000, Xxxxxx Cedex (or other
certified or chartered accountants acceptable to the Lender) and each set
of accounts and financial statements delivered to the Lender pursuant to
Clause (a)(ii) above shall be certified as to their correctness by the
chief financial officer of such
Borrower;
|
|
(c)
|
each
Borrower shall procure that each set of accounts and financial statements
delivered pursuant to Clause (a)(i) and (a)(ii) above is prepared in
accordance with the International Financial Reporting Standards and using
accounting practices and financial reference periods consistent with those
applied in the preparation of the Original Financial Statements unless, in
relation to any set of financial statements, it notifies the Lender that
there has been a change in the International Financing Reporting
Standards, the accounting practices or reference periods and the
Borrowers' auditors deliver to the
Lender:
|
21
|
|
(i)
|
a
description of any change necessary for those financial statements to
reflect the International Financing Reporting Standards, accounting
practices and reference periods upon which the Original Financial
Statements were prepared; and
|
|
|
(ii)
|
sufficient
information, in form and substance as may be reasonably required by the
Lender, to enable the Lender to make an accurate comparison between the
financial position indicated in those financial statements and the
Original Financial Statements.
|
|
(d)
|
each
Borrower will send (or procure that there is sent) to the
Lender:
|
|
|
(i)
|
if
so requested by the Lender a copy of any charterparty for either of the
Ships and any addenda thereto;
|
|
|
(ii)
|
as
soon as the same is instituted (or, to the knowledge of either Borrower,
threatened), details of any litigation, arbitration or administrative
proceedings against
or involving either Borrower, the Approved Manager or either Ship
(including any actual breach of the ISM Code) which is likely to have a
material adverse effect on such Borrower or the operation of such
Ship;
|
|
|
(iii)
|
promptly
upon being sent, copies of all communications to its shareholders and/or
creditors generally (and in their capacities as such);
and
|
|
|
(iv)
|
from
time to time, and on demand, such additional financial or other
information relating to either Borrower and/or its Ship as may be
reasonably requested by the Lender;
|
|
(e)
|
each
Borrower will notify the Lender of any Event of Default (or event which,
with the giving of notice and/or lapse of time or other applicable
condition, might constitute an Event of Default) forthwith upon the
occurrence thereof;
|
|
(f)
|
each
Borrower will maintain its corporate existence as a body corporate duly
organised and validly existing and in good standing under the laws of the
Xxxxxxxx Islands and will obtain and promptly renew from time to time, and
will promptly furnish certified copies to the Lender of, all such
authorisations, approvals, consents and licences as may be required under
any applicable law or regulation to enable such Borrower to perform its
obligations under this Agreement, the Master Agreement and the Security
Documents to which it is a party (or any of them) or required for the
validity or enforceability of this Agreement, the Master Agreement and the
Security Documents to which it is a party (or any of them) or required to
enable such Borrower to continue to own and operate its Ship, and such
Borrower shall comply with the terms of the
same;
|
|
(g)
|
neither
Borrower will without the prior consent of the Lender, create, assume or
permit to exist any Security Interest upon its Ship, her insurances or the
Earnings or any of its other assets (whether now owned or hereafter
acquired) (including, but not limited to, such Borrower's rights against
the Lender under the Master Agreement or all or any part of such
Borrower's interest in any amount payable to such Borrower by the Lender
under the Master Agreement) except Permitted Security
Interests;
|
|
(h)
|
neither
Borrower will (voluntarily or involuntarily) without the prior consent of
the Lender, sell, convey, transfer, lease, or otherwise dispose of all or
a substantial part of its assets (whether by one transaction or a series
of transactions and whether related or not) provided that a Borrower shall
be free to agree to the sale of its Ship without the consent of the Lender
if the sale proceeds will upon completion of such sale be sufficient to
pay all amounts owing to the Lender under this Agreement and the Security
Documents (or if the Ship being sold is the first of the two Ships to be
sold by the Borrowers such amount as shall be sufficient to make a
prepayment of the Loan in the amount required under Clause
4.3);
|
22
|
(i)
|
each
Borrower or the Approved Manager on behalf of itself and the Borrowers
will comply with the ISM Code and notify the Lender in writing in the
event that the DOC or any SMC is withdrawn, cancelled or
suspended;
|
|
(j)
|
each
Borrower will produce such documents and evidence as the Lender from time
to time require in relation to such Borrower, based on applicable law and
regulations from time to time and the Lender's own internal guidelines
from time to time relating to the Lender's knowledge of its customers;
and
|
|
(k)
|
the
Borrowers will not purchase any further tonnage without the consent of the
Lender.
|
|
7.2
|
Each
of the Borrowers further jointly and severally undertakes that it shall
not, as and from the date of this Agreement and throughout the Security
Period, without the prior consent of the Lender (such consent not to be
unreasonably withheld):
|
|
(a)
|
conduct
any business or activity other than the ownership, chartering and
operation of its Ship; or
|
|
(b)
|
except
for the Indebtedness under this Agreement, the MOAs the Master Agreement
and those of the Security Documents to which it is a party and except for
Indebtedness to the Subordinated Lender subordinated pursuant to the
Subordination Letter, incur or agree to incur or issue any Financial
Indebtedness, nor make any commitments, other than those occurring in the
ordinary course of the trading of its Ship (including, without limitation,
commitments in respect of purchases of ships);
or
|
|
(c)
|
assign
or otherwise dispose of any of its book debts;
or
|
|
(d)
|
issue
any shares in its capital other than to the shareholder(s);
or
|
|
(e)
|
reduce
its issued share capital; or
|
|
(f)
|
form
or acquire any Subsidiaries; or
|
|
(g)
|
consolidate
or amalgamate with, or merge into, any other entity;
or
|
|
(h)
|
(save
in accordance with the Subordination Letter) repay any stockholders' loans
or any other loans advanced to it by any person, make any loans or
advances to any person nor pay out any funds to any person;
or
|
|
(i)
|
pay
out any funds to any person except in connection with the administration
of the Borrowers or the operation and/or repair of the Ships or the
servicing of the Loan or as otherwise permitted by or pursuant to this
Agreement and the other Security Documents;
or
|
|
(j)
|
employ
a technical manager of its Ship other than the Approved Manager nor change
any of the material terms and conditions of the technical management of
its Ship; or
|
|
(k)
|
employ
a commercial manager of its Ship other than the commercial manager of the
Jacob-Scorpio Tanker Pool Limited Pool or the Approved
Manager.
|
23
|
7.3
|
|
|
(a)
|
The
Borrowers hereby further jointly and severally undertake that (subject to
Clause 7.(c) below) if and so often as, the market value (as determined in
accordance with Clause 7.3(b)) of the Ships which are the subject of a
Mortgage (plus the market value of any additional security for the time
being actually provided to the Lender pursuant to this Clause 7.3) falls
below One hundred and twenty five per cent. (125%) of the aggregate
of (i) the Loan and (ii) such amount (the "Termination Amount") as
determined by the Lender as the amount due from the Borrowers on
terminating any Transaction under the Master Agreement in the same manner
as if it were a Terminated Transaction (as defined in Section 14 of the
Master Agreement) effected by the Lender after an Event of Default, they
will within ten (10) days of being notified by the Lender of such
requirement (which notification shall be conclusive and binding on the
Borrowers) either:
|
|
|
(i)
|
provide
the Lender with, or procure the provision to the Lender of, such
additional security as shall in the opinion of the Lender be adequate to
make up such deficiency, which additional security shall take such form,
be constituted by such documentation and be entered into between such
parties as the Lender in its absolute discretion may approve or require
(and, if the Borrowers do not make proposals satisfactory to the Lender in
relation to such additional security within five (5) days of the date of
the Lender's notification to the Borrowers aforesaid, the Borrowers shall
be deemed to have elected to prepay in accordance with (ii) below);
or
|
|
|
(ii)
|
prepay
(subject to, and in accordance with, sub-clauses (c), (d) and (e) of
Clause 4.2) such part of the Loan as will ensure that the market value
(determined as aforesaid) of the Ships which are the subject of a Mortgage
and any such additional security is after such prepayment at least One
hundred and twenty five per cent. (125%) of the aggregate of (i) the Loan
and (ii) the Termination Amount.
|
|
(b)
|
For
the purposes of this Clause 7.3, the market value of a Ship shall be
determined at any such time as the Lender may request by means of a
valuation made by such independent sale and purchase shipbroker as may
from time to time be selected and appointed by the Lender from the
Approved Brokers Panel. For this purpose, such valuation shall be made
with or without physical inspection of such Ship (as the Lender may
require), on the basis of a sale for prompt delivery for cash at arm's
length on normal commercial terms as between a willing seller and a
willing buyer, free of any existing charter or other contract of
employment. The Borrowers agree to accept any valuation made by a
shipbroker or shipbrokers appointed as aforesaid as conclusive evidence of
the market value of such Ship at the date of such valuation. The Borrowers
agree to supply to the Lender and to any such shipbroker such information
concerning the Ships and their condition as such shipbroker may require
for the purpose of making such
valuation.
|
|
(c)
|
All
costs of obtaining valuations pursuant to Clause 7.3 shall be for the
account of the Borrower provided that unless an Event of Default has
occurred or unless any valuations show that the test set out in Clause
7.3(a) is not being met, the Borrowers shall not be required to pay for
more than one set of such valuations in each calendar
year.
|
|
(d)
|
Any
cash collateral provided by the Borrower to the Lender pursuant to the
terms of the Master Agreement shall be deducted from the Termination
Amount when determining whether the Borrowers have complied with their
undertaking under this Clause 7.3. For the purpose of this Clause 7.3, the
market value of any other additional security provided or to be provided
to the Lender shall be determined by the Lender in its absolute discretion
without any necessity for the Lender assigning any reason therefor. If the
market value of the Ships which are the subject of a Mortgage (plus the
market value of any additional security for the time being actually
provided to the Lender pursuant to this Clause 7.3) exceeds 125% of the
aggregate of the Loan and the Termination Amount, the Lender shall, as
soon as reasonably practicable after notice from the Borrowers to do so
and subject to being indemnified to its reasonable satisfaction against
the cost of doing so, release any such further security specified by the
Borrowers provided that after such release the Lender is satisfied that
the covenant in this Clause 7.3 shall be
satisfied.
|
24
|
(e)
|
In
connection with any additional security provided in accordance with this
Clause 7.3, the Lender shall be entitled to receive certified copies of
such documents of the kinds referred to in sub-clauses (a), (b), (c), (d)
and (e) (inclusive) of Clause 5.1 and such favourable legal opinions as
the Lender shall in its absolute discretion
require.
|
|
7.4
|
The
Borrowers may enter into FFA Transactions under the Master Agreement
subject to the terms and conditions of the Master Agreement and subject to
the following:
|
|
(a)
|
all
Confirmations for such FFA Transactions will be substantially in the form
set out in Appendix G or in such other form as the Lender may reasonably
require or agree;
|
|
(b)
|
such
FFA Transactions may only be entered into under the Master Agreement once
drawdown of both Tranches under this Agreement has occurred and (subject
to the following) for a period of eight years
thereafter;
|
|
(c)
|
each
such FFA Transaction will be for a maximum tenor of twelve (12)
months;
|
In the
event that either Ship is sold or becomes a Total Loss, the Lender shall have
the right not to continue with the availability of the aforesaid FFA Facility if
it so elects at the time.
|
7.5
|
Each
Borrower is permitted to declare or pay any dividend or make any other
distribution if its assets or profits to any stockholder provided that, in
doing so, it is acting prudently and following the payment of such
dividend or the making of such distribution it shall be able to continue
to meet its payment obligations under this Agreement and the Security
Documents.
|
8
APPLICATION OF EARNINGS
|
8.1
|
The
Borrowers will comply with any written requirement of the Lender from time
to time as to the location or relocation of the Operating Accounts and
will from time to time enter into such documentation as the Lender may
require in order to create or maintain in favour of the Lender a Security
Interest in the Operating Accounts, all at the cost and expense of the
Borrowers.
|
|
8.2
|
The
Borrowers will procure that, throughout the Security Period (and subject
only to the provisions of the General Assignment), all the Earnings
relating to each Ship shall be paid to the Operating Account relating to
such Ship.
|
|
8.3
|
Any
amounts standing to the credit of the Operating Accounts shall, provided
that the foregoing provisions of this Clause 8 shall have been complied
with and provided that no Event of Default (or event which, with the
giving of notice and/or lapse of time or other applicable condition, might
constitute an Event of Default) shall have occurred, be at the free
disposal of the Borrowers.
|
9
EVENTS OF DEFAULT
|
9.1
|
Each
of the following events shall constitute an Event of Default (whether such
event shall occur or come about voluntarily or involuntarily or by
operation of law or regulation or pursuant to, or in compliance with, any
judgment, decree or order of any court or other
authority):
|
25
|
(a)
|
either
Borrower or any other party to any of the Security Documents fails to pay
on the due date or, in the case of sums expressed to be payable on demand,
within three (3) Business Days of the Lender's demand) any sum payable
pursuant to this Agreement or any of the Security Documents (or any
agreement entered into in connection with this Agreement or any of the
Security Documents); or
|
|
(b)
|
either
Borrower breaches any of the undertakings in Clause 7.1(f), (g), (h) or
(k) or Clause 7.2 or either of the Borrowers fail to provide additional
security or make a prepayment of part of the Loan in the circumstances
referred to in Clause 7.3 within the time therein prescribed;
or
|
|
(c)
|
either
Borrower defaults under, or in the due and punctual observance and
performance of, any other provision of this Agreement and where, in the
opinion of the Lender, such default is capable of remedy, such default is
not remedied within ten (10) days after written notice from the Lender
requesting action to remedy the same;
or
|
|
(d)
|
either
Borrower or any other party to any of the Security Documents (other than
the Lender) defaults under, or in the due observance and performance of
any provision of any of the Security Documents;
or
|
|
(e)
|
any
representation or warranty made by either Borrower or any other party to
any of the Security Documents (other than the Lender) in or pursuant to
this Agreement or any of the Security Documents or in any notice,
certificate, instrument or statement contemplated hereby or thereby or
made or delivered pursuant hereto or thereto is, or proves to be, untrue
or incorrect in any respect when made or deemed to be repeated;
or
|
|
(f)
|
any
Financial Indebtedness of either Borrower in an amount of Two hundred and
fifty thousand Dollars ($250,000) (or its equivalent in other currencies)
or more is not paid when due or becomes prematurely payable or capable of
being prematurely declared payable as a consequence of a default with
respect thereto or any Security Interest over any assets of either
Borrower is enforced or becomes capable of being enforced;
or
|
|
(g)
|
any
preparatory or other steps are taken by any person to convene a meeting of
any Borrower for the purposes of considering or passing any resolution or
petition for the winding-up or dissolution of either Borrower, or (ii) a
petition is presented or an order is made or a resolution is passed for
the winding-up or dissolution of either Borrower, or (iii) either Borrower
becomes insolvent or is deemed unable to pay its debts within the meaning
of Section 123 of the Insolvency Xxx 0000 or either Borrower becomes
unable to pay its debts as they fall due, or (iv) either Borrower stops or
threatens to stop making payments generally or declares or threatens to
declare a moratorium or suspension of payments with respect to all or any
part of its debts or enters into any composition, scheme, compromise or
other arrangement with its creditors generally (or any class of .them), or
(v) any preparatory or other steps are taken by any person to appoint an
administrative or other receiver or similar official of either Borrower or
any of its assets, or (vi) any notice appointing an administrator or
examiner or any notice of intended appointment or any other notice which
is required by law (generally or in the case concerned) to be filed with
the court or given to a person prior to, or in connection with, the
appointment of an administrator or examiner is so filed or given in
respect of either Borrower or (vii) any meeting of either Borrower is
convened or any other preparatory or other steps are taken for the purpose
of considering an application for an administration order in relation to
either Borrower or such an administration order is made by a court, or
(viii) (in the reasonable opinion of the Lender) anything analogous to any
of the foregoing events occurs in any applicable jurisdiction;
or
|
|
(h)
|
an
encumbrancer takes possession of the whole or, in the reasonable opinion
of the Lender, any material part of the assets of either Borrower or a
Security Interest (other than in favour of the Lender) is levied or
enforced upon or sued out against the whole or, in the reasonable opinion
of the Lender, a material part of the assets of either Borrower;
or
|
26
|
(i)
|
either
Borrower ceases or threatens to cease, to carry on all or, in the
reasonable opinion of the Lender, any material part of its business;
or
|
|
(j)
|
any
event occurs which renders it unlawful or impossible for (i) either
Borrower or any other party to any of the Security Documents (other than
the Lender) to perform or observe, or to procure the performance or
observance of, any of its obligations or undertakings contained in this
Agreement, the MOAs or any of the Security Documents, or (ii) the Lender
to exercise any of the rights and remedies conferred on the Lender under
this Agreement or any of the Security Documents;
or
|
|
(k)
|
any
authorisation, approval, consent, licence, exemption, filing or
registration or other requirement necessary to enable either Borrower or
any other party to any of the Security Documents (other than the Lender)
to comply with any of its obligations or undertakings contained in this
Agreement, the MOAs or any of the Security Documents is modified, revoked
or withheld or does not remain in full force and effect;
or
|
|
(l)
|
without
the prior consent of the Lender, there is a change in the legal and
beneficial owner or owners of the shares in either Borrower or in the
ultimate beneficial ownership of shares in either Borrower from that
disclosed to the Lender pursuant to Clause
5.1(f);
|
|
(m)
|
either
Ship the subject of a Mortgage shall become a Total Loss and within one
hundred and twenty (120) days (or such longer period as the Lender may
agree) following the occurrence of such Total Loss either the Borrowers do
not make a prepayment of the Loan in the amount required under Clause 4.3
or the Lender does not receive insurance proceeds relating to such Total
Loss in an amount not less than the amount required to be prepaid under
Clause 4.3; for the purpose of this Clause (m), (i) an actual Total Loss
of such Ship shall be deemed to have occurred at the date and time when
such Ship was lost but if the date of the loss is unknown the actual Total
Loss shall be deemed to have occurred on the date on which such Ship was
last reported, (ii) a constructive Total Loss Shall be deemed to have
occurred at the date and time at which notice of abandonment of such Ship
is given to the insurers of such Ship and (iii) a compromised, agreed or
arranged Total Loss shall be deemed to have occurred on the date of the
relevant compromise, agreement or arrangement;
or
|
|
(n)
|
any
Earnings of a Ship are paid otherwise than to the Operating Account
relative to such Ship (unless so directed by the Lender);
or
|
|
(o)
|
for
any reason whatsoever, either Ship ceases to comply with the ISM Code or
the ISPS Code; or
|
|
(p)
|
for
any reason whatsoever, either Ship ceases to be technically managed by the
Approved Manager on terms in all respects approved by the Lender;
or
|
|
(q)
|
for
any reason whatsoever, either Ship ceases to be employed within the
Jacob-Scorpio Tanker Pool Limited Pool or to be commercially managed by
the commercial managers of the Jacob-Scorpio Tanker Pool Limited Pool on
terms in all respects approved by the Lender;
or
|
|
(r)
|
the
security constituted by any of the Security Documents is in the reasonable
opinion of the Lender imperilled or jeopardised in any way whatsoever;
or
|
|
(s)
|
this
Agreement or any of the other Security Documents ceases at any time to be
the legal, valid and binding obligations of either Borrower or any other
party thereto (other than the
Lender);
|
27
|
(t)
|
|
|
(i)
|
notice
of an Early Termination Date is given by the Lender under section 6(a) of
the Master Agreement; or
|
|
|
(ii)
|
a
person entitled to do so gives notice of an Early Termination Date under
section 6(b)(iv) of the Master Agreement;
or
|
|
|
(iii)
|
an
Event of Default (as defined in section 14 of the Master Agreement)
occurs; or
|
|
|
(iv)
|
the
Master Agreement is terminated, cancelled, suspended, rescinded or revoked
or otherwise ceases to remain in full force and effect for any reason
(except in the event that the Master Agreement is voluntarily terminated
by the Borrowers); or
|
|
(u)
|
any
other event or events (whether related or not) occurs (including, without
limitation, a material (in the reasonable opinion of the Lender) adverse
change, from the position applicable as at the date of this Agreement, in
the business, affairs or condition (financial or otherwise) of either of
the Borrowers or a Credit Support Provider) (including any such change
resulting from an Environmental Incident) the effect of which is, in the
reasonable opinion of the Lender, to impair, delay or prevent the due
Fulfilment by either of the Borrowers or a Credit Support Provider of any
of their respective obligations or undertakings contained in this
Agreement, the Master Agreement or any of the Security
Documents.
|
|
9.2
|
Upon
the occurrence of an Event of Default which is
continuing:
|
|
(a)
|
the
Lender, by notice to the Borrowers, may terminate the obligations of the
Lender under this Agreement, whereupon the same shall be so terminated;
and/or
|
|
(b)
|
the
Lender, by notice to the Borrowers, may declare the Loan, accrued interest
thereon and all other amounts payable under this Agreement either
immediately due and payable or payable on demand, whereupon the Loan,
accrued interest thereon and all other amounts payable under this
Agreement shall become immediately due and payable or (as the case may be)
payable on demand by the Lender;
and/or
|
|
(c)
|
the
Lender may take any other action, exercise any other right or pursue any
other remedy conferred upon the Lender by this Agreement, the Master
Agreement and/or by all or any of the Security Documents or by any
applicable law or regulation or otherwise as a consequence of such Event
of Default.
|
10 FEES
AND EXPENSES
|
10.1
|
The
Borrowers shall pay to the Lender an arrangement fee of Two hundred and
ten thousand Dollars ($210,000) on the date of this
Agreement.
|
|
10.2
|
The
Borrowers shall reimburse to the Lender on demand all costs, fees and
expenses (including, but not limited to, legal fees and expenses) and
Taxes thereon incurred by the Lender in connection
with:
|
|
(a)
|
the
negotiation, preparation and execution of this Agreement, the Master
Agreement and the Security Documents and the insurance consultant's report
referred to in Clauses 5.2(1) and 5.3(1);
and/or
|
|
(b)
|
any
variation of, or amendment or supplement to, any of the terms of this
Agreement, the Master Agreement and the Security Documents (or any of
them); and/or
|
28
|
(c)
|
any
consent or waiver required from the Lender in relation to this Agreement,
the Master Agreement and the Security Documents (or any of them), and in
each case, regardless of whether the same is actually implemented,
completed or granted, as the case may
be.
|
|
10.3
|
The
Borrowers shall reimburse to the Lender on demand all costs, fees and
expenses (including, bid not limited to, legal fees and expenses) and
Taxes thereon incurred by the Lender
in connection with the preserving or enforcing of, or attempting to
preserve or enforce, any of its rights under this Agreement, the Master
Agreement and the Security Documents (or any of
them).
|
|
10.4
|
The
Borrowers shall pay promptly all stamp, documentary and other like duties
and Taxes to which this Agreement, the Master Agreement and the Security
Documents (or any of them) may be subject or give rise and shall indemnify
the Lender on demand against any and all liabilities with respect to or
resulting from any delay or omission on the part of the Borrower to pay
any such duties or Taxes.
|
|
10.5
|
The
Lender shall, without prejudice to any other of the provisions of this
Agreement, be entitled (but not obliged) at any time and from time to time
(without prior notice) to debit the Operating Accounts or either of them
in order to satisfy all or any amounts payable by the Borrowers to the
Lender pursuant to this Clause 10.
|
11 PAYMENTS
AND CALCULATIONS
|
11.1
|
All
payments to be made by the Borrowers to the Lender under this Agreement
and any of the Security. Documents to which either of the Borrowers is a
party shall be made by not later than 11.00 a.m. (London time) on the due
date in same day Dollar funds settled through the New York Interbank
Payments System (or in such other Dollar funds and/or settled in such
other manner as the Lender shall specify as being customary at the time
for the settlement of international transactions of the type contemplated
by this Agreement) to the account of the Lender at the Receiving Bank
(Account No 000261123), or to such other account with such other bank as
the Lender shall from time to time notify to the
Borrowers.
|
|
11.2
|
If
any sum payable by the Borrowers under this Agreement or any of the
Security Documents to which either of the Borrowers is a party shall
become due on a day which is not a Business Day, the due date therefor
shall be extended to the next succeeding Business Day, unless such
Business Day falls in the next calendar month, in which event such due
date shall be the immediately preceding Business Day, and interest shall
be payable on such sum during any such extension at the rate payable on
the original due date.
|
|
11.3
|
The
Lender shall maintain accounts showing the amounts from time to time lent
by it under this Agreement and all other sums owing by the Borrowers under
this Agreement and the Security Documents and all payments in respect
thereof made by the Borrowers from time to time. Such accounts, in the
absence of manifest error, shall be conclusive evidence as to any amounts
from time to time owing by the Borrowers under this Agreement and the
Security Documents.
|
|
11.4
|
All
payments of interest and commitment fee and any other payments hereunder
of an annual or periodic nature shall accrue from day-to-day and shall be
calculated on the basis of the actual number of days elapsed in a three
hundred and sixty (360) day year.
|
|
12
|
NO
COUNTERCLAIM, TAXATION
|
|
12.1
|
All
payments to be made by or on behalf of the Borrowers to the Lender
pursuant to this Agreement and any of the Security Documents to which
either Borrower is a party shall be made (a) without set-off counterclaim
or condition whatsoever (including, but not limited to, any set-off,
counterclaim or condition arising under or in relation to or in connection
with the Master Agreement) and (b) free and clear of, and without
deduction for or on account of, any present or future Taxes, unless the
Borrowers are required by law or regulation to make any such payment
subject to any Taxes.
|
29
|
12.2
|
In
the event that either Borrower is required by any law or regulation to
make any deduction or withholding on account of any Taxes which arise as a
consequence of any payment due under this Agreement or any of the Security
Documents to which such Borrower is a party,
then:
|
|
(a)
|
such
Borrower shall notify the Lender promptly as soon as it becomes aware of
such requirement;
|
|
(b)
|
such
Borrower shall remit promptly the amount of such Taxes to the appropriate
taxation authority, and in any event prior to the date on which penalties
attach thereto;
|
|
(c)
|
such
payment shall be increased by such amount as may be necessary to ensure
that the Lender receives a net amount which, after deducting or
withholding such Taxes, is equal to the full amount which the Lender would
have received had such payment not been subject to such Taxes;
and
|
|
(d)
|
such
Borrower shall indemnify the Lender against any liability of the Lender in
respect of such Taxes.
|
|
12.3
|
Not
later than thirty days after each deduction or withholding of any such
Taxes, such Borrower shall forward to the Lender evidence satisfactory to
the Lender that such Taxes have been remitted to the appropriate taxation
authority.
|
|
12.4
|
If,
following any such deduction or withholding as is referred to in Clause
12.2 from any payment by the Borrowers, the Lender shall receive or be
granted a credit against or remission for any Taxes payable by it, the
Lender shall, subject to the Borrowers having made any increased payment
in accordance with Clause 12.1 and to the extent that the Lender can do so
without prejudicing the retention of the amount of such credit or
remission and without prejudice to the right of the Lender to obtain any
other relief or allowance which may be available to it, reimburse the
Borrowers with such amount as the Lender shall in its absolute discretion
certify to be the proportion of such credit or remission as will leave the
Lender (after such reimbursement) in no worse position than it would have
been in had there been no such deduction or withholding from the payment
by the Borrowers as aforesaid. Such reimbursement shall be made forthwith
upon the Lender certifying that the amount of such credit or remission has
been received by it. Nothing contained in this Agreement shall oblige the
Lender to rearrange its tax affairs or to disclose any information
regarding its tax affairs and computations. Without prejudice to
the generality of the foregoing the Borrowers shall not by virtue of this
Clause 12.4 be entitled to enquire about the Lender's tax
affairs.
|
13 CHANGES
IN CIRCUMSTANCES
|
13.1
|
In
the event that by reason of:
|
|
(a)
|
the
introduction of, or any change in, any applicable law or regulation, or
any change in the interpretation or application thereof;
or
|
|
(b)
|
compliance
by the Lender with any directive, request or requirement (whether or not
having the force of law) of any central bank, government, fiscal or other
authority,
|
it
becomes unlawful or it is prohibited or it is contrary to such directive,
request or requirement for the Lender to maintain or give effect to any of its
obligations as contemplated by this Agreement, then the Lender may notify the
Borrowers thereof and, if the Loan has been advanced by the Lender, the
Borrowers shall prepay the Loan forthwith in accordance with the terms of this
Agreement and the obligations of the Lender shall thereupon
terminate.
30
|
13.2
|
If
the Lender shall at any time be of the reasonable opinion
that:
|
|
(a)
|
the
effect of any applicable law, regulation or regulatory requirements, or
the interpretation or application thereof, or any change therein
(including the imposition of Taxes on payments hereunder, other than Taxes
on the overall net income of the Lender);
or
|
|
(b)
|
the
effect of complying with any applicable directive, request or requirement
(whether or not having the force of law) of any central bank or any
governmental, monetary or other authority (including any type of
liquidity, stock or capital adequacy controls or other banking or monetary
controls or requirements which affects the manner in which the Lender
allocates capital resources to its, obligations hereunder),
is:
|
|
|
(i)
|
to
increase the cost to the Lender of making, funding or maintaining its
commitment hereunder or the Loan or being a party to this Agreement;
or
|
|
|
(ii)
|
to
reduce the amount of any payment to the Lender under this Agreement or the
effective return to the Lender under this Agreement or on its
capital,
|
then, and
in any such case, the Lender shall notify the Borrowers as soon as practicable
thereof and the Borrowers shall from time to time pay to the Lender on demand
such amounts as the Lender shall specify to be necessary to compensate the
Lender for such increased cost or such reduction or, at the Borrowers' election,
the Borrowers shall prepay the Loan in accordance with the terms of this
Agreement whereupon the obligations of the Lender shall terminate.
|
13.3
|
If
and each time that prior to any Interest Period the Lender shall have
determined that, by reason of circumstances affecting the London Interbank
Dollar Market, either:
|
|
(a)
|
adequate
and fair means do not exist for ascertaining the rate of interest
applicable to the Loan (or any part thereof) during such Interest Period
pursuant to Clause 3.1; or
|
|
(b)
|
Dollars
are not available to the Lender in order to fund the Loan (or any part
thereof) during such Interest
Period,
|
then the
Lender shall as soon as practicable give notice of such determination to the
Borrowers and, if such notice shall be given prior to the Loan being advanced by
the Lender, the Borrowers' right to borrow hereunder shall be suspended during
the continuance of such circumstances. In any event, during the thirty days
following the giving of such notice, the Borrowers and the Lender shall
negotiate in good faith in order to arrive at an alternative interest rate or
(as the case may be) an alternative basis for the Lender to fund or continue to
fund the Loan (or the relevant part thereof) during such Interest Period. If
within such thirty day period an alternative interest rate or (as the case may
be) an alternative basis to fund or to continue to fund the Loan (or the
relevant part thereof) is agreed upon, then such alternative interest rate or
(as the case may be) such alternative basis shall take effect in accordance with
its terms. If the Borrowers and the Lender fail to agree on such an alternative
interest rate or (as the case may be) alternative basis within such thirty day
period and such circumstances are continuing at the end of such thirty day
period, then the Lender shall set an interest period and interest rate
representing the cost of funding of the Lender in Dollars or in any available
currency of the Loan plus the Margin. If the circumstance shall continue at the
end of such interest period, the procedure in this Clause 13.3 shall be
repeated. If the Borrowers shall not agree with such rate then the Borrowers may
give not less than fifteen (15) Business Days' irrevocable notice of prepayment
to the Lender in which case the commitment hereunder of the Lender shall
thereupon be cancelled and, if the Loan is outstanding, the Borrowers shall
prepay the Loan on the first Business Day after such period in accordance with
the terms of this Agreement and the obligations of the Lender shall thereupon
terminate.
31
14 INDEMNITIES
|
14.1
|
The
Borrowers shall indemnify the Lender on demand against all costs,
expenses, liabilities and losses sustained or incurred as a result of or
in connection with:
|
|
(a)
|
any
default in payment on the due date of any sum due hereunder (after giving
credit for any default interest paid by the Borrowers thereon under Clause
3.4); and/or
|
|
(b)
|
the
occurrence and/or continuance of any Event of Default (or event which,
with the giving of notice and/or lapse of time or other applicable
condition, might constitute an Event of Default) and/or the acceleration
of repayment of the Loan pursuant to Clause 9.2;
and/or
|
|
(c)
|
either
Tranche not being borrowed on the date specified in the Notice of Drawing
relating thereto, other than as a result of a default by the Lender,
and/or
|
|
(d)
|
the
payment or other receipt or recovery of all or any part of a Tranche or
any part thereof or an overdue sum otherwise than on the last day of an
Interest Period relating thereto or other relevant
period,
|
(including,
where appropriate, but not limited to loss of profit and any losses sustained or
incurred in liquidating or employing deposits from third parties acquired or
arranged to effect or maintain the relevant Tranche or any part thereof and, in
the applicable circumstances referred to in Clause 14.1(d), an amount equal to
the Margin which would, but for prepayment or other receipt or recovery of all
or any part of the relevant Tranche, have accrued on the relevant Tranche from
the date of such prepayment, receipt or recovery to the end of the current
Interest Period).
|
14.2
|
If,
under any applicable law or regulation, and whether pursuant to a judgment
being made or registered against the Borrowers or the liquidation of the
Borrowers or for any other reason, any payment under or in connection with
this Agreement is made or falls to be satisfied in a currency (the "payment currency") other
than the currency in which such payment is due under or in connection with
this Agreement (the "contractual currency"),
then to the extent that the amount of such payment actually received by
the Lender, when converted into the contractual currency at the rate of
exchange, falls short of the amount due under or in connection with this
Agreement, the Borrowers, as a separate and independent obligation, shall
indemnify and hold harmless the Lender against the amount, of such
shortfall. For the purposes of this Clause 14.2, "rate of exchange" means
the rate at which the Lender is able on or about the date of such payment
to purchase the contractual currency with the payment currency and shall
take into account any premium and other costs of exchange with respect
thereto.
|
|
14.3
|
The
Borrowers shall indemnify the Lender on demand against all costs,
expenses, liabilities and losses sustained or incurred as a result of or
in connection with any Environmental Claims being made against the Lender
or otherwise howsoever arising out of any Environmental
Incident
|
15 SET-OFF
|
15.1
|
The
Borrowers hereby authorise the Lender (without prior notice) to apply any
credit balance (whether or not then due) which is at any time held by the
Lender for the account of the Borrowers at any office of the Lender in any
country in or towards satisfaction of any sum then due from the Borrowers
to the Lender under this Agreement, the Master Agreement or any of the
Security Documents to which any Borrower is a party and unpaid Provided
however that such right shall not be exercisable by the Lender until the
occurrence of an Event of Default. For that
purpose:
|
32
|
(a)
|
the
Lender is authorised to use all or any part of a deposit or other credit
balance to buy such other currencies as may be necessary to effect such
application; and
|
|
(b)
|
break,
or alter the maturity of, all or any part of a deposit or other credit
balance of either Borrower; and
|
|
(c)
|
enter
into any other transaction or make any entry with regard to a deposit or
other credit balance as the Lender considers
appropriate.
|
|
15.2
|
If
either Borrower is the defaulting party under the Master Agreement, the
Lender, as the non-defaulting party, may (without prejudice to or
limitation of its right of set-off under section 6(e) of the Master
Agreement and its rights under Clause 15.1) at the same time as, or at any
time after, such Borrower's default set-off any amount due from the
Borrowers to the. Lender under this Agreement against any amount due from
the Lender to the Borrowers under the Master Agreement, and apply the
first amount in discharging the second amount. The effect of any set-off
under this Clause 15.2 shall be effective to extinguish or, as the case
may require, reduce the liabilities of the Lender under the Master
Agreement.
|
|
15.3
|
The
Lender shall not be obliged to exercise any • of its rights under Clause
15.1, which shall be without prejudice and in addition to any right of
set-offs combination of accounts, lien or other rights to which the Lender
is at any time otherwise entitled (whether by operation of law, contract
or otherwise).
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16 SECURITY
AND APPLICATION
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16.1
|
The
Borrowers hereby undertake with the Lender to execute, deliver and perform
the provisions of, and procure the execution, delivery and performance by
the other parties thereto (other than the Lender) of, the Security
Documents and the provisions thereof at the times and in the manner
provided in this Agreement and in the Security Documents so that all such
documents shall both at the date of such execution and delivery and at all
times during the Security Period be valid and binding obligations of the
Borrowers and such other parties enforceable in accordance with their
respective terms.
|
|
16.2
|
All
Moneys received by the Lender under or pursuant to this Agreement or any
of the Security Documents and expressed to be applicable in accordance
with the provisions of this Clause 16.2 shall (unless the Lender otherwise
requires) be applied by the Lender in the following manner:
|
FIRST: in
or towards satisfaction of any amounts as are then accrued due and payable under
this Agreement, the Master Agreement and the Security Documents (or any of them)
or are then due and payable by virtue, of payment demanded under this Agreement,
the Master Agreement and the Security Documents (or any of them) in such order
of application as the Lender shall think fit;
SECONDLY:
at the option of the Lender (i) in retention of an amount equal to any amounts
which are not then accrued due and payable under this Agreement, the Master
Agreement and the Security Documents (or any of them) or are not then due and
payable by virtue of payment demanded under this Agreement, the Master Agreement
and the Security Documents (or any of them) but which (in the sole and absolute
opinion of the Lender) will or may become due and payable in the future and,
upon the same becoming due and payable, in or towards satisfaction thereof in
accordance with the foregoing provisions of this Clause 16.2 and/or (ii) in or
towards prepayment of the Loan in accordance with sub-clauses (d) and (e) of
Clause 4.2; and
33
THIRDLY:
the surplus (if any) shall be paid to the Borrowers or to whomsoever else may be
entitled thereto.
17 JOINT
AND SEVERAL LIABILITY
|
17.1
|
All
the liabilities and obligations of the Borrowers under this Agreement
shall, whether expressed to be so or not, be joint and several so that
each Borrower shall be jointly and severally responsible with the other
Borrower for all liabilities and obligations of the Borrowers under this
Agreement and so that such liabilities and obligations shall not be
impaired by:
|
|
(a)
|
any
failure of this Agreement to be legal, valid, binding and enforceable in
relation to either of the Borrowers whether as a result of lack of
corporate capacity, due authorisation, effective execution or
otherwise;
|
|
(b)
|
any
giving of time, forbearance, indulgence, waiver or discharge in relation
to either of the Borrowers or any party to either of the Security
Documents;
|
|
(c)
|
any
other matter or event whatsoever which might have the effect of impairing
all or any of the liabilities and obligations of either of the
Borrowers.
|
|
17.2
|
Each
of the Borrowers declares that it is and will, throughout the Security
Period, remain a principal debtor for all amounts owing under this
Agreement and neither of the Borrowers shall in any circumstances be
construed to be a surety for the obligations of the other Borrower
hereunder.
|
|
17.3
|
Until
such sums owing to the Lender by the Borrowers under this Agreement and
the Security Documents have been paid in full neither of the Borrowers
(hereinafter called the "Creditor Borrower") will
without the prior written consent of the Lender ask, demand, xxx for, take
or receive from the other Borrower (hereinafter called the "Debtor Borrower") by
set-off or in any manner whatsoever the whole or any part of all present
and future sums, liabilities and obligations payable or owing by the
Debtor Borrower to the Creditor Borrower whether actual or contingent,
jointly and severally or otherwise howsoever so long as any Senior
Liabilities are outstanding to the Lender (for such purposes "Senior Liabilities"
shall mean all present and future sums, liabilities and obligations
whatsoever payable or owing by the Borrowers (or either of them) to the
Lender under the Loan Agreement and the Security Documents (or any of
them) or otherwise whatsoever, whether actual or contingent jointly or
severally or otherwise howsoever.
|
18 COMMUNICATIONS
|
18.1
|
Except
as otherwise provided for in this Agreement, all notices or other
communications under or in respect of this Agreement to either party
hereto shall be in writing (that is by letter or fax) and shall be deemed
to be duly given or made when delivered (in the case of personal
delivery or letter) and when despatched or in the case of a fax from
either party to the other) to such party addressed to it at the address
appearing below (or at such address as such party may hereafter specify
for such purpose to the other by notice in
writing):
|
|
(a)
|
in
the case of the Borrowers:
|
Scorpio
Ship Management X.X.X.
Xxx
xx Xxxxxx
XX-00000
Xxxxxx
Fax
No: 00 377 92
05 31 46
Attention: Xxxxxxxx
X. Xxxxx
|
34
|
(b)
|
in
the case of the Lender:
|
Shipping
Business Centre
0-00
Xxxxx Xxxxx Xxxxxx,
Xxxxxx
XX0X 0XX
Fax
No: 00 00 0000 0000
Attention:
Ship Finance Portfolio Management
|
A notice
or other communication received on a non-working day or after business hours in
the place of receipt, shall be deemed to be served on the next following working
day in such place.
|
18.2
|
All
communications and documents delivered pursuant to or otherwise relating
to this Agreement or any of the Security Documents shall either be in
English or accompanied by a certified English translation prepared by a
translator approved by the Lender.
|
|
18.3
|
A
certificate or determination of the Lender as to any matter provided for
in this Agreement or any of the Security Documents shall, in the absence
of manifest error, be conclusive and binding on the
Borrowers.
|
19 ASSIGNMENTS
|
19.1
|
This
Agreement shall be binding upon and inure to the benefit of the Lender and
the Borrowers and their respective successors and permitted
assigns.
|
|
19.2
|
The
Borrowers may not assign or transfer all or any part of its rights and/or
obligations under this Agreement.
|
|
19.3
|
The
Lender may assign, transfer or sub-participate all or any part, of its
rights or obligations under this Agreement and the Security Documents or
change its lending office, in any such case, following consultation with
the Borrowers. The Lender shall notify the Borrowers promptly following
any such assignment or transfer or change of lending
office.
|
|
19.4
|
The
Lender may disclose to any potential assignee or transferee of all or any
part of its rights or obligations under this Agreement and the Security
Documents or to any such sub-participant or any other person who may
otherwise enter into contractual relations with the Lender in relation to
this Agreement and the Security Documents such information about this
Agreement and/or the Security Documents (or any of them) and the Borrowers
and/or its related entities as the Lender thinks
fit.
|
20 MISCELLANEOUS
|
20.1
|
Time
shall be of the essence in this Agreement. No delay or omission on the
part of the Lender in exercising any right, power or remedy under this
Agreement shall impair such right, power or remedy or be construed as a
waiver thereof nor shall any single or partial exercise of any such right,
power or remedy preclude any further exercise thereof or the exercise of
any other right, power or remedy. The rights, powers and remedies herein
provided are cumulative and not exclusive of any rights, powers and
remedies provided by law and may be exercised from time to time and as
often as the Lender deems
expedient.
|
|
20.2
|
Any
waiver by the Lender of any provision of this Agreement, or any consent or
approval given by the Lender hereunder, shall only be effective if given
in writing and then only for the purpose and upon the terms for which it
is. given.
|
|
20.3
|
If
at any time any one or more of the provisions in this Agreement is or
becomes invalid, illegal or unenforceable in any respect under any law or
regulation, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not be in any way affected or impaired
thereby.
|
35
|
20.4
|
The
obligations of the Borrowers under this Agreement shall remain in full
force and effect until the Lender shall have received all amounts due or
to become due to it hereunder and under the Security Documents in
accordance with the terms hereof and thereof. Without prejudice to the
foregoing, the obligations of the Borrower under Clauses 3.4, 10, 12, 13.2
and 14 shall survive the repayment of the
Loan.
|
|
20.5
|
A
person who is not a party to this Agreement has no right under the
Contracts (Rights Of Third Parties) Act 1999 to enforce or to enjoy the
benefit of any term of this
Agreement.
|
21 LAW
AND JURISDICTION
|
21.1
|
This
Agreement shall be governed by, and construed in accordance with; English
law.
|
|
21.2
|
Subject
to Clause 21.4, the courts of England shall have exclusive jurisdiction in
relation to all matters which may arise out of or in connection with this
Agreement.
|
|
21.3
|
The
Borrowers shall not commence any proceedings in any country other than
England in relation to a matter which arises out of or in connection with
this Agreement.
|
|
21.4
|
Clause
21.2 is for the exclusive benefit of the Lender which reserves the
rights:
|
|
(a)
|
to
commence proceedings in relation to any matter which arises out of or in
connection with this Agreement in the courts of any country other than
England and which have or claim jurisdiction to that matter;
and
|
|
(b)
|
to
commence such proceedings in the courts of any such country or countries
concurrently with or in addition to proceedings in England or without
commencing proceedings in England.
|
|
21.5
|
The
Borrowers irrevocably appoint Cheeswrights at its office for the time
being, presently at 00 Xxxxxxx Xxxx, Xxxxxx XX0X 8BR, to act as its agent
to receive and accept on its behalf any process or other document relating
to any proceedings in the English courts which are connected with this
Agreement.
|
|
21.6
|
In
this Clause 21, "proceedings" means
proceedings of any kind, including an application for a provisional or
protective measure.
|
36
SCHEDULE
MANDATORY
COST RATE
The
Mandatory Cost Rate will be calculated in accordance with the following
formula:
|
F x 0.01
|
|
|
300
|
where on
the day(s) of application of the formula:
F. is
the rate of charge payable by the Lender to the Financial Services Authority
pursuant to paragraph 2 of the Fees Regulations (but where for this purpose, the
figure at paragraph 2.02b/2.03b shall be deemed to be zero) and expressed in
pounds per £1 million of the Fee Base of the Lender.
For the
purposes. of this Schedule:
Fee Base
has the meaning ascribed to it for the purposes of, and all be calculated in
accordance with, the Fees Regulations.
Fees
Regulations means, as appropriate, either the Banking Supervision (Fees)
Regulations 2000 or such regulations as from time to time may be in force,
relating to the payment of fees for banking supervision in respect of periods
subsequent to 31 March 2001.
Any
reference to a provision of any statute, directive, order or regulation herein
is a reference to that provision as amended or re-enacted from time to
time.
If
alternative or additional financial requirements are imposed which in the
Lender's opinion make the formula set out above no longer appropriate, the
Lender shall be entitled to stipulate such other formula as shall be suitable to
apply in substitution for the formula set out above.
37
IN WITNESS whereof the parties
hereto have entered into this Agreement the date first above
written.
|
SIGNED
by
|
)
|
|
|
)
|
||
|
for
and on behalf of
|
)
|
|
|
XXXXXXXX
SHIPPING COMPANY LIMITED
|
)
|
|
|
in
the presence of
|
||
|
Xxxxxx
Xxxx
Solicitor
Xxxxxx
XX0X
0XX
|
||
|
SIGNED
by
|
)
|
|
|
)
|
||
|
for
and on behalf of
|
)
|
|
|
XXXXX
SHIPPING COMPANY LIMITED
|
)
|
|
|
in
the presence of
|
||
|
Xxxxxx
Xxxx
Solicitor
Xxxxxx
XX0X
0XX
|
||
|
SIGNED
by
|
)
|
|
|
)
|
||
|
for
and on behalf of
|
)
|
|
|
THE
ROYAL BANK OF SCOTLAND PLC
|
)
|
|
|
in
the presence of
|
||
|
Xxxxxx
Xxxx
Solicitor
Xxxxxx
XX0X
0XX
|
||
38
